As filed with the Securities and Exchange Commission on May 5, 1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-3 REGISTRATION STATEMENT
Under
The Securities Act of 1933
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VIACOM INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
04-2949533
(IRS Employer Identification No.)
200 Elm Street
Dedham, MA 02026
(617) 461-1600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
VIACOM INTERNATIONAL INC. PARAMOUNT COMMUNICATIONS INC.
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its charter)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
04-2980402 74-1330475
(IRS Employer Identification No.) (IRS Employer Identification No.)
1515 Broadway 15 Columbus Circle
New York, NY 10036 New York, NY 10023-7780
(212) 258-6000 (212) 373-8000
(Address, including zip code, and (Address, including zip code, and
telephone number, including area code, telephone number, including area code,
of registrant's principal executive of registrant's principal executive
offices) offices)
VIACOM CAPITAL I L.P. VIACOM CAPITAL II L.P.
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its charter)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
13-3766768 13-3766770
(IRS Employer Identification No.) (IRS Employer Identification No.)
1515 Broadway 1515 Broadway
New York, NY 10036 New York, NY 10036
(212) 258-6000 (212) 258-6000
(Address, including zip code, and (Address, including zip code, and
telephone number, including area code, telephone number, including area code,
of registrant's principal executive of registrant's principal executive
offices) offices)
-------------------
Philippe P. Dauman, Esq.
Executive Vice President, General Counsel,
Chief Administrative Officer and Secretary
Viacom International Inc.
1515 Broadway
New York, New York 10036
(212) 258-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-------------------
Copies To:
Phillip L. Jackson, Esq. Candace K. Beinecke, Esq. Joel S. Hoffman, Esq.
Stephen T. Giove, Esq. Hughes Hubbard & Reed Simpson Thacher & Bartlett
Shearman & Sterling One Battery Park Plaza 425 Lexington Avenue
599 Lexington Avenue New York, New York 10004 New York, New York
New York, New York 10022 10017-3909
Continued on next page
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [X]
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Amount maximum maximum Amount of
Title of each class of Securities to be offering price aggregate registration
to be registered registered(1) per unit(2) offering price(2) fee
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Debt Securities of Viacom Inc.(3) .............................. ) 100% )
Guarantees of Viacom International Inc.(4) ..................... ) -- )
Guarantees of Paramount Communications Inc.(4) ................. ) -- )
Preferred Stock, par value $.01 per share, of Viacom Inc.(5) ... ) 100% )
Depositary Shares of Viacom Inc. ............................... ) -- )
Preferred Partnership Interests ) $3,000,000,000(1) ) $3,000,000,000(1) $1,034,483
of Viacom Capital I L.P.(6) .................................. ) 100% )
Preferred Partnership Interests ) )
of Viacom Capital II L.P.(6) ................................. ) 100% )
Guarantees of Viacom Inc.(7) ................................... ) -- )
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(1) In United States dollars or the equivalent thereof in foreign currency or currency units.
(2) Estimated solely for the purpose of calculating the registration fee. The aggregate proceeds from the offer and sale of the
securities registered hereby will not exceed $3,000,000,000.
(3) Includes subordinated debentures which may be issued by Viacom Inc. to evidence the loan or loans by Viacom Capital I L.P. or
Viacom Capital II L.P. to Viacom Inc. of any proceeds from (i) the offer and sale of the Preferred Partnership Interests of
Viacom Capital I L.P. and Viacom Capital II L.P. and (ii) other capital contributions to Viacom Capital I L.P. and Viacom
Capital II L.P. No separate consideration will be received for these subordinated debentures. If any of the Debt Securities
are issued at an original issue discount, the principal amount will be increased such that the aggregate proceeds of the
securities issued hereunder will equal $3,000,000,000.
(4) To be issued in connection with Debt Securities of Viacom Inc. other than the subordinated debentures described in footnote 3.
(5) Such indeterminate number of shares of Preferred Stock as may from time to time be issued at indeterminate prices.
(6) Such indeterminate number of Preferred Partnership Interests as may from time to time be issued at indeterminate prices.
(7) To be issued in connection with Preferred Partnership Interests of Viacom Capital I L.P. and Viacom Capital II L.P.
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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EXPLANATORY NOTE
This Registration Statement consists of two separate
Prospectuses, covering securities to be registered as follows:
(1) Senior Debt Securities, Senior Subordinated Debt
Securities and Preferred Stock, par value $.01 per
share, of Viacom Inc., and Guarantees of Senior Debt
Securities and Senior Subordinated Debt Securities by Viacom
International Inc. and Paramount Communications Inc.; and
(2) Preferred Partnership Interests of Viacom Capital
I L.P., Preferred Partnership Interests of Viacom
Capital II L.P., Guarantees of Preferred Partnership
Interests by Viacom Inc. and Subordinated Debentures of Viacom.
SUBJECT TO COMPLETION, DATED MAY 5, 1994
PROSPECTUS
$3,000,000,000
____________________
VIACOM INC.
Senior Debt Securities
Senior Subordinated Debt Securities
Preferred Stock
Unconditionally guaranteed as to payment of
principal, premium, if any, and interest on
Senior and Senior Subordinated Debt Securities by
VIACOM INTERNATIONAL INC.
and
from and after the Paramount Effective Time (as defined below)
PARAMOUNT COMMUNICATIONS INC.
(subsidiaries of Viacom Inc.)
____________________
Viacom Inc. ("Viacom") may offer from time to time (i)
its senior unsecured debt securities (the "Senior Debt
Securities"), (ii) its senior subordinated unsecured debt
securities (the "Senior Subordinated Debt Securities" and
together with the Senior Debt Securities, the "Debt Securities"),
and (iii) shares of its Preferred Stock, par value $.01 per share
(the "Preferred Stock"), in one or more series, which may be
represented by depositary shares ("Depositary Shares") evidenced
by depositary receipts, or any combination of the foregoing.
The aggregate gross proceeds from the offer and sale of Debt
Securities and Preferred Stock hereunder, together with the
aggregate gross proceeds from the offer and sale of preferred
partnership interests registered under the Registration Statement
(as defined below) of which this Prospectus forms a part, will
not exceed $3,000,000,000 based upon prices determined at the
time of sale.
The Senior Subordinated Debt Securities will be
subordinated in right of payment to all existing and future
Senior Obligations of Viacom. See "Description of Senior
Subordinated Debt Securities --Subordination" and "Description
of Debt Securities -- Certain Definitions" for the definition of
"Senior Obligations". All of the Senior Debt Securities and the
Senior Subordinated Debt Securities will be unconditionally
guaranteed (the "Guarantees") as to the payment of principal,
premium, if any, interest and mandatory sinking fund payments, if
any, by Viacom International Inc. ("Viacom International") and,
from and after the Paramount Effective Time (as defined below),
Paramount Communications Inc. ("Paramount"; Viacom International
and Paramount are sometimes referred to herein as the "Debt
Guarantors"), on a senior basis and a senior subordinated basis,
as the case may be, except as set forth in "Description of Senior
Debt Securities --Guarantees".
Specific terms of the securities in respect of which
this Prospectus is being delivered ("Offered Securities") will be
set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement"), together with the terms of the offering
of the Offered Securities, the initial price thereof and the net
proceeds from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Debt
Securities, the specific designation (whether senior or senior
subordinated), aggregate principal amount, authorized denomination,
initial public
offering price, purchase price, maturity (which may be
fixed or extendible), interest rate or rates (which may
be fixed or variable), if any, or method of calculation
of interest and dates for payment thereof, premium, if
any, the terms of the guarantees of Viacom International and
Paramount and any exchangeability, conversion, redemption,
prepayment or sinking fund provisions, the currency or currency
units of payment of principal of, and premium, if any, and
interest on the Debt Securities and any listing on a securities
exchange, and (ii) in the case of Preferred Stock, the
designation, number of shares or fractional interests therein,
liquidation preference per share, initial public offering price,
dividend rate, or method of calculation thereof, dates on which
dividends shall be payable and dates from which dividends shall
accrue, and any exchangeability, redemption or sinking fund
provisions and any listing on a securities exchange. Debt
Securities may be issued as Original Issue Discount Securities to
be sold at a substantial discount below their principal amount
and, if issued, certain terms thereof will be set forth in the
Prospectus Supplement related thereto. If shares of Preferred
Stock are to be represented by Depositary Shares, the Prospectus
Supplement will set forth the fraction of a share of such
Preferred Stock represented by one Depositary Share.
____________________
For information concerning certain factors that should be
considered by prospective investors, see "Certain
Considerations".
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________
The Offered Securities may be offered directly to
purchasers, to or through underwriters or through dealers or
agents. See "Plan of Distribution". The names of any
underwriters, dealers or agents involved in the sale of the
Offered Securities and any applicable fee, commission or discount
arrangements with them will be set forth in an accompanying
Prospectus Supplement.
This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
____________________
The date of this Prospectus is , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
No dealer, salesman or other person has been authorized
to give any information or to make any representation not
contained or incorporated by reference in this Prospectus or any
accompanying Prospectus Supplement and, if given or made, such
information or representation must not be relied upon as having
been authorized by Viacom, Viacom International or Paramount, or
any underwriter, dealer or agent. Neither this Prospectus nor
any accompanying Prospectus Supplement constitutes an offer to
sell or a solicitation of any offer to buy any of the securities
hereby or thereby offered in any jurisdiction to any person to
whom it is unlawful to make such offer or solicitation in such
jurisdiction. Neither the delivery of this Prospectus or any
accompanying Prospectus Supplement nor any sale made hereunder or
thereunder shall, under any circumstances, create any implication
that the information herein or therein is correct as of any time
subsequent to the date hereof or thereof or that there has been
no change in the affairs of Viacom, Viacom International or
Paramount since such date or, in the case of information
incorporated herein or therein by reference, the date of filing
with the Securities and Exchange Commission.
AVAILABLE INFORMATION
Each of Viacom, Viacom International, Paramount and
Blockbuster Entertainment Corporation ("Blockbuster") is
currently subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Securities and Exchange Commission
(the "Commission"). The reports, proxy statements and other
information filed by Viacom, Viacom International, Paramount and
Blockbuster with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and should be available at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material also can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, at prescribed rates. In addition,
material filed by Viacom and Viacom International can be
inspected at the offices of the American Stock Exchange, Inc.
(the "AMEX"), 86 Trinity Place, New York, New York 10006,
material filed by Blockbuster may be inspected at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005, and the London Stock Exchange, Old
Broad Street, London, England EC2N 1HP, and material filed by
Paramount may be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005. After consummation of the
Mergers (as defined below), Paramount, Blockbuster and Viacom
International may no longer file reports, proxy statements or
other information with the Commission. Instead, such information
would be provided, to the extent required, in filings made by
Viacom. All information concerning Blockbuster included in this
Prospectus has been derived from reports filed by Blockbuster
with the Commission or otherwise furnished by Blockbuster.
This Prospectus constitutes part of a combined
registration statement (the "Registration Statement") filed by
Viacom, Viacom International, Viacom Capital I L.P., a Delaware
limited partnership ("Viacom Capital I"), Viacom Capital II L.P.,
a Delaware limited partnership ("Viacom Capital II"; Viacom
Capital I or Viacom Capital II, as the case may be, are sometimes
referred to herein as "Viacom Capital"), and Paramount with the
Commission under the Securities Act of 1933, as amended (the
"Securities Act"). As permitted by the rules and regulations of
the Commission, this Prospectus omits certain of the information
contained in the Registration Statement. For further information
with respect to Viacom, Viacom International, Viacom Capital I,
Viacom Capital II and Paramount and the securities offered
hereby, reference is hereby made to the Registration Statement
and to the exhibits thereto, copies of which may be obtained as
provided in the preceding paragraph. Statements contained herein
concerning the provisions of documents are necessarily summaries
of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed
with the Commission. Copies of the Registration Statement and the
exhibits thereto
2
are on file at the offices of the Commission and may be obtained
upon payment of the fee prescribed by the Commission, or may
be examined without charge at the public reference facilities
of the Commission described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by
Viacom and Viacom International (File Nos. 1-9553/1-9554) or
Paramount (File No. 1-5404) pursuant to the Exchange Act are
incorporated by reference in this Prospectus:
1. Viacom's Annual Report on Form 10-K for the year ended
December 31, 1993, as amended by Form 10-K/A Amendment
No. 1 dated May 2, 1994;
2. Viacom's Current Reports on Form 8-K dated January 12,
1994, March 18, 1994 and March 28, 1994;
3. Viacom International's Annual Report on Form 10-K for
the year ended December 31, 1993;
4. Viacom International's Current Reports on Form 8-K
dated January 12, 1994, March 18, 1994 and March 28,
1994;
5. Paramount's Transition Report on Form 10-K for the six-
month period ended April 30, 1993, as amended by Form
10-K/A Amendment No. 1 dated September 28, 1993, as further
amended by Form 10-K/A Amendment No. 2 dated September 30,
1993 and as further amended by Form 10-K/A Amendment
No. 3 dated March 21, 1994;
6. Paramount's Current Reports on Form 8-K dated June 22,
1993, June 30, 1993, July 15, 1993, September 15, 1993,
January 4, 1994, January 28, 1994, March 17, 1994 and March
18, 1994; and
7. Paramount's Quarterly Reports on Form 10-Q for the
three months ended July 31, 1993, the six months ended
October 31, 1993 and the nine months ended January 31, 1994.
All documents and reports filed by Viacom, Viacom
International and Paramount pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Offered
Securities shall be deemed to be incorporated by reference in
this Prospectus and to be a part of this Prospectus from the
dates of filing of such documents or reports. Any statement
contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein, in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein or in the accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
and superseded, to constitute a part of this Prospectus.
This Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. Such
documents (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference) are
available, without charge, to any person, including any
beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request to Viacom International, 1515
Broadway, New York, New York 10036, Attention: John H. Burke
(telephone number (212) 258-6000).
3
THE COMPANY
Viacom is a holding company whose principal assets are
its 100% ownership of Viacom International and its majority
ownership of Paramount. National Amusements, Inc. ("NAI") is the
controlling stockholder of Viacom. Sumner M. Redstone, the
controlling stockholder of NAI, is the Chairman of the Board of
Directors of each of Viacom, Viacom International and Paramount.
The principal executive offices of Viacom are located at 200 Elm
Street, Dedham, Massachusetts 02026 and its telephone number is
(617) 461-1600.
The Mergers. On March 11, 1994, pursuant to the terms
------------
of its tender offer for shares of Paramount's common stock (the
"Offer"), Viacom completed its purchase of 61,657,432 of such
shares, representing a majority of the shares of Paramount's
common stock outstanding. Pursuant to a merger agreement among
Viacom, a wholly owned subsidiary of Viacom and Paramount (the
"Paramount Merger Agreement"), such wholly owned subsidiary of
Viacom will merge with and into Paramount. As a result,
Paramount will be the corporation surviving the merger and will
become a wholly owned subsidiary of Viacom (the "Paramount
Merger") after the effective time of the Paramount Merger (the
"Paramount Effective Time"). Pursuant to a voting agreement
between Paramount and NAI, NAI has agreed to vote all of its
shares of outstanding voting stock of Viacom in favor of the
Paramount Merger and related transactions and against any
competing business combinations. The vote of NAI in accordance
with such voting agreement would be sufficient to approve the
Paramount Merger Agreement and the related transactions without
any action on the part of any other holder of the outstanding
voting stock of Viacom. In addition, in order to effect the
Paramount Merger, the Paramount Merger Agreement must be approved
by the affirmative vote of the holders of a majority of the
outstanding shares of Paramount's common stock entitled to vote
thereon. As Viacom has acquired a majority of the outstanding
shares of Paramount's common stock pursuant to the Offer, Viacom
has sufficient voting power to approve the Paramount Merger
Agreement, even if no other stockholder of Paramount votes in
favor of the Paramount Merger Agreement.
On January 7, 1994, Viacom entered into a merger
agreement (the "Blockbuster Merger Agreement") with Blockbuster,
pursuant to which Blockbuster will be merged with and into
Viacom, with Viacom continuing as the surviving corporation of
the merger, subject to shareholder approval (the "Blockbuster
Merger" and, together with the Paramount Merger, the "Mergers").
Pursuant to a voting agreement between Blockbuster and NAI, NAI
has agreed to vote its shares of outstanding voting stock of
Viacom in favor of the Blockbuster Merger and against any
competing business combination proposal. Approval of the
Blockbuster Merger by the stockholders of Viacom is therefore
assured.
Each of the Mergers is subject to conditions,
including, without limitation, material accuracy of
representations and warranties, material compliance with and
performance of covenants and agreements, no material adverse
change, filing of the appropriate charter amendments and receipt
of regulatory approvals.
Potential purchasers of the Offered Securities are
urged to review Blockbuster's publicly available information
which can be obtained at the locations specified under "Available
Information" above. See "Available Information".
Strategic Relationships. Viacom has entered into
------------------------
strategic relationships with Blockbuster and NYNEX Corporation
("NYNEX"), including (i) a $600 million investment by Blockbuster
in the Series A Cumulative Convertible Preferred Stock, par value
$.01 per share, of Viacom (the "Series A Preferred Stock"), (ii)
a $1.2 billion investment by NYNEX in the Series B Cumulative
Convertible Preferred Stock, par value $.01 per share, of Viacom
(the "Series B Preferred Stock"), and (iii) an agreement with
each of Blockbuster and NYNEX to explore strategic partnership
opportunities. The Series A Preferred Stock and the Series B
Preferred Stock each pay a 5% annual cash dividend, are
convertible into shares of Viacom's Class B Common Stock, par
value $.01 per share ("Class B Common Stock"), at a conversion
price of $70 per share and will be
4
redeemable by Viacom at declining redemption premiums after the
fifth anniversary of the date of issuance. In addition, on
March 10, 1994, Blockbuster purchased approximately 22.7 million
shares of Class B Common Stock for an aggregate purchase price of
$1.25 billion. Upon consummation of the Blockbuster Merger, the
Series A Preferred Stock and Class B Common Stock owned by
Blockbuster will cease to be outstanding. However, if the
Blockbuster Merger Agreement is terminated, Viacom will be obligated
to make certain payments to Blockbuster in an amount not exceeding
$275 million or to sell certain assets to Blockbuster in the event
that Viacom Class B common stock trades (for a specific period) at
levels below $55 per share during the one year period after such
termination.
Viacom International
Viacom International is a diversified entertainment and
communications company with operations in four principal
segments: Networks, Cable Television, Entertainment and
Broadcasting. The principal executive offices of Viacom
International are located at 1515 Broadway, New York, New York
10036, and its telephone number is (212) 256-6000.
Networks. Viacom Networks operates three basic cable
---------
services in the U.S.: MTV: MUSIC TELEVISION , VH-1/VIDEO HITS ONE
and NICKELODEON /NICK AT NITE . Viacom Networks also operates
three premium services: SHOWTIME , THE MOVIE CHANNEL and FLIX .
Viacom International also participates as a joint venturer in
COMEDY CENTRAL and ALL NEWS CHANNEL . Internationally, MTV
Networks operates MTV EUROPE and MTV LATINO and participates as
a joint venturer in NICKELODEON U.K.
Cable Television. Viacom Cable owns and operates cable
-----------------
television systems servicing approximately 1,111,000 customers as
of March 31, 1994 in California, the Pacific Northwest and the
Midwest. Among other projects, Viacom Cable has constructed a
fiber optic cable system in Castro Valley, California to
accommodate testing of new interactive services. In connection
with this test, Viacom International has entered into an
agreement with AT&T to test and further develop such services.
Entertainment. Viacom Entertainment is comprised
--------------
principally of (i) Viacom Enterprises, which distributes off-
network programming and feature films for television exhibition
in various markets throughout the world and also distributes
television programs for initial U.S. television exhibition on a
non-network basis and for international television exhibition;
(ii) Viacom Productions, which produces television series and
other television properties independently and in association with
others primarily for initial exhibition on U.S. prime time
network television; and (iii) Viacom New Media, which develops,
produces, distributes and markets interactive software for the
stand-alone and other multimedia marketplaces.
Broadcasting. Viacom Broadcasting owns and operates
-------------
five network-affiliated television stations and 14 radio stations
(two of which are under contract to be sold) in six of the top
eight radio markets, including duopolies (i.e., ownership of two
or more AM or two or more FM stations in the same market) in each
of Los Angeles, Seattle and Washington, D.C. Pursuant to the
consent granted by the Federal Communications Commission to
transfer control of the broadcast licenses of Paramount to Viacom
in connection with the Paramount Merger, Viacom has undertaken to
dispose of one of its two AM stations and one of its two FM
stations serving Washington, D.C.
Recent Developments. On April 4, 1994, Viacom sold its
--------------------
one-third partnership interest in LIFETIME to its partners The
Hearst Corporation and Capital Cities/ABC Inc. for approximately
$317.6 million.
5
Paramount
The businesses of Paramount are entertainment and
publishing. The principal executive offices of Paramount are
located at 15 Columbus Circle, New York, New York 10023-7780, and
its telephone number is (212) 373-8000.
Entertainment. Theatrical Motion Pictures. Paramount
-------------- ---------------------------
Pictures produces and/or finances feature motion pictures for
exhibition in theaters and on television and for distribution by
videocassettes and video discs. Motion pictures are produced by
Paramount Pictures, produced by independent producers and
financed in whole or in part by Paramount Pictures, or produced
by others and acquired by Paramount Pictures. Each picture is,
in effect, a separate and distinct product with its financial
success dependent upon many factors, among which cost and public
response are of fundamental importance. Paramount Pictures
distributes its motion pictures for theatrical release outside
the United States and Canada through United International
Pictures, a company owned by Paramount Pictures, MCA and Metro-
Goldwyn-Mayer Inc.
Paramount Pictures has an exclusive pay television
license agreement with HBO which includes new Paramount Pictures'
motion pictures released theatrically through December 1997.
Paramount Pictures also licenses its motion pictures to home and
hotel/motel pay-per-view, airlines, schools and universities.
Paramount Pictures also distributes its motion pictures for pay
television release outside the United States and Canada through
United International Pictures.
Television Programs. Paramount Pictures is engaged in
--------------------
(i) the production and distribution of series, mini-series,
specials and made-for-television movies for network television,
first-run syndication, pay and basic cable, videocassettes and
video discs, and live television programming and (ii) the
licensing of series, mini-series and specials made for U.S.
television and theatrical and made-for-television movies that are
part of its television library and television product acquired
from independent producers in foreign markets.
Home Video. Paramount Pictures sells videocassettes
-----------
and video discs for the home video market, featuring its motion
picture and television program library, acquisitions from third
parties and programs made originally for the home video market.
Paramount Pictures distributes its home video products outside
the United States and Canada through Cinema International B.V., a
joint venture with MCA.
Theatrical Exhibition. Famous Players operates
----------------------
theaters throughout Canada. Cinamerica, a joint venture with
Time Warner Inc., includes Mann and Festival Theaters and
operates theaters in California, Colorado, Arizona and Alaska.
United Cinemas International, a joint venture with MCA, operates
theaters in the United Kingdom, Ireland, Germany and Spain.
Television Broadcasting and Cable Television Networks.
------------------------------------------------------
Paramount Stations Group owns and operates seven television
stations. Paramount and MCA jointly own USA Networks, which
operates two national advertiser-supported basic cable television
networks, USA Network and the Sci-Fi Channel.
Theme Parks. Paramount Parks owns and operates five
------------
regional theme parks.
Madison Square Garden. Madison Square Garden's
----------------------
activities include the operation of the Madison Square Garden
Arena, The Paramount theatre, the New York Knickerbockers
Basketball Club of the National Basketball Association and the
New York Rangers Hockey Club of the National Hockey League. It
also supplies and distributes television programming for cable
systems principally in New York, New Jersey and Connecticut
through the Madison Square Garden Network. In addition, Madison
Square Garden produces, promotes and/or presents live
entertainment.
6
Publishing. Paramount Publishing includes well-known
----------
imprints such as Simon & Schuster, Pocket Books, Prentice Hall,
Silver Burdett Ginn and Computer Curriculum Corporation, among
others. Paramount Publishing's Elementary, Secondary and Higher
Education Groups publish elementary, secondary and college
textbooks and related materials, computer-based educational
products, audiovisual products and vocational and technical
materials. Its Consumer Group publishes and distributes
hardcover, trade paperback and mass market books and audio tapes.
The Business, Technical and Professional Group publishes books,
newsletters and software for a variety of professional groups,
including lawyers, accountants, tax professionals, business
executives and the medical community. Paramount Publishing's
international operations include publishing in Canada, the United
Kingdom, Australia, Brazil, Mexico, Singapore, Japan and India,
as well as distribution of Paramount Publishing's products
worldwide.
Recent Developments. In February 1994, Paramount
--------------------
completed the acquisition of Macmillan Publishing Company and
certain other publishing assets of Macmillan, Inc. for
approximately $553 million.
Paramount and BHC Communications, Inc., which is
majority owned by Chris-Craft Industries, Inc., are forming a
joint venture to be known as the Paramount Television Network
which will provide prime-time television programming primarily to
broadcast affiliates nationwide in competition with the three
major networks and the Fox Broadcasting Network. The network is
expected to begin operations in January 1995.
7
CERTAIN CONSIDERATIONS
Prospective purchasers of the Offered Securities should
-------------------------------------------------------
consider carefully all of the information set forth or
------------------------------------------------------
incorporated in this Prospectus and an accompanying Prospectus
--------------------------------------------------------------
Supplement and, in particular, the following:
---------------------------------------------
Controlling Stockholder
Immediately after completion of the Paramount Merger
and before the completion of the Blockbuster Merger, NAI (which
is controlled by Sumner M. Redstone) will own approximately 85%
of the voting stock and approximately 46% of the total (voting
and non-voting) common stock of Viacom (after the Paramount
Merger, Viacom is sometimes hereinafter referred to as "Viacom-
Paramount"). Immediately after completion of the Mergers, NAI
would own approximately 62% of the voting stock and approximately
25% of the total (voting and non-voting) common stock of Viacom-
Paramount and Blockbuster combined (the "Combined Company"). As
such, Mr. Redstone will be in a position to control the election
of the Board of Directors as well as the direction and future
operations of Viacom-Paramount or the Combined Company, as the
case may be (although certain provisions of the Blockbuster
Merger Agreement and the Paramount Merger Agreement restrict the
ability of certain large stockholders from engaging in going
private transactions).
Total Indebtedness and Certain Refinancing
Viacom anticipates that, following the Mergers, the
Combined Company will have outstanding total indebtedness of
approximately $10.0 billion ($8.1 billion if the Blockbuster
Merger is not consummated) and 5% preferred stock with a
liquidation preference of $1.2 billion ($1.8 billion if the
Blockbuster Merger is not consummated). Of such $10.0 billion,
$3.7 billion was borrowed under a credit agreement dated as of
November 19, 1993, as amended on January 4, 1994 and February 15,
1994 (the "November 19, 1993 Credit Agreement"), among Viacom,
the banks named therein, and The Bank of New York, Citibank, N.A.
and Morgan Guaranty Trust Company of New York, as Managing
Agents, and must be repaid by November 18, 1994. In addition,
the $1.0 billion borrowed under a credit agreement dated as of
February 15, 1994 (the "New Blockbuster Facility"), among
Blockbuster, certain banks named therein, Bank of America, as
Agent, and BA Securities Inc., as Arranger, must be repaid by
February 14, 1995 and both the New Blockbuster Facility and a
previous Blockbuster credit agreement, under which approximately
$700 million is currently outstanding, contain certain covenants
and events of default, including a change of control default,
which will require either a waiver in connection with the
Blockbuster Merger or the refinancing of the indebtedness under
such facilities prior to the Blockbuster Merger.
Accordingly, the foregoing facilities, together with
other current maturities, may require Viacom to refinance up to
$5.9 billion ($4.2 billion if the Blockbuster Merger is not
consummated) on various dates over a period ending November 18,
1994. Viacom also intends to refinance certain indebtedness of
Viacom International. See "-- Holding Company Structure" below.
In addition, in the event that the Blockbuster Merger is not
consummated, Viacom would under certain circumstances incur
certain additional costs. See "The Company -- The Mergers" and
"-- Strategic Relationships". No decision has been made
concerning the method Viacom-Paramount will, or the Combined
Company would, employ to refinance such indebtedness. Such
decision will be based on Viacom-Paramount's or the Combined
Company's review from time to time of the advisability of the
particular actions, as well as on prevailing interest rates and
financial and other economic conditions and such other factors as
Viacom-Paramount or the Combined Company, as the case may be,
deem appropriate. Although Viacom expects that it will be able
to refinance its indebtedness and meet its obligations without
the need to sell any assets, Viacom is continuing to review
opportunities for the sale of non-strategic assets as such
opportunities may arise.
8
Holding Company Structure
Viacom has no significant assets other than the capital
stock of its subsidiaries. As a holding company, Viacom is
dependent on dividends or other intercompany transfers of funds
from its subsidiaries to meet its debt service and other
obligations. Such dividends and other intercompany transfers of
funds by Viacom International and its subsidiaries to Viacom are
currently restricted under Viacom International's outstanding
credit agreements. Viacom expects that in connection with any
bank refinancing of the indebtedness of up to $5.9 billion ($4.2
billion if the Blockbuster Merger is not consummated) discussed
above in "-- Total Indebtedness and Certain Refinancing",
substantially all of Viacom International's $1.9 billion facility
will also be refinanced and such restrictions on dividends and
other intercompany advances of funds will be removed. Upon
consummation of the Paramount Merger, Viacom will have unlimited
access to funds from Paramount. It is anticipated that Viacom
International and, upon the consummation of the Paramount Merger,
Paramount each will guarantee Viacom's indebtedness. Claims of
creditors of Viacom's subsidiaries, including trade creditors,
will generally have priority as to the assets of such
subsidiaries over the claims of Viacom and the holders of
Viacom's indebtedness and other obligations, including the
Offered Securities, except (with respect to the Debt Securities
only) to the extent that holders of the Debt Securities may make
claims against the Debt Guarantors pursuant to the Guarantees
(see " -- Fraudulent Conveyance Considerations" below).
Fraudulent Conveyance Considerations
Viacom's obligations under the Debt Securities will be
guaranteed to the extent set forth herein by the Debt Guarantors.
Various federal and state fraudulent conveyance laws have been
enacted for the protection of creditors and may be utilized by a
court of competent jurisdiction to subordinate or avoid all or
part of any Guarantee issued by a Debt Guarantor.
To the extent that a court were to find that (x) a
Guarantee was incurred by a Debt Guarantor with intent to hinder,
delay or defraud any present or future creditor or (y) such Debt
Guarantor did not receive fair consideration or reasonably
equivalent value for issuing its Guarantee and such Debt
Guarantor (i) was insolvent or rendered insolvent by reason of
the issuance of such Guarantee, (ii) was engaged or about to
engage in a business or transaction for which the remaining
assets of such Debt Guarantor constituted unreasonably small
capital to carry on its business or (iii) intended to incur, or
believed that it would incur, debts beyond its ability to pay
such debts as they matured, the court could subordinate or avoid
all or part of such Guarantee in favor of the Debt Guarantor's
other creditors. To the extent any Guarantee issued by a Debt
Guarantor was avoided as a fraudulent conveyance or held
unenforceable for any other reason, the holders of the Debt
Securities would cease to have any claim against such Debt
Guarantor and would be creditors solely of Viacom and, if the
Guarantee of the other Debt Guarantor was not avoided or held
unenforceable, such other Debt Guarantor.
Viacom and the Debt Guarantors believe that the
issuances of the Guarantees by the Debt Guarantors are not
fraudulent conveyances. There can be no assurance, however, that
a court passing on such questions would reach the same
conclusions.
Changing Competitive Environment
The entertainment and communications industries of
which either Viacom-Paramount or the Combined Company, as the
case may be, will be a part of, are changing rapidly as a result
of evolving distribution technologies, particularly the advent of
digital compression, and related ongoing and anticipated changes
to regulation of the communications industry. The future success
of Viacom-Paramount or the Combined Company will be affected by
such changes, the nature of which cannot be forecast with
certainty. Although management believes that such technological
developments are likely to enhance the value of Viacom-
Paramount's or the Combined Company's entertainment properties
and trademarks, there can be no assurance that such developments
will not limit Viacom-Paramount's or the Combined Company's access
to certain
9
distribution channels or create additional competitive pressures on
some or all of Viacom-Paramount's or the Combined Company's
businesses.
Combining the Companies
Viacom, Paramount and Blockbuster are large,
diversified enterprises, with operations and sales worldwide.
Although management of the companies believe that their
respective operations are complementary and that, if the Mergers
are consummated, integration of the companies will be
accomplished promptly and without substantial difficulty, there
can be no assurance that future results will improve as a result
of the Mergers. If the Mergers are consummated, Viacom-Paramount
or the Combined Company, as the case may be, on a pro forma
basis, will be substantially more leveraged than any of Viacom,
Paramount or Blockbuster immediately prior to the Offer and the
Mergers.
USE OF PROCEEDS
The net proceeds from the sale of the Offered
Securities may be used by Viacom to repay, redeem or repurchase
its outstanding indebtedness; to make loans to its subsidiaries;
or for such other purposes as may be specified in the applicable
Prospectus Supplement. A description of any indebtedness to be
refinanced with the proceeds of the Offered Securities will be
set forth in the applicable Prospectus Supplement.
10
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth (i) the ratio of
earnings to fixed charges for Viacom for each year in the five-
year period ended December 31, 1993 and for the year ended
December 31, 1993 on a pro forma basis for each of Viacom-
Paramount and the Combined Company and (ii) the ratio of earnings
to combined fixed charges and preferred stock dividends for
Viacom for each year in the five-year period ended December 31,
1993 and for the year ended December 31, 1993 on a pro forma
basis for each of Viacom-Paramount and the Combined Company. For
purposes of computing the following ratios, earnings represent
income from operations before fixed charges and taxes, and fixed
charges represent interest on indebtedness, amortization of debt
discount and such portion of rental expense which is deemed to be
representative of the interest factor. The pro forma ratios set
forth below should be read in conjunction with the pro forma
financial statements incorporated in this Prospectus.
Pro Forma Viacom Historical
-------------------------------------------- -----------------------------------------
Year Ended December 31, 1993 Year Ended December 31,
-------------------------------------------- -----------------------------------------
Viacom-Paramount(a) Combined Company(b) 1993 1992 1991 1990 1989
------------------- ------------------- ---- ---- ---- ---- ----
Ratio of Earnings
to Fixed Charges 1.3x 1.6x 2.8x 1.8x 1.0x (c) 1.5x(d)
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends (e) 1.0x 1.4x 2.5x (f) (f) (f) 1.3x(d)
_________________
(a) As adjusted to give effect to the Paramount Merger and
certain other transactions described in the pro forma financial
statements incorporated in this Prospectus, in each case as
if such transactions had occurred on January 1, 1993.
(b) As adjusted to give effect to the Mergers and certain other
transactions described in the pro forma financial statements
incorporated in this Prospectus, in each case as if such
transactions had occurred on January 1, 1993. All information
concerning Blockbuster included in the pro forma ratios has
been derived from reports filed by Blockbuster with the
Commission or otherwise furnished by Blockbuster.
(c) Earnings of Viacom were insufficient to cover fixed charges
for the year ended December 31, 1990. The additional amount
of earnings required to cover fixed charges of Viacom for the
year ended December 31, 1990 would have been $66.2 million.
(d) As a result of the $313.1 million pre-tax gain recognized on
the sale of its Long Island and Cleveland cable systems during
the first quarter of 1989, Viacom's earnings were sufficient
to cover fixed charges and combined fixed charges and preferred
stock dividends.
(e) The statutory income tax rate was used for purposes of
calculating the ratio of earnings to combined fixed charges and
preferred stock dividends.
(f) Viacom did not have any preferred stock outstanding from
1990 to 1992.
11
DESCRIPTION OF DEBT SECURITIES
The following statements relating to the Debt
Securities and the Indentures (as defined below) are summaries
and do not purport to be complete. Such summaries may make use
of certain terms defined in the Indentures and are qualified in
their entirety by express reference to such Indentures. In
addition, certain defined terms, including "Credit Agreement",
used in this Section and under "Description of Senior Debt
Securities" and "Description of Senior Subordinated Debt
Securities" are set forth below under "-- Certain Definitions".
Capitalized terms not otherwise defined below or elsewhere in
this Prospectus have the meanings given to them in the applicable
Indenture.
Except as otherwise noted, the following terms and
conditions apply to both the Senior Debt Securities and the
Senior Subordinated Debt Securities. For terms and conditions
applicable solely to Senior Debt Securities, see "Description of
Senior Debt Securities". For terms and conditions applicable
solely to Senior Subordinated Debt Securities, see "Description
of Senior Subordinated Debt Securities".
Viacom may offer Senior Debt Securities, Senior
Subordinated Debt Securities or a combination of both under this
Prospectus, provided that the aggregate gross proceeds of the
--------
Debt Securities and the Preferred Stock offered by Viacom under
this Prospectus will not exceed $3,000,000,000.
The Debt Securities will represent unsecured general
obligations of Viacom. The Senior Debt Securities will be pari
passu with the other unsecured unsubordinated indebtedness of
Viacom. The Senior Subordinated Debt Securities will be
subordinated and subject in right of payment to the prior payment
in full of all Senior Obligations (as defined in "-- Certain
Definitions") of Viacom and will be pari passu with unsecured
---- -----
senior subordinated indebtedness of Viacom.
The Senior Debt Securities will be issued under an
Indenture to be executed by Viacom, the Debt Guarantors and The
First National Bank of Boston, as trustee (the "Senior
Indenture"), and the Senior Subordinated Debt Securities will be
issued under an Indenture to be executed by Viacom, the Debt
Guarantors and The First National Bank of Boston, as trustee (the
"Senior Subordinated Indenture"). In this Prospectus, the Senior
Indenture and the Senior Subordinated Indenture are sometimes
collectively referred to as the "Indentures" and individually as
an "Indenture", and the trustee under the Senior Indenture and
the trustee under the Senior Subordinated Indenture are sometimes
collectively referred to as the "Trustees" and individually as a
"Trustee". Copies of the Indentures have been filed as exhibits
to the Registration Statement of which this Prospectus is a part.
Section references used in this Prospectus refer to the sections
of both Indentures unless otherwise indicated.
The Indentures will provide that Debt Securities may be
issued in separate series thereunder without limitation as to
aggregate principal amount. The terms of each series of Debt
Securities will be established by or pursuant to a resolution of
the Board of Directors of Viacom and set forth or determined in
the manner provided in an Officers' Certificate or by a
supplemental indenture. (Section 301) The particular terms of
each series of Debt Securities offered by a Prospectus Supplement
will be described in such Prospectus Supplement relating to such
series.
The applicable Prospectus Supplement will describe the
following terms of the Debt Securities of each series: (1) the
title of the Debt Securities; (2) any limit on the aggregate
principal amount of the Debt Securities; (3) whether the Debt
Securities are to be issuable as Senior Debt Securities or Senior
Subordinated Debt Securities, or both; (4) the price or prices
(expressed as a percentage of the aggregate principal amount
thereof) at which the Debt Securities will be issued; (5) the
date or dates on which the Debt Securities will mature; (6) the
rate or rates per annum at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates will
be determined, and the date or dates from which any such interest
will accrue;
12
(7) the Interest Payment Dates, if any, on which any
such interest on the Debt Securities will be payable and the
Regular Record Date for any interest payable on any Interest
Payment Date; (8) each office or agency where, subject to the
terms of the Indenture as described below under "-- Payment and
Paying Agents", the principal of, premium, if any, and interest
on the Debt Securities will be payable and each office or agency
where, subject to the terms of the Indenture as described below
under "-- Form, Exchange, Registration and Transfer", the Debt
Securities may be presented for registration of transfer or
exchange; (9) the period or periods within which and the price or
prices at which the Debt Securities may, pursuant to any optional
redemption provisions, be redeemed, in whole or in part, and the
other detailed terms and provisions of any such optional
redemption provisions; (10) the obligation, if any, of Viacom to
redeem, repay or purchase the Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of the
Holder thereof and the period or periods within which and the
price or prices at which the Debt Securities will be redeemed,
repaid or purchased, in whole or in part, pursuant to such
obligation, and the other detailed terms and provisions of such
obligation; (11) the denominations in which any Debt Securities
will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (12) the currency or currency units of
payment of principal of and any premium and interest on the Debt
Securities; (13) any index used to determine the amount of
payments of principal of and any premium and interest on the Debt
Securities; (14) any covenants of Viacom applicable to the Debt
Securities; (15) any Events of Default applicable to the Debt
Securities in addition to, or in modification of, the Events of
Default described below; (16) any provisions in modification of
or in lieu of the terms of the Indenture described below under
"-- Defeasance and Covenant Defeasance" and the obligations to
which such covenant defeasance provisions shall apply; (17) any
provisions in modification or in lieu of the terms of the
Guarantee of the Debt Guarantors described below under
"Description of Senior Debt Securities -- Guarantees" or
"Description of Senior Subordinated Debt Securities --
Subordinated Guarantees", as the case may be; (18) the terms of
any exchangeability or prepayment provisions; and (19) any other
terms of the Debt Securities not inconsistent with the provisions
of the Indentures. (Section 301)
Debt Securities may be issued as Original Issue
Discount Debt Securities. An Original Issue Discount Debt
Security is a Debt Security, including any zero-coupon Debt
Security, which is issued at a price lower than the amount
payable upon the Stated Maturity thereof, and which provides
that, upon redemption or acceleration of the Maturity thereof, an
amount less than the amount payable upon the Stated Maturity
thereof and determined in accordance with the terms of such Debt
Security shall become due and payable. Special United States
federal income tax considerations applicable to Original Issue
Discount Debt Securities will be described in the Prospectus
Supplement relating thereto.
Form, Exchange, Registration and Transfer
Debt Securities of a series will be issuable in
registered form only. At the option of the Holder, subject to
the terms of the applicable Indenture, Debt Securities of any
series will be exchangeable for other Debt Securities of the same
series of any authorized denominations and of a like aggregate
principal amount and tenor.
Debt Securities may be presented for registration or
transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the
office of any transfer agent designated by Viacom for such
purpose with respect to any series of Debt Securities and
referred to in an applicable Prospectus Supplement, without a
service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture.
Such registration or transfer will be effected upon the Security
Registrar or such transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person
making the request. Viacom has appointed the Trustees as
Security Registrars. (Section 305) If a Prospectus Supplement
refers to any transfer agent (in addition to the Security
Registrar) initially designated by Viacom with respect to any
series of Debt Securities, Viacom may at any time rescind the
designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that
Viacom will be required to maintain a transfer agent in each
Place of Payment for such series.
13
Viacom may at any time designate additional transfer agents with
respect to any series of Debt Securities. (Section 1002)
In the event of any redemption in part, Viacom shall
not be required to (i) issue, register the transfer of or
exchange any Debt Security during a period beginning at the
opening of business 15 days before any selection for redemption
of Debt Securities of the series of which such Debt Security is a
part, and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been
given to all Holders of Debt Securities of such series to be
redeemed; or (ii) register the transfer of or exchange any Debt
Securities so selected for redemption in whole or in part, except
the unredeemed portion of any Debt Security being redeemed in
part. (Section 305)
Registered Global Securities
The registered Debt Securities of a series may be
issued in the form of one or more fully registered global Debt
Securities (a "Registered Global Security") that will be
deposited with a depositary (referred to in this section as the
"Depositary"), or with a nominee for a Depositary identified in
the Prospectus Supplement relating to such series. In such
cases, one or more Registered Global Securities will be issued in
a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of outstanding registered Debt
Securities of the series to be represented by such Registered
Global Security or Securities. Unless and until it is exchanged
in whole or in part for Debt Securities in definitive registered
form, a Registered Global Security may not be transferred except
as a whole by the Depositary for such Registered Global Security
to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with
respect to any portion of a series of Debt Securities to be
represented by a Registered Global Security will be described in
the Prospectus Supplement relating to such series. Viacom
anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Registered Global Security, the
Depositary for such Registered Global Security will credit, on
its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such
Registered Global Security to the accounts of persons that have
accounts with such Depositary ("participants"). The accounts to
be credited shall be designated by any underwriters or agents
participating in the distribution of such Debt Securities or by
Viacom if such Debt Securities are offered and sold directly by
Viacom. Ownership of beneficial interest in a Registered Global
Security will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial
interests in such Registered Global Security will be shown on,
and the transfer of that ownership will be effected only through,
records maintained by the Depositary for such Registered Global
Security (with respect to interests of participants) or by
participants or persons that hold through participants (with
respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities
take physical delivery of such securities in definitive form.
Such limits and such laws may impair the ability to transfer
beneficial interests in a Registered Global Security.
So long as the Depositary for a Registered Global
Security, or its nominee, is the registered owner of such
Registered Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global
Security for all purposes under the respective Indenture. Except
as set forth below, owners of beneficial interests in a
Registered Global Security will not be entitled to have the Debt
Securities represented by such Registered Global Security
registered in their names, will not receive or be entitled to
receive physical delivery of such Debt Securities in definitive
form and will not be considered the owners or holders under the
respective Indenture.
14
Principal, premium, if any, and interest payments on
Debt Securities represented by a Registered Global Security
registered in the name of a Depositary or its nominee will be
made to such Depositary or its nominee, as the case may be, as
the registered owner of such Registered Global Security. None of
Viacom, the Trustee under the respective Indenture or any paying
agent for such Debt Securities will have any responsibility or
liability for any aspect of the records to or payments made on
account of beneficial ownership interests in such Registered
Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Viacom expects that the Depositary for any Debt
Securities represented by a Registered Global Security, upon
receipt of any payment of principal, premium or interest, will
immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in
the principal amount of such Registered Global Security as shown
on the records of such Depositary. Viacom also expects that
payments by participants to owners of beneficial interests in
such Registered Global Security held through such participants
will be governed by standing instructions and customary
practices, as is now the case with the securities held for the
accounts of customers in bearer form or registered in "street
names", and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented
by a Registered Global Security is at any time unwilling or
unable to continue as Depositary and a successor Depositary is
not appointed by Viacom within 90 days or an Event of Default has
occurred and is continuing with respect to such Debt Securities,
Viacom will issue such Debt Securities in definitive form in
exchange for such Registered Global Security. In addition,
Viacom may at any time and in its sole discretion determine not
to have the Debt Securities of a series represented by one or
more Registered Global Securities and, in such event, will issue
Debt Securities of such series in definitive form in exchange for
the Registered Global Securities or Securities representing such
Debt Securities.
Further, if Viacom so specifies with respect to the
Debt Securities of a series, an owner of a beneficial interest in
a Registered Global Security representing such Debt Securities
may, on terms acceptable to Viacom and the Depositary for such
Registered Global Securities, receive such Debt Securities in
definitive form. In any such instance, an owner of a beneficial
interest in such a Registered Global Security will be entitled to
have Debt Securities equal in principal amount to such beneficial
interest registered in its name and will be entitled to physical
delivery of such Debt Securities in definitive form. Debt
Securities so issued in definitive form will, except as set forth
in the applicable Prospectus Supplement, be issued in
denominations of $100,000 and integral multiples of $1,000 in
excess thereof and will be issued in registered form only without
coupons.
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus
Supplement, principal of, premium, if any, and interest on
registered Debt Securities will be payable, subject to any
applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as Viacom may designate from time to time,
except that at the option of Viacom payment of any interest may
be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on a Debt Security on any
Interest Payment Date will be made to the Person in whose name
such Debt Security (or Predecessor Debt Security) is registered
at the close of business on the Regular Record Date for such
interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus
Supplement, the Corporate Trust Office of the Trustee in the City
of New York will be designated as a Paying Agent for Viacom for
payments with respect to the Debt Securities of each series. Any
Paying Agents initially designated by Viacom for the Debt
Securities of each series will be named in an applicable
Prospectus Supplement. Viacom may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or
approve a change in the
15
office through which any Paying Agent acts, except that Viacom will
be required to maintain a Paying Agent in each Place of Payment for
such series.
All moneys paid by Viacom to a Paying Agent for the
payment of the principal of, premium, if any, or interest on any
Debt Security of any series that remain unclaimed at the end of
two years after such principal, premium or interest shall have
become due and payable will be repaid to Viacom and the Holder of
such Debt Security will thereafter look only to Viacom and the
Debt Guarantors for payment thereof. (Section 1003)
Defaults and Remedies
The following are Events of Default with respect to a
series of Debt Securities under each Indenture, unless otherwise
indicated in an applicable Prospectus Supplement and except as
noted below: (1) default in the payment of any interest on any
Debt Security of such series issued under such Indenture when
due, and continuance of such default for a period of 30 days
whether or not, in the case of the Senior Subordinated Debt
Securities, such payment shall be prohibited by the terms of
Article Thirteen (Subordination) of the Senior Subordinated
Indenture; (2) default in the payment of the principal of or
premium, if any, on any Debt Security of such series when due and
payable, at maturity, upon acceleration, redemption or otherwise,
whether or not, in the case of the Senior Subordinated Debt
Securities, such payment shall be prohibited by the terms of
Article Thirteen (Subordination) of the Senior Subordinated
Indenture; (3) default in the performance, or breach, of any
other covenant or warranty of Viacom or the Debt Guarantors in
such Indenture unless otherwise specifically provided for,
continued for 60 days after written notice; (4) nonpayment upon
acceleration of indebtedness as described in the applicable
Prospectus Supplement; (5) failure to satisfy or discharge
certain material judgments against Viacom within 60 days; (6)
certain events of bankruptcy, insolvency or reorganization of
Viacom, any Debt Guarantor or certain Subsidiaries of Viacom; and
(7) any other Event of Default provided with respect to such
series of Debt Securities. (Section 501)
Unless otherwise specified in an applicable Prospectus
Supplement, if an Event of Default with respect to a series of
Debt Securities (other than as specified in (6) above) shall
occur and be continuing under an Indenture, either the applicable
Trustee or the Holders of not less than 25% in aggregate
principal amount of such series of Debt Securities outstanding
may declare immediately due and payable the "Default Amount",
which is defined as the unpaid principal (or, if the Securities
of that series are Original Issue Discount Debt Securities, such
portion of the principal amount thereof as may be specified in
the terms of that series) of (and premium, if any) and any
accrued interest in respect of each such Debt Security
outstanding; provided, however, that, with respect to the Senior
-------- -------
Subordinated Securities, if any Credit Agreement is then in
effect, such declaration shall not become effective until the
first to occur of (i) an acceleration under any Credit Agreement
and (ii) the fifth Business Day after notice of such declaration
is received by Viacom, the Debt Guarantors and each Agent Bank
(unless on or prior to such fifth Business Day Viacom or the Debt
Guarantors shall have discharged the Indebtedness, if any, that
is the subject of the Event of Default or otherwise cured the
default relating to the Event of Default); and provided further
-------- -------
that no action on the part of such Trustee or any Holder of such
Debt Securities is required for such declaration if an Event of
Default specified in (6) above shall occur and be continuing; and
provided further that, after such declaration, but before a
-------- -------
judgment or decree based on such declaration has been obtained,
the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of such series may, under certain
circumstances, rescind or annul such declaration if all Events of
Default, other than the nonpayment of accelerated principal, have
been cured or waived as provided in the Indenture. (Section 502)
The Holders of not less than a majority in principal amount of a
series of Debt Securities Outstanding also have the right to
waive certain past defaults under their respective Indenture.
(Section 513)
No Holder of any Debt Security of any series issued
under an Indenture has any right to institute any proceeding with
respect to such Indenture, or for any remedy thereunder, unless
(i) such Holder
16
has previously given to the Trustee with respect to such Indenture
written notice of a continuing Event of Default bunder such
Indenture, (ii) the Holders of not less than 25% in principal amount
of the Outstanding Debt Securities of such series issued under such
Indenture have made written request, and offered an indemnity
reasonably satisfactory, to such Trustee to institute such proceeding
as Trustee under the Indenture and (iii) the Trustee has not received
from the Holders of a majority in principal amount of the Outstanding
Debt Securities of such series a direction inconsistent with such
request and the Trustee has failed to institute such proceeding
within 60 days after receipt of such notice. (Section 507) Such
limitations do not apply, however, to a suit instituted by a Holder
of a Debt Security of such series for the enforcement of payment of
the principal of or premium, if any on, or any interest on such Debt
Security on or after the respective due dates expressed in such
Debt Security. (Section 508)
During the existence of an Event of Default, the
Trustee is required to exercise such rights and powers vested in
it under the Indenture and use the same degree of care and skill
in its exercise thereof as a prudent person would exercise under
the circumstances in the conduct of such person's own affairs.
Subject to the provisions of the Indenture relating to the duties
of the Trustee, in case an Event of Default shall occur and be
continuing, the Trustee is not under any obligation to exercise
any of its rights or powers under the Indenture at the request or
direction of any of the Holders unless such Holders shall have
offered to the Trustee security or indemnity reasonably
satisfactory to the Trustee. (Section 602) Subject to such
provisions for the indemnification of the Trustee, the Holders of
a majority in principal amount of a series of Debt Securities
Outstanding have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the
Trustee under the Indenture. (Section 512)
Viacom is required to furnish to each Trustee an annual
statement as to the performance by Viacom of its obligations
under each Indenture and as to any default in such performance.
Viacom is also required to notify each Trustee of any event that
is, or after notice or lapse of time or both would become, an
Event of Default. (Section 1004)
Meetings, Modification and Waiver
Modifications and amendments of an Indenture may be
made by Viacom and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series affected by such
modification or amendment; provided, however, that no such
-------- -------
modification or amendment may, without the consent of the Holder
of each Outstanding Debt Security affected thereby, (a) change
the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Debt Security or the terms of
any sinking fund or analogous payment with respect to any Debt
Security, (b) reduce the principal amount of, or premium or
interest on, any Debt Security, (c) change any obligation of
Viacom to pay additional amounts, (d) reduce the amount of
principal of an Original Issue Discount Debt Security payable
upon acceleration of the Maturity thereof or provable in
bankruptcy, (e) change the Place of Payment where, or the coin or
currency in which, any Debt Security or any premium or interest
thereon is payable, (f) impair the right to institute suit for
the enforcement of any payment on or with respect to any Debt
Security, (g) reduce the percentage in principal amount of
Outstanding Debt Securities of any series, the consent of whose
Holders is required for modification or amendment of such
Indenture or for waiver of compliance with certain provisions of
such Indenture or for waiver of certain defaults, (h) reduce the
requirements contained in such Indenture for quorum or voting,
(i) change any obligation of Viacom to maintain an office or
agency in the places and for the purposes required by such
Indenture, or (j) reduce the obligations of the Debt Guarantors
in respect of the due and punctual payment of the principal
thereof and premium, if any, and interest, if any, on, any
additional amounts or any sinking fund or analogous payment.
(Section 902)
The Holders of at least a majority in aggregate
principal amount of the Outstanding Debt Securities of a series
may, on behalf of the Holders of all the Debt Securities of that
series, waive, insofar as
17
that series is concerned, compliance by Viacom with certain
restrictive provisions of an Indenture. (Senior Indenture Section
1009 and Senior Subordinated Indenture Section 1010) The Holders
of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of a series may, on behalf of all
Holders of Debt Securities of that series, waive any past default
under the Indenture with respect to Debt Securities of that
series, except a default (a) in the payment of principal
of or any premium or interest on any Debt Security of
such series or (b) in respect of any other provision of
the Indenture that cannot be modified or amended without the
consent of the Holder of each Outstanding Debt Security of such
series affected thereby. (Section 513)
Each Indenture will provide that, in determining
whether the Holders of the requisite principal amount of the
Outstanding Debt Securities have given any request, demand,
authorization, direction, notice, consent or waiver thereunder or
are present at a meeting of Holders of Debt Securities for quorum
purposes, the principal amount of an Original Issue Discount Debt
Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as
of the date of such determination upon acceleration of the
Maturity thereof. (Section 101)
Each Indenture will contain provisions for convening
meetings of the Holders of Debt Securities of any or all series.
(Senior Indenture Section 1601 and Senior Subordinated Indenture
Section 1701) A meeting may be called at any time by the
Trustee, and also, upon request, by Viacom or the Holders of at
least 25% in aggregate principal amount of the Outstanding Debt
Securities of such series, in any such case upon notice given in
accordance with "-- Notices" below. (Senior Indenture Section
1602 and Senior Subordinated Indenture Section 1702) Except for
any consent that must be given by the Holder of each Outstanding
Debt Security affected thereby, as described above, any
resolution presented at a meeting or adjourned meeting at which a
quorum is present may be adopted by the affirmative vote of the
Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except for
-------- -------
any consent that must be given by the Holder of each Outstanding
Debt Security affected thereby, as described above, any
resolution with respect to any consent, waiver, request, demand,
notice, authorization, direction or other action that may be
given by the Holders of not less than a specified percentage in
principal amount of the Outstanding Debt Securities of a series
may be adopted at a meeting or an adjourned meeting at which a
quorum is present only by the affirmative vote of the Holders of
not less than such specified percentage in principal amount of
the Outstanding Debt Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with an
Indenture will be binding on all Holders of Debt Securities of
that series. The quorum at any meeting called to adopt a
resolution, and at any adjourned meeting, will be Persons holding
or representing a majority in principal amount of the Outstanding
Debt Securities of a series; provided, however, that, if any
-------- -------
action is to be taken at such meeting with respect to a consent,
waiver, request, demand, notice, authorization, direction or
other action that may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Debt
Securities of a series, the Persons holding or representing such
specified percentage in principal amount of the Outstanding Debt
Securities of such series will constitute a quorum. (Senior
Indenture Section 1604 and Senior Subordinated Indenture Section
1704)
Notices
Notices to Holders of Debt Securities will be given by
mail to the addresses of such Holders as they appear in the
Security Register. (Sections 101, 106)
Title
Viacom, the Trustee and any agent of Viacom or the
Trustee may treat the registered owner of any registered Debt
Security as the absolute owner thereof (whether or not such Debt
Security shall be overdue
18
and notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes. (Section 307)
Replacement of Debt Securities
Any mutilated Debt Security will be replaced by Viacom
at the expense of the Holder upon surrender of such Debt Security
to the Trustee. Debt Securities that become destroyed, lost or
stolen will be replaced by Viacom at the expense of the Holder
upon delivery to the Trustee of evidence of the destruction, loss
or theft thereof satisfactory to Viacom and the Trustee. In the
case of a destroyed, lost or stolen Debt Security, an indemnity
satisfactory to the Trustee and Viacom may be required at the
expense of the Holder of such Debt Security before a replacement
Debt Security will be issued. (Section 306)
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable Prospectus
Supplement for a series of Debt Securities, Viacom may elect
either (i) to defease and be discharged from any and all
obligations with respect to such outstanding Debt Securities
(except as otherwise provided in the Indenture) ("defeasance") or
(ii) to be released from its obligations with respect to certain
covenants that are described in the Indenture ("covenant
defeasance"), upon the deposit with the Trustee (or other
qualifying trustee), in trust for such purpose, of money and/or
Government Obligations that through the payment of principal and
interest in accordance with their terms will provide money in an
amount sufficient, without reinvestment, to pay the principal of,
premium, if any, and interest on the Debt Securities of such
series to Maturity or redemption, as the case may be, and any
mandatory sinking fund or analogous payments thereon. As a
condition to defeasance or covenant defeasance, Viacom must
deliver to the Trustee an Opinion of Counsel to the effect that
the Holders of the Debt Securities of such series will not
recognize income, gain or loss for United States federal income
tax purposes as a result of such defeasance or covenant
defeasance and will be subject to United States federal income
tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant
defeasance had not occurred. Such Opinion of Counsel, in the
case of defeasance under clause (i) above, must refer to and be
based upon a ruling of the Internal Revenue Service or a change
in applicable United States federal income tax law occurring
after the date of the Indenture. (Senior Indenture Article
Fifteen and Senior Subordinated Indenture Article Sixteen)
Viacom may exercise its defeasance option with respect
to Debt Securities of any series notwithstanding its prior
exercise of its covenant defeasance option. If Viacom exercises
its defeasance option, payment of the Debt Securities of such
series may not be accelerated because of an Event of Default. If
Viacom exercises its covenant defeasance option, payment of the
Debt Securities of such series may not be accelerated by
reference to any covenant from which Viacom is released as
described under clause (ii) above. However, if acceleration were
to occur for other reasons, the realizable value at the
acceleration date of the money and Government Obligations in the
defeasance trust could be less than the principal and interest
then due on the Debt Securities of such series, in that the
required deposit in the defeasance trust is based upon scheduled
cash flows rather than market value, which will vary depending
upon interest rates and other factors. In the event of full
defeasance by Viacom, the Guarantees will cease to exist.
Governing Law
The Indentures and the Debt Securities will be governed
by, and construed in accordance with, the laws of the State of
New York. (Section 113)
19
Regarding the Trustee
Viacom and Viacom International maintain deposit
accounts and banking and borrowing relations with The First
National Bank of Boston, the trustee under the Senior Indenture
and the Senior Subordinated Indenture, and such trustee is
currently a lender to Viacom and Viacom International.
Certain Definitions
Unless otherwise specified in an applicable Prospectus
Supplement, the following definitions are applicable to one or
both of the Indentures relating to the Debt Securities:
"Capitalized Lease" means any Indebtedness represented
by a lease obligation of a Person incurred with respect to
real property or equipment acquired or leased by such Person and
used in its business that is required to be recorded as a
capital lease in accordance with generally accepted
accounting principles consistently applied as in effect from time
to time.
"Credit Agreement" means any credit agreement under
which Viacom is a borrower, in the principal amount of at
least $100 million.
"Indebtedness" of any Person means, without
duplication, whether contingent or otherwise, (i) any
obligation of such Person for money borrowed, (ii) any obligation
of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) reimbursement obligations of
such Person in respect of letters of credit or other similar
instruments which support financial obligations which would
otherwise become Indebtedness, (iv) obligations of such Person
under Capitalized Leases (other than in respect of (x)
telecommunications equipment including, without limitation,
satellite transponders, and (y) theme park equipment and
attractions), and (v) indebtedness of any third party secured by
a Lien on the assets of such Person. When used with respect
to Viacom, the term "Indebtedness" also includes
Indebtedness of any Debt Guarantor or Restricted Subsidiary of
such Person guaranteed by Viacom. When used with respect to
Viacom, any Debt Guarantor or Restricted Subsidiary, the term
"Indebtedness" excludes any Indebtedness
Guarantor or any Restricted Subsidiary.
"Liens" means pledges, mortgages, liens, encumbrances
and other security interests.
"Officers' Certificate" means a certificate signed by
two Officers or by any Officer and either an Assistant
Treasurer or an Assistant Secretary of Viacom or a Debt
Guarantor, as the case may be, and delivered to the Trustee.
"Principal Property" means any parcel of real property
and related fixtures or improvements (other than
telecommunications equipment, including, without limitation,
satellite transponders) owned by Viacom, any Debt Guarantor
or wholly owned Subsidiary and located in the United States, the
aggregate book value of which on the date of determination
exceeds $500 million, other than any such real property and
related fixtures or improvements which, as determined in good
faith by the Board of Directors of Viacom, is not of
material importance to the total business conducted by Viacom and
its Subsidiaries, taken as a whole.
"Restricted Subsidiary" means a corporation all of the
outstanding voting stock of which is owned, directly or
indirectly, by Viacom or by one or more of its Subsidiaries, or
by Viacom and one or more of its Subsidiaries, which is
incorporated under the laws of a State of the United States,
and which owns a Principal Property.
20
"Senior Indebtedness" means, with respect to any
Person, any Indebtedness which is not by its terms
subordinate or junior in any respect to any other Indebtedness.
(Senior Subordinated Indenture Section 101)
"Senior Obligations" of any Person means (i) Senior
Indebtedness (excluding clause (v) of the definition of
Indebtedness and the parenthetical in clause (iv) of such
definition), (ii) swap agreements of such Person, (ii)
guarantees of Indebtedness, (iv) all Capitalized Leases not
otherwise included in Senior Indebtedness and (v) all
letters of credit and similar instruments not otherwise included
in Senior Indebtedness.
"Subsidiary" of any Person means (i) a corporation a
majority of the outstanding voting stock of which is at the
time, directly or indirectly, owned by such Person by one or more
Subsidiaries of such Person, or by such Person and one or
more Subsidiaries thereof or (ii) any other Person (other
than a corporation), including, without limitation, a partnership
or joint venture, in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries
thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest
entitled to vote in the election of directors, managers or
trustees thereof (or other Person performing similar functions).
DESCRIPTION OF SENIOR DEBT SECURITIES
The following terms and conditions apply solely to
Senior Debt Securities. See "Description of Debt Securities" for
other terms and conditions that are also applicable to Senior
Debt Securities.
Ranking
The payment of the principal of and premium, if any,
and any interest on the Senior Debt Securities will rank pari
----
passu with all other unsecured and unsubordinated indebtedness of
-----
Viacom.
Guarantees
Pursuant to the Guarantees which will be endorsed on
the Senior Debt Securities, Viacom International and, from and
after the Paramount Effective Time, Paramount will, jointly and
severally, unconditionally guarantee the due and punctual payment
of the principal of, and premium, if any, and any interest on the
Senior Debt Securities, when and as the same shall become due and
payable, whether at maturity, upon redemption, upon declaration
of acceleration or otherwise.
The Guarantees of Senior Debt Securities of each Debt
Guarantor represent unsecured general obligations of such Debt
Guarantor, will be pari passu with the other unsecured
----------
unsubordinated indebtedness of such Debt Guarantor and will be
senior to the Subordinated Guarantees (as defined below) of such
Debt Guarantor. The Guarantees of Paramount of Senior Debt
Securities will be pari passu with respect to the $231.4 million
----------
aggregate principal amount of Paramount's 7% Subordinated
Debentures due July 1, 2003 currently outstanding. See "Certain
Considerations -- Fraudulent Conveyance Considerations".
21
DESCRIPTION OF SENIOR SUBORDINATED DEBT SECURITIES
The following terms and conditions apply solely to
Senior Subordinated Debt Securities. See "Description of Debt
Securities" for other terms and conditions that are also
applicable to Senior Subordinated Debt Securities.
Subordination
The payment of the principal of and premium, if any,
and any interest on the Senior Subordinated Debt Securities will,
to the extent set forth in the Senior Subordinated Indenture, be
subordinated in right of payment to the prior payment in full of
all Senior Obligations of Viacom. (Senior Subordinated Indenture
Section 1301) Subject to any exceptions provided for in the
applicable Prospectus Supplement, upon any payment or
distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy,
insolvency or similar proceedings of Viacom, the holders of all
Senior Obligations of Viacom will first be entitled to receive
payment in full of all amounts due or to become due thereon
before the Holders of the Senior Subordinated Debt Securities
will be entitled to receive any payment in respect of the
principal of, premium, if any, or any interest on the Senior
Subordinated Debt Securities, and in the event that,
notwithstanding the foregoing, the Trustee under the Senior
Subordinated Indenture or the Holder of any Senior Subordinated
Debt Security receives any payment or distribution of assets of
any kind or character before all Senior Obligations of Viacom are
paid in full, then such payment or distribution will be required
to be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of
Viacom for application to the payment of all Senior Obligations
of Viacom remaining unpaid, to the extent necessary to pay all
Senior Obligations of Viacom in full. (Senior Subordinated
Indenture Section 1302) No payments on account of principal,
premium, if any, or any interest in respect of the Senior
Subordinated Debt Securities may be made if there shall have
occurred and be continuing (i) a default in any payment with
respect to any Senior Obligations of Viacom beyond any applicable
grace period, (ii) a nonpayment event of default with respect to
any Senior Obligations of Viacom resulting in the acceleration of
the maturity thereof, (iii) any other nonpayment event of default
with respect to any Senior Obligations of Viacom permitting the
holders thereof to accelerate the maturity thereof after Viacom
or the Trustee under the Senior Subordinated Indenture is
notified of such event by a representative of a holder of Senior
Obligations of Viacom (until the earlier of (A) 180 days
thereafter and (B) the date, if any, on which such event is cured
or waived or the related indebtedness is discharged) or (iv) the
pendency of any judicial proceeding with respect to any such
default; and in the event that Viacom makes any payment to the
Trustee under the Senior Subordinated Indenture or the Holder of
any Senior Subordinated Debt Security prohibited by the
foregoing, then such payment will be required to be paid over and
delivered forthwith to the appropriate Agent Bank. (Senior
Subordinated Indenture Section 1303)
Subject to the payment in full of all Senior
Obligations of Viacom, the Holders of the Senior Subordinated
Debt Securities shall be subrogated to the rights of the holders
of Senior Obligations of Viacom to receive payments or
distributions of assets of Viacom applicable to Senior
Obligations of Viacom until the Senior Subordinated Debt
Securities are paid in full. (Senior Subordinated Indenture
Section 1305)
By reason of such subordination, in the event of
insolvency, the holders of Senior Obligations of Viacom may
recover more, ratably, than the Holders of the Senior
Subordinated Debt Securities.
At ________, 199_, Viacom had outstanding approximately
$_____ billion of Senior Obligations, determined in accordance
with generally accepted accounting principles.
22
Subordinated Guarantees
Pursuant to the subordinated guarantees which will be
endorsed on the Senior Subordinated Debt Securities (the
"Subordinated Guarantees"), Viacom International and, from and
after the Paramount Effective Time, Paramount will, jointly and
severally, unconditionally guarantee the due and punctual payment
of the principal of, and premium, if any, and any interest on the
Senior Subordinated Debt Securities, when and as the same shall
become due and payable, whether at maturity, upon redemption,
upon declaration of acceleration or otherwise. No payment,
however, may be made on any Subordinated Guarantee during any
period in which no payment may be made on the Senior Subordinated
Debt Security on which such Subordinated Guarantee is endorsed in
accordance with the subordination provisions contained in Article
Thirteen of the Senior Subordinated Indenture. See "Certain
Considerations -- Fraudulent Conveyance Considerations".
The Subordinated Guarantees of each Debt Guarantor will
be subordinate in right of payment to the same extent as
described with respect to Viacom under "-- Subordination" above
to the prior payment in full of all Senior Obligations of such
Debt Guarantor, including the Guarantees by such Debt Guarantor
of the Senior Debt Securities; will be pari passu with the other
unsecured senior subordinated indebtedness of such Debt
Guarantor. The Subordinated Guarantees of Paramount will be pari
passu with respect to the $231.4 million aggregate principal
amount of Paramount's 7% Subordinated Debentures due July 1, 2003
currently outstanding.
At ________, 199_, Viacom International and Paramount
had outstanding approximately $________ billion and $________
billion of Senior Obligations, respectively, determined in
accordance with generally accepted accounting principles. In
addition, at such date, under the terms of the Viacom's November
19, 1993 Credit Agreement, Viacom was obligated to cause
Paramount, upon the Paramount Effective Time, to guarantee all
indebtedness of Viacom under such Credit Agreement.
DESCRIPTION OF PREFERRED STOCK
Under its Restated Certificate of Incorporation (the
"Viacom Certificate of Incorporation"), Viacom is authorized to
adopt resolutions providing for the issuance, in one or more
series, of up to 100,000,000 shares of its preferred stock, with
such powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or
restrictions thereof as shall be adopted by the Board of
Directors of Viacom or a duly authorized committee thereof.
The description below sets forth certain general terms
and provisions of Viacom's Preferred Stock covered by this
Prospectus. The specific terms of any series of the Preferred
Stock will be described in the Prospectus Supplement relating to
such Offered Securities. The following summaries of certain
provisions of the Preferred Stock offered hereby do not purport
to be complete and are subject to, and are qualified in their
entirety by reference to, the Viacom Certificate of Incorporation
and the certificate of designations relating to the particular
series of Preferred Stock.
If so indicated in the applicable Prospectus
Supplement, the terms of the Offered Securities may differ from
the terms set forth below, except those terms required by the
Viacom Certificate of Incorporation.
General
The Preferred Stock of any series offered hereby will,
when issued, be fully paid and nonassessable and holders thereof
will have no preemptive rights. Reference is made to the
Prospectus Supplement related to the Preferred Stock offered
thereby for specific terms, including: (1) the title and stated
value of such Preferred Stock; (2) the number of shares of such
Preferred Stock offered, the liquidation
23
preference per share and the offering price of such Preferred
Stock; (3) the dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such
Preferred Stock; (4) the date from which dividends
on such Preferred Stock shall accumulate, if applicable;
(5) the procedures for any auction and remarketing, if any,
of such Preferred Stock; (6) the provision for a sinking fund,
if any, for such Preferred Stock; (7) the provision for
redemption, if applicable, of such Preferred Stock;
(8) the terms of any conversion or exchangeability provisions;
(9) any listing of such Preferred Stock on any securities
exchange; (10) whether interests in such Preferred Stock will be
represented by Depositary Shares; (11) any other specific terms,
preferences, rights, limitations or restrictions of such
Preferred Stock; and (12) a discussion of federal income tax
considerations applicable to such Preferred Stock.
Subject to the Viacom Certificate of Incorporation and
to any limitations contained in then outstanding Preferred Stock,
Viacom may issue additional series of Preferred Stock, at any
time or from time to time, with such powers, preferences and
relative, participating, optional or other special rights and
qualifications, limitations or restrictions thereof, as the Board
of Directors of Viacom or any duly authorized committee thereof
shall determine, all without further action of the stockholders,
including holders of then outstanding Preferred Stock, of Viacom.
The Preferred Stock offered hereby will rank senior to Viacom's
common stock with respect to dividends and distribution of assets
upon liquidation or winding up. Issuance of a new series of
Preferred Stock, while providing desirable flexibility in
connection with possible acquisitions or other corporate
purposes, could contain terms that adversely affect the voting
power and other rights of holders of other series of Preferred
Stock and could have the effect of making it more difficult for a
third party to acquire, or discouraging a third party from
acquiring, a majority of the outstanding voting stock of Viacom.
The Viacom Certificate of Incorporation provides that,
so long as Viacom or any of its subsidiaries holds any
authorization from the Federal Communications Commission, Viacom
may prohibit the ownership or voting of a percentage of its
equity securities in order to ensure compliance with the
requirements of the Communications Act of 1934, as amended, and
regulations thereunder.
Dividends
Holders of the Preferred Stock offered hereby will be
entitled to receive cash dividends, when, as and if declared by
the Board of Directors of Viacom out of assets of Viacom legally
available for payment, at such rate and on such dates as will be
set forth in the applicable Prospectus Supplement. Each dividend
will be payable to holders of record as they appear on the stock
books of Viacom on the record date fixed by its Board of
Directors. Dividends, if cumulative, will be cumulative from and
after the date set forth in the applicable Prospectus Supplement.
All dividends declared on any particular series of
Preferred Stock offered hereby for any dividend period and on any
class or series of stock of Viacom ranking on a parity with such
particular series of Preferred Stock as to dividends shall be
declared pro rata so that the amounts of dividends per share
declared for such period on such particular series of Preferred
Stock and on any other class or series of stock ranking on a
parity with such particular series of Preferred Stock as to
dividends that were outstanding during such period shall in all
cases bear to each other the same ratio that the accrued
dividends per share on the shares of such particular series of
Preferred Stock and such other stock bear to each other. As of
the date of this Prospectus, Viacom has issued 24 million shares
of Series A Preferred Stock and 24 million shares of Series B
Preferred Stock, both of which classes will rank equally with or
senior to any particular series of Preferred Stock offered hereby
as to dividends. Holders of shares of Series A Preferred Stock
are entitled to receive cumulative cash dividends at the rate per
annum of $1.25 per share and holders of Series B Preferred Stock
are entitled to receive cumulative cash dividends at the rate per
annum of $2.50 per share. In addition, in connection with the
Paramount Merger, Viacom has reserved for issuance a new series
of preferred stock (the "Series C Preferred Stock"). If and when
issued, the Series C Preferred Stock would also rank equally with
or senior to any particular series of Preferred Stock offered
hereby as to dividends. Holders of shares of Series C Preferred
Stock, if issued, would be entitled to receive cumulative cash
dividends at the rate per annum of $2.50 per share
24
until the tenth anniversary of the Paramount Effective
Time, and at the rate per annum of $5.00 per
share thereafter. The terms of the Series A Preferred Stock
and Series B Preferred Stock contain, and the terms of the
Series C Preferred Stock if issued would contain, restrictions on
dividend declarations on parity stock comparable to those described
above in this paragraph.
So long as any shares of any particular series of
Preferred Stock are outstanding, Viacom may not (i) declare or
pay any dividend or distribution on any class or series of stock
of Viacom ranking junior to such particular series of Preferred
Stock as to dividends or (ii) redeem or set apart funds for the
purchase or redemption of any such junior stock through a sinking
fund or otherwise, unless all accrued and unpaid dividends with
respect to such particular series of Preferred Stock have been
paid or funds have been set apart for payment through the current
dividend period.
Liquidation Rights
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Viacom, the holders of
any particular series of Preferred Stock offered hereby will be
entitled to receive out of assets of Viacom available for
distribution to stockholders, before any distribution of assets
is made to holders of any stock ranking junior to such particular
series of Preferred Stock on liquidation, dissolution or winding
up of Viacom, liquidating distributions in the amount set forth
in the applicable Prospectus Supplement plus all accrued and
unpaid dividends. If, upon any liquidation, dissolution or
winding up of Viacom, the assets of Viacom, or proceeds thereof,
distributable among the holders of such particular series of
Preferred Stock shall be insufficient to pay in full the
preferential amount set forth in the applicable Prospectus
Supplement and the liquidation preference with respect to any
other shares of stock ranking, as to liquidation, dissolution or
winding up, on a parity with such particular series of Preferred
Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of shares of such particular series
of Preferred Stock and any such other stock ratably in accordance
with the respective amounts which would be payable on such
particular series of Preferred Stock and any such other stock if
all amounts payable thereon were paid in full. The Series A
Preferred Stock and the Series B Preferred Stock will rank, and,
upon issuance, the Series C Preferred Stock would rank, equally
with or senior to any particular series of Preferred Stock
offered hereby as to distribution of assets upon liquidation,
dissolution or winding up. In the event of any liquidation,
dissolution or winding up of Viacom, whether voluntary or
involuntary, holders of shares of Series A Preferred Stock,
Series B Preferred Stock and, if issued, Series C Preferred
Stock, shall receive $25.00 per share, $50.00 per share and
$50.00 per share, respectively, plus in each case an amount per
share equal to all dividends accrued and unpaid thereon to the
date of final distribution to such holders. The terms of the
Series A Preferred Stock and Series B Preferred Stock contain,
and the terms of the Series C Preferred Stock if issued would
contain, restrictions on liquidation preference on parity stock
comparable to those described above in this paragraph. After
payment of the full amount of the liquidating distribution to
which they are entitled, the holders of the Preferred Stock
offered hereby will not be entitled to any further participation
in any distribution of assets by Viacom. A consolidation or
merger of Viacom with or into any other corporation or
corporations or a sale of all or substantially all of the assets
of Viacom shall not be deemed to be a liquidation, dissolution or
winding up of Viacom.
Redemption
A series of the Preferred Stock offered hereby may be
redeemable, in whole or in part, at the option of Viacom, at the
times and at the redemption prices set forth in the applicable
Prospectus Supplement.
Voting Rights
Except as indicated below or in the applicable
Prospectus Supplement, or except as expressly required by
applicable law, the holders of the Preferred Stock offered hereby
will not be entitled to vote. Except as indicated in the
applicable Prospectus Supplement, when and if any series is
entitled to vote, each share in such series will be entitled to
one vote.
25
If the equivalent of six quarterly dividends payable on
any series of Preferred Stock offered hereby are in default, then
the number of directors of Viacom will be increased by two and
the holders of all such series of Preferred Stock offered hereby,
together with any other series of Preferred Stock ranking on a
parity with such series as to dividends or upon liquidation,
dissolution or winding up which are in default, voting as a class
without regard to series, will be entitled to elect two
additional directors to Viacom's Board at Viacom's next annual
meeting of stockholders and at each subsequent annual meeting
until all such dividends in default have been paid in full or
declared and set apart for payment.
Changes to the Viacom Certificate of Incorporation
which adversely affect the rights of the holders of any series of
Preferred Stock offered hereby will require two-thirds approval
of the outstanding shares of such series.
26
DESCRIPTION OF DEPOSITARY SHARES
The description below sets forth certain general terms
and provisions of the Depositary Shares. The specific terms of
the Depositary Shares offered by any Prospectus Supplement (the
"Offered Depositary Shares") and a discussion of federal income
tax considerations applicable thereto will be described in the
Prospectus Supplement relating to such Offered Depositary Shares.
The following summaries of certain provisions of the Depositary
Shares do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the Deposit
Agreement and the Depositary Receipts referred to below.
If so indicated in the applicable Prospectus
Supplement, the terms of the Offered Depositary Shares may differ
from the terms set forth below.
General
Viacom may, at its option, elect to offer fractional
interests in the Preferred Stock offered hereby, rather than full
shares of the Preferred Stock. In the event such option is
exercised, Viacom will provide for the issuance by a depositary
to the public of receipts for Depositary Shares, each of which
will represent a fractional interest (to be set forth in the
Prospectus Supplement relating to a particular series of the
Viacom Preferred Stock) in a share of a particular series of the
Preferred Stock, as described below.
The shares of any series of Preferred Stock offered
hereby represented by the Depositary Shares will be deposited
under a Deposit Agreement (the "Deposit Agreement") between
Viacom and a bank or trust company selected by Viacom having its
principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Preferred Stock
Depositary"). The applicable Prospectus Supplement will set
forth the name and address of the Preferred Stock Depositary.
Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the
applicable fractional interest in a Preferred Stock represented
by such Depositary Share, to all the rights and preferences of
the Preferred Stock represented by such Depositary Share
(including dividend, voting, redemption, conversion, exchange and
liquidation rights).
The Depositary Shares will be evidenced by depositary
receipts issued pursuant to the Deposit Agreement ("Depositary
Receipts"). Depositary Receipts will be distributed to those
persons purchasing the fractional interests in the shares of the
related series of Preferred Stock in accordance with the terms of
the offering described in the related Prospectus Supplement.
Dividends and Other Distributions
The Preferred Stock Depositary will distribute all cash
dividends or other cash distributions received in respect of the
related series of Preferred Stock to the record holders of
Depositary Shares relating to such series of Preferred Stock in
proportion to the number of such Depositary Shares owned by such
holders on the relevant record date. The Preferred Stock
Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary
Shares a fraction of one cent, and any balance not so distributed
shall be added to and treated as part of the next sum received by
the Preferred Stock Depositary for distribution to record holders
of Depositary Shares.
In the event of a distribution other than in cash, the
Preferred Stock Depositary will distribute property received by
it to the record holders of Depositary Shares entitled thereto in
proportion to the number of such Depositary Shares owned by such
holders, unless the Preferred Stock Depositary determines that it
is not feasible to make such distribution, in which case the Preferred
Stock Depositary may, with the approval of Viacom, sell such
property and distribute the net proceeds from such sale to
such holders.
27
The Deposit Agreement will also contain provisions
relating to the manner in which any subscription or similar
rights offered by Viacom to holders of the Preferred Stock shall
be made available to holders of Depositary Shares.
Withdrawal of Stock
Upon surrender of the Depositary Receipts at the
corporate trust office of the Preferred Stock Depositary (unless
the related Depositary Shares have previously been called for
redemption), and upon payment of the charges provided in the
Deposit Agreement and subject to the terms hereof, the holder of
the Depositary Shares evidenced thereby will be entitled to
delivery at such office, to or upon such holder's order, of the
number of whole shares of the related series of the Preferred
Stock and any money or other property represented by such
Depositary Shares. Holders of Depositary Shares will be entitled
to receive whole shares of the related series of Preferred Stock
on the basis set forth in the related Prospectus Supplement for
such series of Preferred Stock, but holders of such whole shares
of Preferred Stock will not thereafter be entitled to receive
Depositary Shares therefor. If the Depositary Receipts delivered
by the holder evidence a number of Depositary Shares in excess of
the number of Depositary Shares representing the number of whole
shares of the related Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the
same time a new Depositary Receipt evidencing such excess number
of Depositary Shares.
Redemption of Depositary Shares
Whenever Viacom redeems Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will
redeem as of the same redemption date the number of Depositary
Shares representing the Preferred Stock so redeemed, provided
Viacom shall have paid in full to the Preferred Stock Depositary
the redemption price of the Preferred Stock to be redeemed plus
an amount equal to any accrued and unpaid dividends thereon to
the date fixed for redemption. The redemption price per
Depositary Share will be equal to the applicable fraction of the
redemption price per share payable with respect to such series of
the Preferred Stock. If less than all the Depositary Shares are
to be redeemed, the Depositary Shares to be redeemed will be
selected by lot or pro rata or other equitable method, in each
case as may be determined by Viacom.
After the date fixed for redemption, the Depositary
Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary
Shares so called for redemption will cease, except the right to
receive the moneys payable upon such redemption and any money or
other property to which the holders of such Depositary Shares
were entitled upon such redemption upon surrender to the
Preferred Stock Depositary of the Depositary Receipts evidencing
such Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the
holders of the Preferred Stock are entitled to vote, the
Preferred Stock Depositary will mail the information contained in
such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Stock. Each record holder of
such Depositary Shares on the record date (which will be the same
date as the record date for the Preferred Stock) will be entitled
to instruct the Preferred Stock Depositary as to the exercise of
the voting rights pertaining to the number of shares of Preferred
Stock represented by such Depositary Shares in accordance with
such instructions, and Viacom will agree to take all reasonable
action that may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting
Preferred Stock to the extent it does not receive specific
instructions from the holders of Depositary Shares representing
such Preferred Stock.
28
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the
Depositary Shares and any provision of the Deposit Agreement may
at any time be amended by agreement between Viacom and the
Preferred Stock Depositary. However, any amendment that
materially and adversely alters the rights of the existing
holders of Depositary Shares will not be effective unless such
amendment has been approved by the record holders of at least a
majority of the Depositary Shares then outstanding. The Deposit
Agreement may be terminated by Viacom at any time upon not less
than 60 days' prior written notice to the Preferred Stock
Depositary, in which case the Preferred Stock Depositary shall
deliver or make available for delivery to holders of Depositary
Shares, upon surrender of such Depositary Shares, such number of
whole or fractional shares of the related series of Preferred
Stock as are represented by such Depositary Shares. The Deposit
Agreement shall terminate automatically after all outstanding
Depositary Shares have been redeemed or there has been a final
distribution in respect of the Preferred Stock represented by
such Depositary Shares in connection with any liquidation,
dissolution or winding up of Viacom and such distribution has
been distributed to the holders of the related Depositary Shares.
Charges of Depositary
Viacom will pay all transfer and other taxes and
governmental charges arising solely from the existence of the
depositary arrangements. Viacom will pay the fees and expenses
of the Preferred Stock Depositary in connection with the
performance of its duties under the Deposit Agreement. Holders
of Depositary Shares will pay transfer and other taxes and
governmental charges in connection with the transfer, exchange,
surrender or split-up of Depositary Receipts and such other
charges as are expressly provided in the Deposit Agreement to be
for their accounts.
Miscellaneous
The Preferred Stock Depositary will forward to the
holders of Depositary Shares all reports and communications from
Viacom that are delivered to the Preferred Stock Depositary and
that Viacom is required to furnish to the holders of the
Preferred Stock offered hereby.
Neither the Preferred Stock Depositary nor Viacom will
be liable if it is prevented or delayed by law or any
circumstance beyond its control in performing its obligations
under the Deposit Agreement. The obligations of Viacom and the
Preferred Stock Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder
and neither entity will be obligated to prosecute or defend any
legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. Each entity
may rely on written advice of counsel or accountants, or
information provided by persons representing Preferred Stock for
deposit, holders of Depositary Shares or other persons believed
to be competent, and on documents believed to be genuine.
In the event the Preferred Stock Depositary shall
receive conflicting claims, requests or instructions from any
holders of Depositary Shares, on the one hand, and Viacom, on the
other hand, the Preferred Stock Depositary shall be entitled to
act on such claims, requests or instructions received from
Viacom.
Resignation and Removal of Depositary
The Preferred Stock Depositary may resign at any time
by delivering to Viacom notice of its election to do so, and
Viacom may at any time remove the Preferred Stock Depositary, any
such resignation or removal to take effect upon the appointment
of a successor Preferred Stock Depositary and its acceptance of
such appointments. Such successor Preferred Stock Depositary
must be appointed within 60 days after delivery
29
of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having
a combined capital and surplus of at least $50,000,000.
30
PLAN OF DISTRIBUTION
Viacom may offer the Offered Securities directly to
purchasers, to or through underwriters or through dealers or
agents. Any such underwriter(s), dealer(s) or agent(s) involved
in the offer and sale of the Offered Securities in respect of
which this Prospectus is delivered will be named in the
Prospectus Supplement. The Prospectus Supplement with respect to
such Offered Securities will also set forth the terms of the
offering of such Offered Securities, including the purchase price
of such Offered Securities and the proceeds to Viacom from such
sale, any underwriting discounts and other items constituting
underwriters' compensation, any initial public offering price and
any discounts or concessions allowed or reallowed or paid to
dealers and any securities exchanges on which such Offered
Securities may be listed.
If underwriters are used in an offering of Offered
Securities, the name of each managing underwriter, if any, and
any other underwriters and the terms of the transaction,
including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement relating to such offering and
the Offered Securities will be acquired by the underwriters for
their own accounts and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time
of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time. It is anticipated that any
underwriting agreement pertaining to any Offered Interests will
(i) entitle the underwriters to indemnification by Viacom against
certain civil liabilities under the Interests Act, or to
contribution with respect to payments which the underwriters may
be required to make in respect thereof, (ii) provide that the
obligations of the underwriters will be subject to certain
conditions precedent and (iii) provide that the underwriters will
be obligated to purchase all Offered Securities in a particular
offering if any such Offered Securities are purchased.
If a dealer is used in an offering of Offered
Securities, Viacom will sell such Offered Securities to the
dealer, as principal. The dealer may then resell such Offered
Securities to the public at varying prices to be determined by
such dealer at the time of resale. The name of the dealer and
the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
If an agent is used in an offering of Offered
Securities, the agent will be named, and the terms of the agency
will be set forth, in the Prospectus Supplement relating thereto.
Unless otherwise indicated in such Prospectus Supplement, an
agent will act on a best efforts basis for the period of its
appointment.
Dealers and agents named in a Prospectus Supplement may
be deemed to be underwriters (within the meaning of the
Securities Act) of the Offered Securities described therein and,
under agreements which may be entered into with Viacom, may be
entitled to indemnification by Viacom against certain civil
liabilities under the Securities Act. Underwriters, dealers and
agents may be customers of, engage in transactions with, or
perform services for, Viacom, Viacom International or Paramount
in the ordinary course of business.
Offers to purchase Offered Securities may be solicited,
and sales thereof may be made, by Viacom directly to
institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will
be set forth in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, Viacom
will authorize underwriters or other agents of Viacom to solicit
offers by certain institutional investors to purchase Offered
Securities from Viacom pursuant to contracts providing for
payment and delivery at a future date. Institutional investors
with which such contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others,
but in all cases such purchasers must
31
be approved by Viacom. The obligations of any purchaser under any
such contract will not be subject to any conditions except that
(1) the purchase of the Offered Securities shall not at the
time of delivery be prohibited under the laws of any
jurisdiction to which such purchaser is subject and (2) if
the Offered Securities are also being sold to underwriters,
Viacom shall have sold to such underwriters the Offered
Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of
the validity or performance of such contracts.
The anticipated date of delivery of Offered Securities
will be set forth in the Prospectus Supplement relating to each
offering.
LEGAL MATTERS
The validity of the Offered Securities and, if
applicable, the related Guarantees will be passed upon for
Viacom, Viacom International and Paramount by Shearman &
Sterling, New York, New York, counsel for such companies, and for
any underwriters by Hughes Hubbard & Reed and/or Simpson Thacher
& Bartlett, New York, New York, or such other counsel as may be
named in the applicable Prospectus Supplement. Hughes Hubbard &
Reed has from time to time performed legal services for Viacom
International. Simpson Thacher & Bartlett has from time to time
performed legal services for Paramount and Viacom International.
EXPERTS
The consolidated financial statements and schedules of
Viacom incorporated in this Prospectus by reference to its Annual
Report on Form 10-K for the year ended December 31, 1993, as
amended by Form 10-K/A Amendment No. 1, have been so incorporated
in reliance on the reports of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements and schedules of
Paramount incorporated by reference in this Prospectus and
Registration Statement at April 30, 1993 and at October 31, 1992
and 1991, and for the six-month period ended April 30, 1993, and
for each of the three years in the period ended October 31, 1992
included in its Transition Report on Form 10-K for the six-month
period ended April 30, 1993, as amended by Form 10-K/A Amendments
No. 1, 2 and 3 have been audited by Ernst & Young, independent
auditors, as set forth in their reports thereon included therein
and incorporated herein by reference. Such consolidated
financial statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
32
SUBJECT TO COMPLETION, DATED MAY 5, 1994
PROSPECTUS
$3,000,000,000
____________________
VIACOM CAPITAL I L.P.
(a subsidiary of Viacom International Inc.)
Preferred Partnership Interests
Guaranteed to the extent set forth herein by
VIACOM INC.
____________________
VIACOM CAPITAL II L.P.
(a subsidiary of Viacom International Inc.)
Preferred Partnership Interests
Guaranteed to the extent set forth herein by
VIACOM INC.
____________________
Viacom Capital I L.P., a Delaware limited partnership
("Viacom Capital I"), and Viacom Capital II L.P., a Delaware
limited partnership ("Viacom Capital II"; Viacom Capital I or
Viacom Capital II, as the case may be, are sometimes referred to
herein as "Viacom Capital"), each may offer from time to time
their respective preferred partnership interests (the "Preferred
Partnership Interests"), in one or more series. The proceeds of
an offering of Preferred Partnership Interests, together with any
related capital contributions by the general partner of Viacom
Capital, will be loaned to Viacom Inc. ("Viacom") in exchange
for junior subordinated debentures of Viacom ("Subordinated
Debentures") having the terms described herein and in the
applicable Prospectus Supplement. The Subordinated Debentures
will be subordinated in right of payment to all Obligations
Senior to the Subordinated Debentures (as defined herein). See
"Description of Subordinated Debentures -- Subordination"
generally and for the definition of "Obligations Senior to the
Subordinated Debentures". The aggregate gross proceeds from the
offer and sale of Preferred Partnership Interests hereunder,
together with the aggregate gross proceeds from the offer and
sale of debt securities and preferred stock of Viacom Inc.
registered under the Registration Statement (as defined below) of
which this Prospectus forms a part of, will not exceed
$3,000,000,000 based upon prices determined at the time of sale.
See "Use of Proceeds".
The payment of distributions on the Preferred Partnership
Interests, if and to the extent declared out of moneys held by
Viacom Capital and legally available therefor, and payments on
liquidation of Viacom Capital or redemption of the Preferred
Partnership Interests, are guaranteed by Viacom to the extent set
forth herein (the "Viacom Guarantees"). Any Viacom Guarantee
will rank pari passu with the Subordinated Debentures and,
---- -----
accordingly, will be subordinated in right of payment to all
Obligations Senior to the Subordinated Debentures. See
"Description of the Viacom Guarantee -- Status of the Guarantee"
and see "Description of Preferred Partnership Interests" and
"Description of the Viacom Guarantee" for a description of the
various contractual obligations of Viacom and Viacom
International Inc. ("Viacom International"), as the general
partner (the "General Partner") of Viacom Capital, relating to
the Preferred Partnership Interests.
Specific terms of the securities in respect of which
this Prospectus is being delivered ("Offered Securities") will be
set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement"), together with the terms of the offering
of the Offered Securities, the initial price thereof and the net
proceeds from the sale thereof. The Prospectus Supplement will
set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Preferred
Partnership Interests, the designation; number of Preferred
Partnership Interests; liquidation preference per Preferred
Partnership Interest; initial public offering price; monthly
distribution rate, or method of calculation thereof; dates on
which distributions shall be payable and dates from which
distributions shall accrue; the terms of the guarantees of
Viacom; any exchangeability or redemption provisions, which may
include any exchange of the Preferred Partnership Interests as a
result of changes in or other developments in applicable law
relating to tax or investment companies, and the terms and
conditions, if any, on which Preferred Partnership Interests of
such series shall, at the option of Viacom, be exchangeable or
redeemable in exchange for other interests of Viacom Capital or
for shares of preferred stock or debt securities of Viacom; and
any listing on a securities exchange and (ii) in the case of
Subordinated Debentures, the specific designation; aggregate
principal amount; authorized denomination; maturity (which may be
fixed or extendible); interest rate or rates (which may be fixed
or variable), if any, or method of calculation of interest and
dates for payment thereof, and premium, if any; and any
conversion, prepayment or sinking fund provisions; the currency
or currency units of payment of principal of, and premium, if
any, and interest on the Subordinated Debentures and any listing
on a securities exchange.
____________________
For information concerning certain factors that should be
considered by prospective investors, see "Certain
Considerations".
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
_________________
The Offered Securities may be offered directly to
purchasers, to or through underwriters or through dealers or
agents. See "Plan of Distribution". The names of any
underwriters, dealers or agents involved in the sale of the
Offered Securities and any applicable fee, commission or discount
arrangements with them will be set forth in an accompanying
Prospectus Supplement.
This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
____________________
The date of this Prospectus is , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
No dealer, salesman or other person has been authorized
to give any information or to make any representation not
contained or incorporated by reference in this Prospectus or any
accompanying Prospectus Supplement and, if given or made, such
information or representation must not be relied upon as having
been authorized by Viacom, Viacom International, Viacom Capital
I, Viacom Capital II or Paramount, or any underwriter, dealer or
agent. Neither this Prospectus nor any accompanying Prospectus
Supplement constitutes an offer to sell or a solicitation of any
offer to buy any of the securities hereby or thereby offered in
any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation in such jurisdiction. Neither the
delivery of this Prospectus or any accompanying Prospectus
Supplement nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that the information
herein or therein is correct as of any time subsequent to the
date hereof or thereof or that there has been no change in the
affairs of Viacom, Viacom International, Viacom Capital I, Viacom
Capital II or Paramount since such date or, in the case of
information incorporated herein or therein by reference, the date
of filing with the Securities and Exchange Commission.
AVAILABLE INFORMATION
Each of Viacom, Viacom International, Paramount and
Blockbuster Entertainment Corporation ("Blockbuster") is
currently subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and
other information with the Securities and Exchange Commission
(the "Commission"). The reports, proxy statements and other
information filed by Viacom, Viacom International, Paramount and
Blockbuster with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 and should be available at the Commission's Regional
Offices at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material also can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, at prescribed rates. In addition,
material filed by Viacom and Viacom International can be
inspected at the offices of the American Stock Exchange, Inc.
(the "AMEX"), 86 Trinity Place, New York, New York 10006,
material filed by Blockbuster may be inspected at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street,
New York, New York 10005, and the London Stock Exchange, Old
Broad Street, London, England EC2N 1HP, and material filed by
Paramount may be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005. After consummation of the
Mergers (as defined below), Paramount, Blockbuster and Viacom
International may no longer file reports, proxy statements or
other information with the Commission. Instead, such information
would be provided, to the extent required, in filings made by
Viacom. All information concerning Blockbuster included in this
Prospectus has been derived from reports filed by Blockbuster
with the Commission or otherwise furnished by Blockbuster.
This Prospectus constitutes part of a combined
registration statement (the "Registration Statement") filed by
Viacom, Viacom International, Viacom Capital I, Viacom Capital II
and Paramount with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). As permitted by the
rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration
Statement. For further information with respect to Viacom,
Viacom International, Viacom Capital I, Viacom Capital II and
Paramount and the securities offered hereby, reference is hereby
made to the Registration Statement and to the exhibits thereto,
copies of which may be obtained as provided in the preceding
paragraph. Statements contained herein concerning the provisions
of documents are necessarily summaries of such documents, and
each statement is qualified in its entirety by reference to the
copy of the applicable document filed with the Commission.
Copies of the Registration Statement and the exhibits thereto are
on file at the
2
offices of the Commission and may be obtained upon
payment of the fee prescribed by the Commission, or may be
examined without charge at the public reference facilities of the
Commission described above.
No separate financial statements of Viacom Capital I or
Viacom Capital II have been included herein. Viacom, Viacom
Capital I and Viacom Capital II do not consider that such
financial statements would be material to holders of Preferred
Partnership Interests because Viacom Capital I and Viacom Capital
II are newly organized special purpose entities, which have no
operating history and no independent operations and are not
engaged in, and do not propose to engage in, any activity other
than the issuance of their respective securities and the lending
of the net proceeds thereof to Viacom. See "The Company --
Viacom Capital I L.P. and Viacom Capital II L.P.".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by
Viacom and Viacom International (File Nos. 1-9553/1-9554) or
Paramount (File No. 1-5404) pursuant to the Exchange Act are
incorporated by reference in this Prospectus:
1. Viacom's Annual Report on Form 10-K for the year ended
December 31, 1993, as amended by Form 10-K/A Amendment
No. 1 dated May 2, 1994;
2. Viacom's Current Reports on Form 8-K dated January 12,
1994, March 18, 1994 and March 28, 1994;
3. Viacom International's Annual Report on Form 10-K for
the year ended December 31, 1993;
4. Viacom International's Current Reports on Form 8-K
dated January 12, 1994, March 18, 1994 and March 28,
1994;
5. Paramount's Transition Report on Form 10-K for the six-
month period ended April 30, 1993, as amended by Form
10-K/A Amendment No. 1 dated September 28, 1993, as
further amended by Form 10-K/A Amendment No. 2 dated
September 30, 1993 and as further amended by Form
10-K/A Amendment No. 3 dated March 21, 1994;
6. Paramount's Current Reports on Form 8-K dated June 22,
1993, June 30, 1993, July 15, 1993, September 15, 1993,
January 4, 1994, January 28, 1994, March 17, 1994 and
March 18, 1994; and
7. Paramount's Quarterly Reports on Form 10-Q for the
three months ended July 31, 1993, the six months ended
October 31, 1993 and the nine months ended January 31, 1994.
All documents and reports filed by Viacom, Viacom
International and Paramount pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the Offered
Securities shall be deemed to be incorporated by reference in
this Prospectus and to be a part of this Prospectus from the
dates of filing of such documents or reports. Any statement
contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that
a statement contained herein, in any other subsequently filed
document which also is or is deemed to be incorporated by
reference herein or in the accompanying Prospectus Supplement
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
and superseded, to constitute a part of this Prospectus.
3
This Prospectus incorporates documents by reference
which are not presented herein or delivered herewith. Such
documents (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference) are
available, without charge, to any person, including any
beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request to Viacom International, 1515
Broadway, New York, New York 10036, Attention: John H. Burke
(telephone number (212) 258-6000).
THE COMPANY
Viacom is a holding company whose principal assets are
its 100% ownership of Viacom International and its majority
ownership of Paramount. National Amusements, Inc. ("NAI") is the
controlling stockholder of Viacom. Sumner M. Redstone, the
controlling stockholder of NAI, is the Chairman of the Board of
Directors of each of Viacom, Viacom International and Paramount.
The principal executive offices of Viacom are located at 200 Elm
Street, Dedham, Massachusetts 02026 and its telephone number is
(617) 461-1600.
The Mergers. On March 11, 1994, pursuant to the terms
------------
of its tender offer for shares of Paramount's common stock (the
"Offer"), Viacom completed its purchase of 61,657,432 of such
shares, representing a majority of the shares of Paramount's
common stock outstanding. Pursuant to a merger agreement among
Viacom, a wholly owned subsidiary of Viacom and Paramount (the
"Paramount Merger Agreement"), such wholly owned subsidiary of
Viacom will merge with and into Paramount. As a result,
Paramount will be the corporation surviving the merger and will
become a wholly owned subsidiary of Viacom (the "Paramount
Merger") after the effective time of the Paramount Merger (the
"Paramount Effective Time"). Pursuant to a voting agreement
between Paramount and NAI, NAI has agreed to vote all of its
shares of outstanding voting stock of Viacom in favor of the
Paramount Merger and related transactions and against any
competing business combinations. The vote of NAI in accordance
with such voting agreement would be sufficient to approve the
Paramount Merger Agreement and the related transactions without
any action on the part of any other holder of the outstanding
voting stock of Viacom. In addition, in order to effect the
Paramount Merger, the Paramount Merger Agreement must be approved
by the affirmative vote of the holders of a majority of the
outstanding shares of Paramount's common stock entitled to vote
thereon. As Viacom has acquired a majority of the outstanding
shares of Paramount's common stock pursuant to the Offer, Viacom
has sufficient voting power to approve the Paramount Merger
Agreement, even if no other stockholder of Paramount votes in
favor of the Paramount Merger Agreement.
On January 7, 1994, Viacom entered into a merger
agreement (the "Blockbuster Merger Agreement") with Blockbuster,
pursuant to which Blockbuster will be merged with and into
Viacom, with Viacom continuing as the surviving corporation of
the merger, subject to shareholder approval (the "Blockbuster
Merger" and, together with the Paramount Merger, the "Mergers").
Pursuant to a voting agreement between Blockbuster and NAI, NAI
has agreed to vote its shares of outstanding voting stock of
Viacom in favor of the Blockbuster Merger and against any
competing business combination proposal. Approval of the
Blockbuster Merger by the stockholders of Viacom is therefore
assured.
Each of the Mergers is subject to conditions,
including, without limitation, material accuracy of
representations and warranties, material compliance with and
performance of covenants and agreements, no material adverse
change, filing of the appropriate charter amendments and receipt
of regulatory approvals.
Potential purchasers of the Offered Securities are
urged to review Blockbuster's publicly available information
which can be obtained at the locations specified under "Available
Information" above. See "Available Information".
4
Strategic Relationships. Viacom has entered into
------------------------
strategic relationships with Blockbuster and NYNEX Corporation
("NYNEX"), including (i) a $600 million investment by Blockbuster
in the Series A Cumulative Convertible Preferred Stock, par value
$.01 per share, of Viacom (the "Series A Preferred Stock"), (ii)
a $1.2 billion investment by NYNEX in the Series B Cumulative
Convertible Preferred Stock, par value $.01 per share, of Viacom
(the "Series B Preferred Stock"), and (iii) an agreement with
each of Blockbuster and NYNEX to explore strategic partnership
opportunities. The Series A Preferred Stock and the Series B
Preferred Stock each pay a 5% annual cash dividend, are
convertible into shares of Viacom's Class B Common Stock, par
value $.01 per share ("Class B Common Stock"), at a conversion
price of $70 per share and will be redeemable by Viacom at
declining redemption premiums after the fifth anniversary of the
date of issuance. In addition, on March 10, 1994, Blockbuster
purchased approximately 22.7 million shares of Class B Common
Stock for an aggregate purchase price of $1.25 billion. Upon
consummation of the Blockbuster Merger, the Series A Preferred
Stock and Class B Common Stock owned by Blockbuster will cease to
be outstanding. However, if the Blockbuster Merger Agreement is
terminated, Viacom will be obligated to make certain payments to
Blockbuster in an amount not exceeding $275 million or to sell
certain assets to Blockbuster in the event that Viacom Class B
common stock trades (for a specific period) at levels below $55
per share during the one year period after such termination.
Viacom International
Viacom International is a diversified entertainment and
communications company with operations in four principal
segments: Networks, Cable Television, Entertainment and
Broadcasting. The principal executive offices of Viacom
International are located at 1515 Broadway, New York, New York
10036, and its telephone number is (212) 256-6000.
Networks. Viacom Networks operates three basic cable
---------
services in the U.S.: MTV: MUSIC TELEVISION , VH-1/VIDEO HITS ONE
and NICKELODEON /NICK AT NITE . Viacom Networks also operates
three premium services: SHOWTIME , THE MOVIE CHANNEL and FLIX .
Viacom International also participates as a joint venturer in
COMEDY CENTRAL and ALL NEWS CHANNEL . Internationally, MTV
Networks operates MTV EUROPE and MTV LATINO and participates as
a joint venturer in NICKELODEON U.K.
Cable Television. Viacom Cable owns and operates cable
-----------------
television systems servicing approximately 1,111,000 customers as
of March 31, 1994 in California, the Pacific Northwest and the
Midwest. Among other projects, Viacom Cable has constructed a
fiber optic cable system in Castro Valley, California to
accommodate testing of new interactive services. In connection
with this test, Viacom International has entered into an
agreement with AT&T to test and further develop such services.
Entertainment. Viacom Entertainment is comprised
--------------
principally of (i) Viacom Enterprises, which distributes off-
network programming and feature films for television exhibition
in various markets throughout the world and also distributes
television programs for initial U.S. television exhibition on a
non-network basis and for international television exhibition;
(ii) Viacom Productions, which produces television series and
other television properties independently and in association with
others primarily for initial exhibition on U.S. prime time
network television; and (iii) Viacom New Media, which develops,
produces, distributes and markets interactive software for the
stand-alone and other multimedia marketplaces.
Broadcasting. Viacom Broadcasting owns and operates
------------
five network-affiliated television stations and 14 radio stations
(two of which are under contract to be sold) in six of the top
eight radio markets, including duopolies (i.e., ownership of two
or more AM or two or more FM stations in the same market) in each
of Los Angeles, Seattle and Washington, D.C. Pursuant to the
consent granted by the Federal Communications Commission to
transfer control of the broadcast licenses of Paramount to Viacom
in connection
5
with the Paramount Merger, Viacom has undertaken to
dispose of one of its two AM stations and one of its two FM
stations serving Washington, D.C.
Recent Developments. On April 4, 1994, Viacom sold its
--------------------
one-third partnership interest in LIFETIME to its partners The
Hearst Corporation and Capital Cities/ABC Inc. for approximately
$317.6 million.
Paramount
The businesses of Paramount are entertainment and
publishing. The principal executive offices of Paramount are
located at 15 Columbus Circle, New York, New York 10023-7780, and
its telephone number is (212) 373-8000.
Entertainment. Theatrical Motion Pictures. Paramount
-------------- ---------------------------
Pictures produces and/or finances feature motion pictures for
exhibition in theaters and on television and for distribution by
videocassettes and video discs. Motion pictures are produced by
Paramount Pictures, produced by independent producers and
financed in whole or in part by Paramount Pictures, or produced
by others and acquired by Paramount Pictures. Each picture is,
in effect, a separate and distinct product with its financial
success dependent upon many factors, among which cost and public
response are of fundamental importance. Paramount Pictures
distributes its motion pictures for theatrical release outside
the United States and Canada through United International
Pictures, a company owned by Paramount Pictures, MCA and Metro-
Goldwyn-Mayer Inc.
Paramount Pictures has an exclusive pay television
license agreement with HBO which includes new Paramount Pictures'
motion pictures released theatrically through December 1997.
Paramount Pictures also licenses its motion pictures to home and
hotel/motel pay-per-view, airlines, schools and universities.
Paramount Pictures also distributes its motion pictures for pay
television release outside the United States and Canada through
United International Pictures.
Television Programs. Paramount Pictures is engaged in
--------------------
(i) the production and distribution of series, mini-series,
specials and made-for-television movies for network television,
first-run syndication, pay and basic cable, videocassettes and
video discs, and live television programming and (ii) the
licensing of series, mini-series and specials made for U.S.
television and theatrical and made-for-television movies that are
part of its television library and television product acquired
from independent producers in foreign markets.
Home Video. Paramount Pictures sells videocassettes
-----------
and video discs for the home video market, featuring its motion
picture and television program library, acquisitions from third
parties and programs made originally for the home video market.
Paramount Pictures distributes its home video products outside
the United States and Canada through Cinema International B.V., a
joint venture with MCA.
Theatrical Exhibition. Famous Players operates
----------------------
theaters throughout Canada. Cinamerica, a joint venture with
Time Warner Inc., includes Mann and Festival Theaters and
operates theaters in California, Colorado, Arizona and Alaska.
United Cinemas International, a joint venture with MCA, operates
theaters in the United Kingdom, Ireland, Germany and Spain.
Television Broadcasting and Cable Television Networks.
------------------------------------------------------
Paramount Stations Group owns and operates seven television
stations. Paramount and MCA jointly own USA Networks, which
operates two national advertiser-supported basic cable television
networks, USA Network and the Sci-Fi Channel.
Theme Parks. Paramount Parks owns and operates five
------------
regional theme parks.
6
Madison Square Garden. Madison Square Garden's
----------------------
activities include the operation of the Madison Square Garden
Arena, The Paramount theatre, the New York Knickerbockers
Basketball Club of the National Basketball Association and the
New York Rangers Hockey Club of the National Hockey League. It
also supplies and distributes television programming for cable
systems principally in New York, New Jersey and Connecticut
through the Madison Square Garden Network. In addition, Madison
Square Garden produces, promotes and/or presents live
entertainment.
Publishing. Paramount Publishing includes well-known
-----------
imprints such as Simon & Schuster, Pocket Books, Prentice Hall,
Silver Burdett Ginn and Computer Curriculum Corporation, among
others. Paramount Publishing's Elementary, Secondary and Higher
Education Groups publish elementary, secondary and college
textbooks and related materials, computer-based educational
products, audiovisual products and vocational and technical
materials. Its Consumer Group publishes and distributes
hardcover, trade paperback and mass market books and audio tapes.
The Business, Technical and Professional Group publishes books,
newsletters and software for a variety of professional groups,
including lawyers, accountants, tax professionals, business
executives and the medical community. Paramount Publishing's
international operations include publishing in Canada, the United
Kingdom, Australia, Brazil, Mexico, Singapore, Japan and India,
as well as distribution of Paramount Publishing's products
worldwide.
Recent Developments. In February 1994, Paramount
--------------------
completed the acquisition of Macmillan Publishing Company and
certain other publishing assets of Macmillan, Inc. for
approximately $553 million.
Paramount and BHC Communications, Inc., which is
majority owned by Chris-Craft Industries, Inc., are forming a
joint venture to be known as the Paramount Television Network
which will provide prime-time television programming primarily to
broadcast affiliates nationwide in competition with the three
major networks and the Fox Broadcasting Network. The network is
expected to begin operations in January 1995.
Viacom Capital I L.P. and Viacom Capital II L.P.
Viacom Capital I and Viacom Capital II are limited
partnerships organized under the laws of the State of Delaware.
Viacom International is the General Partner of each of Viacom
Capital I and Viacom Capital II. Viacom Capital I and Viacom
Capital II exist solely for the purpose of issuing their
respective partnership interests and lending the net proceeds
thereof, together with any related capital contributions by the
General Partner, to Viacom in exchange for Subordinated
Debentures. Interest and principal on the Subordinated
Debentures are intended to fund the payment of monthly
distributions and redemption and liquidation distributions on the
partnership interests. Accordingly, the sole source of cash flow
of Viacom Capital I and Viacom Capital II is Viacom, and their
respective abilities to make monthly distributions and other
payments in respect of the Preferred Partnership Interests that
they each issue will be dependent on interest and principal
payments by Viacom on the Subordinated Debentures relating to
such issuance.
Viacom Capital I and Viacom Capital II each will be
managed by Viacom International, in its capacity as General
Partner. Holders of Preferred Partnership Interests will be
limited partners in Viacom Capital and as such may be referred to
herein as "Limited Partners". The agreement of limited
partnership (the "Agreement of Limited Partnership") of each of
Viacom Capital I and Viacom Capital II provides that the General
Partner shall be liable for all obligations and liabilities of
Viacom Capital I or Viacom Capital II, as the case may be (other
than obligations to holders of Preferred Partnership Interests).
The principal executive offices of Viacom Capital I and
Viacom Capital II are located at 1515 Broadway, New York, New
York 10036, and their telephone number is (212) 258-6000.
7
CERTAIN CONSIDERATIONS
Prospective purchasers of the Offered Securities should
-------------------------------------------------------
consider carefully all of the information set forth or
------------------------------------------------------
incorporated in this Prospectus and an accompanying Prospectus
--------------------------------------------------------------
Supplement and, in particular, the following:
--------------------------------------------
Controlling Stockholder
Immediately after completion of the Paramount Merger
and before the completion of the Blockbuster Merger, NAI (which
is controlled by Sumner M. Redstone) will own approximately 85%
of the voting stock and approximately 46% of the total (voting
and non-voting) common stock of Viacom (after the Paramount
Merger, Viacom is sometimes hereinafter referred to as "Viacom-
Paramount"). Immediately after completion of the Mergers, NAI
would own approximately 62% of the voting stock and approximately
25% of the total (voting and non-voting) common stock of Viacom-
Paramount and Blockbuster combined (the "Combined Company"). As
such, Mr. Redstone will be in a position to control the election
of the Board of Directors as well as the direction and future
operations of Viacom-Paramount or the Combined Company, as the
case may be (although certain provisions of the Blockbuster
Merger Agreement and the Paramount Merger Agreement restrict the
ability of certain large stockholders from engaging in going
private transactions).
Total Indebtedness and Certain Refinancing
Viacom anticipates that, following the Mergers, the
Combined Company will have outstanding total indebtedness of
approximately $10.0 billion ($8.1 billion if the Blockbuster
Merger is not consummated) and 5% preferred stock with a
liquidation preference of $1.2 billion ($1.8 billion if the
Blockbuster Merger is not consummated). Of such $10.0 billion,
$3.7 billion was borrowed under a credit agreement dated as of
November 19, 1993, as amended on January 4, 1994 and February 15,
1994, among Viacom, the banks named therein, and The Bank of New
York, Citibank, N.A. and Morgan Guaranty Trust Company of New
York, as Managing Agents, and must be repaid by November 18,
1994. In addition, the $1.0 billion borrowed under a credit
agreement dated as of February 15, 1994 (the "New Blockbuster
Facility"), among Blockbuster, certain banks named therein, Bank
of America, as Agent, and BA Securities Inc., as Arranger, must
be repaid by February 14, 1995 and both the New Blockbuster
Facility and a previous Blockbuster credit agreement, under which
approximately $700 million is currently outstanding, contain
certain covenants and events of default, including a change of
control default, which will require either a waiver in connection
with the Blockbuster Merger or the refinancing of the
indebtedness under such facilities prior to the Blockbuster
Merger.
Accordingly, the foregoing facilities, together with
other current maturities, may require Viacom to refinance up to
$5.9 billion ($4.2 billion if the Blockbuster Merger is not
consummated) on various dates over a period ending November 18,
1994. Viacom also intends to refinance certain indebtedness of
Viacom International. See "-- Holding Company Structure" below.
In addition, in the event that the Blockbuster Merger is not
consummated, Viacom would under certain circumstances incur
certain additional costs. See "The Company -- The Mergers" and
"-- Strategic Relationships". No decision has been made
concerning the method Viacom-Paramount will, or the Combined
Company would, employ to refinance such indebtedness. Such
decision will be based on Viacom-Paramount's or the Combined
Company's review from time to time of the advisability of the
particular actions, as well as on prevailing interest rates and
financial and other economic conditions and such other factors as
Viacom-Paramount or the Combined Company, as the case may be,
deem appropriate. Although Viacom expects that it will be able
to refinance its indebtedness and meet its obligations without
the need to sell any assets, Viacom is continuing to review
opportunities for the sale of non-strategic assets as such
opportunities may arise.
8
Holding Company Structure
Viacom has no significant assets other than the capital
stock of its subsidiaries. As a holding company, Viacom is
dependent on dividends or other intercompany transfers of funds
from its subsidiaries to meet its debt service and other
obligations. Such dividends and other intercompany transfers of
funds by Viacom International and its subsidiaries to Viacom are
currently restricted under Viacom International's outstanding
credit agreements. Viacom expects that in connection with any
bank refinancing of the indebtedness of up to $5.9 billion ($4.2
billion if the Blockbuster Merger is not consummated) discussed
above in "-- Total Indebtedness and Certain Refinancing",
substantially all of Viacom International's $1.9 billion facility
will also be refinanced and such restrictions on dividends and
other intercompany advances of funds will be removed. Upon
consummation of the Paramount Merger, Viacom will have unlimited
access to funds from Paramount. It is anticipated that Viacom
International and, upon consummation of the Paramount Merger,
Paramount each will guarantee Viacom's indebtedness.
Changing Competitive Environment
The entertainment and communications industries of
which either Viacom-Paramount or the Combined Company, as the
case may be, will be a part of are changing rapidly as a result
of evolving distribution technologies, particularly the advent of
digital compression, and related ongoing and anticipated changes
to regulation of the communications industry. The future success
of Viacom-Paramount or the Combined Company will be affected by
such changes, the nature of which cannot be forecast with
certainty. Although management believes that such technological
developments are likely to enhance the value of Viacom-
Paramount's or the Combined Company's entertainment properties
and trademarks, there can be no assurance that such developments
will not limit Viacom-Paramount's or the Combined Company's
access to certain distribution channels or create additional
competitive pressures on some or all of Viacom-Paramount's or the
Combined Company's businesses.
Combining the Companies
Viacom, Paramount and Blockbuster are large,
diversified enterprises, with operations and sales worldwide.
Although management of the companies believe that their
respective operations are complementary and that, if the Mergers
are consummated, integration of the companies will be
accomplished promptly and without substantial difficulty, there
can be no assurance that future results will improve as a result
of the Mergers. If the Mergers are consummated, Viacom-Paramount
or the Combined Company, as the case may be, on a pro forma
basis, will be substantially more leveraged than any of Viacom,
Paramount or Blockbuster immediately prior to the Offer and the
Mergers.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus
Supplement, Viacom Capital intends to lend to Viacom the net
proceeds from the issuance and sale of the Preferred Partnership
Interests. Such proceeds may be used by Viacom to repay, redeem
or repurchase its outstanding indebtedness; to make loans to its
subsidiaries; or for such other purposes as may be specified in
the applicable Prospectus Supplement. A description of any
indebtedness to be refinanced with the proceeds of the Offered
Securities will be set forth in the applicable Prospectus
Supplement.
9
RATIO OF EARNINGS TO FIXED CHARGES AND
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth (i) the ratio of
earnings to fixed charges for Viacom for each year in the five-
year period ended December 31, 1993 and for the year ended
December 31, 1993 on a pro forma basis for each of Viacom-
Paramount and the Combined Company and (ii) the ratio of earnings
to combined fixed charges and preferred stock dividends for
Viacom for each year in the five-year period ended December 31,
1993 and for the year ended December 31, 1993 on a pro forma
basis for each of Viacom-Paramount and the Combined Company. For
purposes of computing the following ratios, earnings represent
income from operations before fixed charges and taxes, and fixed
charges represent interest on indebtedness, amortization of debt
discount and such portion of rental expense which is deemed to be
representative of the interest factor. The pro forma ratios set
forth below should be read in conjunction with the pro forma
financial statements incorporated in this Prospectus.
Pro Forma Viacom Historical
Year Ended December 31, 1993 Year Ended December 31,
Viacom-Paramount(a) Combined Company(b) 1993 1992 1991 1990 1989
Ratio of Earnings
to Fixed Charges 1.3x 1.6x 2.8x 1.8x 1.0x (c) 1.5x(d)
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends (e) 1.0x 1.4x 2.5x (f) (f) (f) 1.3x(d)
(a) As adjusted to give effect to the Paramount Merger and
certain other transactions described in the pro forma financial
statements incorporated in this Prospectus, in each case as
if such transactions had occurred on January 1, 1993.
(b) As adjusted to give effect to the Mergers and certain other
transactions described in the pro forma financial statements
incorporated in this Prospectus, in each case as if such
transactions had occurred on January 1, 1993. All information
concerning Blockbuster included in the pro forma ratios has
been derived from reports filed by Blockbuster with the
Commission or otherwise furnished by Blockbuster.
(c) Earnings of Viacom were insufficient to cover fixed charges
for the year ended December 31, 1990. The additional amount of
earnings required to cover fixed charges of Viacom for the year
ended December 31, 1990 would have been $66.2 million.
(d) As a result of the $313.1 million pre-tax gain recognized on
the sale of its Long Island and Cleveland cable systems during
the first quarter of 1989, Viacom's earnings were sufficient
to cover fixed charges and combined fixed charges and preferred
stock dividends.
(e) The statutory income tax rate was used for purposes of
calculating the ratio of earnings to combined fixed charges and
preferred stock dividends.
(f) Viacom did not have any preferred stock outstanding from
1990 to 1992.
10
DESCRIPTION OF PREFERRED PARTNERSHIP INTERESTS
The following is a summary of certain terms and
provisions of any series of the Preferred Partnership Interests
offered hereby. Certain terms and provisions, together with
certain tax consequences thereof, of the Preferred Partnership
Interests of a particular series will be summarized in the
Prospectus Supplement relating to the Preferred Partnership
Interests of such series. If so indicated in the Prospectus
Supplement, the terms and provisions of the Preferred Partnership
Interests of a particular series may differ from the terms set
forth below. The summaries set forth below and in the applicable
Prospectus Supplement address the material terms of the Preferred
Partnership Interests of any particular series but do not purport
to be complete and are subject to, and qualified in their
entirety by reference to, the respective Agreement of Limited
Partnership of Viacom Capital I or Viacom Capital II and the
resolutions adopted, or to be adopted, as the case may be, by the
General Partner establishing the rights, preferences, privileges,
limitations and restrictions relating to the Preferred
Partnership Interests of any series or of a particular series.
Copies of the Agreements of Limited Partnership have been filed
as exhibits to the Registration Statement of which this
Prospectus forms a part.
General
Each of Viacom Capital I and Viacom Capital II is
authorized to issue Preferred Partnership Interests in one or
more series, with such distribution rights, liquidation
preferences, redemption provisions, voting rights and other
rights, powers and duties as shall be established by its
Agreement of Limited Partnership and any resolutions adopted, or
to be adopted, by its General Partner establishing such rights,
powers and duties (which resolutions, when taken, are deemed to
amend and supplement and be a part of its Agreement of Limited
Partnership). A copy of the resolutions relating to Preferred
Partnership Securities of any series will be filed with the
Commission at or prior to the time of the sale of the Preferred
Partnership Interests of such series. All of the Preferred
Partnership Interests, to be issued in one or more series or
classes, will rank pari passu with each other with respect to
---- -----
participation in profits and assets. The initial offering price
of the Preferred Partnership Interests of any particular series
will be reasonably related to the liquidation preference thereof.
The Preferred Partnership Interests of any series will
be issued in registered form only without distribution coupons.
Registration of, and registration of transfers of, the Preferred
Partnership Interests of any series will be by book-entry only.
The General Partner is authorized, subject to the provisions in
the applicable Agreement of Limited Partnership, to establish by
resolution for each series of Preferred Partnership Interests,
and the applicable Prospectus Supplement shall set forth with
respect to such series: (i) the designation, stated value and
liquidation preference of the Preferred Partnership Interests of
such series and the number of Preferred Partnership Interests
offered; (ii) the distribution rate or rates or method of
calculation thereof, the date or dates and conditions on which
distributions will be payable and from which distributions shall
accrue and the preference or relation which such distributions
shall bear to the distributions payable on any other partnership
interests of Viacom Capital or on any other series of Preferred
Partnership Interests; (iii) the voting rights of the Preferred
Partnership Interests of such series; (iv) any exchangeability or
redemption provisions, which may include any exchange of the
Preferred Partnership Interests as a result of changes in or
other developments in applicable law relating to tax or
investment companies, and the terms and conditions, if any, on
which Preferred Partnership Interests of such series shall, at
the option of Viacom, be exchangeable or redeemable in exchange
for shares of stock of any other class or classes, or other
series of the same class, of Viacom Capital or for shares of
preferred stock or debt securities of Viacom; (v) the
circumstances, if any, upon which additional amounts may be paid
to holders of the Preferred Partnership Interests; (vi) the
rights of the holders of Preferred Partnership Interests of such
series upon the liquidation, dissolution or winding up of Viacom
Capital; (vii) the conditions and restrictions, if any, on the
making of distributions on, or the purchase, redemption or other
acquisition by Viacom Capital of a partnership interest of Viacom
Capital ranking junior to the interests of such series as to
monthly distributions or upon liquidation, dissolution or winding
up; (viii) any other rights, preferences, privileges, limitations
and restrictions relating to the Preferred Partnership Interests
of
11
such series and (ix) the terms of the Subordinated Debentures
under which the proceeds from the sale of the Preferred
Partnership Interests of such series will be loaned to Viacom.
All Preferred Partnership Interests of any one series
shall be identical with each other in all respects, except that
Preferred Partnership Interests of any one series issued at
different times may differ as to the dates from which
distributions, if any, thereon shall be cumulative. All series
of Preferred Partnership Interests shall rank equally and be
identical in all respects, except as permitted by the Agreements
of Limited Partnership of Viacom Capital I and Viacom Capital II.
All series of Preferred Partnership Interests shall rank senior
to the general partnership interests of Viacom Capital both as to
monthly distributions and upon liquidation, dissolution or
winding up.
All Preferred Partnership Interests offered hereby will
be guaranteed by Viacom to the limited extent set forth below
under "Description of the Viacom Guarantee". Certain Federal
income tax considerations applicable to any offering of Preferred
Partnership Interests will be described in the applicable
Prospectus Supplement.
Distributions
Distributions on the Preferred Partnership Interests
will be cumulative. Cumulative distributions on the Preferred
Partnership Interests of a series will accrue from the date of
original issue thereof and will be payable in United States
dollars monthly in arrears on the last day of each calendar month
of each year, commencing on the dates specified in the applicable
Prospectus Supplement relating to such series.
The distributions payable on Preferred Partnership
Interests of a particular series will be fixed at the rate per
annum specified in the applicable Prospectus Supplement relating
to such series. The amount of distributions payable for any
period will be computed on the basis of twelve 30-day months and
a 360-day year and, for any period shorter than a full monthly
distribution period, will be computed on the basis of the actual
number of days elapsed in such period. Payment of distributions
is limited by the amount of funds held by Viacom Capital and
legally available therefor. See "Description of the Subordinated
Debentures -- Interest" and "Description of the Viacom
Guarantee -- General" below.
Under the Agreement of Limited Partnership of Viacom
Capital I and Viacom Capital II, distributions on the Preferred
Partnership Interests of any series must be declared by the
General Partner of Viacom Capital in any calendar year or portion
thereof to the extent that the General Partner reasonably
anticipates that at the time of payment Viacom Capital will have,
and must be paid by Viacom Capital to the extent that at the time
of proposed payment it has, (x) funds legally available for the
payment of such distributions and (y) cash on hand sufficient to
permit such payments. It is anticipated that such funds will be
derived from payments by Viacom of interest on the Subordinated
Debentures. Under the terms of the Subordinated Debentures, so
long as Viacom is not in default in the payment of interest on
the Subordinated Debentures, Viacom shall have the right at any
time to extend the interest payment period to the next interest
payment date by a period (not to exceed the 60 months, or such
lesser period as set forth in the applicable Prospectus
Supplement, from the last date on which interest was paid in
full) at the end of which Viacom shall pay all interest then
accrued and unpaid (together with interest thereon at the rate
specified for the Subordinated Debentures to the extent permitted
by applicable law). During any such extended interest period, or
at any time during which there is an uncured Event of Default (as
hereinafter defined), or an event that, with the giving of notice
or the lapse of time or both, would constitute an Event of
Default, under the Subordinated Debentures, Viacom shall not pay
any dividends on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its shares of common
stock or make any guarantee payments with respect to the
foregoing. Viacom is required to give Viacom Capital not less
than five Business Days' (as hereinafter defined) prior notice of
its selection of such longer interest period. See "Description
of the Subordinated Debentures".
12
If distributions can be paid only in part on any series
of Preferred Partnership Interests in any calendar year or
portion thereof as a result of the lack of sufficient funds
legally available for the payment of distributions, then such
partial distributions shall be paid on the respective
distribution payment dates on a pro rata basis to holders of such
series of Preferred Partnership Interests. If any distributions
on the Preferred Partnership Interests are not paid in full on
any distribution payment date, additional distributions will
accrue at the distribution rate for the Preferred Partnership
Interests specified in the applicable Prospectus Supplement.
Distributions declared on the Preferred Partnership
Interests of any series will be payable to the record holders
thereof as they appear on the register for the Preferred
Partnership Interests of such series on the relevant record dates
which will be, unless otherwise specified in the applicable
Prospectus Supplement relating to each such series, one Business
Day prior to the relevant payment dates. Subject to any
applicable laws and regulations, each such payment will be made
as described under "-- Book-Entry-Only Issuance; The Depository
Trust Company" below. In the event that any date on which
distributions are payable on the Preferred Partnership Interests
of any series is not a Business Day, then payment of the
distributions payable on such date will be made on the next
succeeding calendar day which is a Business Day (and without any
interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if
made on such date. A "Business Day" shall mean any day other
than a day on which banking institutions in The City of New York
are authorized or required by law to close.
Except as described herein and in the applicable
Prospectus Supplement relating to the Preferred Partnership
Interests of a particular series, holders of the Preferred
Partnership Interests of any series will have no other right to
participate or share in the profits or assets of Viacom Capital.
Certain Restrictions on Viacom Capital
Viacom Capital may not engage in any business or
activity other than issuing its general partnership interests and
the Preferred Partnership Interests, having terms generally
consistent with each other (other than distribution rate, and
other than changes that would not adversely affect the ability of
Viacom Capital to make full and timely monthly distribution
payments or payments upon liquidation, dissolution or winding up
to the holders of each series of Preferred Partnership
Interests), lending the net proceeds thereof to Viacom in return
for Subordinated Debentures in an aggregate principal amount
equal to the amount of such loan, bearing interest at a rate at
least equal to the monthly distribution rate on such Preferred
Partnership Interests and otherwise having terms generally
consistent with those of the Preferred Partnership Interests
(other than changes that would not materially adversely affect
the ability of Viacom Capital to make full and timely
distribution payments or payments upon liquidation, dissolution
or winding up to the holders of the Preferred Partnership
Interests) and engaging in activities incidental or conducive to
the foregoing. Viacom Capital may not consolidate or merge with
or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation, partnership or
other entity.
If distributions have not been paid in full on the
Preferred Partnership Interests of a particular series, Viacom
Capital shall not:
(i) pay, or declare and set aside for payment, any
distributions on the Preferred Partnership Interests of any
other series or any other preferred or preference partnership
interests of Viacom Capital ranking pari passu with the
---- -----
Preferred Partnership Interests of such series as regards
participation in profits of Viacom Capital ("Distribution Parity
Interests"), unless the amount of any distributions declared
on any Preferred Partnership Interests or Distribution Parity
Interests is paid on the Distribution Parity Interests and
the Preferred Partnership Interests of such series on a pro rata
basis, so that:
13
(x) (A) the aggregate amount paid as
distributions on the Preferred Partnership
Interests of such series bears to
(B) the aggregate amount paid as
distributions on the Distribution Parity
Interests the same ratio as
(y) (A) the aggregate of all accumulated arrears
of unpaid distributions on the
Preferred Partnership Interests of such series
bears to (B) the aggregate of all accumulated
arrears of unpaid distributions on the
Distribution Parity Interests;
(ii) pay, or declare and set aside for payment, any
distributions on any interests of Viacom Capital
ranking junior to the Preferred Partnership Interests
of such series as to distributions ("Distribution
Junior Interests"); or
(iii) redeem, purchase or otherwise acquire any
Distribution Parity Interests or Distribution
Junior Interests;
until, in each case, such time as all accumulated arrears of
unpaid distributions on the Preferred Partnership Interests of
such series shall have been paid in full for all distribution
periods terminating on or prior to, in the case of clauses (i)
and (ii), such payment, and in the case of clause (iii), the date
of such redemption, purchase or other acquisition. So long as
the Preferred Partnership Interests of any series are represented
by one or more global certificates, distributions on such series
of Preferred Partnership Interests shall have been paid in full
with respect to any distribution payment date for such series
when the amount of distributions payable on such date has been
paid to The Depository Trust Company ("DTC"). See "-- Book-
Entry-Only Issuance; The Depository Trust Company". As of the
date of this Prospectus, there are no Distribution Parity
Interests outstanding.
The General Partner is authorized to conduct its
affairs and to operate Viacom Capital in such a way that Viacom
Capital would not be deemed to be an "investment company"
required to be registered under the 1940 Act or taxed as a
corporation for federal income tax purposes and so that any loans
made by Viacom Capital to Viacom will be treated as indebtedness
for federal income tax purposes. In this connection, the General
Partner is authorized to take any action that (i) is not
inconsistent with applicable law and the applicable Agreement of
Limited Partnership, (ii) does not materially affect the rights
of the holders of Preferred Partnership Interests and (iii) the
General Partner determines in its sole discretion to be necessary
or desirable for such purposes.
Redemption or Exchange
The Preferred Partnership Interests of a series will be
redeemable for cash, if so provided in the applicable Prospectus
Supplement, at the option of Viacom Capital and subject to the
prior consent of Viacom, in whole or in part from time to time,
on or after the date specified in the applicable Prospectus
Supplement relating to such series, at the stated liquidation
preference per share for such series, plus accumulated and unpaid
monthly distributions (whether or not declared) (the "Redemption
Price") to the date fixed for redemption (the "Redemption Date").
The terms and conditions of any such redemption right will be set
forth in the applicable Prospectus Supplement.
The proceeds from any repayment at maturity of any
Subordinated Debentures (or any new loan replacing the
Subordinated Debentures as contemplated by the proviso to this
sentence) shall be applied to redeem Preferred Partnership
Interests relating to such Subordinated Debentures for cash at
the Redemption Price, provided that all or any portion of the
--------
principal amount of Subordinated Debentures repaid by Viacom may
be reloaned to Viacom, and not used for such redemption, if at
the time of such new loan, and as determined in the judgment of
the General Partner and its financial advisor (selected by the
General Partner and who shall not be affiliated with the General
Partner and shall be among the 30 largest investment banking firms,
14
measured by total capital, in the United States at the
time of the proposed new loan): (a) Viacom is not bankrupt,
insolvent or in liquidation; (b) Viacom is not in default on any
Subordinated Debenture pertaining to Preferred Partnership
Interests of any series; (c) Viacom has timely made all required
monthly payments of interest on the repaid Subordinated
Debentures for the period specified in the applicable Prospectus
Supplement, which period shall not exceed 60 months; (d) Viacom
Capital is not in arrears on payments of monthly distributions on
the Preferred Partnership Interests of such series; (e) Viacom is
expected to be able to make timely payment of principal and
interest on such new loan; (f) such new loan is being made on
terms, and under circumstances, that are no less favorable to
Viacom Capital than those that a lender would require for a
similar loan to an unrelated party; (g) such new loan is being
made at a rate of interest sufficient to provide monthly payments
of interest equal to or greater than the amount of monthly
distributions required in respect of the Preferred Partnership
Interests of such series; (h) such new loan is being made for a
fixed term that is consistent with market circumstances and
Viacom's financial condition; (i) immediately prior to the making
of such new loan, the senior unsecured long-term debt of Viacom
is (or if no such debt is outstanding, would be) rated not less
than the ratings (or the equivalents) by Standard & Poor's
Corporation and Moody's Investors Service, Inc. set forth in the
applicable Prospectus Supplement (or, if either of such rating
organizations is not then rating Viacom's senior unsecured long-
term debt, the equivalent of such rating by any other nationally
recognized statistical rating organization) and any subordinated
long-term debt of Viacom or, if there is no such debt then
outstanding, the Preferred Partnership Interests of such series,
are rated not less than the ratings (or the equivalents) by
Standard & Poor's Corporation and Moody's Investors Service, Inc.
set forth in the applicable Prospectus Supplement or the
equivalent of either such rating by any other nationally
recognized statistical rating organization; (j) such new loan
shall not pay any contingent interest or other interest
determined by reference to, or otherwise participate in, the
earnings or profits of Viacom or any of its affiliates; and (k)
such new loan will have a final maturity no later than a date set
forth in the applicable Prospectus Supplement (provided that such
--------
date shall not be later than the 50th anniversary of the original
issuance of the Preferred Partnership Interests of such series).
If, at the maturity of the Subordinated Debentures, an amount
less than the entire principal amount of the Subordinated
Debentures is reloaned to Viacom, the amount of such principal
not so reloaned shall be used to effect a partial redemption of
the Preferred Partnership Interests of the applicable series,
provided that, if a partial redemption would result in a
--------
delisting of the Preferred Partnership Interests, no amount of
principal may be reloaned to Viacom, and the Preferred
Partnership Interests of such series shall be redeemed in whole.
In the event that fewer than all of the outstanding Preferred
Partnership Interests of a particular series are to be redeemed,
the Preferred Partnership Interests of such series to be redeemed
may be selected as described under "-- Book-Entry-Only Issuance;
The Depository Trust Company" below.
If Viacom Capital gives a notice of redemption for cash
in respect of Preferred Partnership Interests of a particular
series, then, by 12:00 noon, New York time, on the applicable
Redemption Date, Viacom Capital will irrevocably deposit with DTC
funds sufficient to pay the applicable Redemption Price, and will
give DTC irrevocable instructions and authority to pay the
Redemption Price to the holders thereof. See "-- Book-Entry-Only
Issuance; The Depository Trust Company". If such notice of
redemption shall have been given and funds deposited as required,
then upon the date of such deposit, all rights of holders of such
Preferred Partnership Interests of a series so called for
redemption will cease, except the right of the holders of such
securities to receive the Redemption Price, but without interest,
and such securities will cease to be outstanding. In the event
that any date on which any payment in respect of the redemption
of Preferred Partnership Interests of any series is not a
Business Day, then payment of the Redemption Price payable on
such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of
the Redemption Price in respect of Preferred Partnership
Interests of any series is improperly withheld or refused and not
paid either by Viacom Capital or by Viacom pursuant to the Viacom
Guarantee, monthly distributions on such shares will continue to
accrue, at the then applicable rate, from the original Redemption
Date to the date that the Redemption Price is
15
actually paid, in which case the actual payment date will
be the date fixed for redemption for purposes of calculating
the Redemption Price.
Subject to the foregoing and applicable law (including,
without limitation, U.S. federal securities laws) Viacom or any
of its affiliates may at any time and from time to time purchase
outstanding Preferred Partnership Interests of any series by
tender, in the open market or by private agreement.
Liquidation Distribution
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of Viacom Capital, the
holders of Preferred Partnership Interests of each series issued
by Viacom Capital at the time outstanding will be entitled to
receive out of the assets of Viacom Capital legally available for
distribution to partners, before any payment or distribution of
assets is made to or set apart for the General Partner, but
together with the holders of outstanding Preferred Partnership
Interests of every other series and the holders of every other
series of preferred or preference interests of Viacom Capital
outstanding, if any, ranking pari passu with the Preferred
---- -----
Partnership Interests of such series as regards participation in
the assets of Viacom Capital ("Liquidation Parity Interests"), an
amount equal, in the case of the holders of the Preferred
Partnership Interests of such series, to the aggregate of the
stated liquidation preference for Preferred Partnership Interests
of such series as set forth in the applicable Prospectus
Supplement and all accumulated and unpaid distributions (whether
or not declared) to the date of payment (the "Liquidation
Distribution"), payable in cash. If, upon any such liquidation,
dissolution or winding up, the Liquidation Distributions can be
paid only in part because Viacom Capital has insufficient assets
available to pay in full the aggregate Liquidation Distributions
and the aggregate maximum liquidation distributions on the
Liquidation Parity Interests, then the amounts payable directly
by Viacom Capital on the Preferred Partnership Interests of such
series and on such Liquidation Parity Interests shall be paid on
a pro rata basis, so that:
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Preferred Partnership Interests of such
series bears to (y) the aggregate amount paid as liquidation
distributions on the Liquidation Parity Interests the same
ratio as
(ii) (x) the aggregate Liquidation Distributions bears
to (y) the aggregate maximum liquidation distributions on
the Liquidation Parity Interests.
Pursuant to their respective Agreements of Limited
Partnership, Viacom Capital I and Viacom Capital II will
automatically dissolve and be liquidated (i) when the period
fixed for the duration of Viacom Capital expires; (ii) if the
General Partner by resolution requires Viacom Capital to be wound
up and dissolved, subject to the voting rights of the holders of
the Preferred Partnership Interests described in "-- Voting
Rights"; (iii) upon the resignation, withdrawal, expulsion,
termination, cessation or dissolution or bankruptcy of the
General Partner or the occurrence of any other event which
terminates the General Partner as the general partner of Viacom
Capital; or (iv) upon the entry of a judicial decree of
dissolution under Section 17-802 of the Delaware Revised Uniform
Limited Partnership Act (the "Partnership Act"). Under the
Viacom Guarantee, Viacom will covenant that it will not cause
Viacom International to voluntarily dissolve, wind up or
liquidate Viacom Capital so long as any Preferred Partnership
Interests are outstanding, except as described in the applicable
Prospectus Supplement. See "Description of the Viacom
Guarantee -- Certain Covenants of Viacom".
Personal Liability of General Partner
Pursuant to Section 17-403 of the Partnership Act and
the Agreements of Limited Partnership of Viacom Capital I and
Viacom Capital II, Viacom International, in its capacity as
General Partner, will be
16
liable for, and will pay (as an additional capital contribution
to Viacom Capital I) the debts of and claims against Viacom
Capital (other than the obligations to holders of Preferred
Partnership Interests).
Limited Liability
Assuming that a Limited Partner does not participate in
the control of the business of Viacom Capital, within the meaning
of the Partnership Act and that he otherwise acts in conformity
with the provisions of the Agreement of Limited Partnership, his
liability under the Partnership Act will be limited, subject to
certain possible exceptions, generally to the amount of capital
he is obligated to contribute to Viacom Capital in respect of his
Preferred Partnership Interests plus his share of any
undistributed profits and assets of Viacom Capital. If it were
determined, however, that the right or exercise of the right by
the Limited Partners as a group to take certain action pursuant
to the Agreement of Limited Partnership constituted
"participation in the control" of Viacom Capital's business for
the purposes of the Partnership Act, then the Limited Partners
could, under certain circumstances, be held personally liable for
Viacom Capital's obligations under the laws of the State of
Delaware to the same extent as the General Partner. Under the
Partnership Act, a limited partnership may not make a
distribution to a partner to the extent that at the time of the
distribution, after giving effect to the distribution, all
liabilities of the partnership, other than liabilities to
partners on account of their partnership interests and
nonrecourse liabilities, exceed the fair value of the assets of
the limited partnership. The Partnership Act provides that a
limited partner who receives such a distribution and knew at the
time of the distribution that the distribution was in violation
of the Partnership Act shall be liable to the limited partnership
for the amount of the distribution for three years from the date
of the distribution. Under the Partnership Act, an assignee who
becomes a substituted limited partner of a limited partnership is
liable for the obligations of his assignor to make contributions
to the partnership, except the assignee is not obligated for
liabilities that were unknown to him at the time he became a
limited partner and that could not be ascertained from the
partnership agreement.
Voting Rights
The holders of the Preferred Partnership Interests have
no voting rights except as described herein or in the applicable
Prospectus Supplement. If (i) Viacom Capital fails to pay
monthly distributions in full on the Preferred Partnership
Interests of any series (whether or not funds are legally
available therefor) for any period and as a result distributions
on the Preferred Partnership Interests shall be in arrears in an
aggregate amount equal to such number of distribution payments as
shall be set forth in the applicable Prospectus Supplement (not
to exceed 60); (ii) an Event of Default (as defined in the
Subordinated Indenture) occurs and is continuing; or (iii) Viacom
is in default on any of its payment or other obligations under
the Viacom Guarantee (as described under "Description of the
Viacom Guarantee -- Certain Covenants of Viacom"), then the
holders of a majority in stated liquidation preference of the
Outstanding Preferred Partnership Interests of such series,
together with the holders of any other preferred partnership
interests of Viacom Capital having the right to vote for the
appointment of a trustee in such event, acting as a single class,
will be entitled to appoint and authorize a trustee to enforce
Viacom Capital's rights under the Subordinated Debentures against
Viacom and to enforce the obligations undertaken by Viacom under
the Viacom Guarantee and declare and pay distributions on the
Preferred Partnership Interests of such series to the extent that
funds are held by Viacom Capital and legally available therefor.
For a description of rights and obligations under the
Subordinated Debentures, including the right of Viacom to extend
the period to the next interest payment date to up to the number
of months set forth in the applicable Prospectus Supplement (not
to exceed 60 months), see "Description of the Subordinated
Debentures". Not later than 30 days after such right to appoint
a trustee arises, the General Partner will convene a general
meeting for the above purpose. If the General Partner fails to
convene such meeting within such 30-day period, the holders of
25% in stated liquidation preference (plus all accrued and unpaid
distributions) of the outstanding Preferred Partnership Interests
of such series and such other series will be entitled to convene
such meeting. The provisions of the Agreement of Limited
Partnership of Viacom Capital relating to the convening and
conduct of the general meetings of partners will apply with
respect to any such meeting. Any trustee so appointed shall
vacate office immediately, subject to the terms of any other
partnership
17
interests affected thereby, if Viacom Capital (or
Viacom pursuant to the Viacom Guarantee) shall have paid in full
all accumulated and unpaid distributions on the Preferred
Partnership Interests of all series (if the event that gave rise
to such appointment was clause (i) of this paragraph), such Event
of Default shall have been cured (if the event that gave rise to
such appointment was clause (ii) of this paragraph) or such
default by Viacom shall have been cured (if the event that gave
rise to such appointment was clause (iii) of this paragraph).
If any resolution is proposed for adoption by the
partners of Viacom Capital providing for, or the General Partner
otherwise proposes to take, any action that will (w) amend, alter
or repeal the provisions of the Agreement of Limited Partnership
of Viacom Capital (including the resolutions creating the
Preferred Partnership Interests) so as to adversely affect any
rights or powers of the Preferred Partnership Interests or the
holders thereof or result in the authorization or issuance of any
partnership interest in Viacom Capital ranking, as to monthly
distributions or upon liquidation, dissolution or winding up,
senior to the Preferred Partnership Interests, (x) result in the
liquidation, dissolution or winding up of Viacom Capital, (y)
waive any rights of Viacom Capital under the Subordinated
Debentures or allow the Subordinated Debentures to be repurchased
or prepaid prior to a date specified in the applicable Prospectus
Supplement other than in accordance with the terms of the
Agreement of Limited Partnership of Viacom Capital or the terms
of the Subordinated Debentures (unless there is an Event of
Default thereunder and except in connection with a permitted
redemption as specified in the applicable Prospectus Supplement)
or (z) modify the provisions of the Agreement of Limited
Partnership of Viacom Capital (i) which limit the business and
activity in which Viacom Capital may engage, (ii) which prohibit
transfers of the General Partner's interest, (iii) which require
the General Partner to contribute amounts to Viacom Capital such
that its interest represents at all times not less than 21% of
all interests in the capital, income, gain, loss, deduction or
credit of Viacom Capital or (iv) pursuant to which the General
Partner agrees to be personally liable for all debts of and
claims against Viacom Capital (other than payment of monthly
distributions on the Preferred Partnership Interests), then the
holders of Outstanding Preferred Partnership Interests of all
series (and, in the case of a resolution described in clause (w)
above that would, to a like extent, adversely affect the rights
or powers of any Distribution Parity Interests or any Liquidation
Parity Interests, the holders of such Distribution Parity
Interests or such Liquidation Parity Interests, as the case may
be, or, in the case of any resolution described in clause (x) or
(z) above, all Liquidation Parity Interests) will be entitled to
vote together as a class on such resolution or action (but not on
any other resolution or action), and such resolution or action
shall not be effective except with the approval of the holders of
not less than 66 2/3% in stated liquidation preference of such
Outstanding securities; provided, however, that no such approval
-------- -------
shall be required under clause (x) if the liquidation,
dissolution or winding up of Viacom Capital is proposed or
initiated upon the initiation of proceedings, or after
proceedings have been initiated, for the liquidation, dissolution
or winding up of Viacom.
The rights attached to the Preferred Partnership
Interests of any series will be deemed not to be varied by the
creation or issue of, and no vote will be required for the
creation of, any further series of Preferred Partnership
Interests or any partnership interests in Viacom Capital ranking
as to distributions or upon liquidation, dissolution or winding
up pari passu with or junior to such series of Preferred
---- -----
Partnership Interests.
Any required approval of holders of Preferred
Partnership Interests may be given at a separate meeting of such
holders convened for such purpose, at a general meeting of
partners or pursuant to written consent. Viacom Capital will
cause a notice of any meeting at which holders of the Preferred
Partnership Interests of a series are entitled to vote, or of any
matter upon which action by written consent of such holders is to
be taken, to be mailed to each holder of record of Preferred
Partnership Interests of such series. Each such notice will
include a statement setting forth (i) the date of such meeting or
the date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on which
such holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery
of proxies or consents.
18
No vote or consent of the holders of the Preferred
Partnership Interests of any series will be required for Viacom
Capital to redeem and cancel Preferred Partnership Interests of
any series in accordance with their respective Agreements of
Limited Partnership and any applicable resolutions.
Notwithstanding that holders of Preferred Partnership
Interests of any series are entitled to vote or consent under any
of the circumstances described above, any of the Preferred
Partnership Interests of any series that are owned by Viacom or
any of its affiliates, either directly or indirectly, shall not
be entitled to vote or consent and shall, for the purposes of
such vote or consent, be treated as if they were not Outstanding.
Book-Entry-Only Issuance; The Depository Trust Company
The Depository Trust Company ("DTC"), New York, New
York, will act as securities depository for the Preferred
Partnership Interests. The Preferred Partnership Interests will
be issued only as fully registered securities registered in the
name of Cede & Co. (DTC's nominee). One or more fully-registered
global preferred interest certificates will be issued for each
series of Preferred Partnership Interests, in the aggregate
liquidation preference of such issue, and will be deposited with
DTC.
DTC is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct
Participants and by the NYSE, AMEX and the National Association
of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers,
banks, and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The Rules applicable to
DTC and its Participants are on file with the Commission.
Purchases of Preferred Partnership Interests under the
DTC system must be made by or through Direct Participants, which
will receive a credit for the Preferred Partnership Interests on
DTC's records. The ownership interest of each actual purchaser
of each Preferred Partnership Interest ("Beneficial Owner") is in
turn recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC
of their purchases, but Beneficial Owners are expected to receive
written confirmations providing details of their transactions, as
well as periodic statements of their holdings, from the Direct or
Indirect Participants through which the Beneficial Owners
purchased Preferred Partnership Interests. Transfers of
ownership interests in the Preferred Partnership Interests are to
be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests
in Preferred Partnership Interests, except in the event that use
of the book-entry system for the Preferred Partnership Interests
is discontinued.
To facilitate subsequent transfers, all Preferred
Partnership Interests deposited by Participants with DTC are
registered in the name of Cede & Co. The deposit of Preferred
Partnership Interests with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has
no knowledge of the actual Beneficial Owners of the Preferred
Partnership Interests; DTC's records reflect only the identity of
the Direct Participants to whose accounts such Preferred
Partnership Interests are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
19
Conveyance of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less
than all of the Preferred Partnership Interests of any series are
being redeemed, DTC's practice is to determine by lot the amount
of the interest of each Direct Participant in such series to be
redeemed.
Although voting with respect to the Preferred
Partnership Interests is limited, in those cases where a vote is
required, neither DTC nor Cede & Co. will consent or vote with
respect to Preferred Partnership Interests. Under its usual
procedures, DTC mails an Omnibus Proxy to Viacom Capital as soon
as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Preferred Partnership
Interests are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Partnership
Interests will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and
customary practices and will be the responsibility of such
Participants and not of DTC, Viacom Capital or Viacom, subject to
any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the
responsibility of Viacom Capital, disbursement of such payments
to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be
the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as
securities depository with respect to the Preferred Partnership
Interests of any series at any time by giving reasonable notice
to Viacom Capital. Under such circumstances, in the event that a
successor securities depository is not obtained, preferred share
certificates for such series are required to be printed and
delivered.
The information in this section concerning DTC and
DTC's book-entry system has been obtained from sources that
Viacom Capital believes to be reliable, but none of Viacom,
Viacom Capital I or Viacom Capital II takes any responsibility
for the accuracy thereof.
Registrar, Transfer Agent and Paying Agent
Registration of transfers of Preferred Partnership
Interests of any series will be effected without charge by or on
behalf of Viacom Capital, but upon payment (with the giving of
such indemnity as Viacom Capital or Viacom may require) in
respect of any tax or other governmental charges which may be
imposed in relation to it.
Viacom Capital will not be required to register or
cause to be registered the transfer of Preferred Partnership
Interests of a particular series after such Preferred Partnership
Interests have been called for redemption.
Miscellaneous
Except as described in the applicable Prospectus
Supplement, neither Viacom Capital I nor Viacom Capital II is
subject to any mandatory redemption or sinking fund provisions
with respect to the Preferred Partnership Interests. Holders of
Preferred Partnership Interests have no preemptive rights.
20
Viacom International is the General Partner of Viacom
Capital I and Viacom Capital II. The General Partner's interest
in each of Viacom Capital I and Viacom Capital II is not
transferable. The General Partner is required, pursuant to the
terms of the Agreements of Limited Partnership, to contribute to
each of Viacom Capital I and Viacom Capital II amounts such that
the General Partner's interest at all times represents at least
21% of all interests in the capital, income, gain, loss,
deduction and credit of each of Viacom Capital I and Viacom
Capital II.
21
DESCRIPTION OF THE VIACOM GUARANTEE
Set forth below is condensed information concerning the
Viacom Guarantee which will be executed and delivered by Viacom
for the benefit of the holders from time to time of Preferred
Partnership Interests. This summary contains all material
information concerning the Viacom Guarantee but does not purport
to be complete. References to provisions of the Viacom Guarantee
are qualified in their entirety by reference to the text of the
Payment and Guarantee Agreement pursuant to which the Viacom
Guarantee will be made, a form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus
forms a part.
General
Viacom will unconditionally agree, to the extent set
forth herein and in the applicable Prospectus Supplement, to pay
in full to the holders of the Preferred Partnership Interests of
any series the Guarantee Payments (as defined below) (except to
the extent paid by Viacom Capital), as and when due, regardless
of any defense, right of set-off or counterclaim which Viacom
Capital may have or assert. The Viacom Guarantee will constitute
a guarantee of payment and may be enforced by holders of
Preferred Partnership Interests directly against Viacom. The
following payments, to the extent not paid by Viacom Capital (the
"Guarantee Payments"), will be subject to the Viacom Guarantee
(without duplication): (i) any accumulated and unpaid monthly
distributions which have been theretofore declared on the
Preferred Partnership Interests of such series out of funds held
by Viacom Capital and legally available therefor, (ii) the
redemption price (including all accumulated and unpaid monthly
distributions whether or not declared) payable out of funds held
by Viacom Capital and legally available therefor with respect to
any Preferred Partnership Interests of such series called for
redemption by Viacom Capital and (iii) upon a liquidation,
dissolution or winding up of Viacom Capital, the lesser of (a)
the aggregate of the stated liquidation preference of the
Preferred Partnership Interests of such series and all
accumulated and unpaid distributions (whether or not declared) to
the date of payment and (b) the amount of remaining assets of
Viacom Capital legally available for distribution to holders of
Preferred Partnership Interests of such series. Viacom's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by Viacom to the holders of
Preferred Partnership Interests of any series or by causing
Viacom Capital to pay such amounts to such holders. The
applicable Prospectus Supplement will describe any additional
covenants or other terms of the Viacom Guarantee with respect to
any series.
Certain Covenants of Viacom
In the Viacom Guarantee, Viacom will covenant that, so
long as any Preferred Partnership Interests remain outstanding,
Viacom shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of its common stock or make any guarantee payments with
respect to the foregoing (other than dividends or guarantee
payments to Viacom) during any extended interest period or if at
such time Viacom shall be in default with respect to its payment
or other material obligations under the Viacom Guarantee or there
shall have occurred an Event of Default or any event that, with
the giving of notice or the lapse of time or both, would
constitute an Event of Default under the Subordinated Debentures.
In the Viacom Guarantee, Viacom will also covenant
that, so long as Preferred Partnership Interests of any series
remain outstanding, it will (i) not cause or permit the General
Partner's Interest to be transferred, (ii) be or maintain
ownership, directly or indirectly, of 100% of the capital stock
of the General Partner, (iii) make (or cause to be made) such
contributions to Viacom Capital, either in connection with the
General Partner's Interest or otherwise, so as to cause at least
21% of all interests in the capital, income, gain, loss,
deductions and credit of Viacom Capital to be represented by the
General Partner, (iv) cause Viacom Capital not to be voluntarily
dissolved, wound-up or liquidated (except as described in the
applicable Prospectus Supplement), (v) cause Viacom International
to remain the General Partner of Viacom Capital and timely
perform all of its respective duties under the Agreement of
Limited Partnership (including the duty to declare
22
and pay distributions on the Preferred Partnership Interests
as described under "Description of Preferred Partnership Interests --
Distributions") and (vi) use its reasonable efforts to cause
Viacom Capital to remain a limited partnership and otherwise
continue to be treated as a partnership for U.S. federal income
tax purposes.
Amendments and Assignments
Except with respect to any changes which do not
adversely affect the rights of holders (in which case no vote
will be required), the Viacom Guarantee may be amended only with
the prior approval of the holders of not less than 66 2/3% in stated
liquidation preference of all Preferred Partnership Interests of
all series then outstanding. The manner of obtaining any such
approval of holders of the Preferred Partnership Interests will
be as set forth under "Description of Preferred Partnership
Interests -- Voting Rights". All guarantees and agreements
contained in the Viacom Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Viacom and
shall inure to the benefit of the holders of the Preferred
Partnership Interests.
Termination of the Viacom Guarantee
The Viacom Guarantee will terminate and be of no
further force and effect as to any series of Preferred
Partnership Interests upon full payment of the Redemption Price
of all Preferred Partnership Interests of such series upon full
payment of the amounts payable upon liquidation of Viacom Capital
or upon exchange of all Preferred Partnership Interests for
Subordinated Debentures as described above. The Viacom Guarantee
will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of Preferred Partnership
Interests of any series must restore payment of any sums paid
under the Preferred Partnership Interests of such series or the
Viacom Guarantee.
Status of the Guarantee
The Viacom Guarantee will rank pari passu with the
---- -----
Subordinated Debentures and, accordingly, will be subordinated in
right of payment to all Obligations Senior to the Subordinated
Debentures as such term is defined in the Subordinated Indenture.
See "Description of the Subordinated Debentures --Subordination".
The Viacom Guarantee will constitute a guarantee of
payment and not of collection. A holder of Preferred Partnership
Interests may enforce the Viacom Guarantee directly against
Viacom, and Viacom will waive any right or remedy to require that
any action be brought against Viacom Capital or any other person
or entity before proceeding against Viacom. The Viacom Guarantee
will not be discharged except by payment of the Guarantee
Payments in full to the extent not paid by Viacom Capital and by
complete performance of all obligations under the Viacom
Guarantee.
Governing Law
The Viacom Guarantee will be governed and construed in
accordance with the laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBENTURES
Set forth below is condensed information concerning the
Subordinated Debentures that will evidence the loans to be made
by Viacom Capital to Viacom of the proceeds of the issuance of
(i) the Preferred Partnership Interests of each series and (ii)
Viacom Capital's general partnership interests and related
capital contributions ("Partnership Payments"). Subordinated
Debentures will be issued under the
23
subordinated indenture to be executed by Viacom and
The First National Bank of Boston, as trustee (the "Subordinated
Indenture"). References to provisions of the Subordinated
Indenture are qualified in their entirety by
reference to the text of the Subordinated Indenture, a form of
which has been filed as an exhibit to the Registration Statement
of which this Prospectus forms a part. Certain capitalized terms
used below are defined in the Subordinated Indenture and have the
meanings given them in the Subordinated Indenture. Section
references are to the Subordinated Indenture. Wherever
particular sections or defined terms of the Subordinated
Indenture are referred to, such sections or defined terms are
incorporated by reference as part of the statement made, and the
statement is qualified in its entirety by such reference.
General
The Subordinated Indenture does not limit the amount of
Subordinated Debentures which may be issued thereunder. The
Subordinated Indenture provides that Subordinated Debentures may
be issued from time to time in one or more series. Special
United States federal income tax considerations applicable to any
Subordinated Debentures so denominated will be described in the
applicable Prospectus Supplement. The terms of each series of
Subordinated Debentures will be established by or pursuant to a
resolution of the Board of Directors of Viacom and set forth or
determined in the manner provided in an Officers' Certificate or
by a supplemental indenture. (Section 301) The particular terms
of each series of Subordinated Debentures offered by a Prospectus
Supplement will be described in such Prospectus Supplement
relating to such series. The aggregate dollar amount of the
Subordinated Debentures relating to Preferred Partnership
Interests of any series will be set forth in the applicable
Prospectus Supplement for such series and will be equal to the
aggregate liquidation preference of the Preferred Partnership
Interests of such series, together with the related Partnership
Payments.
The Subordinated Debentures will be unsecured general
obligations of Viacom. The Subordinated Debentures will be
subordinate and junior in right of payment to the extent and in
the manner set forth in the Subordinated Indenture to all
Obligations Senior to the Subordinated Debentures (as defined
below; see "--Subordination").
The applicable Prospectus Supplement will describe the
following terms of the Subordinated Debentures of each series
offered pursuant thereto: (1) designation; (2) any limit on the
aggregate principal amount of the Subordinated Debentures; (3)
the price or prices (expressed as a percentage of the aggregate
principal amount thereof) at which the Subordinated Debentures
will be issued; (4) the date or dates on which the Subordinated
Debentures will mature; (5) the rate or rates per annum at which
the Subordinated Debentures will bear interest or the method by
which such rate or rates will be determined, and the date or
dates from which any such interest will accrue; (6) the Interest
Payment Dates on which any such interest on the Subordinated
Debentures will be payable and the Regular Record Date for any
interest payable on any Interest Payment Date; (7) each office or
agency where, subject to the terms of the Subordinated Indenture
as described below under "-- Payment and Paying Agents", the
principal of, premium, if any, and interest on the Subordinated
Debentures will be payable and each office or agency where,
subject to the terms of the Subordinated Indenture as described
below under "-- Form, Exchange, Registration and Transfer", the
Subordinated Debentures may be presented for registration of
transfer or exchange; (8) the period or periods within which and
the price or prices at which the Subordinated Debentures may,
pursuant to any optional redemption provisions, be redeemed, in
whole or in part, and the other detailed terms and provisions of
any such optional redemption provisions; (9) the obligation, if
any, of Viacom to redeem, repay or purchase the Subordinated
Debentures pursuant to any sinking fund or analogous provisions
or at the option of the holder thereof and the period or periods
within which and the price or prices at which the Subordinated
Debentures will be redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation, and the other detailed terms
and provisions of such obligation; (10) any covenants of Viacom
applicable to the Subordinated Debentures; (11) any Events of
Default applicable to the Subordinated Debentures in addition to,
or in modification of, the Events of Default described below;
(12) the terms of any exchangeability or prepayment
24
provisions; and (13) any other terms of the Subordinated Debentures
not inconsistent with the provisions of the Subordinated Indenture.
(Section 301)
The entire principal amount of the Subordinated
Debentures relating to the Preferred Partnership Interests of any
series will become due and payable, together with any accrued and
unpaid interest thereon, including Additional Interest (as herein
defined), if any, on the earlier of (i) the date that is set
forth in the applicable Prospectus Supplement, subject to
Viacom's right to exchange such Subordinated Debentures for new
Subordinated Debentures or reborrow the proceeds from the
repayment of such Subordinated Debentures upon the terms and
subject to the conditions set forth under "Description of
Preferred Partnership Interests --Redemption or Exchange" above
and (ii) the date upon which Viacom Capital is dissolved, wound
up, liquidated or terminated or the General Partner is
liquidated, bankrupt or insolvent or withdraws, resigns or is
expelled from Viacom Capital.
Form, Exchange, Registration and Transfer
Subordinated Debentures of a series will be issuable in
registered form only. At the option of the Holder, subject to
the terms of the Subordinated Indenture, Subordinated Debentures
of any series will be exchangeable for other Subordinated
Debentures of the same series of any authorized denominations and
of a like aggregate principal amount and tenor.
Subordinated Debentures may be presented for
registration or transfer (with the form of transfer endorsed
thereon duly executed), at the office of the Security Registrar
or at the office of any transfer agent designated by Viacom for
such purpose with respect to any series of Subordinated
Debentures and referred to in an applicable Prospectus
Supplement, without a service charge and upon payment of any
taxes and other governmental charges as described in the
Subordinated Indenture. Such registration or transfer will be
effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and
identity of the person making the request. Viacom has appointed
the Trustee under the Subordinated Indenture as Security
Registrar. (Section 305) If a Prospectus Supplement refers to
any transfer agent (in addition to the Security Registrar)
initially designated by Viacom with respect to any series of
Subordinated Debentures, Viacom may at any time rescind the
designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, except that
Viacom will be required to maintain a transfer agent in each
Place of Payment for such series. Viacom may at any time
designate additional transfer agents with respect to any series
of Subordinated Debentures. (Section 1002)
In the event of any redemption in part, Viacom shall
not be required to (i) issue, register the transfer of or
exchange any Subordinated Debenture during a period beginning at
the opening of business 15 days before any selection for
redemption of Subordinated Debentures of the series of which such
Subordinated Debenture is a part, and ending at the close of
business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of
Subordinated Debentures of such series to be redeemed; or (ii)
register the transfer of or exchange any Subordinated Debentures
so selected for redemption in whole or in part, except the
unredeemed portion of any Subordinated Debenture being redeemed
in part. (Section 305)
Registered Global Securities
The registered Subordinated Debentures of a series may
be issued in the form of one or more fully registered global
Subordinated Debentures (a "Registered Global Security") that
will be deposited with DTC, or with a nominee for DTC identified
in the Prospectus Supplement relating to such series. In such
cases, one or more Registered Global Securities will be issued in
a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of outstanding registered
Subordinated Debentures of the series to be represented by such
Registered Global Security or Securities. Unless and until it is
exchanged in whole or in part for Subordinated Debentures in
definitive registered form, a Registered Global Security may
25
not be transferred except as a whole by DTC to a nominee of DTC or by
a nominee of DTC to DTC or another nominee of DTC or by DTC or
any such nominee to a successor of DTC or a nominee of such
successor.
The specific terms of the depositary arrangement with
respect to any portion of a series of Subordinated Debentures to
be represented by a Registered Global Security will be described
in the Prospectus Supplement relating to such series. Viacom
anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a Registered Global Security, DTC
will credit, on its book-entry registration and transfer system,
the respective principal amounts of the Subordinated Debentures
represented by such Registered Global Security to the accounts of
Participants. The accounts to be credited shall be designated by
any underwriters or agents participating in the distribution of
such Subordinated Debentures or by Viacom if such Subordinated
Debentures are offered and sold directly by Viacom. Ownership of
beneficial interest in a Registered Global Security will be
limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of
that ownership will be effected only through, records maintained
by DTC for such Registered Global Security (with respect to
interests of Participants) or by Participants or persons that
hold through Participants (with respect to interests of persons
other than Participants). The laws of some states require that
certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a
Registered Global Security.
So long as DTC, or its nominee, is the registered owner
of such Registered Global Security, DTC or such nominee, as the
case may be, will be considered the sole owner or holder of the
Subordinated Debentures represented by such Registered Global
Security for all purposes under the Subordinated Indenture.
Except as set forth below, owners of beneficial interests in a
Registered Global Security will not be entitled to have the
Subordinated Debentures represented by such Registered Global
Security registered in their names, will not receive or be
entitled to receive physical delivery of such Subordinated
Debentures in definitive form and will not be considered the
owners or holders under the Subordinated Indenture.
Principal, premium, if any, and interest payments on
Subordinated Debentures represented by a Registered Global
Security registered in the name of DTC or its nominee will be
made to DTC or its nominee, as the case may be, as the registered
owner of such Registered Global Security. None of Viacom, the
Trustee under the Subordinated Indenture or any paying agent for
such Subordinated Debentures will have any responsibility or
liability for any aspect of the records to or payments made on
account of beneficial ownership interests in such Registered
Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Viacom expects that DTC, upon receipt of any payment of
principal, premium or interest, will immediately credit
Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of
such Registered Global Security as shown on the records of DTC.
Viacom also expects that payments by Participants to owners of
beneficial interests in such Registered Global Security held
through such Participants will be governed by standing
instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or
registered in "street names", and will be the responsibility of
such Participants.
If DTC is at any time unwilling or unable to continue
as Depositary and a successor Depositary is not appointed by
Viacom within 90 days or an Event of Default has occurred and is
continuing with respect to such Subordinated Debentures, Viacom
will issue such Subordinated Debentures in definitive form in
exchange for such Registered Global Security. In addition,
Viacom may at any time and in its sole discretion determine not
to have the Subordinated Debentures of a series represented by
one or more Registered Global Securities and, in such event, will
issue Subordinated Debentures of such series in definitive form
in exchange for the Registered Global Securities or Securities
representing such Subordinated Debentures.
26
Further, if Viacom so specifies with respect to the
Subordinated Debentures of a series, an owner of a beneficial
interest in a Registered Global Security representing such
Subordinated Debentures may, on terms acceptable to Viacom and
DTC, receive such Subordinated Debentures in definitive form. In
any such instance, an owner of a beneficial interest in such a
Registered Global Security will be entitled to have Subordinated
Debentures equal in principal amount to such beneficial interest
registered in its name and will be entitled to physical delivery
of such Subordinated Debentures in definitive form. Subordinated
Debentures so issued in definitive form will, except as set forth
in the applicable Prospectus Supplement, be issued in
denominations of $100,000 and integral multiples of $1,000 in
excess thereof and will be issued in registered form only without
coupons.
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus
Supplement, principal of, premium, if any, and interest on
registered Subordinated Debentures will be payable, subject to
any applicable laws and regulations, at the office of such Paying
Agent or Paying Agents as Viacom may designate from time to time,
except that at the option of Viacom payment of any interest may
be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on a Subordinated Debenture on
any Interest Payment Date will be made to the Person in whose
name such Subordinated Debenture (or Predecessor Subordinated
Debenture) is registered at the close of business on the Regular
Record Date for such interest. (Section 307)
Unless otherwise indicated in an applicable Prospectus
Supplement, the Corporate Trust Office of the Trustee in the City
of New York will be designated as a Paying Agent for Viacom for
payments with respect to the Subordinated Debentures of each
series. Any Paying Agents initially designated by Viacom for the
Subordinated Debentures of each series will be named in an
applicable Prospectus Supplement. Viacom may at any time
designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that Viacom will be required to
maintain a Paying Agent in each Place of Payment for such series.
All moneys paid by Viacom to a Paying Agent for the
payment of the principal of, premium, if any, or interest on any
Subordinated Debenture of any series that remain unclaimed at the
end of two years after such principal, premium or interest shall
have become due and payable will be repaid to Viacom and the
holder of such Subordinated Debenture will thereafter look only
to Viacom for payment thereof. (Section 1003)
Mandatory Prepayment
If Viacom Capital redeems Preferred Partnership
Interests of any series in cash for the Redemption Price in
accordance with the terms thereof, the Subordinated Debentures
pertaining to such securities will become due and payable in a
principal amount equal to the aggregate stated liquidation
preference of the Preferred Partnership Interests of such series
so redeemed (together with any accrued but unpaid interest,
including Additional Interest, if any, on the principal amount to
the date of redemption). Any payment pursuant to this provision
shall be made prior to 12:00 noon, New York time, on the
Redemption Date or at such other time on such earlier date as
Viacom Capital and Viacom shall agree.
Optional Prepayment
Viacom shall have the right to prepay the Subordinated
Debentures without premium or penalty, in whole or in part
(together with any accrued but unpaid interest, including
Additional Interest, if any, on the portion being prepaid) at any
time on or after the date, if any, set forth in the applicable
Prospectus Supplement.
27
Interest
The Subordinated Debentures shall bear interest at the
annual rate set forth in the applicable Prospectus Supplement,
accruing from the date they are made or issued until maturity.
Such interest shall be payable on the last day of each calendar
month of each year, commencing on the date set forth in the
Prospectus Supplement relating to such series. In the event that
any date on which interest is payable on the Subordinated
Debentures is not a Business Day, then payment of the interest
due on such date will be made on the next succeeding Business Day
(and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same
force and effect as if made on such date; provided that Viacom
--------
shall have the right at any time or times during the term of the
Subordinated Debentures, so long as Viacom is not in default in
the payment of interest on the Subordinated Debentures, to extend
the interest payment period up to a period specified in the
applicable Prospectus Supplement (which period shall not exceed
60 months), at the end of which period Viacom shall pay all
interest which has accrued and not been paid (together with
interest thereon at the rate specified for the Subordinated
Debentures to the extent permitted by applicable law); provided
--------
further that, during any such extended interest period, or at any
-------
time during which there is an uncured Default or Event of Default
under the Subordinated Debentures, Viacom shall not pay any
dividends on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of its common stock or make any
guarantee payments with respect to the foregoing (other than
payments under the Viacom Guarantee). Prior to the termination
of any such extended interest payment period Viacom may further
extend the interest payment period, provided that such extended
--------
interest payment period, together with all such further
extensions thereof, may not exceed the period specified in the
applicable Prospectus Supplement. Following the termination of
any extended interest payment period, if Viacom has paid all
accrued and unpaid interest required by the Subordinated
Debentures for such period, then Viacom shall have the right to
again extend the interest payment period up to a period specified
in the applicable Prospectus Supplement (which period shall not
exceed 60 months) as herein described. Viacom shall give Viacom
Capital notice of its selection of such extended interest payment
period one Business Day prior to the earlier of (i) the date
Viacom Capital declares the related distribution payment or (ii)
the date Viacom Capital is required to give notice of the record
or payment date of such related distribution payment to the AMEX
or other applicable self-regulatory organization or to holders of
the Preferred Partnership Interests, but in any event not less
than two Business Days prior to such record date. Viacom shall
cause Viacom Capital to give such notice of Viacom's selection of
such extended interest payment period to the holders of the
Preferred Partnership Interests.
Additional Interest
If at any time following the date of the applicable
Prospectus Supplement, Viacom Capital shall be required to pay,
with respect to its income derived from the interest payments on
the Subordinated Debentures, any amounts, for or on account of
any taxes, duties or governmental charges of whatever nature
imposed by the United States, or any other taxing authority,
then, in any such case, Viacom will pay as interest such
additional amounts ("Additional Interest") as may be necessary in
order that the net amounts received and retained by Viacom
Capital after the payment of such taxes, duties, assessments or
governmental charges shall result in Viacom Capital's having such
funds as it would have had in the absence of the payment of such
taxes, duties, assessments or governmental charges.
Method and Date of Payment
Each payment by Viacom of principal and interest
(including Additional Interest, if any) on the Subordinated
Debentures shall be made to Viacom Capital in lawful money of the
United States, at such place and to such account as may be
designated by Viacom Capital.
28
Set-Off
Notwithstanding anything to the contrary in the
Subordinated Indenture or Subordinated Debentures, Viacom shall
have the right to set-off any payment it is otherwise required to
make thereunder with and to the extent Viacom has theretofore
made, or is concurrently on the date of such payment making, a
payment under the Viacom Guarantee.
Subordination
The payment of the principal of and premium, if any,
and any interest on the Subordinated Debentures will, to the
extent set forth in the Subordinated Indenture, be subordinated
and junior in right of payment to the prior payment in full of
all Obligations Senior to the Subordinated Debentures. The
Subordinated Indenture defines the term "Obligations Senior to
the Subordinated Debentures" as all debt securities issued as
consideration in connection with the Paramount Merger or upon
exchange of Viacom's Series C Preferred Stock, when issued, and
all obligations to which such securities are subordinated.
(Section 1301) Subject to any exceptions provided for in the
applicable Prospectus Supplement, upon any payment or
distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshalling of assets or any bankruptcy,
insolvency or similar proceedings of Viacom, the holders of all
Obligations Senior to the Subordinated Debentures will first be
entitled to receive payment in full of all amounts due or to
become due thereon before the holders of the Subordinated
Debentures will be entitled to receive any payment in respect of
the principal of, premium, if any, or any interest on the
Subordinated Debentures, and in the event that, notwithstanding
the foregoing, the Trustee under the Subordinated Indenture or
the holder of any Subordinated Debenture receives any payment or
distribution of assets of any kind or character before all
Obligations Senior to the Subordinated Debentures are paid in
full, then such payment or distribution will be required to be
paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of Viacom
for application to the payment of all Obligations Senior to the
Subordinated Debentures remaining unpaid, to the extent necessary
to pay all Obligations Senior to the Subordinated Debentures in
full. (Section 1302) No payments on account of principal,
premium, if any, or any interest in respect of the Subordinated
Debentures may be made if there shall have occurred and be
continuing (i) a default in any payment with respect to any
Obligations Senior to the Subordinated Debentures beyond any
applicable grace period, (ii) a nonpayment event of default with
respect to any Obligations Senior to the Subordinated Debentures
resulting in the acceleration of the maturity thereof, (iii) any
other nonpayment event of default with respect to any Obligations
Senior to the Subordinated Debentures permitting the holders
thereof to accelerate the maturity thereof after Viacom or the
Trustee under the Subordinated Indenture is notified of such
event by a representative of a holder of Obligations Senior to
the Subordinated Debentures (until the earlier of (A) 180 days
thereafter and (B) the date, if any, on which such event is cured
or waived or the related indebtedness is discharged) or (iv) the
pendency of any judicial proceeding with respect to any such
default; and in the event that Viacom makes any payment to the
Trustee under the Subordinated Indenture or the holder of any
Subordinated Debenture prohibited by the foregoing, then such
payment will be required to be paid over and delivered forthwith
to the appropriate Agent Bank. (Section 1303)
The Subordinated Indenture will provide that Viacom and
Viacom Capital covenant and agree (and each holder of Preferred
Partnership Interests by acceptance thereof agrees) that each of
the Subordinated Debentures is subordinate and junior in right of
payment to all Obligations Senior to the Subordinated Debentures.
The Obligations Senior to the Subordinated Debentures shall
continue to be Obligations Senior to the Subordinated Debentures
and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term
of the Obligations Senior to the Subordinated Debentures or
extension or renewal of the Obligations Senior to the
Subordinated Debentures.
Subject to the payment in full of all Obligations
Senior to the Subordinated Debentures, the holders of the
Subordinated Debentures shall be subrogated to the rights of the
holders of Obligations Senior to
29
the Subordinated Debentures to receive payments or distributions
of assets of Viacom applicable to Obligations Senior to the
Subordinated Debentures until the Subordinated Debentures are
paid in full. (Section 1305)
Certain Covenants of Viacom
In the Subordinated Debentures, Viacom will covenant
that, so long as Preferred Partnership Interests of any series
remain outstanding, it will (i) not declare or pay any
distribution on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its common stock, or
make any guarantee payments with respect to the foregoing (other
than payments pursuant to the Viacom Guarantee) if at such time
(x) there shall have occurred any Event of Default or event that,
with the giving of notice or the lapse of time or both, would
constitute an Event of Default or (y) Viacom shall be in default
with respect to its payment or other obligations under the Viacom
Guarantee, (ii) be or maintain ownership, directly or indirectly,
of all of the capital stock of the General Partner, (iii) make
(or cause to be made) such contributions to Viacom Capital so as
to cause at least 21% of all interests in the capital, income,
gain, loss, deductions and credit of Viacom Capital to be
represented by the General Partner, (iv) not voluntarily
dissolve, wind-up, or liquidate Viacom Capital or the General
Partner (except as described in the applicable Prospectus
Supplement), (v) cause Viacom International to remain the General
Partner of Viacom Capital and to timely perform all of its duties
as General Partner of Viacom Capital (including the duty to
declare and pay distributions on the Preferred Partnership
Interests as described under "Description of Preferred
Partnership Interests -- Distributions") and (vi) use its
reasonable efforts to cause Viacom Capital to remain a limited
partnership and otherwise continue to be treated as a partnership
for U.S. federal income tax purposes.
Viacom also will agree (i) that its obligations under
the Subordinated Debentures will also be for the benefit of the
holders from time to time of the related Preferred Partnership
Interests and that such holders will be entitled to enforce the
Subordinated Debentures directly against Viacom and (ii) not to
consolidate with or merge with another entity or permit another
entity to consolidate with or merge into it unless (a) at such
time no Event of Default has occurred and is continuing, or would
occur as a result of such merger and (b) Viacom is the survivor
of such merger or the entity formed by or resulting from such
merger shall expressly assume payment of the principal of and
premium, if any, and interest on the Subordinated Debentures. So
long as Viacom Capital holds the Subordinated Debentures, it may
not waive compliance or waive any default in compliance by Viacom
of any covenant or other term in the Subordinated Debentures or
the Subordinated Indenture without the approval of the same
percentage of Preferred Partnership Interests, obtained in the
same manner, as would be required for an amendment of the
Subordinated Debentures or the Subordinated Indenture to the same
effect.
Events of Default
The following are Events of Default with respect to a
series of Subordinated Debentures under the Subordinated
Indenture, unless otherwise indicated in the applicable
Prospectus Supplement and except as noted below:
(1) default in the payment of any interest on the
Subordinated Debentures, including any Additional Interest
in respect thereof, when due and continuance of such default for
a period of 30 days (whether or not such payment shall be
prohibited by the terms described above under "--
Subordination"); provided that a valid extension of the interest
--------
payment period by Viacom shall not constitute a default in
the payment of interest for this purpose; or
(2) default in the payment of the principal on the
Subordinated Debentures when due and payable, at maturity,
upon acceleration, redemption or otherwise (whether or not such
payment shall be prohibited by the terms described above
under "-- Subordination"); or
30
(3) certain events of bankruptcy, insolvency,
reorganization or liquidation of Viacom Capital, Viacom or
the General Partner; or
(4) default in the performance or breach in any
material respect of any other covenants or warranty of
Viacom contained in the Subordinated Debentures or the
Subordinated Indenture unless otherwise specifically
provided for, continued for 90 days after written notice.
(Section 501)
Unless otherwise specified in an applicable Prospectus
Supplement, if an Event of Default with respect to a series of
Subordinated Debentures (other than as specified in (3) above)
shall occur and be continuing under the Indenture, either the
applicable Trustee or the holders of not less than 25% in
aggregate principal amount of such series of Subordinated
Debentures outstanding shall have the right to declare the unpaid
principal of (and premium, if any) and any accrued interest on
the applicable series of Subordinated Debentures (including any
interest subject to an extension of the interest payment period)
and any other amounts payable on the Subordinated Debentures to
be forthwith due and payable; provided, however, that if any
-------- -------
Credit Agreement is then in effect, such declaration shall not
become effective until the first to occur of (i) an acceleration
under any Credit Agreement and (ii) the fifth Business Day after
notice of such declaration is received by Viacom and each Agent
Bank (unless on or prior to such fifth Business Day Viacom shall
have discharged the Indebtedness, if any, that is the subject of
the Event of Default or otherwise cured the default relating to
the Event of Default); and provided further that no action on the
-------- -------
part of such Trustee or any holder of such Subordinated
Debentures is required for such declaration if an Event of
Default specified in (3) above shall occur and be continuing; and
provided further that, after such declaration, but before a
-------- -------
judgment or decree based on such declaration has been obtained,
the holders of a majority in aggregate principal amount of
outstanding Subordinated Debentures of such series may, under
certain circumstances, rescind or annul such declaration if all
Events of Default, other than the nonpayment of accelerated
principal, have been cured or waived as provided in the
Indenture. (Section 502) The holders of not less than a
majority in principal amount of a series of Subordinated
Debentures outstanding also have the right to waive certain past
defaults under their respective Indenture. (Section 513)
No holder of any Subordinated Debenture of any series
issued under the Subordinated Indenture has any right to
institute any proceeding with respect to the Subordinated
Indenture, or for any remedy thereunder, unless (i) such holder
has previously given to the Trustee with respect to the
Subordinated Indenture written notice of a continuing Event of
Default under such Subordinated Indenture, (ii) the holders of
not less than 25% in principal amount of the outstanding
Subordinated Debentures of such series issued under the
Subordinated Indenture have made written request, and offered an
indemnity reasonably satisfactory, to such Trustee to institute
such proceeding as Trustee under the Subordinated Indenture and
(iii) the Trustee has not received from the holders of a majority
in principal amount of the outstanding Subordinated Debentures of
such series a direction inconsistent with such request and the
Trustee has failed to institute such proceeding within 60 days
after receipt of such notice. (Section 507) Such limitations do
not apply, however, to a suit instituted by a holder of a
Subordinated Debenture of such series for the enforcement of
payment of the principal of or premium, if any on, or any
interest on such Subordinated Debenture on or after the
respective due dates expressed in such Subordinated Debenture.
(Section 508)
During the existence of an Event of Default, the
Trustee is required to exercise such rights and powers vested in
it under the Subordinated Indenture and use the same degree of
care and skill in its exercise thereof as a prudent person would
exercise under the circumstances in the conduct of such person's
own affairs. Subject to the provisions of the Subordinated
Indenture relating to the duties of the Trustee, in case an Event
of Default shall occur and be continuing, the Trustee is not
under any obligation to exercise any of its rights or powers
under the Subordinated Indenture at the request or direction of
any of the holders unless such holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the
Trustee. (Section 602) Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in
principal amount of a series of Subordinated Debentures
outstanding have the right to direct the time, method and place
of
31
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the
Trustee under the Subordinated Indenture. (Section 512)
Viacom is required to furnish to each Trustee an annual
statement as to the performance by Viacom of its obligations
under the Subordinated Indenture and as to any default in such
performance. Viacom is also required to notify each Trustee of
any event that is, or after notice or lapse of time or both would
become, an Event of Default. (Section 1004)
Meetings, Modification and Waiver
Modifications and amendments of the Subordinated
Indenture may be made by Viacom and the Trustee with the consent
of the holders of not less than a majority in aggregate principal
amount of the Outstanding Subordinated Debentures of each series
affected by such modification or amendment; provided, however,
-------- -------
that no such modification or amendment may, without the consent
of the holder of each Outstanding Subordinated Debenture affected
thereby, (a) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Subordinated
Debenture or the terms of any sinking fund or analogous payment
with respect to any Subordinated Debenture, (b) reduce the
principal amount of, or premium or interest on, any Subordinated
Debenture, (c) change any obligation of Viacom to pay additional
amounts, (d) change the Place of Payment where, or the coin or
currency in which, any Subordinated Debenture or any premium or
interest thereon is payable, (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any
Subordinated Debenture, (f) reduce the percentage in principal
amount of Outstanding Subordinated Debentures of any series, the
consent of whose holders is required for modification or
amendment of such Subordinated Indenture or for waiver of
compliance with certain provisions of such Subordinated Indenture
or for waiver of certain defaults, (g) reduce the requirements
contained in such Subordinated Indenture for quorum or voting, or
(h) change any obligation of Viacom to maintain an office or
agency in the places and for the purposes required by such
Subordinated Indenture. (Section 902)
The holders of at least a majority in aggregate
principal amount of the Outstanding Subordinated Debentures of a
series may, on behalf of the holders of all the Subordinated
Debentures of that series, waive, insofar as that series is
concerned, compliance by Viacom with certain restrictive
provisions of the Subordinated Indenture. (Section 1010) The
holders of not less than a majority in aggregate principal amount
of the Outstanding Subordinated Debentures of a series may, on
behalf of all holders of Subordinated Debentures of that series,
waive any past default under the Subordinated Indenture with
respect to Subordinated Debentures of that series, except a
default (a) in the payment of principal of or any premium or
interest on any Subordinated Debenture of such series or (b) in
respect of any other provision of the Subordinated Indenture that
cannot be modified or amended without the consent of the holder
of each Outstanding Subordinated Debenture of such series
affected thereby. (Section 513)
The Subordinated Indenture will contain provisions for
convening meetings of the holders of Subordinated Debentures of
any or all series. (Section 1701) A meeting may be called at
any time by the Trustee, and also, upon request, by Viacom or the
holders of at least 25% in aggregate principal amount of the
Outstanding Subordinated Debentures of such series, in any such
case upon notice given in accordance with "--Notices" below.
(Section 1702) Except for any consent that must be given by the
holder of each Outstanding Subordinated Debenture affected
thereby, as described above, any resolution presented at a
meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the holders of a majority in
principal amount of the Outstanding Subordinated Debentures of
that series; provided, however, that, except for any consent that
-------- -------
must be given by the holder of each Outstanding Subordinated
Debenture affected thereby, as described above, any resolution
with respect to any consent, waiver, request, demand, notice,
authorization, direction or other action that may be given by the
holders of not less than a specified percentage in principal
amount of the Outstanding Subordinated Debentures of a series may
be adopted at a meeting or an adjourned meeting at which a quorum
is present only by the affirmative vote of the holders of not
less than such
32
specified percentage in principal amount of the
Outstanding Subordinated Debentures of that series. Any
resolution passed or decision taken at any meeting of holders of
Subordinated Debentures of any series duly held in accordance
with the Subordinated Indenture will be binding on all holders of
Subordinated Debentures of that series. The quorum at any
meeting called to adopt a resolution, and at any adjourned
meeting, will be Persons holding or representing a majority in
principal amount of the Outstanding Subordinated Debentures of a
series; provided, however, that, if any action is to be taken at
-------- -------
such meeting with respect to a consent, waiver, request, demand,
notice, authorization, direction or other action that may be
given by the holders of not less than a specified percentage in
principal amount of the Outstanding Subordinated Debentures of a
series, the Persons holding or representing such specified
percentage in principal amount of the Outstanding Subordinated
Debentures of such series will constitute a quorum. (Section
1704)
Notices
Notices to holders of Subordinated Debentures will be
given by mail to the addresses of such holders as they appear in
the Security Register. (Sections 101, 106)
Title
Viacom, the Trustee and any agent of Viacom or the
Trustee may treat the registered owner of any registered
Subordinated Debenture as the absolute owner thereof (whether or
not such Subordinated Debenture shall be overdue and
notwithstanding any notice to the contrary) for the purpose of
making payment and for all other purposes. (Section 307)
Replacement of Subordinated Debentures
Any mutilated Subordinated Debenture will be replaced
by Viacom at the expense of the holder upon surrender of such
Subordinated Debenture to the Trustee. Subordinated Debentures
that become destroyed, lost or stolen will be replaced by Viacom
at the expense of the holder upon delivery to the Trustee of
evidence of the destruction, loss or theft thereof satisfactory
to Viacom and the Trustee. In the case of a destroyed, lost or
stolen Subordinated Debenture, an indemnity satisfactory to the
Trustee and Viacom may be required at the expense of the holder
of such Subordinated Debenture before a replacement Subordinated
Debenture will be issued. (Section 306)
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable Prospectus
Supplement for a series of Subordinated Debentures, Viacom may
elect either (i) to defease and be discharged from any and all
obligations with respect to such Outstanding Subordinated
Debentures (except as otherwise provided in the Subordinated
Indenture) ("defeasance") or (ii) to be released from its
obligations with respect to certain covenants set forth in the
Subordinated Indenture ("covenant defeasance"), upon the deposit
with the Trustee (or other qualifying trustee), in trust for such
purpose, of money and/or Government Obligations that through the
payment of principal and interest in accordance with their terms
will provide money in an amount sufficient, without reinvestment,
to pay the principal of, premium, if any, and interest on the
Subordinated Debentures of such series to Maturity or redemption,
as the case may be, and any mandatory sinking fund or analogous
payments thereon. As a condition to defeasance or covenant
defeasance, Viacom must deliver to the Trustee an Opinion of
Counsel to the effect that the holders of the Subordinated
Debentures of such series will not recognize income, gain or loss
for United States federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred. Such Opinion
of Counsel, in the case of defeasance under clause (i) above,
must refer to and be based upon a
33
ruling of the Internal Revenue Service or a change in applicable
United States federal income tax law occurring after the date of
the Subordinated Indenture. (Article Sixteen)
Viacom may exercise its defeasance option with respect
to Subordinated Debentures of any series notwithstanding its
prior exercise of its covenant defeasance option. If Viacom
exercises its defeasance option, payment of the Subordinated
Debentures of such series may not be accelerated because of an
Event of Default. If Viacom exercises its covenant defeasance
option, payment of the Subordinated Debentures of such series may
not be accelerated by reference to any covenant from which Viacom
is released as described under clause (ii) above. However, if
acceleration were to occur for other reasons, the realizable
value at the acceleration date of the money and Government
Obligations in the defeasance trust could be less than the
principal and interest then due on the Subordinated Debentures of
such series, in that the required deposit in the defeasance trust
is based upon scheduled cash flows rather than market value,
which will vary depending upon interest rates and other factors.
Miscellaneous
Viacom will have the right at all times to assign any
of its rights or obligations under the Subordinated Debentures to
a direct or indirect wholly owned subsidiary of Viacom; provided
--------
that, in the event of any such assignment, Viacom will remain
jointly and severally liable for all such obligations and
provided further that Viacom shall have received an opinion of
-------- -------
nationally recognized tax counsel that such assignment shall not
constitute a taxable event to the holders of Preferred
Partnership Interests for federal income tax purposes. Except as
set forth in the applicable Prospectus Supplement, Viacom Capital
may not assign any of its rights under the Subordinated
Debentures without the prior written consent of Viacom. Subject
to the foregoing, the Subordinated Debentures will be binding
upon and inure to the benefit of Viacom and Viacom Capital and
their respective successors and assigns. The Subordinated
Debentures provide that they may not otherwise be assigned by
Viacom or Viacom Capital.
The Subordinated Debentures may be amended by mutual
consent of Viacom and the holders thereof, subject to the terms
of the Subordinated Indenture, in the manner the parties shall
agree; provided that, so long as any of the Preferred Partnership
Interests remain outstanding, no such amendment shall be made
that adversely affects the holders of Preferred Partnership
Interests then outstanding, and no termination of the
Subordinated Debentures shall occur, without the prior approval
of the holders of at least 66 2/3% in stated liquidation preference
of all Preferred Partnership Interests then outstanding (or,
under certain circumstances, 100% in stated liquidation
preference of all Preferred Partnership Interests then
outstanding) unless and until the Subordinated Debentures and all
accrued and unpaid interest thereon (including Additional
Interest, if any) shall have been paid in full. The manner of
obtaining such approval of holders of Preferred Partnership
Interests will be as set forth under "Description of Preferred
Partnership Interests -- Voting Rights".
Governing Law
The Subordinated Indenture and the Subordinated
Debentures will be governed by, and construed in accordance with,
the laws of the State of New York. (Section 113)
Regarding the Trustee
Viacom and Viacom International maintain deposit
accounts and banking and borrowing relations with The First
National Bank of Boston, the trustee under the Subordinated
Indenture, and such trustee is currently a lender to Viacom and
Viacom International.
34
Certain Definitions
"Credit Agreement" means any credit agreement under
which Viacom is a borrower, in the principal amount of at
least $100 million.
"Officers' Certificate" means a certificate signed by
two Officers or by any Officer and either an Assistant
Treasurer or an Assistant Secretary of the referent company and
delivered to the Trustee.
"Subsidiary" of any Person means (i) a corporation a
majority of the outstanding voting stock of which is at the
time, directly or indirectly, owned by such Person, by one or
more Subsidiaries of such Person, or by such Person and one
or more Subsidiaries thereof or (ii) any other Person (other
than a corporation), including, without limitation, a partnership
or joint venture, in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries
thereof, directly or indirectly, at the date of
determination thereof, has at least majority ownership interest
entitled to vote in the election of directors, managers or
trustees thereof (or other Person performing similar functions).
PLAN OF DISTRIBUTION
Viacom Capital may offer the Offered Securities
directly to purchasers, to or through underwriters or through
dealers or agents. Any such underwriter(s), dealer(s) or
agent(s) involved in the offer and sale of the Offered Securities
in respect of which this Prospectus is delivered will be named in
the Prospectus Supplement. The Prospectus Supplement with
respect to such Offered Securities will also set forth the terms
of the offering of such Offered Securities, including the
purchase price of such Offered Securities and the proceeds to
Viacom Capital from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any initial
public offering price and any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on
which such Offered Securities may be listed.
If underwriters are used in an offering of Offered
Securities, the name of each managing underwriter, if any, and
any other underwriters and the terms of the transaction,
including any underwriting discounts and other items constituting
compensation of the underwriters and dealers, if any, will be set
forth in the Prospectus Supplement relating to such offering and
the Offered Securities will be acquired by the underwriters for
their own accounts and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time
of sale. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time. It is anticipated that any
underwriting agreement pertaining to any Offered Securities will
(i) entitle the underwriters to indemnification by Viacom against
certain civil liabilities under the Securities Act, or to
contribution with respect to payments which the underwriters may
be required to make in respect thereof, (ii) provide that the
obligations of the underwriters will be subject to certain
conditions precedent and (iii) provide that the underwriters will
be obligated to purchase all Offered Securities in a particular
offering if any such Offered Securities are purchased.
If a dealer is used in an offering of Offered
Securities, Viacom Capital will sell such Offered Securities to
the dealer, as principal. The dealer may then resell such
Offered Securities to the public at varying prices to be
determined by such dealer at the time of resale. The name of the
dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
If an agent is used in an offering of Offered
Securities, the agent will be named, and the terms of the agency
will be set forth, in the Prospectus Supplement relating thereto.
Unless otherwise indicated in such Prospectus Supplement, an
agent will act on a best efforts basis for the period of its
appointment.
35
Dealers and agents named in a Prospectus Supplement may
be deemed to be underwriters (within the meaning of the
Securities Act) of the Offered Securities described therein and,
under agreements which may be entered into with Viacom, may be
entitled to indemnification by Viacom against certain civil
liabilities under the Securities Act. Underwriters, dealers and
agents may be customers of, engage in transactions with, or
perform services for, Viacom, Viacom International, Viacom
Capital or Paramount in the ordinary course of business.
Offers to purchase Offered Securities may be solicited,
and sales thereof may be made, by Viacom Capital directly to
institutional investors or others, who may be deemed to be
underwriters within the meaning of the Securities Act with
respect to any resales thereof. The terms of any such offer will
be set forth in the Prospectus Supplement relating thereto.
If so indicated in the Prospectus Supplement, Viacom
Capital will authorize underwriters or other agents of Viacom
Capital to solicit offers by certain institutional investors to
purchase Offered Securities from Viacom Capital pursuant to
contracts providing for payment and delivery at a future date.
Institutional investors with which such contracts may be made
include commercial and savings banks, insurance companies,
pension funds, investment companies, educational and charitable
institutions and others, but in all cases such purchasers must be
approved by Viacom Capital. The obligations of any purchaser
under any such contract will not be subject to any conditions
except that (1) the purchase of the Offered Securities shall not
at the time of delivery be prohibited under the laws of any
jurisdiction to which such purchaser is subject and (2) if the
Offered Securities are also being sold to underwriters, Viacom
Capital shall have sold to such underwriters the Offered
Securities not subject to delayed delivery. Underwriters and
other agents will not have any responsibility in respect of the
validity or performance of such contracts.
The anticipated date of delivery of Offered Securities
will be set forth in the Prospectus Supplement relating to each
offering.
LEGAL MATTERS
The validity of the Offered Securities and the related
guarantees will be passed upon for Viacom, Viacom Capital I and
Viacom Capital II by Shearman & Sterling, New York, New York,
counsel for such companies, and for any underwriters by Hughes
Hubbard & Reed and/or Simpson Thacher & Bartlett, New York, New
York, or such other counsel as may be named in the applicable
Prospectus Supplement. Hughes Hubbard & Reed has from time to
time performed legal services for Viacom International. Simpson
Thacher & Bartlett has from time to time performed legal services
for Paramount and Viacom International.
EXPERTS
The consolidated financial statements and schedules of
Viacom incorporated in this Prospectus by reference to its Annual
Report on Form 10-K for the year ended December 31, 1993, as
amended by Form 10-K/A Amendment No. 1, have been so incorporated
in reliance on the reports of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements and schedules of
Paramount incorporated by reference in this Prospectus and
Registration Statement at April 30, 1993 and at October 31, 1992
and 1991, and for the six-month period ended April 30, 1993, and
for each of the three years in the period ended October 31, 1992
included in its Transition Report on Form 10-K for the six-month
period ended April 30, 1993, as amended by Form 10-K/A Amendments
No. 1, 2 and 3 have been audited by Ernst & Young, independent
auditors, as set forth in their reports thereon included therein
and incorporated herein by reference. Such consolidated
financial
36
statements and schedules are incorporated herein by
reference in reliance upon such reports given upon the authority
of such firm as experts in accounting and auditing.
37
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following expenses, other than the Securities and
Exchange Commission registration fee, are estimated. All
expenses of the offering will be paid by Viacom:
Securities and Exchange
Commission registration fee. $1,034,483
Blue Sky fees and expenses . .
American Stock Exchange listing fee. . .
Printing and engraving expenses . .
Legal fees and expenses (other than
Blue Sky fees and expenses).
Accounting fees and expenses .
Trustees' fees and expenses. .
Miscellaneous. . . . . . . . .
Total. . . . . . . . . .
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law
(the "DGCL") empowers a Delaware corporation to indemnify any
person who was or is, or is threatened to be made, a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of such corporation) by reason
of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture,
trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that
such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, such person had no reasonable cause to believe his
conduct was unlawful. A Delaware corporation may indemnify such
persons against expenses (including attorneys' fees) in actions
brought by or in the right of the corporation to procure a
judgment in its favor under the same conditions, except that no
indemnification is permitted in respect of any claim, issue or
matter as to which such person shall have been adjudged to be
liable to the corporation unless and to the extent the Court of
Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that,
in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses as
the Court of Chancery or other such court shall deem proper. To
the extent such person has been successful on the merits or
otherwise in defense of any action referred to above, or in
defense of any claim, issue or matter therein, the corporation
must indemnify such person against expenses (including attorneys'
fees) actually and reasonably incurred by such person in
connection therewith. The indemnification and advancement of
expenses provided for in, or granted pursuant to, Section 145 is
not exclusive of any other rights to which those seeking
indemnification or
II-1
advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
Section 145 also provides that a corporation may
maintain insurance against liabilities for which indemnification
is not expressly provided by the statute.
Article VI of each of Viacom's Restated Certificate of
Incorporation and Viacom International's Certificate of
Incorporation provides for indemnification of the directors,
officers, employees and agents of Viacom and Viacom Inc.,
respectively, to the full extent currently permitted by the DGCL.
Article XII, Section 1 of Paramount's Amended and Restated Bylaws
provides for indemnification of directors and officers of
Paramount against certain liabilities as a result of their duties
as such.
In addition, each of Viacom's Restated Certificate of
Incorporation and Viacom International's Certificate of
Incorporation, as permitted by Section 102(b) of the DGCL, limits
directors' liability to Viacom and Viacom International,
respectively, and their respective stockholders by eliminating
liability in damages for breach of fiduciary duty. Article VII
of each of Viacom's Restated Certificate of Incorporation and
Viacom International's Certificate of Incorporation provides that
neither Viacom nor Viacom International, respectively, nor their
respective stockholders may recover damages from their respective
directors for breach of their fiduciary duties in the performance
of their duties as directors of Viacom or Viacom International,
as the case may be. As limited by Section 102(b), this provision
cannot, however, have the effect of indemnifying any director of
Viacom or Viacom International in the case of liability (i) for a
breach of the director's duty of loyalty, (ii) for acts or
omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) for unlawful
payment of dividends or unlawful stock repurchases or redemptions
as provided in Section 174 of the DGCL, or (iv) for any
transactions for which the director derived an improper personal
benefit. Article XIII of Paramount's Restated Certificate of
Incorporation limits the liability of its directors to Paramount
or its stockholders for monetary damages for breach of fiduciary
duty.
Paramount has in effect liability insurance policies
covering certain claims against any officer or director of
Paramount by reason of certain breaches of duty, neglect, error,
misstatement, omission or other act committed by such person in
his capacity as officer or director.
It is expected that in connection with the Paramount
Merger Paramount's Restated Certificate of Incorporation and
Bylaws will contain the same provisions regarding indemnification
of officers and directors as Viacom International's Certificate
of Incorporation and Bylaws.
Item 16. Exhibits.
1.1 - Form of Underwriting Agreement for Debt Securities and
Viacom Preferred Stock.*
1.2 - Form of Underwriting Agreement for Viacom Capital
Preferred Interests and Subordinated Debentures.*
4.1 - Form of Indenture relating to the Senior Debt
Securities.*
4.2 - Form of Indenture relating to the Senior
Subordinated Debt Securities.*
4.3 - Forms of Senior Debt Securities (included as Exhibits A
and B to the Form of Indenture filed as Exhibit 4.1).
4.4 - Forms of Senior Subordinated Debt Securities (included
as Exhibits A and B to the Form of Indenture filed as
Exhibit 4.2).
4.5 - Restated Certificate of Incorporation of Viacom
(incorporated by reference to Exhibit 3(a) to the
Annual Report on Form 10-K of Viacom for the fiscal year
ended December 31, 1992, as amended by Form 10-K/A
Amendment No. 1 dated November 29, 1993 and as further
amended by Form 10-K/A Amendment No. 2 dated December 9,
1993) (File No. 1-9553).
4.6 - Certificate of Limited Partnership of Viacom
Capital I.*
II-2
4.7 - Certificate of Limited Partnership of
Viacom Capital II.*
4.8 - Agreement of Limited Partnership of Viacom Capital I.*
4.9 - Agreement of Limited Partnership of
Viacom Capital II.*
4.10 - Form of Preferred Partnership Interests.+
4.11 - Form of Payment and Guarantee Agreement by Viacom.*
4.12 - Form of Indenture relating to the Subordinated
Debentures.*
4.13 - Form of Deposit Agreement between Viacom
and the Depositary.*
5.1 - Opinion of Shearman & Sterling as
to the validity of the Offered Securities.*
12.1 - Computation of Ratio of Earnings to Fixed Charges of
Viacom Inc.**
12.2 - Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.**
23.1 - Consent of Price Waterhouse.**
23.2 - Consent of Shearman & Sterling (included in their
opinion filed as Exhibit 5).
23.3 - Consent of Ernst & Young.**
24 - Powers of Attorney.**
25 - Form T-1 Statement of Eligibility of The First National
Bank of Boston, Trustee.**
________________________________________
* To be filed by amendment.
** Filed herewith.
+ To be incorporated by reference.
Item 17. Undertakings.
(a) The undersigned registrants hereby undertake:
(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;
(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, represent a fundamental change in the information set
forth in the registration statement; and
(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 information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrants pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, 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.
II-3
(b) The undersigned registrants hereby undertake that,
for purposes of determining any liability under the Securities
Act, each filing of the registrants' annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act 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.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrants pursuant to the
foregoing provisions, or otherwise, the registrants have been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of
expenses incurred or paid by a director, officer or controlling
person of the registrants 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 registrants will, unless in the opinion of their
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by them is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under
the Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under
the Securities Act, each post-effective amendment that
contains a form of prospectus 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.
(e) With respect to the Indentures for the Debt
Securities and the Debentures, the undersigned registrants hereby
undertake to file an application for the purpose of determining
the eligibility of the trustees to act under subsection (a) of
section 310 of the Trust Indenture Act (the"TIA") in accordance
with the rules and regulations prescribed by the Commission under
section 305(b)(2) of the TIA.
(f) Viacom Capital I L.P. and Viacom Capital II L.P.
each hereby undertake to provide to the underwriter or
underwriters at the closing specified in the underwriting
agreements, certificates in such denominations and registered in
such names as required by the underwriter or underwriters to
permit prompt delivery to each purchaser.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Viacom Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York, on May 5, 1994.
VIACOM INC.
By /s/ Frank J. Biondi, Jr.
------------------------------
Frank J. Biondi, Jr.
President, Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities indicated on May 5, 1994:
Name and Signature Title
/s/ Frank J. Biondi, Jr. Director, President,
---------------------------------- Chief Executive Officer
(Frank J. Biondi, Jr.)
/s/ George S. Smith, Jr. Senior Vice President,
---------------------------------- Chief Financial Officer
(George S. Smith, Jr.)
/s/ Kevin C. Lavan Vice President, Controller,
----------------------------------
(Kevin C. Lavan) Chief Accounting Officer
* Director
----------------------------------
(George S. Abrams)
/s/ Philippe P. Dauman Director
----------------------------------
(Philippe P. Dauman)
* Director
----------------------------------
(William C. Ferguson)
* Director
----------------------------------
(H. Wayne Huizenga)
II-5
* Director
----------------------------------
(Ken Miller)
* Director
----------------------------------
(Brent D. Redstone)
* Director
----------------------------------
(Sumner M. Redstone)
* Director
----------------------------------
(Frederic V. Salerno)
* Director
----------------------------------
(William Schwartz)
*By /s/ Philippe P. Dauman
----------------------------------
Philippe P. Dauman,
Attorney-in-Fact
for the Directors
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Viacom International Inc. certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New
York, on May 5, 1994.
VIACOM INTERNATIONAL INC.
By /s/ Frank J. Biondi, Jr.
--------------------------------
Frank J. Biondi, Jr.
President, Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities indicated on May 5, 1994:
Name and Signature Title
/s/ Frank J. Biondi, Jr. Director, President,
----------------------------------
(Frank J. Biondi, Jr.)
Chief Executive Officer
/s/ George S. Smith, Jr. Senior Vice President,
----------------------------------
(George S. Smith, Jr.) Chief Financial Officer
/s/ Kevin C. Lavan Vice President, Controller,
----------------------------------
(Kevin C. Lavan) Chief Accounting Officer
* Director
----------------------------------
(George S. Abrams)
/s/ Philippe P. Dauman Director
----------------------------------
(Philippe P. Dauman)
* Director
----------------------------------
(William C. Ferguson)
* Director
----------------------------------
(H. Wayne Huizenga)
II-7
* Director
----------------------------------
(Ken Miller)
* Director
----------------------------------
(Brent D. Redstone)
* Director
----------------------------------
(Sumner M. Redstone)
* Director
----------------------------------
(Frederic V. Salerno)
* Director
----------------------------------
(William Schwartz)
*By /s/ Philippe P. Dauman
----------------------------------
Philippe P. Dauman,
Attorney-in-Fact
for the Directors
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Viacom Capital I L.P. certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New
York, on May 5, 1994.
VIACOM CAPITAL I L.P.
By: VIACOM INTERNATIONAL INC.,
as General Partner
By /s/ Frank J. Biondi, Jr.
--------------------------------
Frank J. Biondi, Jr.
President,
Chief Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
directors of Viacom International Inc., the corporate general
partner of Viacom Capital I L.P., on May 5, 1994:
Name and Signature Title
/s/ Frank J. Biondi, Jr. Director
----------------------------------
(Frank J. Biondi, Jr.)
* Director
----------------------------------
(George S. Abrams)
/s/ Philippe P. Dauman Director
----------------------------------
(Philippe P. Dauman)
* Director
----------------------------------
(William C. Ferguson)
* Director
----------------------------------
(H. Wayne Huizenga)
* Director
----------------------------------
(Ken Miller)
II-9
* Director
----------------------------------
(Brent D. Redstone)
* Director
----------------------------------
(Sumner M. Redstone)
* Director
----------------------------------
(Frederic V. Salerno)
* Director
----------------------------------
(William Schwartz)
*By /s/ Philippe P. Dauman
----------------------------------
Philippe P. Dauman,
Attorney-in-Fact
for the Directors
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Viacom Capital II L.P. certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New
York, on May 5, 1994.
VIACOM CAPITAL II L.P.
By: VIACOM INTERNATIONAL INC.,
as General Partner
By /s/ Frank J. Biondi, Jr.
----------------------------------
Frank J. Biondi, Jr.
President, Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
directors of Viacom International Inc., the corporate general
partner of Viacom Capital II L.P., on May 5, 1994:
Name and Signature Title
/s/ Frank J. Biondi, Jr. Director
----------------------------------
(Frank J. Biondi, Jr.)
* Director
----------------------------------
(George S. Abrams)
/s/ Philippe P. Dauman Director
----------------------------------
(Philippe P. Dauman)
* Director
----------------------------------
(William C. Ferguson)
* Director
----------------------------------
(H. Wayne Huizenga)
* Director
----------------------------------
(Ken Miller)
II-11
* Director
----------------------------------
(Brent D. Redstone)
* Director
----------------------------------
(Sumner M. Redstone)
* Director
----------------------------------
(Frederic V. Salerno)
* Director
----------------------------------
(William Schwartz)
*By /s/ Philippe P. Dauman
----------------------------------
Philippe P. Dauman,
Attorney-in-Fact
for the Directors
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Paramount Communications Inc. certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York,
State of New York, on May 5, 1994.
PARAMOUNT COMMUNICATIONS INC.
By /s/ Frank J. Biondi, Jr.
----------------------------------
President, Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed below by the
following persons in the capacities indicated on May 5, 1994:
Name and Signature Title
/s/ Frank J. Biondi, Jr. Director, President
----------------------------------
(Frank J. Biondi, Jr.) Chief Executive Officer
/s/ Thomas E. Dooley Executive Vice President,
----------------------------------
(Thomas E. Dooley) Finance, Corporate Development
and Communications
/s/ Rudolph L. Hertlein Senior Vice
----------------------------------
(Rudolph L. Hertlein) President, Controller
* Director
----------------------------------
(George S. Abrams)
/s/ Philippe P. Dauman Director
----------------------------------
(Philippe P. Dauman)
* Director
----------------------------------
(Martin S. Davis)
* Director
----------------------------------
(William C. Ferguson)
* Director
----------------------------------
(Irving R. Fischer)
II-13
* Director
----------------------------------
(H. Wayne Huizenga)
* Director
----------------------------------
(Ken Miller)
* Director
----------------------------------
(Ronald L. Nelson)
* Director
----------------------------------
(Donald Oresman)
* Director
----------------------------------
(James A. Pattison)
* Director
----------------------------------
(Brent D. Redstone)
* Director
----------------------------------
(Sumner M. Redstone)
* Director
----------------------------------
(Frederic V. Salerno)
* Director
----------------------------------
(William Schwartz)
*By /s/ Philippe P. Dauman
----------------------------------
Philippe P. Dauman,
Attorney-in-Fact
for the Directors
II-14
EXHIBIT INDEX
Exhibit Description
------- -----------
1.1 - Form of Underwriting Agreement for Debt Securities and
Viacom Preferred Stock.*
1.2 - Form of Underwriting Agreement for Viacom Capital
Preferred Interests and Subordinated Debentures.*
4.1 - Form of Indenture relating to the Senior Debt
Securities.*
4.2 - Form of Indenture relating to the Senior
Subordinated Debt Securities.*
4.3 - Forms of Senior Debt Securities (included as Exhibits A
and B to the Form of Indenture filed as Exhibit 4.1).
4.4 - Forms of Senior Subordinated Debt Securities (included
as Exhibits A and B to the Form of Indenture filed as
Exhibit 4.2).
4.5 - Restated Certificate of Incorporation of Viacom
(incorporated by reference to Exhibit 3(a) to the
Annual Report on Form 10-K of Viacom for the fiscal year
ended December 31, 1992, as amended by Form 10-K/A
Amendment No. 1 dated November 29, 1993 and as further
amended by Form 10-K/A Amendment No. 2 dated December 9,
1993) (File No. 1-9553).
4.6 - Certificate of Limited Partnership of Viacom
Capital I.*
4.7 - Certificate of Limited Partnership of
Viacom Capital II.*
4.8 - Agreement of Limited Partnership of Viacom Capital I.*
4.9 - Agreement of Limited Partnership of
Viacom Capital II.*
4.10 - Form of Preferred Partnership Interests.+
4.11 - Form of Payment and Guarantee Agreement by Viacom.*
4.12 - Form of Indenture relating to the Subordinated
Debentures.*
4.13 - Form of Deposit Agreement between Viacom
and the Depositary.*
5.1 - Opinion of Shearman & Sterling as
to the validity of the Offered Securities.*
12.1 - Computation of Ratio of Earnings to Fixed Charges of
Viacom Inc.**
12.2 - Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.**
23.1 - Consent of Price Waterhouse.**
23.2 - Consent of Shearman & Sterling (included in their
opinion filed as Exhibit 5).
23.3 - Consent of Ernst & Young.**
24 - Powers of Attorney.**
25 - Form T-1 Statement of Eligibility of The First National
Bank of Boston, Trustee.**
________________________________________
* To be filed by amendment.
** Filed herewith.
+ To be incorporated by reference.
Viacom/Paramount and Viacom/Paramount/Blockbuster
Unaudited Pro Forma Combined
Ratio of Earnings to Fixed Charges
For the Year Ended December 31, 1993
(In millions, except ratios)
Viacom Offer and
------------------------------ Paramount Blockbuster Viacom/
Pro Forma Pro Forma Merger Viacom/ Pro Forma Merger Paramount/
Viacom Adjustments Pro Forma Paramount Adjustments Paramount Blockbuster Adjustments Blockbuster
------ ----------- --------- --------- ----------- --------- ----------- ----------- -----------
Earnings before income
taxes................. $301.8 $8.9 $310.7 $243.9 ($393.1) $161.5 $360.4 ($121.0) $400.9
Add:
Distributed income
of affiliated
companies........... 13.4 ($12.0) 1.4 -- 1.4 -- 1.4
Distributed income of
affiliated
companies, net of
equity pick-up...... -- -- (9.5) (9.5) (9.5)
Interest expense, net
of capitalized
interest............ 154.2 (8.9) 145.3 76.0 249.3 470.6 98.7 569.3
Capitalized interest
amortized........... 2.1 2.1 6.2 8.3 -- 8.3
Interest rate factor
of rental expense... 24.7 24.7 33.8 58.5 60.4 118.9
Preferred stock
dividends of
majority-owned
subsidiaries....... -- -- -- -- 0.8 0.8
------------------------------ --------- ----------- --------- ----------- ----------- -----------
Earnings................ $496.2 ($12.0) $484.2 $350.4 ($143.8) $690.8 $520.3 ($121.0) $1,090.1
============================== ========= =========== ========= =========== =========== ===========
Fixed Charges:
Interest costs on all
indebtedness........ $154.5 ($8.9) $145.6 $82.4 $249.3 $477.3 $98.7 -- $576.0
Interest rate factor
of rental expense... 24.7 24.7 33.8 58.5 60.4 -- 118.9
Preferred stock
dividends of
majority-owned
subsidiaries........ -- -- -- -- 0.8 -- 0.8
------------------------------ --------- ----------- --------- ----------- ----------- -----------
Total fixed charges..... 179.2 (8.9) 170.3 116.2 249.3 535.8 159.9 -- 695.7
Preferred stock
dividend requirement 22.4 130.2 152.7 152.6 (51.0) 101.6
Total fixed charges and
preferred stock ------------------------------ --------- ----------- --------- ----------- ----------- -----------
dividend requirements. $201.6 $121.3 $322.9 $116.2 $249.3 $688.4 $159.9 ($51.0) $797.3
============================== ========= =========== ========= =========== =========== ===========
Ratio of earnings to
fixed charges......... 2.8x 2.8x 3.0x 1.3x 3.3x 1.6x
====== ========= ========= ========= =========== ===========
Ratio of earning to
fixed charges and
preferred stock
dividend requirements. 2.5x 1.5x 3.0x 1.0x 3.3x 1.4x
====== ========= ========= ========= =========== ===========
VIACOM INC. AND
VIACOM INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
(In thousands, except ratios)
Year Ended December 31,
-------------------------------------------------------------------
1993 1992 1991 1990 1989 (c)
Earnings (loss) before income taxes $301,816 $155,579 $8,247 ($70,363) $144,913
Add:
Distributed income of Affiliated Companies 13,441 9,447 5,546 2,800 4,500
Interest expense, net of capitalized interest 154,137 195,223 298,078 295,305 313,079
Capitalized interest amortized 2,094 2,376 2,326 2,249 2,349
1/3 of rental expense 24,745 22,640 21,537 18,781 15,492
Earnings $496,233 $385,265 $335,734 $248,772 $480,333
Fixed charges:
Interest costs on all indebtedness $154,510 $195,725 $298,591 $296,145 $313,805
1/3 of rental expense 24,745 22,640 21,537 18,781 15,492
Total fixed charges $179,255 $218,365 $320,128 $314,926 $329,297
Preferred Stock dividend requirements (a) 22,368 -- -- -- 29,103
Total fixed charges and Preferred Stock dividend
requirements $201,623 $218,365 $320,128 $314,926 $358,400
Ratio of earnings to fixed charges 2.8x 1.8x 1.0x Note b 1.5x
Ratio of earnings to fixed charges and
Preferred Stock dividend requirements 2.5x -- -- -- 1.3x
(a) For purposes of calculating the ratio of earnings to combined fixed charges and preferred stock dividends, the
preferred stock dividend requirements were assumed to be equal to the pre-tax earnings which would be required to
cover such dividend requirements computed using the effective tax rate.
(b) As a result of the interest expense associated with Viacom Inc.'s consolidated indebtedness outstanding under the
Credit Agreement, the 1988 Existing Subordinated Debt and the Exchange Debentures, earnings of Viacom Inc. were
insufficient to cover fixed charges for the year ended December 31, 1990. The additional amount of earnings required
to cover fixed charges of Viacom Inc. for the year ended December 31, 1990 would have been $66,154.
(c) As a result of the $313.1 million pre-tax gain recognized on the sale of its Long Island and Cleveland cable systems
during the first quarter of 1989, Viacom's earnings were sufficient to cover fixed charges.
Consent of Independent Auditors
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Viacom Inc.,
Viacom International Inc., Paramount Communications Inc., Viacom Capital I L.P.
and Viacom Capital II L.P. of our reports dated February 4, 1994 appearing on
pages 24 and 60 of the Viacom Inc. Current Report on Form 8-K and on pages
II-32 and F-2 of the Viacom Inc. and Viacom International Annual Report on
Form 10-K for the year ended December 31, 1993. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE
New York, New York
May 5, 1994
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related prospectus of Viacom Inc.,
Viacom International Inc., Paramount Communications Inc., Viacom Capital I L.P.
and Viacom Capital II L.P. for the registration of $3,000,000,000 of senior debt
securities, senior subordinated debt securities, preferred stock and preferred
partnership interests and to the incorporation by reference therein of our
reports dated August 27, 1993, except for Notes A and I, as to which the date is
September 10, 1993, with respect to the consolidated financial statements and
schedules of Paramount Communications Inc. included in its Transition Report
(Form 10-K) for the six months ended April 30, 1993, as amended September 28,
1993, as further amended September 30, 1993, and as further amended March 21,
1994, all filed with the Securities and Exchange Commission.
ERNST & YOUNG
New York, New York
May 5, 1994
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director
and/or officer of PARAMOUNT COMMUNICATIONS INC. ("Paramount")
(the "Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Earl H. Doppelt, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign (1) a
registration statement on Form S-3, or such other form as may be
recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all
amendments and post-effective amendments thereto and supplements
to the Prospectus contained therein, and any and all instruments
and documents filed as a part of or in connection with the said
registration statement or amendments thereto or supplements or
amendments to such Prospectus, covering the offering and issuance
of up to $3 billion principal amount of (i) debt securities of
Viacom Inc., including related guarantees of Viacom International
and Paramount, (ii) preferred stock of Viacom Inc. and (iii)
preferred stock of one or more wholly owned subsidiaries of
Viacom International yet to be formed, including related
guarantees of Viacom Inc. and (2) any registration statements,
reports and applications relating to such securities to be filed
by the Company with the Commission and/or any national securities
exchanges under the Securities Exchange Act of 1934, as amended,
and any and all amendments thereto, and any and all instruments
and documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that the said attorney-in-fact and agent, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this 22nd
day of April, 1994.
/s/ James A. Pattison
----------------------------
James A. Pattison
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director
and/or officer of PARAMOUNT COMMUNICATIONS INC. ("Paramount")
(the "Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Earl H. Doppelt, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign (1) a
registration statement on Form S-3, or such other form as may be
recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all
amendments and post-effective amendments thereto and supplements
to the Prospectus contained therein, and any and all instruments
and documents filed as a part of or in connection with the said
registration statement or amendments thereto or supplements or
amendments to such Prospectus, covering the offering and issuance
of up to $3 billion principal amount of (i) debt securities of
Viacom Inc., including related guarantees of Viacom International
and Paramount, (ii) preferred stock of Viacom Inc. and (iii)
preferred stock of one or more wholly owned subsidiaries of
Viacom International yet to be formed, including related
guarantees of Viacom Inc. and (2) any registration statements,
reports and applications relating to such securities to be filed
by the Company with the Commission and/or any national securities
exchanges under the Securities Exchange Act of 1934, as amended,
and any and all amendments thereto, and any and all instruments
and documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that the said attorney-in-fact and agent, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this 22nd
day of April, 1994.
/s/ Irving R. Fischer
----------------------------
Irving R. Fischer
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director
and/or officer of PARAMOUNT COMMUNICATIONS INC. ("Paramount")
(the "Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Earl H. Doppelt, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign (1) a
registration statement on Form S-3, or such other form as may be
recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all
amendments and post-effective amendments thereto and supplements
to the Prospectus contained therein, and any and all instruments
and documents filed as a part of or in connection with the said
registration statement or amendments thereto or supplements or
amendments to such Prospectus, covering the offering and issuance
of up to $3 billion principal amount of (i) debt securities of
Viacom Inc., including related guarantees of Viacom International
and Paramount, (ii) preferred stock of Viacom Inc. and (iii)
preferred stock of one or more wholly owned subsidiaries of
Viacom International yet to be formed, including related
guarantees of Viacom Inc. and (2) any registration statements,
reports and applications relating to such securities to be filed
by the Company with the Commission and/or any national securities
exchanges under the Securities Exchange Act of 1934, as amended,
and any and all amendments thereto, and any and all instruments
and documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that the said attorney-in-fact and agent, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this 22nd
day of April, 1994.
/s/ Martin S. Davis
----------------------------
Martin S. Davis
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director
and/or officer of PARAMOUNT COMMUNICATIONS INC. ("Paramount")
(the "Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Earl H. Doppelt, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign (1) a
registration statement on Form S-3, or such other form as may be
recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all
amendments and post-effective amendments thereto and supplements
to the Prospectus contained therein, and any and all instruments
and documents filed as a part of or in connection with the said
registration statement or amendments thereto or supplements or
amendments to such Prospectus, covering the offering and issuance
of up to $3 billion principal amount of (i) debt securities of
Viacom Inc., including related guarantees of Viacom International
and Paramount, (ii) preferred stock of Viacom Inc. and (iii)
preferred stock of one or more wholly owned subsidiaries of
Viacom International yet to be formed, including related
guarantees of Viacom Inc. and (2) any registration statements,
reports and applications relating to such securities to be filed
by the Company with the Commission and/or any national securities
exchanges under the Securities Exchange Act of 1934, as amended,
and any and all amendments thereto, and any and all instruments
and documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that the said attorney-in-fact and agent, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this 22nd
day of April, 1994.
/s/ Ronald L. Nelson
----------------------------
Ronald L. Nelson
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned director
and/or officer of PARAMOUNT COMMUNICATIONS INC. ("Paramount")
(the "Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Earl H. Doppelt, and each of
them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign (1) a
registration statement on Form S-3, or such other form as may be
recommended by counsel, to be filed with the Securities and
Exchange Commission (the "Commission"), and any and all
amendments and post-effective amendments thereto and supplements
to the Prospectus contained therein, and any and all instruments
and documents filed as a part of or in connection with the said
registration statement or amendments thereto or supplements or
amendments to such Prospectus, covering the offering and issuance
of up to $3 billion principal amount of (i) debt securities of
Viacom Inc., including related guarantees of Viacom International
and Paramount, (ii) preferred stock of Viacom Inc. and (iii)
preferred stock of one or more wholly owned subsidiaries of
Viacom International yet to be formed, including related
guarantees of Viacom Inc. and (2) any registration statements,
reports and applications relating to such securities to be filed
by the Company with the Commission and/or any national securities
exchanges under the Securities Exchange Act of 1934, as amended,
and any and all amendments thereto, and any and all instruments
and documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that the said attorney-in-fact and agent, shall do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this 22nd
day of April, 1994.
/s/ Donald Oresman
----------------------------
Donald Oresman
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ Brent D. Redstone
----------------------------
Brent D. Redstone
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ Ken Miller
----------------------------
Ken Miller
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ Sumner M. Redstone
----------------------------
Sumner M. Redstone
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ George S. Abrams
----------------------------
George S. Abrams
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ Frank J. Biondi, Jr.
----------------------------
Frank J. Biondi, Jr.
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ William Schwartz
----------------------------
William Schwartz
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ William C. Ferguson
----------------------------
William C. Ferguson
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ Frederic V. Salerno
----------------------------
Frederic V. Salerno
VIACOM INC.
VIACOM INTERNATIONAL INC.
PARAMOUNT COMMUNICATIONS INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned
director and/or officer of VIACOM INC., VIACOM INTERNATIONAL
INC. ("Viacom International") and PARAMOUNT COMMUNICATIONS
INC. ("Paramount") (individually, and collectively, the
"Company"), hereby constitutes and appoints Philippe P.
Dauman, Michael D. Fricklas and Nancy P. Rosenfeld, and each
of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him
and in his name, place and stead, in any and all capacities,
to sign (1) a registration statement on Form S-3, or such
other form as may be recommended by counsel, to be filed
with the Securities and Exchange Commission (the
"Commission"), and any and all amendments and post-effective
amendments thereto and supplements to the Prospectus
contained therein, and any and all instruments and documents
filed as a part of or in connection with the said
registration statement or amendments thereto or supplements
or amendments to such Prospectus, covering the offering and
issuance of up to $3 billion principal amount of (i) debt
securities of Viacom Inc., including related guarantees of
Viacom International and Paramount, (ii) preferred stock of
Viacom Inc. and (iii) preferred stock of limited
partnerships directly or indirectly controlled by Viacom Inc.,
including related guarantees of Viacom Inc., and (2) any
registration statements, reports and applications relating
to such securities to be filed by the Company with the
Commission and/or any national securities exchanges under
the Securities Exchange Act of 1934, as amended, and any and
all amendments thereto, and any and all instruments and
documents filed as part of or in connection with such
registration statements or reports or amendments thereto;
granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully for all intents
and purposes as he might or could do in person, hereby
ratifying and confirming all that the said attorney-in-fact
and agent, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto signed my name this
26th day of April, 1994.
/s/ H. Wayne Huizenga
----------------------------
H. Wayne Huizenga
SECURITIES ACT OF 1933 FILE NO: (IF APPLICATION TO DETERMINE ELIGIBILITY
OF TRUSTEE FOR DELAYED OFFERING PURSUANT TO SECTION 305(b)(2))
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b) (2)_______
______________________
THE FIRST NATIONAL BANK OF BOSTON
(Exact name of Trustee as specified in its charter)
04-2472499
(I.R.S. Employer Identification No.)
100 Federal Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Gary A. Spiess, Cashier and General Counsel
100 Federal Street, 24th Floor, Boston, Massachusetts 02110 (617) 434-2870
__________________________
VIACOM INC.
(Exact name of obligor as specified in its charter)
Delaware 04-2949533
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Elm Street 02026
Dedham, Massachusetts (Zip Code)
(Address of principal executive offices)
VIACOM INTERNATIONAL INC. PARAMOUNT COMMUNICATIONS INC.
(Exact name of Registrant as (Exact name of Registrant as
specified in its Charter) specified in its Charter)
Delaware Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
04-2980402 74-1330475
(IRS Employer Identification No.) (IRS Employer Identification No.)
1515 Broadway 15 Columbus Circle
New York, NY 10036 New York, NY 10023-7780
(address, including zip code, and (address, including zip code, and
telephone number, including area code, telephone number, including area code,
of registrant's principal executive of registrant's principal executive
offices) offices)
Senior Debt Securities
Senior Subordinated Debt Securities
Subordinated Debt Securities
(title of Indenture Securities)
================================================================================
1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency of the United States, Washington D.C.
Board of Governors of the Federal Reserve System, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
2. Affiliations with Obligor and Underwriters.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the Trustee.
(See Notes on page 2)
None with respect to Bank of Boston Corporation.
16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility and
qualification.
1. A copy of the articles of association of the trustee as now in
effect.
A certified copy of the Articles of Association of the trustee is filed as
Exhibit No. 1 to statement of eligibility and qualification No. 22-9514 and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of the certificate of T. McLean Griffin, Cashier of the trustee,
dated February 3, 1978, as to corporate succession containing copies of the
Certificate of the Comptroller of the Currency that The Massachusetts Bank,
National Association, into which The First National Bank of Boston was merged
effective January 4, 1971, is authorized to commence the business of banking as
a national banking association, as well as a certificate as to such merger is
filed as Exhibit No. 2 to statement of eligibility and qualification No. 22-9514
and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified in
paragraph (1) or (2) above.
A copy of a certificate of the Office of the Currency dated February 6,
1978 is filed as Exhibit No. 3 to statement of eligibility and qualification No.
22-9514 and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A certified copy of the existing By-Laws of the trustee dated December
23,1993 is filed as Exhibit No. 4 to statement of eligibility and qualifications
No. 22-25754 and is incorporated herein by reference thereto.
5. The consent of the trustee required by Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto and made a part hereof.
6. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
A copy of the latest report of condition of the trustee published pursuant
to law or the requirements of its supervising or examining authority is annexed
hereto as Exhibit 6 and made a part hereof.
NOTES
In answering any item in this Statement of Eligibility and Qualification
which relates to matters peculiarly within the knowledge of the obligor or any
underwriter for the obligor, the trustee has relied upon information furnished
to it by the obligor and the underwriters, and the trustee disclaims
responsibility for the accuracy or completeness of such information.
The answer furnished to Item 2 of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee,
The First National Bank of Boston, a national banking association organized and
existing under the laws of The United States of America, has duly caused this
statement of eligibility and qualification to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and
Commonwealth of Massachusetts, on the 28th day of April, 1994.
THE FIRST NATIONAL BANK OF BOSTON, Trustee
By /s/ ERIC J. DONAGHEY
----------------
Eric J. Donaghey
Account Manager
EXHIBIT 5
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, in connection with the proposed issue of Viacom Inc., Viacom
International Inc. and Paramount Communications Inc. Senior Debt Securities,
Senior Subordinated Debt Securities and Subordinated Debt Securities, we hereby
consent that reports of examinations by Federal, State, Territorial, or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
THE FIRST NATIONAL BANK OF BOSTON, Trustee
By /s/ ERIC J. DONAGHEY
----------------
Eric J. Donaghey
Account Manager
EXHIBIT 6
CONSOLIDATED REPORT OF CONDITION, INCLUDING DOMESTIC AND FOREIGN SUBSIDIARIES,
OF
THE FIRST NATIONAL BANK OF BOSTON
In the Commonwealth of Massachusetts, at the close of business on December
31, 1993. Published in response to call made by Comptroller of the Currency,
under Title 12, United States Code, Section 161. Charter number 200.
Comptroller of the Currency Northeastern District.
ASSETS
Dollar
Amounts in
Thousands
---------
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . . . . . $ 1,896,648.
Interest-bearing balances . . . . . . . . . . . . . . . 989,983
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,120,299
Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's:
Federal funds sold . . . . . . . . . . . . . . . . . . . . . . 786,594
Securities purchased under agreements to resell . . . . . . . . 0
Loans and lease financing receivable:
Loans and leases, net of unearned income . . . . $21,760,082
LESS: Allowance for loan and lease losses . . . . 488,235
LESS: Allocated transfer risk reserve . . . . . . 0
Loans and leases, net of unearned income, allowance and reserve 21,271,847
Assets held in trading accounts . . . . . . . . . . . . . . . . . . 303,841
Premises and fixed assets (including capitalized leases) . . . . . 317,599
Other real estate owned . . . . . . . . . . . . . . . . . . . . . . 42,600
Investments in unconsolidated subsidiaries and associated companies 118,921
Customers' liability to this bank on acceptances outstanding . . . 374,873
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . 307,582
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,020,881
---------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . $29,551,668
===========
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . . . . . . $13,331,731
Noninterest-bearing . . . . . . . . . . . . . . . . $ 3,780,365
Interest-bearing . . . . . . . . . . . . . . . . . 9,551,366
In foreign offices, Edge and Agreement subsidiaries, and IBF's . . 7,295,863
Noninterest-bearing . . . . . . . . . . . . . . . . 525,888
Interest-bearing . . . . . . . . . . . . . . . . . 6,769,975
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBF's:
Federal funds purchased . . . . . . . . . . . . . . . . . . . . 1,302,034
Securities sold under agreements to repurchase . . . . . . . . 199,132
Demand notes issued to the U.S. Treasury . . . . . . . . . . . . . 48,780
Other borrowed money . . . . . . . . . . . . . . . . . . . . . . . 3,590,568
Mortgage indebtedness and obligations under capitalized leases . . 14,180
Bank's liability on acceptances executed and outstanding . . . . . 375,153
Subordinated notes and debentures . . . . . . . . . . . . . . . . . 598,835
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 723,480
-------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . $27,479,757
===========
Limited-life preferred stock and equity capital . . . . . . . . . . 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus . . . . . . . . . . . $ 0
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,200
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893,227
Undivided profits and capital reserves . . . . . . . . . . . . . . 1,076,870
LESS: Net unrealized loss on marketable equity securities . . . . . (34,746)
Cumulative foreign currency translation adjustments . . . . . . . . (8,132)
Total equity capital . . . . . . . . . . . . . . . . . . . . . . . 2,071,911
---------
Total Liabilities, Limited-life preferred stock, and equity . $29,551,668
===========
I, Robert T. Jefferson, Comptroller of the above-named bank, do hereby
declare that this Report of Condition is true and correct to the best of my
knowledge and belief.
Robert T. Jefferson
February 9, 1994
We, the undersigned directors, attest to the correctness of this statement
of resources and liabilities. We declare that it has been examined by us, and
to the best of our knowledge and belief has been prepared in conformance with
the instructions and is true and correct.
Charles G. Gifford
Ira Stepanian
Paul C. O'Brien
Directors
February 9, 1994
