EXHIBIT 10.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BLOCKBUSTER INVESTMENT PLAN

(Amended and Restated effective January 1, 2006)

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TABLE OF CONTENTS

 

          PAGE ARTICLE I    PREAMBLE    1 ARTICLE II    DEFINITIONS    2 2.1  
   “Accounting Period”    2 2.2      “Account(s)”    2 2.3      “Administrator”
   2 2.4      “Affiliated Company”    2 2.5      “After-Tax Contributions”    2
2.6      “Annual Addition”    2 2.7      “Beneficiary”    2 2.8      “BIP”    3
2.9      “Blockbuster”    3 2.10    “Blockbuster Class A Stock Fund”    3 2.11
   “Blockbuster Class B Stock Fund”    3 2.12    “Board”    3 2.13    “Break in
Service”    3 2.14    “Code”    3 2.15    “Company”    3 2.16    “Company Stock”
   3 2.17    “Compensation”    3 2.18    “Disability”    4 2.19    “Earnings”   
4 2.20    “Eligibility Service”    4 2.21    “Employee”    4

 

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                    2.22    “Employer”    4 2.23    “ERISA”    4 2.24    “Former
Participant”    5 2.25    “Fund”    5 2.26    “Highly Compensated Participant”
   5 2.27    “Hour of Service”    6 2.28    “IRS”    6 2.29    “Leased Employee”
   6 2.30    “Matchable Contributions”    6 2.31    “Matching Employer
Contributions”    6 2.32    “Merged Plan”    6 2.33    “Parental Leave”    6
2.34    “Movie Brands Plan”    6 2.35    “Participant”    6 2.36    “Payroll
Period”    6 2.37    “Plan”    7 2.38    “Plan Year”    7 2.39    “Predecessor
Plan(s)”    7 2.40    “Retirement/Investments Committee”    7 2.41    “Rollover
Contributions”    7 2.42    “Salary Reduction Contributions”    7 2.43   
“Service”    7 2.44    “Severance Date”    7 2.45    “Temporary Employee”    7
2.46    “Trust Agreement”    7

 

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2.47    “Trustee”    7 2.48    “Unmatched Contributions”    7 2.49    “Valuation
Date”    7 2.50    “Viacom”    7 2.51    “Viacom Stock”    7 2.52    “Viacom
Class A Stock Fund”    8 2.53    “Viacom Class B Stock Fund”    8 2.54    “VIP”
   8 2.55    “Vesting Service”    8 2.56    “Year of Eligibility Service”    8
2.57    “Year of Vesting Service”    8 ARTICLE III    ELIGIBILITY FOR
PARTICIPATION    9 3.1      Eligibility    9 3.2      Method of Becoming a
Participant    9 3.3      Reemployed Participants    10 3.4      Events
Affecting Participation    10 3.5      Military Service    10 ARTICLE IV   
SERVICE    11 4.1      Credited Service    11 4.2      Year of Eligibility
Service    11 4.3      Year of Vesting Service    12 4.4      Additional Service
Credit    13 ARTICLE V    CONTRIBUTIONS    14 5.1      Matchable Contributions
   14 5.2      Unmatched Contributions    14

 

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5.3      Election of Salary Reduction Contributions    15 5.4      Change in
Amount or Form of Contributions    15 5.5      Suspension of Contributions    15
5.6      Cessation of Contributions    15 5.7      Matching Employer
Contributions    15 5.8      Remittance of Contributions to Trustee    16 5.9  
   Remittance of Matching Employer Contributions to Trustee    16 5.10    Refund
of Matching Employer Contributions    16 5.11    Correction of Administrative
Errors    16 5.12    Rollover Contributions    17 5.13    Limitation on
Contributions    18 5.14    Safe Harbor Notice    19 ARTICLE VI    PARTICIPANT
ACCOUNTS    20 6.1      Valuation of Assets    20 6.2      Credits to
Participant Accounts    20 6.3      Debits to Participant Accounts    20 6.4  
   Statement of Participant Accounts    20 ARTICLE VII    INVESTMENT OF
CONTRIBUTIONS    21 7.1      Investment of Salary Reduction Contributions and
Rollover Contributions    21 7.2      Investment of Matching Employer
Contributions    21 7.3      Change in Investment Election for Current
Contributions    21 7.4      Change in Investment Election for Prior
Contributions    21 7.5      Fiduciary Responsibility for Investments    21
7.6      Trading Restrictions    21

 

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ARTICLE VIII    WITHDRAWALS DURING EMPLOYMENT    23 8.1      Withdrawals of
Salary Reduction Contributions, After-Tax Contributions, Matching Employer
Contributions, Transferred Amounts, and Rollover Contributions; Frequency of
Withdrawals    23 8.2      Withdrawal Procedures    26 8.3      Funds to be
Charged with Withdrawal    27 ARTICLE IX    PARTICIPANT LOANS    28 9.1     
Loan Subaccounts    28 9.2      Eligibility for Loans    28 9.3     
Availability of Loans    28 9.4      Amount of Loan    28 9.5      Terms of Loan
   29 9.6      Distribution and Repayment of Loan    30 9.7      Events of
Default and Action Upon Default    30 9.8      Military Service    31 ARTICLE X
   VESTING AND TERMINATION OF EMPLOYMENT    32 10.1    Matchable, Unmatched and
Rollover Contributions    32 10.2    Matching Employer Contributions    32 10.3
   Forfeitures    32 10.4    Lost Participants or Beneficiaries    33 ARTICLE XI
   PAYMENT OF ACCOUNTS OTHER THAN WITHDRAWALS    34 11.1    Right to Payment   
34 11.2    Forms of Payment    34 11.3    Stock Election    34 11.4    Timing of
Payment    35 11.5    Valuation and Payment Procedures for Lump Sum Payments   
35

 

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11.6    Valuation and Payment Procedures for Installment Payments    36 11.7   
Time of Payment    37 11.8    Minimum Distribution Requirements    37 11.9   
Direct Rollover Distributions    38 ARTICLE XII    ADMINISTRATION OF THE BIP   
40 12.1    Appointment of Retirement/Investments Committee    40 12.2   
Retirement/Investments Committee Discretion, Powers and Duties    40 12.3   
Claims Procedure    42 12.4    Claims Review Relating to Disability    42 12.5
   Retirement/Investments Committee Procedures    43 12.6    Authorization of
Payments    43 12.7    Expenses    43 12.8    Indemnity    44 12.9    Reliance
on Reports and Certificates    44 ARTICLE XIII    AMENDMENT AND TERMINATION   
45 13.1    Right to Amend or Terminate    45 13.2    Complete or Partial
Termination    45 13.3    Distribution of Funds Upon Termination of the BIP   
46 ARTICLE XIV    GENERAL PROVISIONS    47 14.1    Employment Relationships   
47 14.2    Non-Alienation    47 14.3    Qualified Domestic Relations Order    47
14.4    Exclusive Benefit of Employees    47 14.5    Merger, Consolidation or
Transfer of Assets or Liabilities    47 14.6    Appointments of Trustee    48

 

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14.7      Voting Rights    48 14.8      Tender Rights    49 14.9      Payments
to Minors and Incompetents    50 14.10    Employee’s Records    50 14.11   
Titles and Headings    50 14.12    Notices    50 14.13    Use of Masculine and
Feminine; Singular and Plural    51 14.14    Governing Law    51 ARTICLE XV   
ANNUAL ADDITION LIMITATIONS    52 15.1      Limitation on Annual Additions    52
ARTICLE XVI    TOP-HEAVY PLAN    53 16.1      General Rule    53 16.2     
Top-Heavy Plan    53 16.3      Definitions    53 16.4      Requirements
Applicable if BIP is Top-Heavy    54 APPENDIX A    INVESTMENT FUNDS AS OF
JANUARY 1, 2006    58

 

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ARTICLE I

PREAMBLE

 

The Blockbuster Investment Plan (the “BIP” or the “Plan”) originally effective
as of May 1, 1999, is hereby amended and restated in its entirety, as of
January 1, 2006, except as otherwise provided. This Plan received a spin-off of
assets and liabilities from the Viacom Investment Plan (the “VIP”) effective as
of May 1, 1999. The spun-off assets and liabilities included assets and
liabilities from the Blockbuster Entertainment Retirement and Savings Plan (the
“Merged Plan”), which was merged into the VIP effective December 31, 1995.

 

The Plan, as amended and restated hereby, is intended to qualify as a profit
sharing plan under Section 401(a) of the Internal Revenue Code (the “Code”), and
includes a cash or deferred arrangement that is intended to qualify under
Section 401(k) of the Code. Furthermore, the Plan is intended to comply with the
requirements of a “safe harbor” 401(k) plan, as set forth in Sections 401(k)(12)
and 401(m)(11) of the Code, Internal Revenue Service (“IRS”) Notices 98-52 and
2000-3 and subsequent IRS guidance issued thereunder.

 

Since the last amendment and restatement of the Plan effective February 28,
2002, the Movie Brands 401(k) Profit Sharing Plan & Trust (the “Movie Brands
Plan”) has been merged into the Plan. The Movie Brands Plan and those plans
merged into the Plan prior to February 28, 2002 shall be referred to as
“Predecessor Plans” for purposes of this Plan.

 

It is the intention of the Company that the Plan and its Trust shall meet the
requirements of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), and of the Code and shall be qualified and exempt under Sections
401(a) and 501(a) of the Code, and shall qualify as a profit sharing plan that
includes a cash or deferred arrangement within the meaning of Section 401(k) of
the Code. This restatement of the Plan, effective January 1, 2006, except as
otherwise noted in the Plan, required by law, or as adopted in separate Company
action, includes all amendments to the amended and restated Plan made through
December 31, 2005.

 

The rights of any Employee (as defined below) or former Employee whose
employment terminated prior to the effective date of any amendment and the
rights of the beneficiary of such Employee or former Employee shall be governed
by the terms of the Plan (including any merged-in or Predecessor Plans) as in
effect at the time of such termination of employment, except in the event such
Employee is rehired and except as otherwise specifically provided herein, or as
required by law

 

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ARTICLE II

DEFINITIONS

 

2.1 “Accounting Period” shall mean the period of four or five consecutive
calendar weeks in a calendar month used by each Employer in the maintenance of
Participant and Employer Accounts.

 

2.2 “Account(s)” shall mean with respect to any Participant the separate
accounts maintained by the Retirement/Investments Committee with respect to
which are allocated to the appropriate separate account Salary Reduction
Contributions, After-Tax Contributions, Rollover Contributions, Matching
Employer Contributions, and any other contributions or direct transfers made to
the BIP on behalf of any Participant or Beneficiary.

 

2.3 “Administrator” shall mean the Retirement/Investments Committee which shall
be the named fiduciary of the Plan within the meaning of Section 402(a)(2) of
ERISA.

 

2.4 “Affiliated Company” shall mean any corporation or other entity that is
required to be aggregated with the Company pursuant to Sections 414(b), (c),
(m), or (o) of the Code, but only to the extent so required.

 

2.5 “After-Tax Contributions” shall mean those contributions made by
Participants that are included in each Participant’s income for Federal income
and Social Security tax purposes and are subject to the limitations of Article
XV. Effective for all Plan Years beginning on and after January 1, 2001,
Participants shall not be permitted to make After-Tax Contributions to the BIP.

 

2.6 “Annual Addition” shall mean for any Plan Year, Salary Reduction
Contributions, Matching Employer Contributions, additional Employer
contributions pursuant to Paragraph 5.11 (which shall be treated as Annual
Additions only to the extent and for the Plan Year (limitation year) required by
regulations or other guidance issued pursuant to Code Section 415), forfeitures,
if any, allocated to a Participant’s Accounts and any other amounts required to
be included by law.

 

2.7 “Beneficiary” shall mean the person designated by the Participant to receive
any death benefits payable hereunder. Each Participant has the right, from time
to time, to change any designation of Beneficiary. A designation or change of
Beneficiary must be in such format as is required by the Retirement/Investments
Committee from time to time, and any change of Beneficiary will not become
effective until such change of Beneficiary is filed with the
Retirement/Investments Committee whether or not the Participant is alive at the
time of such filing; provided, however, that any such change will not be
effective with respect to any payments made by the Trustee in accordance with
the Participant’s last designation and prior to the time such change was
received by the Retirement/Investments Committee. Notwithstanding the above, in
the case of any Participant who is married on the date of the Participant’s
death, the Participant’s spouse as of his date of death shall be the
Participant’s Beneficiary unless the Participant shall have consented to a
different Beneficiary on prescribed forms and before either a notary public or
an individual designated by the Committee. In the absence of an effective
designation or if a named Beneficiary shall have died, any death benefits
payable hereunder on behalf of the Participant shall be distributed to the first
of the following classes of successive preference beneficiaries:

 

(1) the Participant’s surviving spouse;

 

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(2) the Participant’s surviving children;

 

(3) the Participant’s surviving parents;

 

(4) the Participant’s surviving brothers and sisters;

 

(5) the estate of the person last receiving benefits hereunder.

 

Any individual who is designated as an alternate payee in a qualified domestic
relations order (as defined in Section 414(p) of the Code) relating to a
Participant’s benefits under the Plan shall be treated as a Beneficiary
hereunder, to the extent provided by such order.

 

2.8 “BIP” shall have the meaning set forth in the Preamble.

 

2.9 “Blockbuster” shall mean Blockbuster Inc., a Delaware corporation.

 

2.10 “Blockbuster Class A Stock Fund” shall mean the fund relating to the Plan
consisting of Blockbuster class A common stock, par value $0.01 per share.

 

2.11 “Blockbuster Class B Stock Fund” shall mean the fund relating to the Plan
consisting of Blockbuster class B common stock, par value $0.01 per share

 

2.12 “Board” shall mean the Board of Directors of the Company.

 

2.13 “Break in Service” shall mean a period of severance from service as
determined in accordance with Paragraph 2.44, Paragraph 4.2 and Paragraph 4.3.
For purposes of applying Paragraph 3.3 to any Part-Time Employee, a one year
Break in Service shall occur if such Employee completes less than 501 Hours of
Service in one of the computation periods described in Paragraph 4.2(b) (subject
to any special rules to the contrary, including any applicable rules with
respect to Parental Leave or Family and Medical Leave).

 

2.14 “Code” shall have the meaning set forth in the Preamble.

 

2.15 “Company” shall mean Blockbuster.

 

2.16 “Company Stock” shall mean Blockbuster class A common stock, par value
$0.01 per share and Blockbuster class B common stock, par value $0.01 per share.

 

2.17 “Compensation” shall mean a Participant’s base pay for services rendered to
the Employer paid during a Payroll Period, including all pre-tax elective
contributions made on behalf of a Participant either to a “qualified cash or
deferred arrangement” (as defined under Section 401(k) of the Code and
applicable regulations), a “cafeteria plan” (as defined under Code Section 125
and applicable regulations), or, effective January 1, 2002, a “qualified
transportation fringe” (as defined under Code Section 132(f) and applicable
regulations) maintained by an Employer, plus all overtime pay, annual cash
performance bonuses under any Company short-term cash bonus plan sponsored by an
Employer, commissions, hazard pay and shift differential pay, but excluding
(i) other deferred compensation and (ii) additional compensation of every other
kind, including cash bonuses under a Company long-term performance plan, if any.
For Participants who are eligible for the Company’s Excess Investment Plan,
Compensation shall exclude cash performance bonuses under any Company’s
short-term bonus plan and certain other comparable cash bonus plans sponsored by
the Company or an Employer. The total amount of a Participant’s Compensation
taken into account for any Plan Year beginning on or after January 1, 2002 shall
not exceed $200,000, as adjusted for cost of living increases in accordance with
Section 401(a)(17)(B) of the Code and the regulations and other guidance issued
thereunder. If any Plan Year consists of fewer than twelve months, the
Section 401(a)(17) limitation will be

 

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multiplied by a fraction, the numerator of which is the number of months in the
Plan Year, and the denominator of which is twelve.

 

2.18 “Disability” shall mean a permanent and total disability that would qualify
an Employee for benefits under the provisions of the long-term disability plan
sponsored by, or participated in, by the Employee’s Employer. The determination
of whether a Participant has incurred a Disability for purposes of the BIP shall
be made by the Retirement/Investments Committee.

 

2.19 “Earnings” shall mean the total amount of wages paid by the Employer to a
Participant within the meaning of Section 3401(a) of the Code (without regard to
any rules under Section 3401(a) that limit the remuneration included in wages
based on the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Section 3401(a)(2))) and all
other payments of compensation to a Participant by an Employer (in the course of
the Employer’s trade or business) for which the Employer is required to furnish
the Participant a written statement under Sections 6401(d), 6051(a)(3) and 6052
of the Code (a Form W-2). Earnings in the preceding sentence shall be increased
by the Participant’s pre-tax elective deferrals under any plans maintained by
the Employer under Sections 401(k), 125 and 132(f) of the Code.

 

2.20 “Eligibility Service” shall mean an Employee’s Service, as determined under
Paragraph 4.2.

 

2.21 “Employee” shall mean an employee of the Company or an Affiliated Company.
A “Full-Time Employee” means any Employee who is classified in the Employer’s
employment records as a full-time employee. A “Part-Time Employee” means any
Employee who is classified in the Employer’s employment records as a part-time
employee. Notwithstanding the foregoing, the term “Employee” shall exclude
Leased Employees covered by a plan described in Section 414(n)(5) of the Code.

 

2.22 “Employer” shall include the Company and any Affiliated Company
participating in the Plan as provided below. When used in reference to Matching
Employer Contributions for a Participant, the term “Employer” will refer to the
Employer employing such Participant. When used in reference to the collective
obligations of all Employers in the group, the obligation of each Employer will
be proportionate to the contributions of or on behalf of its Participants to the
BIP.

 

If any entity is now or becomes an Affiliated Company of an Employer, including
the Company, the Retirement/Investments Committee may include the employees of
that entity in the membership of the Plan upon appropriate action by that entity
necessary to adopt the Plan. In that event, or if any persons become Employees
of an Employer as the result of a merger or consolidation or as the result of
the acquisition of all or part of the assets or business of another entity, the
Retirement/Investments Committee shall determine to what extent, if any, credit
shall be granted for previous service with the other entity, subject to the
continued qualification of the Trust for the Plan as tax-exempt under the Code.
The Retirement/Investments Committee may exclude the employees of any division
of an Employer from membership in the Plan.

 

2.23 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

 

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2.24 “Former Participant” shall mean a person whose active participation in the
BIP shall have terminated by reason of death, Disability, retirement, transfer
to an Affiliated Company or other affiliated entity that is not an Employer,
termination of employment, or any other reason, but who still has an Account in
the BIP.

 

2.25 “Fund” shall mean the trust fund established for the purpose of receiving
contributions, and paying distributions, under this Plan. A Trustee shall be
appointed by the Retirement/Investments Committee under the terms of the Trust
Agreement to administer the trust fund in accordance with the terms of the Trust
Agreement. All contributions under this Plan shall be paid to the Trustee and
shall be held, invested and reinvested by the Trustee in accordance with the
terms of the Trust Agreement. All property and funds of the trust fund,
including income from investments and from all other sources, shall be retained
for the exclusive benefit of Employees, as provided in the Plan, and shall be
used to pay distributions to Employees or their Beneficiaries, or to pay
expenses of administration of the Plan and trust fund. No Trustee shall be
required to furnish any bond or security for the performance of its powers and
duties hereunder unless the applicable law makes the furnishing of such bond or
security mandatory, in which event the Company shall pay the premium on any bond
secured hereunder.

 

2.26 “Highly Compensated Participant” shall include those Employees who meet the
definition of “Highly Compensated Employee” as determined under Section 414(q)
of the Code and the regulations issued thereunder, as set forth herein. The term
“Highly Compensated Participant” includes “Highly Compensated Active Employees”
and “Highly Compensated Former Employees” and shall be determined as follows:

 

(a) “Highly Compensated Active Employee” means an Employee described in Code
Section 414(q) and the regulations thereunder, who performs services for the
Company or an Affiliated Company during the Plan Year and who is in one or more
of the following groups:

 

(i) Employees who at any time during the Determination Year (which shall be the
Plan Year) or the Look-Back Year (which shall be the twelve-month period
preceding the Plan Year) were owners (as defined in Code Section 318) of more
than five percent of the outstanding stock of the Company or an Affiliated
Company, or stock possessing more than five percent of the total combined voting
power of all stock of the Company and its Affiliated Companies.

 

(ii) Employees who received Compensation during the Look-Back Year in excess of
$85,000 for Plan Years beginning on and after January 1, 2002 (adjusted for
increases in the cost of living at the same time and in the same manner
permitted under Code Section 415(d)).

 

(b) The determination of the “Highly Compensated Participants” may be made by
the Retirement/Investments Committee on the basis of the “top-paid group”
election or the substantiation guidelines in accordance with such regulations,
notices, or other guidance issued under Section 414(q) of the Code. The
Retirement/Investments Committee has elected to make the “top-paid group”
election. Any subsequent change in the Retirement/Investments Committee’s
election shall be reflected in an amendment to the Plan.

 

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(c) A “Highly Compensated Former Employee” means an Employee who separated from
service prior to the Determination Year, who performed no services for an
Employer during the Determination Year, and who was a Highly Compensated Active
Employee for either such Employee’s separation year or any Determination Year
ending on or after the Employee’s 55th birthday.

 

(d) For purposes of determining Highly Compensated Participants, “Compensation”
for a Determination Year or a Look-Back Year shall be determined in the same
manner as “Earnings” in Paragraph 2.19 of the BIP.

 

(e) The determination of “Highly Compensated Active Employee” shall be made by
the Retirement/Investments Committee on the basis of the “Top-Paid Group”
election or the substantiation guidelines in accordance with such regulations,
notices or other guidance issued under Code Section 414(q).

 

2.27 “Hour of Service” shall mean each hour credited under Paragraph 4.2.

 

2.28 “IRS” shall have the meaning set forth in the Preamble.

 

2.29 “Leased Employee” shall mean any person who provides services for an
Employer under the primary direction and control of the Employer and who
qualifies as a “leased employee” as defined in Section 414(n)(2) of the Code.

 

2.30 “Matchable Contributions” shall mean a Participant’s Salary Reduction
Contributions that are made pursuant to Paragraphs 5.1 and 5.3, with respect to
which Matching Employer Contributions are made.

 

2.31 “Matching Employer Contributions” shall mean contributions made by each
Employer in accordance with Paragraph 5.7 and that are subject to the provisions
of Article XV.

 

2.32 “Merged Plan” shall have the meaning set forth in the Preamble. Provisions
applicable to Participants who were participants in the Merged Plan and the VIP
are set forth in Appendix A.

 

2.33 “Parental Leave” shall mean, for purposes of determining Eligibility
Service under Paragraph 4.2 and Vesting Service under Paragraph 4.3, a period in
which the Employee is absent from work immediately following active employment
because of the Employee’s pregnancy, the birth of the Employee’s child or the
placement of a child with the Employee in connection with the adoption of that
child by the Employee, or for purposes of caring for that child for a period
beginning immediately following that birth or placement. Parental Leave shall
include such periods of leave described in the Family and Medical Leave Act of
1993 (as amended) solely to the extent required thereunder.

 

2.34 “Movie Brands Plan” shall have the meaning as set forth in the Preamble.

 

2.35 “Participant” shall mean an Employee who meets the eligibility requirements
set forth in Article III herein and who has on file with the Company an
authorization to withhold or reduce part of the Participant’s Compensation as a
periodic contribution to the BIP. Such term shall, if the context shall permit,
include a Former Participant.

 

2.36 “Payroll Period” shall mean the regular period (whether weekly or biweekly
or semimonthly or otherwise) on which Compensation payments are based.

 

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2.37 “Plan” shall have the meaning set forth in the Preamble.

 

2.38 “Plan Year” shall mean the twelve-month period that begins on each
January 1.

 

2.39 “Predecessor Plan(s)” shall have the meaning set forth in the Preamble.

 

2.40 “Retirement/Investments Committee” shall mean the persons appointed by the
Board to serve on the Retirement/Investments Committee to administer the Plan,
in accordance with Article XII.

 

2.41 “Rollover Contributions” shall mean contributions made by Participants in
accordance with Paragraph 5.12.

 

2.42 “Salary Reduction Contributions” shall mean pre-tax elective contributions
within the meaning of Section 401(k) of the Code and the regulations thereunder
made by Participants in accordance with Paragraph 5.3. Salary Reduction
Contributions are subject to the provisions of Article XV.

 

2.43 “Service” shall have the meaning set forth in Paragraph 4.1.

 

2.44 “Severance Date” shall mean the earlier of the date on which an Employee
resigns, retires, is discharged or dies, or the first anniversary of the date on
which the Employee is first absent from service, with or without pay, for any
other reason such as vacation, sickness, disability, or leave of absence;
provided, however, that if an Employee is absent beyond such first anniversary
date by reason of Parental Leave or Family and Medical Leave, the Employee’s
Severance Date shall be the second anniversary of the first date of such
absence. A one-year period of severance shall occur if an Employee’s employment
is severed and the Employee is not reemployed within the 12 consecutive month
period commencing on the Employee’s Severance Date.

 

2.45 “Temporary Employee” shall mean an Employee of the Company or an Affiliated
Company who is employed on a temporary or periodic basis where such Employee
from time to time accepts, at the Employee’s discretion, job assignments having
a fixed and limited duration, such as (but not limited to) special projects to
cover unusual or cyclical employment needs, at potentially varying rates of
compensation with each job assignment and who is classified in the Employer’s
records as a “temporary employee.”

 

2.46 “Trust Agreement” shall mean the trust agreement by and among the Company
and the Trustee, as in effect as of January 1, 2006, and as amended from time to
time.

 

2.47 “Trustee” shall mean the Trustee acting under the Trust Agreement.

 

2.48 “Unmatched Contributions” shall mean Salary Reduction Contributions made by
Participants in accordance with Paragraphs 5.2 and 5.3, with respect to which
Matching Employer Contributions are or were not made.

 

2.49 “Valuation Date” shall mean any day on which the New York Stock Exchange or
any successor to its business is open for trading, or such other date as may be
designated by the Committee.

 

2.50 “Viacom” shall mean Viacom Inc., a Delaware corporation.

 

2.51 “Viacom Stock” shall mean Viacom class A common stock, par value $0.01 per
share and Viacom class B common stock, par value $0.01 per share.

 

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2.52 “Viacom Class A Stock Fund” shall mean the fund relating to the Plan
consisting of Viacom class A common stock, par value $0.01 per share.

 

2.53 “Viacom Class B Stock Fund” shall mean the fund relating to the Plan
consisting of Viacom class B common stock, par value $0.01 per share.

 

2.54 “VIP” shall have the meaning set forth in the Preamble.

 

2.55 “Vesting Service” shall mean an Employee’s service, as determined under
Paragraph 4.3.

 

2.56 “Year of Eligibility Service” shall mean the period of Service as defined
in Paragraph 4.2 that is used in determining an Employee’s eligibility to
participate in the BIP.

 

2.57 “Year of Vesting Service” shall mean the period of Service, as defined in
Paragraph 4.3, which is used in determining an Employee’s nonforfeitable right
to Matching Employer Contributions.

 

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ARTICLE III

ELIGIBILITY FOR PARTICIPATION

 

3.1 Eligibility.

 

(a) Each Employee of an Employer will be eligible to become a Participant on the
first day of the month following the month in which the Employee attains age 21
and completes one Year of Eligibility Service, provided that the Employee is
employed by an Employer at such time and the Employee satisfies the requirements
of Paragraph 3.2.

 

(b) Notwithstanding the foregoing, the following persons are not eligible to
participate under the BIP without regard to any decision of the IRS or any other
governmental agency regarding the employment status or classification of such
persons: (i) Temporary Employees; (ii) Employees who work for an Affiliated
Company that does not participate in the BIP, including any employee of a
foreign affiliate who is a United States citizen, unless specifically determined
by the Retirement/Investments Committee to be eligible for participation in the
BIP; (iii) any Employee who is a non-resident alien of the United States for
federal tax purposes and who receives no earned income from the Employer that
constitutes income from sources within the United States; (iv) any Employee
included in a group determined by the Retirement/Investments Committee in
writing not to be eligible for participation in the BIP; (v) any Employee
included in a classification of employees whose terms and conditions of
employment are subject to the provisions of a collective bargaining agreement,
unless the terms of the collective bargaining agreement provide for eligibility
for participation in the BIP; (vi) a Leased Employee; (vii) any other individual
who performs services for an Employer but who does not receive payment for
services directly from the Company’s U.S. based payroll, such as employees of
employment agencies that are not an Affiliated Company and other persons who
perform services for the Company but who are not Company employees; and
(viii) persons whose services are rendered pursuant to written arrangements that
expressly recite that the service provider is not eligible for participation in
the Plan.

 

It is expressly intended that individuals not treated as common law employees by
an Employer on their payroll records are to be excluded from Plan participation
even if a court or administrative agency later determines that such individuals
are common law employees of an Employer and not independent contractors.

 

(c) The preceding notwithstanding, any Full-Time Employee or Part-Time Employee
who has satisfied the applicable service requirements prior to commencing
employment with the Employer by reason of prior service credited under Paragraph
4.1 will be eligible to become a Participant on the first day of the Employee’s
employment with the Employer.

 

3.2 Method of Becoming a Participant. An eligible Employee may become a
Participant (or resume participation in accordance with the Plan) by making
written, telephonic or electronic application to participate in the BIP under
the appropriate procedures prescribed by the Retirement/Investments Committee.
An Employee’s participation will become effective as

 

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soon as is administratively practical following the date such election is
received by the Retirement/Investments Committee.

 

3.3 Reemployed Participants. An Employee who was a Participant in the BIP or who
satisfied the requirements of Paragraph 3.1 but did not enroll under Paragraph
3.2 and whose employment with an Employer has terminated but who subsequently is
reemployed shall again become a Participant or eligible to become a Participant
on the first date on which the Employee is reemployed by an Employer, satisfies
the requirements of Paragraph 3.2 and, if such Employee is a Part-Time Employee,
completes an Hour of Service. A Part-Time Employee who did not satisfy the
requirements of Paragraph 3.1 and whose employment with an Employer has
terminated shall, after a one-year Break in Service, be treated as a newly-hired
Employee upon reemployment by an Employer. A Part-Time Employee who did not
satisfy the requirements of Paragraph 3.1 and whose employment with an Employer
has terminated shall, if the Employee is rehired before the end of a one-year
Break in Service, be eligible to become a Participant in accordance with
Paragraphs 3.1 and 3.2, with such person’s Hours of Service being measured from
the original date of hire. If a Full-Time Employee’s employment with an Employer
is severed prior to the completion of a Year of Eligibility Service but the
Employee is reemployed within 12 months following the earlier to occur of
(i) such person’s Severance Date or (ii) the first day of any leave of absence
immediately preceding the Severance Date that does not in and of itself result
in a Severance, the period of severance shall also constitute Eligibility
Service. If, however, a Full-Time Employee is not reemployed within the 12 month
period described in the preceding sentence, the Employee will be treated as a
newly hired employee upon reemployment. In all such cases, Eligibility Service
for periods after reemployment shall be determined in accordance with the
provisions of the Plan in effect during such reemployment.

 

3.4 Events Affecting Participation. If a Participant is transferred to
employment with an Affiliated Company, or any other business affiliated with the
Company that is not participating in the BIP, or is transferred to a
classification of employment with the Company or an Affiliated Company that
makes the Participant ineligible to participate, the Participant’s active
participation under the BIP shall be suspended. During the period of the
Participant’s employment in such ineligible position, the Participant shall not
be eligible to have amounts deferred, contributed or allocated to the
Participant’s Account under Paragraphs 5.1, 5.2, or 5.7.

 

3.5 Military Service. Notwithstanding any other provision of the Plan to the
contrary, contributions, benefits and Service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the Code.

 

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ARTICLE IV

SERVICE

 

4.1 Credited Service. Except as otherwise provided, Service with respect to any
Employee shall mean periods of employment with the Company, an Affiliated
Company (on or after the date of affiliation unless determined otherwise by the
Retirement/Investments Committee), and any predecessor entity of an Employer, or
a corporation or other entity merged, consolidated or liquidated into the
Employer or a predecessor of the Employer, or a corporation or other entity,
substantially all of the assets of which have been acquired by the Employer, if
the Employer maintains a plan of such a predecessor entity or entity whose
assets were acquired. If the Employer does not maintain a plan maintained by
such a predecessor, periods of employment with such a predecessor shall be
credited as Service only to the extent required under regulations prescribed by
the Secretary of the Treasury pursuant to Section 414(a)(2) of the Code.

 

Periods recognized in the following plans on behalf of a Participant shall be
recognized as Eligibility Service and as Vesting Service, as appropriate, under
the BIP for such Participant: the VIP and the Movie Brands Plan. In addition,
Employees of American Satellite and Video, Inc. who are hired by Game Brands
Inc. as of the date of the acquisition shall be credited for their prior service
with American Satellite and Video, Inc. for purposes of eligibility to
participate in the Plan.

 

4.2 Year of Eligibility Service.

 

(a) Full-Time Employees: A Full-Time Employee’s Eligibility Service shall be
measured in years and days (with each consecutive 365 days of Service being
equivalent to one Year of Eligibility Service) from the date on which employment
commences with the Company or an Affiliated Company (including periods of
employment credited pursuant to Paragraph 4.1) to the Employee’s Severance Date.
Eligibility Service shall include, by way of illustration but not by way of
limitation, the following periods:

 

(i) Any leave of absence from employment that is authorized by the Company, by
an Affiliated Company or predecessor, or other employer described in Paragraph
4.1; and

 

(ii) Any period of military service in the Armed Forces of the United States
required to be credited by law; provided, however, that the Employee returns to
the employment of the Company, Affiliated Company or predecessor or other
employer described in Paragraph 4.1 within the period the Employee’s
reemployment rights are protected by law.

 

(b) Part-Time Employees: A Part-Time Employee shall complete a Year of
Eligibility Service if the Employee completes at least 1,000 Hours of Service
during the twelve consecutive month period beginning with the date the Part-Time
Employee commences employment or re-employment with the Company or an Affiliated
Company or during any twelve consecutive month period preceding the first day of
each month thereafter. No Eligibility Service is counted for any computation
period in which an Employee completes less than 1,000 Hours of Service. An “Hour
of Service” means, with

 

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respect to any applicable computation period, the number of hours recorded on
the Employee’s time sheets or other records used by the Employer to record an
Employee’s time for which the Employee is directly or indirectly compensated by
an Employer or the number of hours for which the Employee is directly or
indirectly compensated by an Affiliated Company, an other affiliated entity or a
Predecessor Company if such Predecessor Company maintained a qualified plan
which is continued by an Employer, but only if such service with an Affiliated
or Predecessor Company or other affiliated entity otherwise meets the
requirements of this paragraph and only to the extent the Retirement/Investments
Committee so determines, consistent with regulations adopted by the Secretary of
the Treasury; provided that seven hours shall be credited for each calendar day
that is a scheduled workday for the Employer, Affiliated Company, Predecessor
Company or other affiliated entity, up to a total of 501 Hours of Service on
account of any single continuous period during which the Employee performs no
duties and for which the Employee is on:

 

(i) a paid leave approved by the Employer, including a personal leave of
absence, vacation leave, sick leave or disability leave approved by the
Employer, provided the Employee returns to Employment upon the expiration of
such leave,

 

(ii) paid jury duty, or

 

(iii) Any period of military service in the Armed Forces of the United States
required to be credited by law:

 

The term Hour of Service shall also include each hour for which back pay,
irrespective of mitigation of damages, has been awarded or agreed by an
Employer. Such Hours of Service shall be credited to the Employee for the Plan
Year or Years to which the award pertains.

 

Hours of Service as defined above shall be computed and credited in accordance
with paragraphs (b) and (c) of section 2530.200b-2 of the Department of Labor
Regulations.

 

4.3 Year of Vesting Service.

 

A Full-Time or Part-Time Employee’s Vesting Service shall be measured in years
and days (with each consecutive 365 days of Service being equivalent to one Year
of Vesting Service) from the date on which employment commences with the Company
or an Affiliated Company (including periods of employment credited pursuant to
Paragraph 4.1) to the Employee’s Severance Date. Vesting Service shall include,
by way of illustration but not by way of limitation, the following periods:

 

(a) Any leave of absence from employment that is authorized by the Company, by
an Affiliated Company or predecessor, or other employer described in Paragraph
4.1; and

 

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(b) Any period of military service in the Armed Forces of the United States
required to be credited by law; provided, however, that the Employee returns to
the employment of the Company, Affiliated Company or predecessor or other
employer described in Paragraph 4.1 within the period the Employee’s
reemployment rights are protected by law.

 

All Years of Vesting Service prior to and subsequent to any period of severance
shall be aggregated. Notwithstanding the foregoing, if an Employee’s employment
with an Employer is severed but the Employee is reemployed within 12 months
following the earlier to occur of (i) the Employee’s Severance Date or (ii) the
first day of any leave of absence immediately preceding the Severance Date that
does not in and of itself result in a Severance, the period of severance shall
constitute Vesting Service.

 

4.4 Additional Service Credit.

 

The Retirement/Investments Committee may provide additional credit for purposes
of determining Eligibility Service or Vesting Service for periods not required
to be credited under this Article IV. Any determination to provide additional
credit made by the Retirement/Investments Committee under this Paragraph 4.4
shall be made in (i) writing; (ii) a non-discriminatory manner; and
(iii) accordance with the requirements of ERISA, the Code and all applicable
rules and regulations.

 

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ARTICLE V

CONTRIBUTIONS

 

5.1 Matchable Contributions.

 

(a) A Participant’s Matchable Contributions shall mean those contributions made
by the Participant’s Employer as Salary Reduction Contributions, which may be in
an amount equal to a stated whole percentage, as indicated in 5.1(b) below, of
the Participant’s Compensation, subject to Paragraph 5.13.

 

(b) Salary Reduction Contributions and Matchable Contributions shall be
determined as follows, based on whether a Participant is a Highly Compensated
Participant (“HCP”) or a non-Highly Compensated Participant (“NHCP”), as
determined under Paragraph 2.26:

 

   

Salary Reduction Contribution %

--------------------------------------------------------------------------------

 

Matchable Contribution

--------------------------------------------------------------------------------

NHCP

  1% to 3%   100% Matchable Contributions     3% to 5%     50% Matchable
Contributions

HCP

  1% to 5%     50% Matchable Contributions

 

5.2 Unmatched Contributions.

 

(a) Regular Unmatched Contributions. A Participant’s Unmatched Contributions
shall mean those contributions in excess of Matchable Contributions made by the
Participant’s Employer as Salary Reduction Contributions. In no event shall the
contributions made under this Paragraph 5.2(a), when added to the Participant’s
Matchable Contributions made under Paragraph 5.1, exceed 75% of the
Participant’s Compensation (as determined in accordance with the limits set
forth in Paragraph 5.13).

 

(b) Catch-Up Contributions. All Participants who are eligible to make Salary
Reduction Contributions under this Plan and who have attained age 50 before the
close of the calendar year shall be eligible to make catch-up contributions in
accordance with, and subject to the limitations of, Section 414(v) of the Code.
Such catch-up contributions shall not be taken into account for purposes of the
Plan implementing the required limitations of Sections 402(g) and 415 of the
Code. The Plan shall not be treated as failing to satisfy the provisions of the
Plan implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions. Catch-up contributions shall not be treated as Matchable
Contributions, regardless of whether such catch-up contributions are
recharacterized as regular Salary Reduction Contributions For purposes of
investment, withdrawal, borrowing, and distribution of contributions, catch-up
contributions shall be treated as Salary Reduction Contributions. In no event
shall the catch-up contributions made under this Paragraph 5.2(b), determined
without regard to the contributions made under the preceding Paragraph 5.2(a),
exceed 75% of the Participant’s Compensation (as determined in accordance with
the limitations set forth in Paragraph 5.13).

 

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5.3 Election of Salary Reduction Contributions. Subject to Paragraphs 5.1 and
5.2, each Participant may authorize through written, telephonic or electronic
instructions (pursuant to procedures prescribed by the Retirement/Investments
Committee) the Participant’s Employer to contribute Salary Reduction
Contributions to the BIP on the Participant’s behalf by payroll deduction, for
each Payroll Period within an Accounting Period, that shall be designated as
Matchable Contributions to the extent of the first 5% of the Participant’s
Compensation and that shall be designated as Unmatched Contributions to the
extent such amounts exceed 5% of the Participant’s Compensation for such Plan
Year. All elections were or will be effective for the first Payroll Period next
following the date of receipt of the election by the Retirement/Investments
Committee.

 

5.4 Change in Amount or Form of Contributions. The percentage of Compensation
designated by the Participant as the Participant’s Salary Reduction
Contributions will continue in effect, notwithstanding any change in the
Participant’s Compensation, until the Participant elects to change such
percentage. A Participant, by making an election in the manner approved by the
Retirement/Investments Committee (including changes made by telephonic or
electronic instruction as prescribed by the Retirement/Investments Committee),
may change the foregoing percentages at any time in the Plan Year, subject to
the limitations herein. Any such change, including a complete suspension, will
become effective as of the first Payroll Period practicable following the date
such election is processed.

 

5.5 Suspension of Contributions. If a Participant elects to suspend the
Participant’s Matchable Contributions to the BIP in accordance with Paragraph
5.4, all Matching Employer Contributions to the Participant’s Account will also
be suspended.

 

5.6 Cessation of Contributions. Salary Reduction Contributions of a Participant
will cease to be effective with the Payroll Period that ends immediately prior
to or coincident with:

 

(a) the Participant’s transfer to an Affiliated Company that is not an Employer,
in which case the Participant’s contributions shall be involuntarily suspended
for the duration of the Participant’s employment with such Affiliated Company or
entity; if such an Employee again becomes an eligible Employee and elects to
become a Participant, the Employee must follow the procedure set forth in
Paragraph 3.2;

 

(b) the Participant’s termination of employment for any reason including
retirement, death or Disability; or

 

(c) the Participant’s withdrawal of amounts pursuant to Paragraph 8.1(e), but
only to the extent required by such Paragraph.

 

5.7 Matching Employer Contributions. Unless the Retirement/Investments Committee
expressly determines otherwise, during each Accounting Period, and subject to
Paragraph 5.13, each Employer will contribute to the BIP an amount equal to 100%
of the 100% Matchable Contributions and 50% of the 50% Matchable Contributions
made during such Accounting Period on behalf of a Participant of such Employer.
Such contributions shall not be limited by the current or accumulated profits of
the Employer.

 

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5.8 Remittance of Contributions to Trustee. Amounts deducted from payroll as
Salary Reduction Contributions will be remitted in cash to the Trustee as soon
as such contributions can reasonably be segregated from the Employer’s general
assets but no later than the last day required by the Code and ERISA. Such
amounts shall be credited to the Accounts of the respective Participants in
accordance with such Participants’ investment elections.

 

5.9 Remittance of Matching Employer Contributions to Trustee. Amounts
contributed by the Employer with respect to Matching Employer Contributions will
be remitted in cash to the Trustee as soon as practicable after the end of a
Payroll Period. Such amounts shall be credited to the Accounts of the respective
Participants in accordance with such Participants’ investment elections.

 

5.10 Refund of Matching Employer Contributions. All Matching Employer
Contributions are hereby conditioned on them being allowed as a deduction for
federal income tax purposes by the Employer. A Matching Employer Contribution
shall be, as determined by the Retirement/Investments Committee, refunded to the
Employer, used to reduce future Matching Employer Contributions or used to
defray administrative expenses, if such contribution:

 

(a) was made by a mistake of fact; or

 

(b) was made conditioned upon the contribution being allowed as a deduction for
federal income tax purposes and such deduction is disallowed, including any
advance determination of disallowance pursuant to any guidance issued by the
IRS.

 

The permissible refund under (a) must be made within one year from the date the
contribution was made to the BIP, and under (b) must be made within one year
from the date of disallowance of the tax deduction. Investment earnings
attributable to the contributions to be returned to the Employer will not be
returned to the Employer, but losses attributable to such contributions will
reduce the amount to be returned.

 

5.11 Correction of Administrative Errors. If, with respect to any Plan Year, any
Participant’s Account is not credited with the amounts of Matchable
Contributions, Unmatched Contributions, Matching Employer Contributions, or
investment earnings on any such contributions to which such Participant is
entitled under the BIP, or if an error is made with respect to the investment of
the assets of the Fund, which error results in an error in the amount credited
to a Participant’s Account, and such failure is due to administrative error in
determining or allocating the proper amount of such contributions or earnings,
the Employer may make additional contributions to the Account of any affected
Participant to best place the affected Participant’s Account in the position
approximating the position that would have existed if the error had not been
made.

 

In addition, with respect to any Plan Year, if an administrative error results
in an amount being credited to an Account for a Participant or any other
individual who is not otherwise entitled to such amount, corrective action may
be taken by the Retirement/Investments Committee, including, but not limited to,
a direction by the Retirement/Investments Committee to forfeit amounts
erroneously credited (with such forfeitures to be used to reduce future

 

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Matching Employer Contributions or other contributions to the Plan), reallocate
such erroneously credited amounts to the Participant’s Accounts, or take such
other corrective action as is necessary under the circumstances.

 

Any Plan administration error may be corrected using any appropriate correction
method permitted under the Employee Plans Compliance Resolution System (or any
successor procedure), as determined by the Retirement/Investments Committee.

 

5.12 Rollover Contributions.

 

(a) A Participant may, with the approval of the Retirement/Investments
Committee, make a Rollover Contribution. An Employee of an Employer who has not
completed the eligibility requirements in Article III of the BIP may participate
in the BIP solely for purposes of the rollover contribution provisions
hereunder. The Trustee shall credit the amount of any Rollover Contribution to
the Participant’s Account, in accordance with the Participant’s designation, as
of the date the Rollover Contribution is made.

 

(b) The term “Rollover Contribution” means the contribution of an “eligible
rollover distribution” to the Trustee by the Employee on or before the sixtieth
(60th) day immediately following the day the contributing Employee receives the
“eligible rollover distribution” or a contribution of an “eligible rollover
distribution” to the Trustee by the Employee or the trustee of another “eligible
retirement plan” (as defined in Section 402(c)(8)(B) of the Code) in the form of
a direct transfer under Section 401(a)(31) of the Code.

 

(c) The term “eligible rollover distribution” means:

 

(i) part or all of a distribution to the Employee from an individual retirement
account or individual retirement annuity (as defined in Section 408 of the Code)
maintained for the benefit of the Employee making the Rollover Contribution;

 

(ii) part or all of the amount received by such Employee or distributed directly
to the BIP on such Employee’s behalf from an employee plan and trust described
in Code Section 401(a) that is exempt from tax under Code Section 501(a),
including after-tax employee contributions;

 

(iii) a plan described in Code Section 403(a), including after-tax employee
contributions;

 

(iv) an annuity contract described in Section 403(b), excluding after-tax
employee contributions; or

 

(v) an eligible plan under Code Section 457(b) that is maintained by a state,
political subdivision of a state, or any agency or instrumentality of a state or
political subdivision of a state.

 

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In all events, such amount shall constitute an “eligible rollover distribution”
only if such amount qualifies as such under Code Section 402(c) and the
regulations and other guidance thereunder and is a distribution of all or any
portion of the balance to the credit of the Employee from the distributing plan
or IRA other than any distribution: (1) that is one of a series of substantially
equal periodic payments (not less frequently than annually) made for the life
(or life expectancy) of the distributee or for a specified period of ten years
or more; (2) to the extent such distribution is required under Code
Section 401(a)(9); (3) to the extent such distribution is not includible in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities); (4) that is made to a
non-spouse beneficiary or (5) that is attributable to a hardship distribution of
elective deferrals described in Code Section 401(k)(B)(i)(iv).

 

(d) Once accepted by the Trust, an amount rolled over pursuant to this Paragraph
5.12 shall be credited to the Participant’s Accounts and invested in the
investment funds in accordance with the Participant’s directions for such
amounts. Thereafter, such rolled over amounts shall be administered and invested
in accordance with Articles VI and VII and shall be subject to the distribution
provisions set forth in Articles VIII, X and XI. The limitations of Article XV
shall not apply to Rollover Contributions. All Rollover Contributions shall be
made in cash and shall be fully vested. No Matching Employer Contributions shall
be made with respect to Rollover Contributions.

 

5.13 Limitation on Contributions.

 

(a) Notwithstanding any other provisions of the BIP to the contrary, in no event
may the contributions made to the BIP by or on behalf of any Participant in any
Plan Year exceed the percentage elected under Paragraphs 5.1 and 5.2, and the
percentage determined under Paragraph 5.7, multiplied by the Participant’s
Compensation not in excess of the annual compensation limitation in effect under
Section 401(a)(17) of the Code, as adjusted by the IRS for increases in the cost
of living in accordance with Section 401(a)(17) of the Code and the regulations
and other guidance issued thereunder.

 

(b) Notwithstanding any other provision of this Plan to the contrary, in no
event may the amount of Salary Reduction Contributions to the BIP, in addition
to all such salary reduction contributions under all other cash or deferred
arrangements (as defined in Code Section 401(k)) maintained by the Company or an
Affiliated Company in which a Participant participates, exceed the applicable
limit imposed under Code Section 402(g) and the regulations, notices and other
guidance issued thereunder. The dollar limitation shall be adjusted annually
pursuant to the method provided in Code Section 415(d) in accordance with
Regulations. If such salary reduction amounts exceed the applicable limit, all
such amounts in excess of the applicable limit and any income or losses
allocable to such excess amounts shall be distributed to the Participant no
later than the April 15 following the calendar year in which the excess
occurred. If a Participant participates in another cash or deferred arrangement
in any calendar year that is not maintained by the Company or an Affiliated
Company, and the Participant’s total Salary Reduction Contributions under the
BIP and such other plan exceed the applicable

 

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limit in a calendar year, the Participant may request to receive a distribution
of the amount of the excess deferral (a deferral in excess of the applicable
limit) that is attributable to Salary Reduction Contribution provided that the
Participant notifies the Retirement/Investments Committee of the amount of the
excess deferral that is attributable to a Salary Reduction Contribution to the
BIP and requests such a distribution. The Participant’s notice must be received
by the Retirement/Investments Committee no later than the March 1 following the
Plan Year of the excess deferral. In the absence of such notice, the amount of
such excess deferral attributable to Salary Reduction Contributions to the BIP
shall be subject to all limitations on withdrawals and distributions in the BIP.

 

5.14 Safe Harbor Notice. In accordance with Code Sections 401(k)(12) and
401(m)(11), each Employee eligible to participate in the Plan shall be, within a
reasonable period before any Plan year, given written notice of the Employee’s
rights and obligations as an employee eligible to participate in a safe harbor
plan.

 

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ARTICLE VI

PARTICIPANT ACCOUNTS

 

6.1 Valuation of Assets. As of each Valuation Date, the Trustee will determine
the total fair market value of all assets then held by it in each of the
investment funds. Notwithstanding any other provision of the BIP, to the extent
that Participants’ Accounts are invested in mutual funds or other assets for
which daily pricing is available (“Daily Pricing Media”), all amounts
contributed to the Fund will be invested at the time of the actual receipt by
the Daily Pricing Media, and the balance of each Account shall reflect the
results of such daily pricing from the time of actual receipt until the time of
distribution. Investment elections and changes pursuant to Article VII shall be
effective upon receipt by the Daily Pricing Media. The provisions of Paragraphs
6.2 and 6.3 shall apply only to the extent, if any, that assets of the Fund are
not invested in Daily Pricing Media.

 

6.2 Credits to Participant Accounts. Each Participant’s Account will be credited
with all contributions made by or on behalf of the Participant as well as
amounts transferred to the BIP on the Participant’s behalf. Except as provided
in Paragraph 6.1, the Accounts of each Participant will also be credited, as of
each Valuation Date, with the Participant’s share of the net investment income
and any realized and unrealized capital gains of the investment funds that
occurred since the last Valuation Date. Such Participant’s share of such income
will be that portion of the total net investment income and capital gains of
each such fund that bears the same ratio to such total as the balance of the
Participant’s Accounts attributable to each such fund on the preceding Valuation
Date bears to the aggregate of the balances of all Participant Accounts
attributable to each such fund as of the preceding Valuation Date.

 

6.3 Debits to Participant Accounts. The Accounts of each Participant will be
debited with the amount of any withdrawal made by the Participant pursuant to
Article VIII and with the amount of any distribution made to or on behalf of the
Participant pursuant to Articles X and XI. The Accounts of each such Participant
will also be debited, as of each Valuation Date, with the Participant’s share of
any realized and unrealized losses, including capital losses, of the investment
funds that occurred since the last Valuation Date. The Participant’s share of
any realized and unrealized losses, including capital losses, will be that
portion of the total realized and unrealized losses of each such fund that bear
the same ratio to such total as the balance of the Participant’s Account
attributable to each such fund on the preceding Valuation Date bears to the
aggregate of the balances of all Participant Accounts attributable to each such
fund as of the preceding Valuation Date.

 

6.4 Statement of Participant Accounts. As soon as practicable after the
completion of a Plan Year or as often as the Retirement/Investments Committee
shall direct, an individual statement will be issued to each Participant showing
the value of the Participant’s Accounts in the investment funds, and the
outstanding balance due the Participant’s Loan Subaccount, if any.

 

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ARTICLE VII

INVESTMENT OF CONTRIBUTIONS

 

7.1 Investment of Salary Reduction Contributions and Rollover Contributions.
Each Participant will direct, at the time such person elects to become a
Participant under the BIP, that the Participant’s Salary Reduction Contributions
and Rollover Contributions, if any, be invested in multiples of 1% in any of the
Funds. After a Participant’s initial investment of Rollover Contributions, such
amounts shall be treated as Salary Reduction Contributions for investment
purposes.

 

7.2 Investment of Matching Employer Contributions. Matching Employer
Contributions with respect to all periods before the Effective Date initially
will be invested in the Blockbuster Class A Stock Fund. Matching Employer
Contributions with respect to all periods beginning on or after the Effective
Date initially will be invested in multiples of 1% in any of the Funds.

 

7.3 Change in Investment Election for Current Contributions. Any change in the
Participant’s initial investment election under Paragraph 7.1 as to the
Participant’s future Salary Reduction Contributions shall be made in such manner
as determined by the Retirement/Investments Committee (including changes made by
telephonic, electronic or other instructions under terms prescribed by the
Retirement/Investments Committee) and within the limits of Paragraph 7.1, and
shall be effective as soon as administratively practicable following the
Retirement/Investments Committee’s receipt of the new election.

 

7.4 Change in Investment Election for Prior Contributions. A Participant may
change the Participant’s investment election as to the Participant’s prior
Salary Reduction Contributions, in such manner as determined by the
Retirement/Investments Committee (including changes made by telephonic,
electronic or other instructions under terms prescribed by the
Retirement/Investments Committee), to be effective as soon as administratively
practicable following the Retirement/Investments Committee’s receipt of the new
election. Participants shall be permitted to change the investment of Matching
Employer Contributions invested in the Blockbuster Class A Stock Fund into any
other investment funds available under the Plan. Any change in any investment
pursuant to this Paragraph 7.4 shall be made in such a manner as determined by
the Retirement/Investments Committee (including changes made by telephonic,
electronic or other instructions under terms prescribed by the
Retirement/Investments Committee.)

 

7.5 Fiduciary Responsibility for Investments. The BIP is intended to constitute
a plan described in ERISA Section 404(c). To the extent permitted under ERISA,
the Trustee, Retirement/Investments Committee and all other BIP fiduciaries are
relieved of liability for any losses that are the direct and necessary result of
all investment instructions given by a Participant or Beneficiary. The
Retirement/Investments Committee shall provide information to Participants
consistent with ERISA Section 404(c) and the regulations and other guidance
issued thereunder.

 

7.6 Trading Restrictions. Notwithstanding any provision of the Plan to the
contrary, the Retirement/Investments Committee may limit transfers among the
investment funds within the Plan to the extent necessary to comply with
restrictions imposed by the investment funds

 

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against market timing, short term trading or other similar trading strategies
identified by the managers of the investment funds.

 

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ARTICLE VIII

WITHDRAWALS DURING EMPLOYMENT

 

8.1 Withdrawals of Salary Reduction Contributions, After-Tax Contributions,
Matching Employer Contributions, Transferred Amounts, and Rollover
Contributions; Frequency of Withdrawals.

 

A Participant who has not terminated employment may elect to withdraw amounts
attributable to Salary Reduction Contributions, After-Tax Contributions,
Matching Employer Contributions, Rollover Contributions and certain amounts
transferred to the BIP, including amounts transferred into the BIP from the
Merged Plan, and investment earnings thereon, less the amount of any outstanding
loan, in accordance with the provisions of this Article VIII, and according to
the order in which subparagraphs (a) through (e) are presented, as the amounts
described in each successive subparagraph are exhausted. The minimum amount for
any single withdrawal, other than a withdrawal on account of financial hardship,
is $500.

 

Except in the case of a financial hardship withdrawal under Paragraph 8.1(e),
each Participant may elect only one withdrawal from the BIP in any Plan Year. A
Participant is not limited with respect to the number of withdrawals that may be
made on account of a financial hardship under Paragraph 8.1(e).

 

(a) Withdrawals of After-Tax Contributions:

 

A Participant may elect to withdraw up to 100% of the Participant’s Account
attributable to After-Tax Contributions and the investment earnings thereon. Any
such withdrawals shall be made in the following order, as the amounts described
in each successive subparagraph are exhausted:

 

(i) An amount equal to all or part of the Participant’s pre-1987 After-Tax
Contributions to the extent required to exhaust such amounts; provided, however,
that if the value of all amounts attributable to After-Tax Contributions plus
investment earnings thereon is less than the net amount of pre-1987 After-Tax
Contributions, no more than such value may be withdrawn.

 

(ii) An amount equal to all or part of the Participant’s post-1986 After-Tax
Contributions, and a pro rata portion of the investment earnings on such
post-1986 After-Tax Contributions to the extent required to exhaust such
amounts, but no more than the current value of all After-Tax Contributions in
the event such value is less than the net amount of such post-1986 After-Tax
Contributions.

 

(iii) An amount equal to all or part of the investment earnings on the
Participant’s pre-1987 After-Tax Contributions to the extent required to exhaust
such amounts.

 

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(b) Withdrawals of Transferred Amounts or Rollover Contributions:

 

(i) A Participant who has had amounts credited to the Participant’s Account
attributable to the Viacom Employee Stock Ownership Plan may elect to withdraw
such amounts and the investment earnings thereon.

 

(ii) A Participant who has made Rollover Contributions to the BIP may elect to
withdraw up to 100% of such Rollover Contributions and investment earnings
thereon.

 

(iii) Any withdrawal of after-tax Rollover Contributions contributed to the Plan
after December 31, 2001, shall include a pro rata portion of the investment
earnings on such contributions.

 

(c) Withdrawals of Matching Employer Contributions:

 

(i) A Participant whose combined years of participation in the VIP or the BIP is
at least 5 years may elect to withdraw up to 100% of the Participant’s Matching
Employer Contributions contributed prior to January 1, 2001 and the investment
earnings thereon.

 

(ii) A Participant who has attained age 59 1/2 may elect to withdraw up to 100%
of the Participant’s Matching Employer Contributions and the investment earnings
thereon.

 

(d) Withdrawals of Salary Reduction Contributions After Attainment of Age
59 1/2:

 

A Participant who has attained age 59 1/2 may elect to withdraw up to 100% of
the Salary Reduction Contributions made to the BIP on the Participant’s behalf
(including recharacterized Salary Reduction Contributions treated as Salary
Reduction Contributions, if any), and the investment earnings thereon.

 

(e) Withdrawals on Account of Financial Hardship:

 

Upon submission of satisfactory evidence by a Participant of a financial
hardship, as defined in this Paragraph 8.1(e), the Retirement/Investments
Committee may direct distribution of part or all of the value of such
Participant’s vested Matching Employer Contributions and Salary Reduction
Contributions, and investment earnings thereon, but only to the extent required
to relieve such financial hardship, taking into account such additional amounts
necessary to pay any federal, state, or local income taxes or penalties
reasonably anticipated to result from the distribution; provided that (i) prior
to attaining age 59 1/2, a Participant may only elect to withdraw the vested
portion of the Participant’s Matching Employer Contributions contributed prior
to January 1, 2001; and (ii) withdrawals shall be taken from Matching Employer
Contributions prior to being taken from Salary Reduction Contributions. No such
withdrawal shall be permitted unless the Participant has previously or
concurrently withdrawn all amounts otherwise available to the Participant under
this Paragraph 8.1. In no event may the Retirement/Investments

 

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Committee direct that such a withdrawal be made to the extent the financial
hardship may be relieved from other resources that are reasonably available to
the Participant.

 

A Participant shall be deemed to have no other resources reasonably available
if: (i) the Participant has obtained all withdrawals and distributions currently
available to the Participant under the BIP and all other qualified defined
contribution plans maintained by the Company or an Affiliated Company; (ii) the
Participant has obtained all nontaxable loans reasonably available under the BIP
and all other qualified defined contribution plans maintained by the Company or
an Affiliated Company, to the extent taking such loan would alleviate the
immediate and heavy financial need and only to the extent any required repayment
of such loan would not itself cause an immediate and heavy financial need; and
(iii) the Participant agrees to cease all Salary Reduction Contributions, as
well as all similar contributions to all other qualified defined contribution
and non-qualified deferred compensation plans maintained by the Company or an
Affiliated Company for a period, of at least six months from the date of the
hardship withdrawal.

 

For purposes of this Paragraph 8.1(e), the term “financial hardship” shall be
determined in accordance with regulations (and any other rulings, notices, or
documents of general applicability) issued pursuant to Section 401(k) of the
Code and, to the extent permitted by such authorities, shall be limited to any
financial need arising from:

 

(i) medical expenses (as defined in Section 213(d) of the Code) previously
incurred by the Participant or a Participant’s spouse or dependent or expenses
necessary for these persons to obtain medical care (as defined in Section 213(d)
of the Code) that, in either case, are not covered by insurance,

 

(ii) expenses relating to the payment of tuition and related educational fees,
including room and board, for the next twelve months of post-secondary education
of a Participant, the Participant’s spouse or dependent,

 

(iii) expenses directly relating to the purchase (excluding mortgage payments)
of a primary residence for the Participant,

 

(iv) expenses relating to the need to prevent the eviction of the Participant
from the Participant’s principal residence or foreclosure on the mortgage of the
Participant’s principal residence,

 

(v) payments for burial or funeral expenses for the Participant’s deceased
parent, spouse, children or dependents (as defined in Code Section 152, without
regard to Section 152(d)(1)(B)),

 

(vi) Expenses for the repair of damage to the Participant’s principal residence
that would qualify for the casualty deduction under Code Section 165 (determined
without regard to whether the loss exceeds 10% of adjusted gross income),

 

(vii) expenses relating to an immediate and heavy financial need as determined
in a uniform and nondiscriminatory manner by the

 

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Retirement/Investments Committee based upon the facts and circumstances of a
particular situation.

 

Notwithstanding anything in the preceding paragraph to the contrary, the term
“financial hardship” includes a financial need arising from expenses for food,
shelter, transportation and other similar needs incurred by Participants, their
spouses or other dependents whose principal residence is located in the
federally-declared disaster areas impacted by Hurricane Katrina in Alabama,
Florida, Louisiana and Mississippi provided that the Committee shall not approve
any withdrawal pursuant to this paragraph after December 31, 2005.

 

There is no minimum withdrawal required under this Paragraph 8.1(e). Hardship
withdrawals shall be paid in a single cash payment and on a pro-rata basis for
the investment funds (other than the Blockbuster Class A Stock Fund, the
Blockbuster Class B Stock Fund, the Viacom Class A Stock Fund or the Viacom
Class B Stock Fund) in which the Participant’s Account is invested. For any
withdrawal under this Paragraph 8.1(e), the portion of the Participant’s Account
attributable to Salary Reduction Contributions that is available for withdrawal
shall not exceed the lesser of: (i) the value of such Salary Reduction
Contributions as of December 31, 1988 (taking into account investment earnings
thereon), plus the total amount of the Participant’s Salary Reduction
Contributions that are made after December 31, 1988, or (ii) the value of all
Salary Reduction Contributions (taking into account investment earnings
thereon).

 

8.2 Withdrawal Procedures. A Participant, by filing a request in accordance with
such rules as are required by the Retirement/Investments Committee, may elect to
withdraw amounts pursuant to Paragraph 8.1. Such withdrawals shall be subject to
the following:

 

(a) All requests for withdrawals shall be reviewed by the Retirement/Investments
Committee. Each approved withdrawal application shall be forwarded by the
Retirement/Investments Committee to the Trustee as soon as practicable after
Retirement/Investments Committee approval. Withdrawals shall be paid as soon as
practicable after the Valuation Date on which proper payment instructions are
received by the Trustee, based on the amount specified in the Participant’s
request and the amount available for withdrawal in the Participant’s Accounts.
Investment earnings and losses will not be credited on the amounts to be
withdrawn after the applicable Valuation Date.

 

(b) All withdrawals shall be paid in a cash lump sum.

 

(c) Notwithstanding anything herein to the contrary, and in the absence of
express approval by the Retirement/Investments Committee, no withdrawal may be
made by a Participant during the period in which the Retirement/Investments
Committee is making a determination of whether a domestic relations order
affecting the Participant’s Account is a qualified domestic relations order,
within the meaning of Section 414(p) of the Code. Further, if the
Retirement/Investments Committee is in receipt of a qualified domestic relations
order with respect to any Participant’s Account, it may prohibit such

 

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Participant from making a withdrawal until the alternate payee’s rights under
such order are satisfied.

 

8.3 Funds to be Charged with Withdrawal. Distributions will be made out of the
Participant’s interest in each of the investment funds in proportion to the
Participant’s interest in these investment funds. Notwithstanding the foregoing,
withdrawals of Matching Employer Contributions shall be charged to the Viacom
Class B Stock Fund, the Blockbuster Class A Stock Fund or the Blockbuster Class
B Stock Fund, and shall be paid in a cash lump sum.

 

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ARTICLE IX

PARTICIPANT LOANS

 

9.1 Loan Subaccounts. Loans from the BIP may be made to all Participants and
Beneficiaries who are “parties in interest” within the meaning of ERISA
Section 3(14) and to Employees who have made Rollover Contributions to the BIP
but who have not met the age and service eligibility requirements of Article
III. Such individuals are referred to herein as “Eligible Borrowers.” Within
each Eligible Borrower’s Account, there shall be maintained a Loan Subaccount
solely for the purpose of effecting loans from the Eligible Borrower’s Account
to the Eligible Borrower.

 

9.2 Eligibility for Loans.

 

Only one loan under the BIP may be outstanding at any time for each Eligible
Borrower. An Eligible Borrower may obtain another loan as soon as is
administratively feasible after the date of repayment. If, on May 1, 1999, an
Eligible Borrower had a loan outstanding as a result of the Eligible Borrower’s
participation in the VIP, such Eligible Borrower may not obtain a loan from the
BIP until any such prior loan is repaid in full.

 

9.3 Availability of Loans.

 

(a) Application for a loan must be made to the Retirement/Investments Committee
in the manner prescribed by the Retirement/Investments Committee. The decisions
by the Retirement/Investments Committee on loan applications shall be made on a
reasonably equivalent, uniform and nondiscriminatory basis and within a
reasonable period after each loan application is received. Notwithstanding the
foregoing, the Retirement/Investments Committee representatives may apply
different terms and conditions for loans to Eligible Borrowers who are not
actively employed by an Employer, or for whom payroll deduction is not
available, based on economic and other differences affecting the individuals’
ability to repay any loan.

 

(b) Notwithstanding anything herein to the contrary, and in the absence of
express approval by the Retirement/Investments Committee, no loan shall be made
to an Eligible Borrower during a period in which the Retirement/Investments
Committee is making a determination of whether a domestic relations order
affecting the Eligible Borrower’s Accounts is a qualified domestic relations
order, within the meaning of Section 414(p) of the Code. Further, if the
Retirement/Investments Committee is in receipt of a qualified domestic relations
order with respect to any Eligible Borrower’s account, it may prohibit such
Eligible Borrower from obtaining a loan until the alternate payee’s rights under
such order are satisfied.

 

9.4 Amount of Loan.

 

A BIP loan shall be derived from the Eligible Borrower’s vested interest in the
Eligible Borrower’s Accounts, determined as of the Valuation Date on which the
Trustee receives proper loan disbursement instructions, which shall be forwarded
to the Trustee by the Retirement/Investments Committee as soon as practicable
after its review and approval of the loan application. Loans shall be made in
increments of $100, rounded down to the nearest $100.

 

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The minimum loan available is $500. The maximum loan available is the lesser of
50% of the Eligible Borrower’s vested interest in the Eligible Borrower’s
Accounts or $50,000 (determined by aggregating loans from all qualified defined
contribution plans of the Company or any Affiliated Company), reduced by the
highest aggregate outstanding balance of all plan loans from all defined
contribution plans of the Company or any Affiliated Company to such Eligible
Borrower during the twelve-month period ending on the day before the loan is
made.

 

9.5 Terms of Loan.

 

(a) A loan shall be secured by a lien on the Eligible Borrower’s interest in the
BIP, to the maximum extent permitted by the relevant provisions of the Code,
ERISA, and any regulations or other guidance issued thereunder.

 

(b) The interest rate on a loan shall be established by the
Retirement/Investments Committee on the date that the loan is approved by a
Retirement/Investments Committee representative and shall be equal to 1% above
the annual prime commercial rate as published in the Wall Street Journal on the
first day of the calendar quarter during which such loan application is
approved.

 

(c) Subject to Paragraph 9.6, the principal amount and interest on a loan shall
be repaid no less frequently than quarterly by level payroll deductions during
each Payroll Period in which the loan is outstanding. Unless the loan is used
within a reasonable time for the purpose of acquiring the principal residence of
the Eligible Borrower, the Eligible Borrower may elect a repayment term of any
number of months from 12 to 60 months from the date of the first Payroll Period
practicable coincident with or next following the distribution of the loan from
the BIP. If the loan is to be used within a reasonable time for the purpose of
acquiring the principal residence of the Eligible Borrower, the Eligible
Borrower may elect a repayment term of any number of months from 12 to 300
months from the date of the first Payroll Period practicable coincident with or
next following the distribution of the loan from the BIP.

 

(d) Each loan shall be evidenced by a promissory note, evidencing the Eligible
Borrower’s obligation to repay the borrowed amount to the BIP, in such form and
with such provisions consistent with this Article IX as are acceptable to the
Trustee. All promissory notes shall be deposited with the Trustee.

 

(e) Under the terms of the loan agreement, a Retirement/Investments Committee
representative may determine a loan to be in default, and may take such actions
upon default, in accordance with Paragraph 9.7.

 

(f) If an Eligible Borrower is transferred from employment with an Employer to
employment with an Affiliated Company or another entity affiliated with the
Employer, the Retirement/Investments Committee may determine that the Eligible
Borrower shall not be treated as having terminated employment and the
Retirement/Investments Committee may make arrangements for the loan to be repaid
in accordance with the loan agreement. For this purpose, the
Retirement/Investments Committee may, but is not required to, authorize the
transfer of the loan to a qualified

 

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plan maintained by such Affiliated Company. In the absence of such arrangements,
the loan shall be deemed to be in default, and shall be subject to the
provisions of Paragraph 9.7.

 

9.6 Distribution and Repayment of Loan.

 

(a) The loan proceeds shall be transferred to the Eligible Borrower’s Loan
Subaccount by the Trustee and shall be derived from the Eligible Borrower’s
interest in the Funds on a pro rata basis. Amounts transferred to such
Subaccount shall reflect the value of the Eligible Borrower’s interest as of the
Valuation Date on which such transfer shall occur. The loan proceeds shall be
distributed from the Loan Subaccount to the Eligible Borrower as soon as
administratively practicable.

 

(b) Repayments of BIP loans shall be made to the Eligible Borrower’s Loan
Subaccount. Such repayments shall be transferred from the Loan Subaccount and
credited to the Eligible Borrower’s Accounts and invested in the Funds in the
same proportions as the Eligible Borrower’s current contributions are invested,
as soon as practicable after they are received by the Loan Subaccount. Eligible
Borrowers may prepay the entire amount due under the loan at any time without
penalty. Notwithstanding the foregoing, a loan may provide that no payments will
be made for the duration of a calendar year in which an Eligible Borrower is on
leave without pay; provided that if an Eligible Borrower commences such a leave
during the last quarter of a year, the loan may provide that payments need not
recommence until the end of the calendar year after the year in which the leave
occurs.

 

9.7 Events of Default and Action Upon Default.

 

(a) In the event that an Eligible Borrower does not repay a BIP loan at such
times as are required by the terms of the loan, such loan shall be in default
and the unpaid balance of the loan, together with interest thereon shall become
due and payable. Further, upon an Eligible Borrower’s termination of employment
(including by reason of retirement, Disability, death or the sale of the
business at which such individual is employed, whether or not the sale is a
distributable event under Code Section 401(k) and the regulations thereunder),
such loan shall be in default. If, before a loan is repaid in full, a
distribution is required to be made from the BIP to an Alternate Payee under a
qualified domestic relations order (as defined in Section 414(p) of the Code and
Section 206(d) of ERISA) and the amount of such distribution exceeds the value
of the Eligible Borrower’s interest in the BIP less the amount of such
outstanding loan, the unpaid balance thereon shall become immediately due and
payable. The Retirement/Investments Committee shall direct the Trustee to
satisfy the indebtedness to the BIP before making any payments to the Eligible
Borrower or any alternate payee. In addition to the foregoing, the loan
agreement may include such other events of default as the Retirement/Investments
Committee shall determine are necessary or desirable.

 

(b) Upon the default of any Eligible Borrower, the Retirement/Investments
Committee may direct the Trustee to take such action as it may reasonably
determine to be necessary in order to preclude the loss of principal and
interest, including:

 

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(i) demanding repayment of the outstanding amount on the loan (including
principal and accrued interest); or

 

(ii) if the loan is not repaid or if other repayment arrangements are not
established, causing a foreclosure of the loan to occur by distributing the
promissory note to the Eligible Borrower or otherwise reducing the Eligible
Borrower’s Account by the value of the loan. For these purposes, such loan shall
be deemed to have a fair market value equal to its face value reduced by any
payments made thereon by the Eligible Borrower. In the event of any default, the
Eligible Borrower’s prior request for a loan shall be treated as the Eligible
Borrower’s consent to an immediate distribution of the promissory note
representing a distribution of the unpaid balance of any such loan. The loan
agreement shall include such provisions as are necessary to reflect such
consent. In all events, however, to the extent a loan is secured by Salary
Reduction Contributions or Matching Employer Contributions made after
December 31, 2000, no foreclosure on the Eligible Borrower’s loan shall be made
until the earliest time Salary Reduction Contributions or Matching Employer
Contributions made after December 31, 2000 may be distributed without violating
any provisions of Code Section 401(k) and the regulations issued thereunder.

 

9.8 Military Service. Notwithstanding any other provision of the Plan to the
contrary, loan repayments may be suspended during periods that the Eligible
Borrower is performing services in the uniformed services, whether or not that
service is qualified military service. If loan repayments are suspended during a
period of service in the uniformed services, that period of service will be
disregarded for all Plan purposes in accordance with Code Section 414(u).

 

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ARTICLE X

VESTING AND TERMINATION OF EMPLOYMENT

 

10.1 Matchable, Unmatched and Rollover Contributions. A Participant shall be
fully vested at all times in the portion of the Participant’s Account
attributable to Matchable Contributions, Unmatched Contributions, and Rollover
Contributions.

 

10.2 Matching Employer Contributions. Each Participant shall be fully vested at
all times in the portion of the Participant’s Account attributable to Matching
Employer Contributions.

 

10.3 Forfeitures.

 

Subparagraphs (a) through (c) below apply to Participants who terminated
employment prior to January 1, 2001.

 

(a) Termination of Employment and Distribution Made. If a Participant terminated
employment prior to the date on which the Participant was fully vested in the
Participant’s Account and has received a distribution of such Account, the
non-vested portion of the Participant’s Account shall be forfeited and used as
soon as practicable after any Accounting Period to reduce future Matching
Employer Contributions, to defray administrative expenses of the BIP, to correct
an error made in allocating amounts to Participant’s Accounts or resolve any
claim filed under the BIP in accordance with Paragraph 12.3 or 12.4, and to
restore Participants’ Accounts in accordance with Paragraph 10.3(b).

 

(b) Restoration of Account Balance. If an amount of a Participant’s Account has
been forfeited in accordance with Paragraph (a) above, that amount shall be
subsequently restored to the Participant’s Account provided (i) the Participant
is reemployed by an Employer before the Participant has a period of five
consecutive one-year periods of Severance (as defined in Paragraph 2.44) and
(ii) the Participant repays to the BIP within five (5) years of the
Participant’s reemployment a cash lump sum payment equal to the full amount
distributed to the Participant from the BIP on account of the Participant’s
termination of employment. Any amounts to be restored by an Employer to a
Participant’s Account shall be taken first from any forfeitures that have not as
yet been applied against Matching Employer Contributions or administrative
expenses and if any amounts remain to be restored, the Employer shall make a
special contribution equal to those amounts.

 

(c) Termination of Employment and No Distribution Made. If (i) a Participant
terminated employment prior to the date on which the Participant was fully
vested in the Participant’s Accounts, (ii) the total value of the Participant’s
vested interest in the Participant’s Accounts in this Plan exceeds $5,000,
(iii) the Participant does not consent to receive a distribution of such
Accounts, and (iv) the Participant is not reemployed by an Employer before the
end of five consecutive one-year periods of Severance, the non-vested portion of
the Participant’s Accounts shall be forfeited as of the close of the fifth one
year Break in Service and used, not later than as of the last day

 

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of the Plan Year in which the forfeiture occurs, to reduce future Matching
Employer Contributions, to defray administrative expenses of the BIP, and to
restore Participants’ Accounts in accordance with Paragraph 10.3(b).

 

10.4 Lost Participants or Beneficiaries. If a Participant or Beneficiary cannot
be located by reasonable efforts of the Retirement/Investments Committee within
a reasonable period of time after the latest date such amounts are otherwise
payable under the BIP, the amount in such Participant’s Accounts shall be
forfeited and used, not later than as of the last day of the Plan Year in which
the forfeiture occurs, to reduce future Matching Employer Contributions, to
defray administrative expenses of the BIP, and to restore Participants’ Accounts
in accordance with Paragraph 10.3(b). Such forfeited amount shall be restored
(without earnings) if, at any time, the Participant or Beneficiary who was
entitled to receive such amount when it first became payable shall, after
furnishing proof of their identity and right to make such claim to the
Retirement/Investments Committee, file a written request for such amount with
the Retirement/Investments Committee.

 

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ARTICLE XI

PAYMENT OF ACCOUNTS OTHER THAN WITHDRAWALS

 

11.1 Right to Payment. Upon a Participant’s termination of employment for any
reason or Disability, the Participant (or, in the event of death, the
Participant’s Beneficiary) shall be entitled to receive a distribution of the
Participant’s vested interest in the Participant’s Accounts in accordance with
the provisions of this Article XI.

 

11.2 Forms of Payment.

 

(a) Subject to any other provision in this Article XI to the contrary, any
Participant may, not more than ninety days before the date an amount is to be
paid from the BIP, file with the Retirement/Investments Committee an election to
have the Participant’s Account paid to the Participant (or, in the event of
death, to the Participant’s Beneficiary) in accordance with the options
described in sections (i) and (ii) of this Paragraph 11.2(a):

 

(i) In such manner of annual installments, not in excess of twenty, as such
Participant shall so elect, and, in the event of the Participant’s death prior
to the receipt of all such installments, the balance of such installments to the
Participant’s Beneficiary; provided, however, that payments shall not extend
over a period exceeding the period over which payments may be made pursuant to
Section 401(a)(9) of the Code and the regulations and other guidance thereunder;
and provided, further, that the Beneficiary may elect, as soon as practicable
after the Participant’s death, to have the balance of the Participant’s Account
paid to the Beneficiary in a single payment.

 

(ii) In a single payment.

 

(b) A Participant may, not more than ninety days before an amount is to be paid
from the BIP, modify or revoke any form of payment specified in Paragraph 11.2
theretofore made by the Participant. A Former Participant who has elected to
receive the Participant’s BIP distribution in the form of installment payments,
and whose installment payments have commenced, may modify or revoke the
Participant’s decision to receive such installment payments.

 

11.3 Stock Election. If the total value of a Former Participant’s Accounts in
this Plan exceeds $5,000, such a Former Participant (or Beneficiary, if such
person is deceased) may, not less than thirty days before the date the entire
interest in the BIP is to be paid or commence to be paid, or such other date
that the Retirement/Investments Committee approves, file with the
Retirement/Investments Committee an election to have that portion of the Account
consisting of the value of the Stock and cash credited to the Account and
invested in the Blockbuster Class A Stock Fund, the Blockbuster Class B Stock
Fund, the Viacom Class A Stock Fund or the Viacom Class B Stock Fund, paid to
such person (or, in the event of death, to such person’s Beneficiary), to the
extent possible, in shares of stock (in lieu of cash). Any such Participant may
also, not less than thirty days before the date the Participant’s entire
interest in the BIP is to be paid or commence to be paid, revoke any such
election theretofore made by the Participant.

 

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11.4 Timing of Payment. Subject to the provisions of Paragraph 14.3 regarding
qualified domestic relations orders, if the value of a Former Participant’s
Accounts in this Plan does not exceed $1,000, such amount shall be paid to such
Former Participant (or, in the event of death, to such person’s Beneficiary) in
a single cash payment as soon as practicable thereafter. Subject to the
provisions of Paragraph 14.3 regarding qualified domestic relations orders, if
the value of such Former Participant’s Accounts in this Plan, is greater than
$1,000, payment of the value of such Participant’s Accounts, determined in
accordance with Paragraph 11.5, shall be made by the Participant as soon as
practicable after the earliest of: (a) the date as of which the Participant or
the Participant’s Beneficiary consents to a distribution (which distribution may
not be scheduled to commence (i) earlier than 30 days after the Participant
receives information regarding such distribution and (ii) later than ninety days
after such Participant elects to receive the distribution); or (b) the date
required by Paragraph 11.7. Notwithstanding the foregoing, distribution of a
Participant’s Account under the Plan may occur prior to thirty (30) days after
the Participant receives information regarding such distribution, provided
(i) the Retirement/Investments Committee informs the Participant that the
Participant has a right to a period of at least thirty (30) days after receiving
the information to consider the decision of whether to receive an immediate
distribution; and (ii) the Participant, after receiving the information,
affirmatively elects to receive an immediate distribution. For purposes of
determining the $1,000 vested balance threshold provided under this paragraph,
the value of the Participant’s vested Account shall include any Rollover
Contributions (and investment earnings thereon) within the meaning of Code
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16).

 

Notwithstanding anything herein to the contrary, in no event may a Former
Participant elect to receive a payment of such person’s Accounts in any form of
payment other than those specified in Paragraph 11.2. All distributions under
this Article XI shall be made by the Trustee only after the Trustee receives
instructions to make such distribution from the Retirement/Investments
Committee. The Participant must submit to the Retirement/Investments Committee
such election and distribution forms in such manner as required by the
Retirement/Investments Committee. The Retirement/Investments Committee shall
review such forms and, upon approval of the distribution request, forward
payment instructions to the Trustee as soon as practicable thereafter.

 

11.5 Valuation and Payment Procedures for Lump Sum Payments.

 

(a) No Stock Election in Effect: If a Former Participant shall have elected to
receive payment in the form of a single sum cash payment, or if payments are to
be made to a Former Participant’s Beneficiary in the form of a single sum cash
payment, the Former Participant’s Accounts shall be valued as of the Valuation
Date on which proper payment instructions are received by the Trustee and such
amount shall be paid to the Former Participant or Beneficiary in cash as soon as
practicable thereafter. To the extent amounts in such Former Participant’s
Account are credited to the Blockbuster Class A Stock Fund, the Blockbuster
Class B Stock Fund, the Viacom Class A Stock Fund or the Viacom Class B Stock
Fund on such Former Participant’s behalf, the shares of stock held in such fund
and credited to such Former Participant’s Account shall be sold as soon as
practicable after the applicable Valuation Date and the proceeds of such sale
shall be distributed as a part of such single sum distribution.

 

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(b) Stock Election in Effect: If a Former Participant shall have elected to
receive payment in the form of a single sum payment, or if payments are to be
made to a Former Participant’s Beneficiary in the form of a single sum payment,
and such Former Participant or Beneficiary shall have made a stock election in
accordance with Paragraph 11.3, the Former Participant’s Accounts shall be
valued as of the Valuation Date on which proper payment instructions are
received by the Trustee. To the extent amounts in such Former Participant’s
Accounts are credited to the Blockbuster Class A Stock Fund, the Blockbuster
Class B Stock Fund, the Viacom Class A Stock Fund or the Viacom Class B Stock
Fund, on such Former Participant’s behalf, such Former Participant, or
Beneficiary, shall receive a distribution as soon as practicable after the
applicable Valuation Date of the entire number of whole shares of stock in such
person’s Accounts credited to the Blockbuster Class A Stock Fund, the
Blockbuster Class B Stock Fund, the Viacom Class A Stock Fund or the Viacom
Class B Stock Fund, plus cash for any remaining amounts credited to such fund or
funds on behalf of such Former Participant as of the applicable Valuation Date.
The remainder of the Former Participant’s Accounts shall be distributed to the
Former Participant or Beneficiary in a single cash sum as soon as practicable
after the applicable Valuation Date.

 

11.6 Valuation and Payment Procedures for Installment Payments. If a Former
Participant or Beneficiary shall have elected to receive payment in the form of
installment payments, the Former Participant’s Accounts shall be valued as of
the Valuation Date on which proper payment instructions are received by the
Trustee. Such Accounts shall continue to be valued as of the Valuation Date on
which each subsequent installment payment is to be made. Such Accounts shall
continue to be so valued to and including the Valuation Date as of which such
Former Participant’s Account shall have been paid in full if installment
payments continue, or to and including the Valuation Date coincident with the
date the Trustee is notified of such Former Participant’s death if such
Participant’s Beneficiary elects to have the remaining installments paid in a
single payment, as the case may be. Notwithstanding anything herein to the
contrary, the amount distributed for each installment shall be paid
proportionately from the specific investment funds in which the Former
Participant’s Accounts are invested.

 

(a) No Stock Election in Effect: If a stock election of such Former Participant
shall not be in effect:

 

(i) Such Former Participant’s interest in the funds, including the value of the
stock and cash then credited to the Blockbuster Class A Stock Fund, the
Blockbuster Class B Stock Fund, the Viacom Class A Stock Fund or the Viacom
Class B Stock Fund on such Former Participant’s behalf shall be determined as of
the applicable Valuation Date.

 

(ii) An installment payment shall be paid to such Former Participant or
Beneficiary, as the case may be, in an amount equal to that fraction of the
respective amounts determined pursuant to the provisions of Subsection (i) of
this Subparagraph, the numerator of which shall be one and the denominator of
which shall be the total number of installments remaining to be paid in the form
of payment to such Former Participant or Beneficiary.

 

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(iii) If such Former Participant shall die prior to the payment of the Account
in full and a single sum cash distribution is to be made to such Former
Participant’s Beneficiary, such distribution shall be made in accordance with
Paragraph 11.5(a), determined as of the Valuation Date on which proper payment
instructions are received by the Trustee.

 

(b) Stock Election in Effect: If a stock election of such Former Participant
shall be in effect:

 

(i) The calculation of the amount of the installment payments shall be made in
accordance with the provisions of the preceding subparagraph (a), provided that
such Former Participant or Beneficiary, as the case may be, shall receive as a
part of each installment payment the number of whole shares of stock, equal to
the product of the fraction determined pursuant to the provisions of Subsection
(ii) of the preceding Subparagraph (a) multiplied by the number of shares of
stock credited to the Blockbuster Class A Stock Fund, the Blockbuster Class B
Stock Fund, the Viacom Class A Stock Fund or the Viacom Class B Stock Fund in
the Account of such Former Participant as of the applicable Valuation Date.

 

(ii) If such Former Participant shall die prior to the payment of the Account in
full and a single sum distribution is to be made to such Former Participant’s
Beneficiary, such distribution shall be made in accordance with Paragraph
11.5(b), determined as of the Valuation Date on which proper payment
instructions are received by the Trustee.

 

11.7 Time of Payment. Unless the Participant elects otherwise, the payment of
the value of a Participant’s vested Accounts under the Plan shall be payable not
later than the sixtieth day after the latest of the close of the Plan Year in
which he:

 

(a) Attains age 65;

 

(b) Completes 10 years of participation under the plan; or

 

(c) Incurs a termination of employment.

 

If no election is received, the Participant is deemed to have elected to defer
the Participant’s distribution.

 

11.8 Minimum Distribution Requirements. Notwithstanding anything to the contrary
herein, with respect to distributions made to Participants who attained age
70 1/2 prior to January 1, 1997, the Accounts of each Participant were required
to be distributed or commenced to be distributed, in accordance with
Section 401(a)(9) of the Code and the regulations issued thereunder, not later
than the April 1 following the end of the calendar year in which the Participant
attained age seventy and one-half (70 1/2), regardless of whether the
Participant’s employment with the Company was terminated as of such date
provided, however, if a Participant is not a five percent (5%) owner (as defined
in Section 416(i)(1)(B) of the Code) and shall have attained age seventy and
one-half (70 1/2) before January 1, 1988, the Accounts of any

 

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such Participant shall be distributed or shall commence to be distributed not
later than the April 1 following the calendar year in which the Participant
terminates employment; provided further, that if a Participant attained age
70 1/2 on or after January 1, 1996 but prior to January 1, 1997, such
Participant could elect, in accordance with procedures established by the
Retirement/Investments Committee, to commence distributions in accordance with
the following paragraph. Any such minimum distributions shall be calculated in
accordance with Code Section 401(a)(9) and the regulations and other guidance
issued thereunder, and in the form of annual payments over the life expectancy
of the Participant, which life expectancy will not be recalculated.

 

With respect to Participants who are not five percent (5%) owners (as defined in
Section 416(1)(B) of the Code) and who (i) attain age 70 1/2 on or after
January 1, 1997 or (ii) are eligible and elect to defer their distributions in
accordance with this Paragraph, the Accounts of any Participant shall be
distributed or shall commence to be distributed in accordance with Code
Section 401(a)(9) and the regulations and other guidance issued thereunder not
later than the April 1 following the close of the calendar year in which the
Participant terminates employment or attains age 70 1/2, whichever is later. The
Accounts of any Participant who is a 5% owner shall be distributed or shall
commence to be distributed in accordance with Code Section 401(a)(9) and the
regulations and other guidance issued thereunder not later than the April 1
following the close of the calendar year in which the Participant attains age
70 1/2.

 

Notwithstanding anything in this Article XI to the contrary, the payment of any
Account hereunder, in accordance with Section 401(a)(9) of the Code, generally
shall be paid or commence to be paid not later than one year after the date of
the Participant’s death (or such later date as allowed by regulations issued by
the IRS), or in the case of payments to a Participant’s spouse, the date on
which the Participant would have attained age seventy and one-half (70 1/2), if
later. Further, such payments shall be distributed within a five year period
following the Participant’s death unless payable over the life of the
Beneficiary or a period not extending beyond the life expectancy of such
Beneficiary.

 

Notwithstanding the foregoing provisions of this Paragraph 11.8, effective with
respect to distributions under the Plan made for calendar years beginning on or
after January 1, 2001, the Plan will apply the minimum distribution requirements
of Code Section 401(a)(9) in accordance with the regulations under
Section 401(a)(9) that were proposed on January 17, 2001, until the end of the
2002 Plan Year. Effective for Plan Years beginning on or after January 1, 2003,
the Plan will apply the minimum distribution requirements of Section 401(a)(9)
of the Code in accordance with the regulations that were finalized on April 17,
2002.

 

11.9 Direct Rollover Distributions.

 

(a) At the written request of a Participant, a surviving spouse of a
Participant, or a spouse or former spouse of a Participant that is an alternate
payee under a qualified domestic relations order as defined in Section 414(p) of
the Code, (referred to as the “distributee”) and upon receipt of the written
direction of the Retirement/Investments Committee, the Trustee shall effectuate
a direct rollover distribution of the amount requested by the distributee, in
accordance with Section 401(a)(31) of the Code, to an eligible retirement plan
(as defined in Section 402(c)(8)(B) of the Code). Such amount

 

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may constitute all or any whole percent of any distribution from the BIP
otherwise to be made to the distributee, provided that such distribution
constitutes an “eligible rollover distribution” as defined in Section 402(c) of
the Code and the regulations and other guidance issued thereunder. All direct
rollover distributions shall be made in accordance with the following
Subparagraphs 11.9(b) through 11.9(h).

 

(b) A distributee may elect to have a direct rollover distribution apportioned
among no more than two eligible retirement plans.

 

(c) Direct rollover distributions shall be made, in accordance with such forms
and procedures as may be established by the Retirement/Investments Committee and
to the extent any such distribution is to be made in shares of stock otherwise
distributable under the BIP to the distributee, such shares shall be registered
in a manner necessary to effectuate a direct rollover under Section 401(a)(31)
of the Code.

 

(d) After-Tax Contributions may be distributed to an eligible retirement plan
through a direct rollover distribution.

 

(e) No direct rollover distribution shall be made unless the distributee
furnishes the Retirement/Investments Committee with such information as the
Retirement/Investments Committee shall require and deems to be sufficient.

 

(f) A distributee may elect to divide an eligible rollover distribution into two
components, with one portion paid as a direct rollover distribution and the
remainder paid to the distributee, provided that such division of payments shall
be permitted only if the amount of the direct rollover distribution is at least
equal to $500.

 

(g) No direct rollover distributions shall be permitted unless the amount of the
distribution exceeds $200.

 

(h) Direct rollover distributions shall be treated as all other distributions
under the BIP and shall not be treated as a direct trustee-to-trustee transfer
of assets and liabilities.

 

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ARTICLE XII

ADMINISTRATION OF THE BIP

 

12.1 Appointment of Retirement/Investments Committee. The Board shall appoint
the Retirement/Investments Committee that shall consist of at least three
(3) persons who shall be responsible for the administration of this Plan. The
members of the Retirement/Investments Committee shall not receive compensation
with respect to their services as a member of the Retirement/Investments
Committee. The members of the Retirement/Investments Committee shall serve
without bond or security for the performance of their duties hereunder unless
applicable law makes the furnishing of such bond or security mandatory or unless
required by the Company. The Company may pay the premiums on any bond secured
under this Paragraph including the purchase of fiduciary liability insurance for
any person who becomes a fiduciary under this Plan.

 

12.2 Retirement/Investments Committee Discretion, Powers and Duties. The
Retirement/Investments Committee shall have full discretionary authority and
responsibility for administering the Plan, including control over the management
and disposition of Plan assets, and resolving all questions arising in the
administration, interpretation and application of the Plan. The
Retirement/Investments Committee shall have such powers as may be necessary to
discharge its duties hereunder, including, but not by way of limitation, the
following powers and duties:

 

(a) to ensure that the Plan is operated in accordance with its terms, that the
Plan is operated consistent with ERISA and the Code, and that assets are only
used to pay appropriate expenses;

 

(b) to approve and execute certain Plan amendments;

 

(c) to construe and interpret any and all provisions of the Plan, decide all
questions of eligibility and determine the amount, manner and time of payment of
any amounts hereunder;

 

(d) to adopt an Investment Policy Statement; to select and replace the Funds
available to Participants and Beneficiaries under the Plan; and to monitor the
performance of the Funds from time to time; provided that the
Retirement/Investments Committee shall have no discretion to remove, replace or
otherwise change the provisions of the Plan related to the Blockbuster Class A
Stock Fund, the Blockbuster Class B Stock Fund, the Viacom Class A Stock Fund or
the Viacom Class B Stock Fund;

 

(e) to prescribe rules for the operation of the Plan, including procedures to be
followed to obtain benefits and to appeal any unfavorable Retirement/Investments
Committee determinations, as described in Paragraph 12.3 hereof;

 

(f) to receive from the Employer and from Employees such information as shall be
necessary for the proper administration of the Plan;

 

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(g) to employ an independent qualified public accountant to examine the books,
records, and any financial statement and schedules which are required to be
included in the annual report;

 

(h) to file with the appropriate government agency (or agencies) the annual
report, plan description, summary plan description, and other pertinent
documents which may be duly requested;

 

(i) to file such terminal and supplementary reports as may be necessary in the
event of the termination of the Plan;

 

(j) to furnish each Employee and each Beneficiary with an Account hereunder a
summary plan description explaining the Plan;

 

(k) to furnish any Employee or Beneficiary, who requests in writing, statements
indicating such Employee’s or Beneficiary’s total Account balance and
nonforfeitable amount, if any;

 

(l) to furnish to an Employee a statement containing information contained in a
registration statement required by Section 6057(a)(2) of the Code prior to the
time prescribed by law to file such registration if such statement contains
information regarding the Employee;

 

(m) to maintain all records necessary for verification of information required
to be filed with the appropriate government agency (or agencies);

 

(n) to report to the Trustee all available information regarding the amount
payable to each Participant, the computations with respect to the allocation of
assets, and any other information which the Trustee may require;

 

(o) to delegate to one or more of the members of the Retirement/Investments
Committee the right to act in its behalf in all matters connected with the
administration of the Plan and Trust;

 

(p) to delegate to any individual(s) such of the above powers and duties as the
Retirement/Investments Committee deems appropriate;

 

(q) to report to the Board from time to time on the general state of the Plan;
and

 

(r) to appoint or employ for the Plan any agents it deems advisable, including,
but not limited to, legal counsel.

 

A majority of the members of the Retirement/Investments Committee shall
constitute a quorum for the transaction of business. No action shall be taken
except upon a majority vote of the Retirement/Investments Committee members. A
member of the Retirement/Investments Committee shall not vote or decide upon any
matter relating solely to such member or vote in any case in which the
Participant’s individual right or claim to any benefit under the Plan is

 

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particularly involved. If, in any case in which a Retirement/Investments
Committee member is so disqualified to act, and the remaining members cannot
agree, the Retirement/Investments Committee may request that the Board appoint a
temporary substitute member to exercise all the powers of the disqualified
member concerning the matter in which such person is disqualified.

 

12.3 Claims Procedure. Benefits under this Plan will be paid only if the
Retirement/Investments Committee decides that the claimant is entitled to them.
In all such cases, the Retirement/Investments Committee’s decision shall be
final and binding upon all parties and shall be given the greatest possible
deference permitted by applicable law.

 

The Retirement/Investments Committee may prescribe procedures for obtaining
benefits and is required to provide a notice in writing to any person whose
claim for benefits under this Plan has been denied, setting forth (1) the
specific reasons for such denial, (2) the specific reference to pertinent Plan
provisions on which the denial is based, (3) a description of any additional
material or information necessary to the claimant to perfect the claim and an
explanation of why such material or information is necessary, and (4) an
explanation of the Plan’s claim review procedure as described below, including
the name and address of the party to whom an appeal should be sent.

 

A claimant has the right to appeal a denial of a claim by written application to
the Retirement/Investments Committee within sixty (60) days of notice of denial
or, if no such notice has been given, at the end of the expiration of a
reasonable period of time after the claim was filed. The claimant, or a duly
authorized representative, may review pertinent documents and may submit issues
and comments in writing to the Retirement/Investments Committee.

 

After the Retirement/Investments Committee reviews the claims appeal, a final
decision shall be made and communicated to the claimant within sixty (60) days
of receipt of the appeal by the Retirement/Investments Committee, unless special
circumstances require an extension. Such extension cannot extend beyond one
hundred twenty (120) days after receipt of the appeal by the
Retirement/Investments Committee. The communication shall be set forth in
writing in a manner calculated to be understood by the claimant and shall
identify the reasons for the denial and shall reference any pertinent Plan
provisions upon which the denial is based.

 

12.4 Claims Review Relating to Disability. If a claim for benefits is based on a
determination of Disability by the Retirement/Investments Committee, such claim
for disability-based benefits will be processed within 45 days of receipt unless
the application is incomplete. The Retirement/Investments Committee will notify
the claimant or the claimant’s representative within the initial 45-day period
if the application is incomplete.

 

If the Retirement/Investments Committee needs additional information, the
initial 45-day period will be suspended. When the information is received, the
Retirement/Investments Committee has the remainder of the 45-day period to
process the application.

 

In unusual circumstances, the Retirement/Investments Committee may extend the
initial 45-day period to process the application by up to two 30-day extensions.
If it does so, the claimant will be notified in writing of the first extension
before the end of the first 45-day period. The claimant will be notified of the
second extension before the end of the first 30-day extension

 

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period. If the Retirement/Investments Committee is waiting for information from
a claimant during a 30-day extension, the period during which it must wait is
not counted toward the 30 days.

 

If the initial application for disability-based benefits is denied in whole or
in part, the Retirement/Investments Committee will provide the claimant with a
written explanation of the denial and the claimant’s right to have the denial
appealed. The explanation also will describe any other information or material
that the claimant can provide that on appeal may result in a reversal of the
denial.

 

The claimant may then submit a written request for reconsideration of the claim
within 180 days after the denial. Any such request should be accompanied by
documents or records that support the appeal and should be sent to the
Retirement/Investments Committee.

 

The Retirement/Investments Committee will consult with vocational and medical
experts in deciding the appeal for technical advice and opinions on claim
appeals when appropriate.

 

The Retirement/Investments Committee will make a final claim determination
within 45 days of its receipt of the request for an appeal of the initial
denial. If the Retirement/Investments Committee needs additional information to
process the appeal, it will notify the claimant or the claimant’s representative
and request the information. While the Retirement/Investments Committee waits
for the information, the 45-day period will be suspended.

 

When the information is received, the Retirement/Investments Committee has the
remainder of the original 45-day period to process the appeal. In special
circumstances, the Retirement/Investments Committee may extend the original
45-day period. The claimant will be notified in writing of the extension before
the end of the original 45-day period. The period for processing the appeal may
not exceed 90 days (not including the time the Retirement/Investments Committee
waits for information it requests from the claimant).

 

12.5 Retirement/Investments Committee Procedures. The Retirement/Investments
Committee shall adopt such charter or bylaws as it deems desirable. The
Retirement/Investments Committee shall elect one of its members as chair person
and shall elect a secretary who may, but need not, be a member of the
Retirement/Investments Committee. The Retirement/Investments Committee shall
advise the Trustee of such elections in writing. The Secretary of the
Retirement/Investments Committee shall keep a record of all meetings.

 

12.6 Authorization of Payments. The Retirement/Investments Committee shall issue
directions to the Trustee concerning all amounts which are to be paid from the
Trust Fund pursuant to the provisions of the Plan. The Retirement/Investments
Committee shall keep on file, in such manner, as it may deem convenient or
proper, all reports from the Trustee.

 

12.7 Expenses. All expenses that shall arise in connection with the
administration of the BIP, including but not limited to the compensation of the
Trustee, administrative expenses, other expenses associated with the purchase
and sale of stock in the Blockbuster Class A Stock Fund, the Blockbuster Class B
Stock Fund, the Viacom Class A Stock Fund or Viacom Class B Stock Fund, or other
proper charges and disbursements of the Trustee, and compensation and other
expenses and charges of any enrolled actuary, accountant, counsel, specialist or
other

 

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person who shall be employed by the Retirement/Investments Committee in
connection with the administration of the BIP will be paid from forfeitures
pursuant to Paragraph 10.3 and, to the extent expenses remain, they shall be
paid by the Trustee from the Funds as directed by the Retirement/Investments
Committee unless paid by the Company. Brokerage fees, transfer taxes and other
expenses related to the investment or reinvestment of BIP assets (including
investment management fees) allocated to the Funds (other than the Blockbuster
Class A Stock Fund, the Blockbuster Class B Stock Fund, the Viacom Class A Stock
Fund or the Viacom Class B Stock Fund) shall be paid out of the respective
Funds.

 

12.8 Indemnity. The Company indemnifies and holds harmless any individual who
serves as a member of the Retirement/Investments Committee, including past and
present members, and any current or former Employee of the Employer from and
against any and all loss resulting from liability to which any such person may
be subjected by reason of any conduct (except willful or reckless misconduct) in
a fiduciary capacity under the Plan or Trust, or both, including all expenses
reasonably incurred in such person’s defense, in case the Employer fails to
provide such defense.

 

12.9 Reliance on Reports and Certificates. The Retirement/Investments Committee
will be entitled to rely conclusively upon all tables, valuations, certificates,
opinions and reports furnished by any Trustee, accountant, controller, counsel
or other person who is employed or engaged for such purposes.

 

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ARTICLE XIII

AMENDMENT AND TERMINATION

 

13.1 Right to Amend or Terminate.

 

(a) Subject to any applicable provisions to the contrary in the Company’s
governing documents, the Company reserves the right to modify, alter or amend
this Plan or any Trust Agreement thereunder from time to time to any extent that
it may deem advisable, with Plan amendments subject to the limitations of Code
Section 411(d)(6), ERISA Section 204(g), or other applicable limitations under
the Code or ERISA. The Company reserves the right, by action of its Board or its
delegate, to terminate the BIP with respect to Participants herein. The Company
reserves the right to execute any amendment deemed necessary or appropriate to
terminate the Trust. No such amendment(s) shall increase the duties or
responsibilities of the Trustee without its consent thereto in writing. No such
amendment(s) shall have any retroactive effect so as to deprive any Participant
of any benefit already accrued (including the timing and form of any optional
payment forms), except that any amendment may be made retroactive that is
necessary to bring the Plan into conformity with government regulations or
policies in order to qualify or maintain qualification of the Plan under the
appropriate section of the Code. No such amendment(s) shall have the effect of
revesting in the Employer the whole or any part of the principal or income for
purposes other than for the exclusive benefit of the Participants or
Beneficiaries at any time prior to the satisfaction of all the liabilities under
the Plan with respect to such persons.

 

(b) Any amendment of the Plan or Trust may be made by the adoption of a
resolution by the Board or by such person or persons to whom such authority is
delegated by the Board.

 

(c) Subject to the legal limitations in Paragraph 13.1(a), the
Retirement/Investments Committee shall have concurrent authority to amend the
Plan, but only to the extent that any such amendment: (i) is administrative in
nature and has no material positive or negative cost implications to the Plan;
or (ii) may be required or advisable in order to address a change in applicable
law or ensure non-discriminatory administration of the Plan. The
Retirement/Investments Committee shall have concurrent authority to amend the
Trust Agreement.

 

(d) If any amendment changes the vesting provisions of Article X, any
Participant with at least three years of Vesting Service may elect, by filing a
written request with the Retirement/Investments Committee within sixty days
after the Participant has received notice of such amendment, to have the
Participant’s vested interest computed under the provisions of Article X as in
effect immediately prior to such amendment.

 

13.2 Complete or Partial Termination. In the event of the complete or partial
termination of the Plan, or the complete discontinuance of contributions
thereto, the account balances of all affected Participants shall become fully
vested. The account balance of each

 

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affected Participant shall continue to be held in Trust until a Participant is
entitled to a distribution under the otherwise applicable terms of the Plan.

 

13.3 Distribution of Funds Upon Termination of the BIP. In the event of, and
upon, an Employer’s termination of the BIP or permanent discontinuance of
contributions other than by reason of being merged into, or consolidated with,
another Employer, whether or not the Trust shall also terminate concurrently
therewith, the Trustee shall, as of and as promptly as shall be practicable
after the Valuation Date next succeeding whichever shall occur first of (i) such
Participant ceasing to be an Employee of an Employer or another Affiliated
Company and (ii) the earliest date allowed by the IRS for distribution following
the termination of the BIP, pay or distribute to such Participant or Beneficiary
in the manner provided in Article XI hereof the amount to which such person is
entitled.

 

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ARTICLE XIV

GENERAL PROVISIONS

 

14.1 Employment Relationships. Nothing contained herein will be deemed to give
any Employee the right to be retained in the service of an Employer or to
interfere with the rights of an Employer to discharge any Employee at any time.

 

14.2 Non-Alienation.

 

(a) Subject to Paragraph 14.3, and subject to and in accordance with applicable
law, no amount payable under the BIP will be subject in any manner to
anticipation, assignment, attachment, garnishment, or pledge, and any attempt to
anticipate, assign, attach, garnish or pledge the same will be void, and no such
amounts will be in any manner liable for or subject to the debts, liabilities,
engagements, or torts of any Participant.

 

(b) A Participant’s Account under the Plan may be offset against an amount the
Participant is ordered to pay to the Plan if (a) the order or requirement to pay
arises (i) under a judgment of conviction for a crime involving the Plan, or
(ii) under a civil judgment (including a consent order or decree) entered by a
court in an action brought in connection with a violation (or alleged violation)
of Part 4 of Subtitle B of Title I of ERISA, in connection with a violation (or
alleged violation) of Part 4 of such subtitle by a fiduciary or any other person
and (b) the judgment, order, decree, or settlement agreement expressly provides
for the offset of all or part of the amount ordered or required to be paid to
the Plan against the Participant’s Account.

 

14.3 Qualified Domestic Relations Order. Notwithstanding any other provisions of
the BIP, in the event that a qualified domestic relations order (as defined in
Section 414(p) of the Code and Section 206(d)(3) of ERISA) is received by the
Retirement/Investments Committee, the amount specified in such order shall be
payable in accordance with such order and with Section 414(p) of the Code and
Section 206(d)(3) of ERISA. The amount payable to the Participant and to any
other person other than the payee entitled to any amounts under the order, shall
be adjusted accordingly. Amounts payable under a qualified domestic relations
order may be paid prior to the “earliest retirement age” as such term is defined
in the Code and ERISA. The Retirement/Investments Committee shall establish
reasonable procedures for determining the qualified status of any domestic
relations order and for administering distributions under any such order.

 

14.4 Exclusive Benefit of Employees. No part of the corpus or income of the Fund
will be used for, or diverted to, purposes other than the exclusive benefit of
Participants and their Beneficiaries.

 

14.5 Merger, Consolidation or Transfer of Assets or Liabilities. There will be
no merger or consolidation with, or transfer of any assets or liabilities to any
other plan, unless each Participant will be entitled to receive an amount
immediately after such merger, consolidation, or transfer as if the BIP were
then terminated that is equal to the amount such person would have

 

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been entitled to immediately before such merger, consolidation, or transfer as
if the BIP had been terminated.

 

14.6 Appointments of Trustee. The Trustee is appointed by the
Retirement/Investments Committee with such powers as to investment,
reinvestment, control and disbursement of the Fund as are set forth in the Trust
Agreement, as modified from time to time. The Retirement/Investments Committee
may remove the Trustee at any time on the notice required by the terms of such
Trust Agreement, and, upon such removal or upon the resignation of any such
Trustee, the Retirement/Investments Committee will designate a successor
Trustee.

 

14.7 Voting Rights.

 

(a) Pass-Through Voting. All shares of Company Stock held by the Trust shall be
voted by the Trustee in accordance with instructions received from the
Retirement/Investments Committee. Each Participant or Beneficiary shall be
entitled to direct the Retirement/Investments Committee as to the manner in
which shares of Company Stock then allocated to their respective Accounts shall
be voted. Except as may otherwise be required by ERISA, a Participant or
Beneficiary who does not give instructions to the Retirement/Investments
Committee shall be treated as having instructed the Retirement/Investments
Committee not to vote such shares, and the Retirement/Investments Committee
shall direct the Trustee accordingly.

 

(b) Information to Participants. The Retirement/Investments Committee shall
provide each Participant or Beneficiary who is entitled to direct the
Retirement/Investments Committee as to the manner in which shares of Company
Stock will be voted with the proxy statement and other materials provided to the
Company’s shareholders in connection with each shareholder meeting, together
with a form upon which the Participant or Beneficiary shall have the right to
give confidential voting directions to the Retirement/Investments Committee. If
proxies are solicited by a person other than the Company, the
Retirement/Investments Committee shall deliver to the Trustee a list of the
names and addresses of the Participants or Beneficiaries showing the number of
shares of Company Stock allocated to each Participant’s Account and shall date
and certify the accuracy of such information; and the Trustee shall provide each
Participant or Beneficiary with the proxy statement and other materials prepared
by such other person. Each Participant or Beneficiary shall be informed that if
such person fails to return the voting instruction form, the shares subject to
such voting instruction form will not be voted. Each Participant or Beneficiary
shall also be informed that such person’s voting directions will be
confidential. The Trustee shall have the right to require payment in advance by
any person soliciting proxies of all reasonably anticipated expenses associated
with the distribution of information to and the processing of instructions
received from Participants or Beneficiaries.

 

(c) No Recommendations. Neither the Retirement/Investments Committee nor the
Trustee shall express any opinion or give any advice or recommendation to any
Participant or Beneficiary concerning the matters subject to vote, and the
Retirement/Investments Committee and the Trustee shall have no authority or
responsibility to do so.

 

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(d) Confidentiality. Neither the Retirement/Investments Committee nor the
Trustee shall reveal or release any individual Participant or Beneficiary voting
instructions to the Company or its officers, directors, Employees or
representatives. The Trustee shall, however, inform the Company, at its request,
of the number of shares of Company Stock for which voting instructions have been
received at a given point in time and the manner in which such shares will be
voted when the votes are cast by the Trustee. The Company shall honor the
confidentiality of the Participant or Beneficiary voting instructions.

 

(e) Participant As Named Fiduciary. Each Participant or Beneficiary shall be a
named fiduciary of the Plan for the purpose of providing directions as to the
voting of shares of Company Stock pursuant to this paragraph.

 

14.8 Tender Rights.

 

(a) Tender Rights. In the event that there should be a tender or exchange offer
for Company Stock, the Trustee shall respond to such offer only in accordance
with the provisions of this paragraph. Each Participant or Beneficiary shall be
entitled to direct the Retirement/Investments Committee as to the manner in
which it should instruct the Trustee to respond to such offer with respect to
shares of Company Stock then allocated to such person’s Account. Except as may
otherwise be required by ERISA, a Participant or Beneficiary who does not give
directions to the Retirement/Investments Committee shall be treated as having
directed the Retirement/Investments Committee to instruct the Trustee not to
tender, and the Retirement/Investments Committee shall direct the Trustee
accordingly.

 

(b) Information to Participants. The Retirement/Investments Committee shall
provide each Participant or Beneficiary who is entitled to provide directions
with the description of the terms and conditions of the offer and other
materials provided to Company shareholders in connection with the offer,
together with a form upon which the Participant or Beneficiary shall have the
right to provide confidential directions to the Retirement/Investments Committee
as to the manner in which to instruct the Trustee to respond to such offer. Each
Participant or Beneficiary shall be informed that if such person fails to return
the tender instruction form, the shares whose tender such person is entitled to
direct will not be tendered. Each Participant or Beneficiary shall also be
informed that such person’s tender directions will be confidential.

 

(c) Expenses. The Retirement/Investments Committee and the Trustee shall have
the right to require payment in advance by the person making the tender offer of
all reasonably anticipated expenses associated with the distribution of
information to and the processing of instructions received from the Participants
or Beneficiaries.

 

(d) No Recommendations. Neither the Retirement/Investments Committee nor the
Trustee shall express any opinion or give any advice or recommendation to any
Participant or Beneficiary concerning the tender offer, and neither the
Retirement/Investments Committee nor the Trustee shall have no authority or
responsibility to do so.

 

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(e) Confidentiality. Neither the Retirement/Investments Committee nor the
Trustee shall reveal or release any individual Participant or Beneficiary tender
instructions to the Company or its officers, directors, Employees or
representatives. The Trustee shall, however, inform the Company, at its request,
of the number of shares of Company Stock for which tender instructions have been
received at a given point in time and whether such shares will be tendered by
the Trustee. The Company shall honor the confidentiality of the Participant or
Beneficiary tender directions.

 

(f) Participant As Named Fiduciary. Each Participant or Beneficiary shall be a
named fiduciary of the Plan for the purpose of providing directions as to the
manner of responding to a tender or exchange offer for shares of Company Stock
pursuant to this Paragraph.

 

(g) Order of Tender. If fewer than all of the shares of Company Stock allocated
to the Participant’s Accounts are accepted in a tender or exchange offer, the
shares submitted for tender shall be withdrawn from the Participant’s Accounts
in the following order of priority: Rollover Contributions, After-Tax
Contributions, Salary Reduction Contributions, Company Matching Contributions,
Blockbuster Employer Matching Contributions, Safe Harbor Matching Contributions,
and Qualified Non-Elective Contributions.

 

14.9 Payments to Minors and Incompetents. If a Participant or Beneficiary
entitled to receive any amounts hereunder is a minor or is deemed by the
Retirement/Investments Committee or is adjudged to be legally incapable of
giving valid receipt and discharge for such amounts, they will be paid to such
persons as the Retirement/Investments Committee shall designate or to the duly
appointed guardian.

 

14.10 Employee’s Records. Each of the Employers and the Retirement/Investments
Committee shall respectively keep such records, and each of the Employers and
the Retirement/Investments Committee shall each reasonably give notice to the
other of such information, as shall be proper, necessary or desirable to
effectuate the purposes of the BIP and the Trust Agreement, including,
without in any manner limiting the foregoing, records and information with
respect to the employment date, date of participation in the BIP and
Compensation and Earnings of Employees, elections by Participants and their
Beneficiaries and consents granted and determinations made under BIP and the
Trust Agreement. Neither any of the Employers nor the Retirement/Investments
Committee shall be required to duplicate any records kept by the other. Each
Participant shall cooperate with the Retirement/Investments Committee to
administer the BIP in the manner herein and in the Trust Agreement provided.

 

14.11 Titles and Headings. The titles to sections and headings or paragraphs of
the BIP are for convenience of reference and, in case of any conflict, the text
of the BIP, rather than such titles and headings, shall control.

 

14.12 Notices. Electronic notice is permitted under this Plan to disseminate
employee benefit notices, elections and consents to the extent authorized by
statutes, regulations or guidance promulgated by the IRS, Department of Labor or
the Securities and Exchange Commission.

 

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14.13 Use of Masculine and Feminine; Singular and Plural. Wherever used herein,
the masculine gender will include the feminine gender and the singular will
include the plural, unless the context indicates otherwise.

 

14.14 Governing Law. To the extent that Texas law has not been preempted by the
provisions of ERISA, the provisions of the BIP will be construed in accordance
with the laws of the State of Texas.

 

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ARTICLE XV

ANNUAL ADDITION LIMITATIONS

 

15.1 Limitation on Annual Additions.

 

(a) Basic Limitations. Except to the extent that this Plan permits catch-up
contributions under Code Section 414(v), and subject to other limitations
imposed by law and this Plan, the annual addition that may be contributed or
allocated to a Participant’s Account under the Plan for any limitation year
shall not exceed the lesser of:

 

(i) $40,000, as adjusted for increases in the cost-of-living under
Section 415(d) of the Code, or

 

(ii) 100% of the Participant’s annual Earnings.

 

(b) Definition of Employer. For purposes of this Paragraph, the term “Employer”
shall include any Affiliated Company, as defined in Paragraph 2.4 hereof and as
modified by Section 415(h) of the Code.

 

(c) Excess Annual Additions Precluded. Prior to the allocation of contributions
in any Plan Year, the Committee shall determine whether the amount to be
allocated would cause the limitations prescribed hereunder to be exceeded with
respect to any Participant. In the event there would be such an excess, the
Annual Additions to the BIP shall be adjusted by reducing Participant and
Employer contributions in such amounts as are determined by the
Retirement/Investments Committee and in such order as is elected by the
Participant with the consent of the Retirement/Investments Committee, but only
to the extent necessary to satisfy such limitations.

 

(d) Disposal of Excess Annual Additions. In the event that, notwithstanding
Subparagraph (c), the limitations with respect to Annual Additions prescribed
hereunder are exceeded with respect to any Participant and such excess arises as
a consequence of a reasonable error in estimating the Participant’s Earnings,
the allocation of forfeitures, or a reasonable error in determining the amount
of Salary Reduction Contributions that may be made with respect to any
individual under the limits of Section 415 of the Code, such excess amounts
shall not be deemed Annual Additions in that limitation year to the extent
corrected hereunder. First, Salary Reduction Contributions and After-Tax
Contributions (together with investment earnings thereon) shall be returned to
each affected Participant to the extent that such distribution would reduce the
excess amounts in the Participant’s Accounts. To the extent excess amounts
remain after any such distributions, such excess amounts shall be utilized to
reduce Matching Employer Contributions on behalf of the Participant for the next
succeeding Plan Year, and succeeding Plan Years, as necessary. If the
Participant is not covered by the BIP at the end of any such succeeding Plan
Year, but an excess amount still exists, such excess amount will be held
unallocated in a suspense account. The suspense account will be applied to
reduce Matching Employer Contributions for Participants in that Plan Year, and
succeeding Plan Years, if necessary. The amount in such suspense account shall
be credited to the Accounts of Participants in the manner provided in Paragraph
5.9.

 

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ARTICLE XVI

TOP-HEAVY PLAN

 

16.1 General Rule. The BIP shall meet the requirements of this Article XVI in
the event that the BIP is or becomes a Top-Heavy Plan. Notwithstanding the
foregoing, the top-heavy requirements of Code Section 416 and this Article 16
shall not apply in any year beginning after December 31, 2001, in which the Plan
consists solely of a cash or deferred arrangement which meets the requirements
of Code Section 401(k)(12) and matching contributions with respect to which the
requirements of Code Section 401(m)(11) are met.

 

16.2 Top-Heavy Plan.

 

(a) Test for Top-Heaviness. Subject to the aggregation rules set forth in
subparagraph (b), the BIP shall be considered a Top-Heavy Plan pursuant to
Section 416(g) of the Code in any Plan Year if, as of the Determination Date,
the value of the cumulative Account Balances of all Key Employees exceeds sixty
percent (60%) of the value of the cumulative Account Balances of all of the
Employees as of such Determination Date. For this purpose, the present values of
accrued benefits and the amounts of account balances of an Employee as of the
Determination Date shall be increased by the distributions made with respect to
the Employee under the Plan and any plan aggregated with the plan under Code
Section 416(g)(2) during the 1-year period ending on the Determination Date. The
preceding sentence shall also apply to distributions under a terminated plan
which, had it not been terminated, would have been aggregated with the Plan
under Code Section 416(g)(2)(A)(i). In the case of a distribution made for a
reason other than separation from service, death, or disability, this provision
shall be applied by substituting 5-year period for 1-year period. The accrued
benefits and accounts of any individual who has not performed services for the
Employer during the 1-year period ending on the Determination Date shall not be
taken into account

 

(b) Aggregation and Coordination With Other Plans. For purposes of determining
whether the BIP is a Top-Heavy Plan and for purposes of meeting the requirements
of this Article XVI, the BIP shall be aggregated and coordinated with other
qualified plans in a Required Aggregation Group and may be aggregated or
coordinated with other qualified plans in a Permissive Aggregation Group. If
such Required Aggregation Group is Top-Heavy, the BIP shall be considered a
Top-Heavy Plan. If such Permissive Aggregation Group is not Top-Heavy, the BIP
shall not be a Top-Heavy Plan.

 

16.3 Definitions. For the purpose of determining whether the BIP is Top-Heavy,
the following definitions shall be applicable:

 

(a) Determination and Valuation Dates. The term “Determination Date” shall mean,
in the case of any Plan Year, the last day of the preceding Plan Year. The value
of an individual’s Account Balance shall be determined as of the Valuation Date
next preceding the Determination Date and shall include any contribution
actually made after such Valuation Date but on or before the Determination Date.
If the highest rate allocated to a Key Employee for a Plan Year in which the
Plan is Top-Heavy is less than

 

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three percent (3%), amounts contributed as a result of a Salary Reduction
Contributions must be included in determining contributions made on behalf of
such Key Employees.

 

(b) Key Employee. The term “Key Employee” means any Employee or former Employee
(including any deceased Employee) who at any time during the Plan Year that
includes the Determination Date was an officer of the Employer having annual
compensation greater than $130,000 (as adjusted under Code Section 416(i)(1) for
Plan Years beginning after December 31, 2002), a 5-percent owner of the
Employer, or a 1-percent owner of the Employer having annual compensation of
more than $150,000. For this purpose, annual compensation means compensation
within the meaning of Code Section 415(c)(3). The determination of who is a Key
Employee will be made in accordance with Code Section 416(i)(1) and the
applicable regulations and other guidance of general applicability issued
thereunder.

 

(c) Non-Key Employee. The term “Non-Key Employee” shall mean any Employee who is
a Participant and who is not a Key Employee.

 

(d) Beneficiary. Whenever the term “Key Employee”, “former Key Employee”, or
“Non-Key Employee” is used herein, it includes the Beneficiary or Beneficiaries
of such individual.

 

(e) Required Aggregation Group. The term “Required Aggregation Group” shall mean
all other qualified defined benefit and defined contribution plans maintained by
the Employer in which a Key Employee participates, and each other plan of the
Employer that enables any plan in which a Key Employee participates to meet the
requirements of Section 401(a)(4) or 410 of the Code.

 

(f) Permissive Aggregation Group. The term “Permissive Aggregation Group” shall
mean all other qualified defined benefit and defined contribution plans
maintained by the Employer that meet the requirements of Sections 401(a)(4) and
410 of the Code when considered with a Required Aggregation Group.

 

16.4 Requirements Applicable if BIP is Top-Heavy. In the event the BIP is
determined to be Top-Heavy for any Plan Year, the following requirements shall
be applicable:

 

(a) Minimum Allocation.

 

(i) In the case of a Non-Key Employee who is covered under the BIP but does not
participate in any qualified defined benefit plan maintained by the Employer,
the Minimum Allocation of contributions plus forfeitures allocated to the
account of each such Non-Key Employee who has not separated from service at the
end of a Plan Year in which the BIP is Top-Heavy shall equal the lesser of three
percent (3%) of Compensation for such Plan Year or the largest percentage of
Compensation provided on behalf of any Key Employee for such Plan Year. The
Minimum Allocation provided hereunder may not be suspended or forfeited under
Section 411(a)(3)(B) or 411(a)(3)(D) of the Code. The Minimum Allocation shall
be made for a Non-Key Employee for each Plan Year in which the BIP is Top-Heavy,
even if the Non-Key Employee has not completed a Year

 

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of Service in such Plan Year or if the Non-Key Employee has declined to elect to
have Salary Reduction Contributions made on the Participant’s behalf.

 

An Employee shall receive such a minimum allocation for each Plan Year in which
the Plan is Top-Heavy, regardless of the Employee’s level of compensation, even
if the Employee has not completed a Year of Service in such Plan Year and even
if the Employee has not separated from service at the end of such Plan Year.
Matching Employer Contributions allocated to Key Employees shall be treated as
Employer contributions for purposes of determining the minimum allocation.

 

Matching Employer Contributions shall be taken into account for purposes of
satisfying the minimum contribution requirements of Code Section 416(c)(2) and
the Plan. The preceding sentence shall apply with respect to Matching Employer
Contributions under the Plan or, if the Plan provides that the minimum
contribution requirement shall be met in another plan, such other plan. Matching
Employer Contributions that are used to satisfy the minimum contribution
requirements shall be treated as matching contributions for purposes of the
actual contribution percentage test and other requirements of Code
Section 401(m).

 

(ii) A Non-Key Employee who is covered under the BIP and under a qualified
defined benefit plan maintained by the Employer shall not be entitled to the
Minimum Allocation under the BIP but shall receive the minimum benefit provided
under the terms of the qualified defined benefit plan.

 

(b) Top-Heavy Vesting Schedule.

 

(i) A Non-Key Employee is at all times one hundred percent (100%) vested in the
full value of such person’s Account attributable to Salary Reduction
Contributions, After-Tax Contributions, and Rollover Contributions.

 

(ii) Fewer than Two Years of Vesting Service. A Non-Key Employee whose
employment is terminated prior to age sixty-five (65) and prior to the
completion of two (2) or more full Years of Vesting Service shall not be
entitled to any Matching Employer Contributions under the BIP.

 

(iii) Two or More Years of Vesting Service. A Non-Key Employee whose employment
is terminated after age sixty-five (65) or after the completion of two (2) or
more full Years of Vesting Service shall be one hundred percent (100%) vested in
the full value of such person’s Account attributable to Matching Employer
Contributions under the BIP.

 

Notwithstanding the foregoing provisions of this Paragraph 16.4(b), at any time
the BIP is a Top-Heavy plan, in no event will a Participant’s vested percentage
interest in the portion of the Participant’s Account attributable to Matching
Employer Contributions be less than the Participant’s vested percentage interest
determined under Paragraph 10.2.

 

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(c) Limitations on Annual Additions and Benefits. For purposes of computing the
defined benefit plan fraction and defined contribution plan fraction as set
forth in Sections 415(e)(2)(B) and 415(e)(3)(B) of the Code for Plan Years
beginning before January 1, 2000, the dollar limitations on benefits and annual
additions applicable to a limitation year shall be multiplied by 1.0.

 

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IN WITNESS WHEREOF, this Plan has been executed this 11th day of October, 2005.

 

BLOCKBUSTER INC.

By:

  /s/ Dan Satterthwaite

Name:

  Dan Satterthwaite

Title:

  SVP HR & Administration      

 

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APPENDIX A

INVESTMENT FUNDS

AS OF JANUARY 1, 2006

 

Putnam Stable Value Fund

 

Putnam Income Fund

 

PIMCO Total Return Fund

 

Vanguard LifeStrategy Moderate Growth Fund

 

The George Putnam Fund of Boston

 

Vanguard Total Stock Market Index Fund

 

Putnam S&P 500 Index Fund

 

Vanguard Growth and Income Fund

 

The Putnam Equity Income Fund

 

Vanguard WindsorTM II Fund

 

Putnam Investors Fund

 

Vanguard Morgan Growth Fund

 

Putnam Voyager Fund

 

Dimensional Fund Advisors U.S. Small Cap Fund

 

EuroPacific Growth Fund

 

Viacom Class A Stock Fund (frozen to new contributions and transfers)

 

Viacom Class B Stock Fund

 

Blockbuster Class A Stock Fund

 

Blockbuster Class B Stock Fund

 

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