SEPARATION AGREEMENT

 

THIS AGREEMENT, dated as of December 6, 2006 (the “Agreement”), by and between
VIACOM INC., a Delaware corporation (the “Company”), and MICHAEL J. DOLAN (the
“Executive”).

WHEREAS, the Company and the Executive are parties to a certain Employment
Agreement, dated May 2, 2005 (the “Employment Agreement”) (any capitalized terms
used without definition in this Agreement to have the meaning assigned to them
in the Employment Agreement);

WHEREAS, the parties intend that this Agreement provide for Executive’s
resignation from employment with the Company for Good Reason and set forth the
terms relating to his resignation for Good Reason;

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set
forth in this Agreement, the parties hereto hereby agree as follows:

 

1.

Resignation Date.

(a)          The Executive hereby resigns for “Good Reason” from his employment
with the Company, including from his position as Chief Financial Officer of the
Company and from all other offices and positions with the Company and all of its
subsidiaries, affiliates, joint ventures, partnerships or any other business
enterprises, as well as from any office or position with any trade group or
other industry organization which he holds on behalf of the Company or its
subsidiaries or affiliates, effective as of December 31, 2006 (the “Resignation
Date”).

(b)          The Board and the Company hereby agree that the Executive’s
resignation is for Good Reason and accept the Executive’s resignation for Good
Reason, and they further agree that they will not at any time assert any claim,
or otherwise take any position, contesting the validity or effectiveness of such
resignation for Good Reason. Without limiting the foregoing, the Company waives
any notice requirements and cure periods under the Employment Agreement with
respect to the Executive’s resignation for Good Reason.

2.            Payments and Benefits. Subject to the provisions of paragraph 17
of this Agreement and in consideration for the Executive’s obligations under
this Agreement, including under paragraph 5 hereof:

(a)         Termination Payments and Benefits. In connection with the
Executive’s resignation, the Company shall pay and provide the Executive with
the payments and benefits (the “Termination Payments and Benefits”) described in
this paragraph 2(a), which shall be payable as provided herein, provided that
the Executive does not revoke this Agreement during the Revocation Period (as
defined below). The Termination Payments and Benefits shall consist of the
following:

(i)          The Company will pay the Executive the cash amount set forth on
Schedule (a)(i) attached hereto (the “Salary Amount”), such amount having been
determined in accordance with paragraphs 8(d)(i) and (iii) of the Employment
Agreement. The Salary Amount will be paid in accordance with the Company’s
regular payroll practices beginning with the first payroll period ending after
the Resignation Date and continuing through May 1, 2009; provided, however, that
any payments that would have made been pursuant to the foregoing schedule in
respect of payroll periods ending on or before the six-month anniversary of the
Resignation Date shall instead be aggregated and paid on the Payment Date.
Notwithstanding the preceding sentence, in the event of the Executive’s death
any portion of the Salary Amount that has not been paid will be paid on the
fifth business day following the Company’s receipt of notice of the Executive’s
death. The earlier of (x) the first business day following the six-month
anniversary of the Resignation Date and (y) the fifth business day following the
Company’s receipt of notice of the Executive’s death is referred to as the
“Payment Date”.

(ii)          The Company will pay the Executive the cash amount set forth on
Schedule (a)(ii) attached hereto (the “Bonus/Deferred Amount”), such amount
having been determined in accordance with paragraphs 8(d)(ii) and (iv) of the
Employment Agreement. The Bonus/Deferred Amount for 2006 (as set forth in
Schedule (a)(ii)) shall be paid to the Executive on the Payment Date. The
Bonus/Deferred Amount for subsequent years (as set forth in Schedule (a)(ii))
shall be paid on the dates set forth on Schedule (a)(ii) with respect to each
such year.

(iii)       The Executive’s balance in his Deferred Compensation Account
established pursuant to his Employment Agreement and referenced on Schedule
(a)(iii) will be paid to him in a single lump sum on the Payment Date.

(iv)       The Company will provide the Executive and his family coverage under
all medical and dental plans in which he participated prior to the Resignation
Date, provided under COBRA (and will pay all COBRA premiums in connection
therewith (the “COBRA Premiums”)), for the period from the Resignation Date
until the earlier of (x) the 18 month anniversary of the Resignation Date; or
(y) the date on which the Executive becomes eligible for medical and dental
coverage from a third party, provided, that, with respect to the period from the
Resignation Date to the Payment Date, the Executive will pay the Company in
advance for the cost of the COBRA Premiums, which amounts will be reimbursed by
the Company to the Executive in a lump sum on the Payment Date. For the period
between the 18 month anniversary of the Resignation Date and the earlier of (A)
May 1, 2009 and (B) the date on which the Executive becomes eligible for medical
and dental coverage from a third party, the Executive will obtain medical and
dental insurance for the Executive and his family, which coverage will be
comparable to the coverage the Executive was provided by the Company immediately
prior to the Resignation Date, and the Company will pay to the Executive monthly
the cost of such medical and dental insurance for such period.

 

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(v)         The Company will continue to provide the Executive with Five Million
Dollars ($5,000,000) of life insurance coverage as set forth in paragraph 4(b)
of the Employment Agreement (and will pay all premiums in connection therewith
(the “Life Insurance Premiums”)) until May 1, 2009 (the amount of such coverage
shall be reduced by the amount of life insurance coverage furnished to you at no
cost by a third party employer); provided, however, that, with respect to the
period from the Resignation Date to the Payment Date, the Executive will pay the
Company in advance for the cost of the Life Insurance Premiums (including
premiums related to the Executive’s coverage under the group term life insurance
policy maintained by the Company), which amounts will be reimbursed by the
Company to the Executive in a lump sum on the Payment Date. The Executive
acknowledges that his Company-provided coverage for disability and accidental
death and dismemberment ended on the Resignation Date.

(vi)       All stock options granted to the Executive pursuant to the Company’s
Long-Term Management Incentive Plan that are unvested as of the Resignation Date
but would have vested and become exercisable on or before May 2, 2009 (the
“Accelerated Options”), shall vest as of the Resignation Date. All stock options
currently held by the Executive, including the Accelerated Options, are listed
on Schedule (a)(vi) and will remain exercisable until the respective Expiration
Date set forth on Schedule (a)(vi).

(vii)       All restricted share units granted to the Executive pursuant to the
Company’s Long-Term Management Incentive Plan that are unvested as of the
Resignation Date shall be forfeited and cancelled, pursuant to the terms of the
Employment Agreement; provided, however, that, notwithstanding the terms of the
Employment Agreement, the restricted share units set forth on Schedule (a)(vii)
shall vest as of the Resignation Date.

(b)         Reimbursement of Expenses. The Executive shall be reimbursed for all
expenses he incurred during the course of his employment with the Company in
accordance with the Company’s policies.

(c)         Incorporation. The provisions of paragraph 8(f) (concerning
termination of benefits), paragraph 8(g) (concerning resignation from official
positions) and paragraph 9 (concerning death) of the Employment Agreement are
hereby incorporated by reference in their entirety as if they were set forth
herein. The provisions in paragraph 8(d) following 8(d)(vii)(y) concerning (1)
non-acceleration of vesting of restricted share units as applicable to the
restricted share units listed on Schedule (a)(vii), (2) the Executive’s
obligation to mitigate payments provided for therein by seeking other employment
and (3) the reduction of such payments for compensation earned from other
sources, in each case shall not apply and are not incorporated herein. The
provisions of paragraph 8(d) following 8(d)(vii)(y) not referenced in the
foregoing sentence are incorporated by reference in their entirety as if they
were set forth herein.

3.            Advisory Services. Executive shall become an advisor to the
Company, for the period from the first day following the Resignation Date until
the earlier of (i) six months following the Resignation Date and (ii) the date
10 days after the Executive notifies the Company

 

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in writing of the termination of such period (the “Advisory Period”). During the
Advisory Period, the Executive will provide such advisory services concerning
the business, affairs and management of the Company as may be reasonably
requested by the Chief Executive Officer or Chief Administrative Officer of the
Company. The Executive is not and shall not be deemed to be an employee of the
Company by virtue of his retention as an advisor hereunder or the performance of
advisory services to the Company, and the Executive shall, for all purposes, be
deemed an independent contractor.

 

4.

Restrictive Covenants.

(a)          Covenant Provisions. The Executive shall continue to be subject to
the provisions of paragraph 6(a) through 6(h) of the Employment Agreement (the
“Covenant Provisions”), and the Covenant Provisions are hereby incorporated by
reference into this Agreement in their entirety as if they were set forth
herein.

(b)          Injunctive Relief, Etc. The Executive acknowledges and agrees that
any violation of Covenant Provisions, which provisions are incorporated by
reference into this paragraph 4, will result in irreparable damage to the
Company, and, accordingly, the Company may obtain injunctive and other equitable
relief for any breach or threatened breach of such paragraphs, in addition to
any other remedies available to the Company. The Executive and the Company agree
that the restrictions and remedies contained in the Covenant Provisions of
paragraph 4 are reasonable and that it is his intention and the intention of the
Company that such restrictions and remedies shall be enforceable to the fullest
extent permissible by law. If it shall be found by a court of competent
jurisdiction that any such restriction or remedy is unenforceable but would be
enforceable if some part thereof were deleted or the period or area of
application reduced, then such restriction or remedy shall apply with such
modification as shall be necessary to make it enforceable.

(c)          Survival. The obligations of the Executive and the Company under
the Covenant Provisions of this paragraph 4 shall remain in full force and
effect for the longer of the entire period provided therein or the last day of
the Advisory Period; provided, however, that Executive’s obligations under
paragraph 6(a) (concerning non-competition) of the Employment Agreement shall
terminate at the later of the Resignation Date or the end of the Advisory
Period.

 

5.

Releases.

 

(a)

Release by the Executive.

(i)           Release. In consideration of the payments and benefits provided to
the Executive under this Agreement and the Employment Agreement, in connection
with his resignation and after consultation with counsel, the Executive, and
each of the Executive’s respective heirs, executors, administrators,
representatives, agents, successors and assigns (collectively, the “Releasors”)
hereby irrevocably and unconditionally release and forever discharge the Company
and any of its subsidiaries, affiliates or predecessors (collectively, the “The
Company Group”) and each of their respective officers, employees, directors,
shareholders and agents from any and all claims, actions, causes of action,
rights, judgments, obligations, damages, demands, accountings or liabilities of

 

4

whatever kind or character (collectively, “Claims”), including, without
limitation, any Claims arising under Title VII of the Civil Rights Act of 1964,
the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, or any other
federal, state, local or foreign law, that the Releasors may have, or in the
future may possess, arising out of the Executive’s employment relationship with
and service as an employee, officer or director of the Company Group, and the
termination of such relationship or service; provided, however, that the release
set forth in this paragraph 5(a)(i) shall not apply to (1) the obligations of
the Company under this Agreement or (2) any indemnification rights the Executive
may have in accordance with the Company’s governance instruments or under any
director and officer liability insurance maintained by the Company with respect
to liabilities arising as a result of the Executive’s service as an officer and
employee of the Company. The Releasors further agree that the payments and
benefits described in this Agreement (including the applicable post-resignation
obligations of the Company under the Employment Agreement) shall be in full
satisfaction of any and all Claims for payments or benefits, whether express or
implied, that the Releasors may have against the Company Group arising out of
the Executive’s employment relationship or the Executive’s service as an
employee, officer and director of the Company Group and the termination thereof
other than rights under any and all the Company benefit plans and programs in
accordance with the terms of such plans or programs.

(ii)          Specific Release of ADEA Claims. In further consideration of the
payments and benefits provided to the Executive under this Agreement, the
Releasors hereby unconditionally release and forever discharge the Company
Group, and each of their respective officers, employees, directors, shareholders
and agents from any and all Claims that the Releasors may have as of the date
the Executive signs this Agreement arising under the Federal Age Discrimination
in Employment Act of 1967, as amended, and the applicable rules and regulations
promulgated thereunder (“ADEA”). By signing this Agreement, the Executive hereby
acknowledges and confirms the following: (1) the Executive was advised by the
Company in connection with his termination to consult with an attorney of his
choice prior to signing this Agreement and to have such attorney explain to the
Executive the terms of this Agreement, including, without limitation, the terms
relating to the Executive's release of claims arising under ADEA and, the
Executive has in fact consulted with an attorney; (2) the Executive was given a
period of not fewer than twenty-one (21) days to consider the terms of this
Agreement and to consult with an attorney of his choosing with respect thereto;
(3) the Executive is providing the release and discharge set forth in this
paragraph 5(b) only in exchange for consideration in addition to anything of
value to which the Executive is already entitled; and (4) that the Executive
knowingly and voluntarily accepts the terms of this Agreement.

(iii)         No Assignment. The Executive represents and warrants that he has
not assigned any of the Claims being released under this paragraph 5(a).

(iv)         Claims. The Executive agrees that he has not instituted, assisted
or otherwise participated in connection with, any action, complaint, claim,
charge, grievance, arbitration, lawsuit, or administrative agency proceeding, or
action at law or otherwise

 

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against any member of the Company Group or any of their respective officers,
employees, directors, shareholders or agents.

 

(b)

Release by the Company.

(i)           Release. In consideration of the Executive’s waiver and release of
claims set forth above and the other obligations of the Executive hereunder, the
Company Group, for its, and their respective officers, directors, employees,
shareholders and agents, hereby irrevocably and unconditionally releases and
forever discharges the Executive, his family, his estate, his agents, attorneys,
his heirs, executors, administrators, representatives, successors and assigns
from and against any and all Claims that they may have or in the future may
possess, relating to or arising out of, directly or indirectly, the Executive’s
employment relationship with and service as a director, employee or officer of
the Company Group and the termination of such relationship or service; provided,
however, that this release shall not apply to (1) any of the Executive’s
obligations under this Agreement (2) any of the applicable post-Resignation Date
obligations of the Executive under the Employment Agreement as referenced in
paragraph 4(a) of this Agreement or (3) any Claims relating to or arising out of
the Executive’s gross negligence, willful misconduct or bad faith.

(ii)          No Assignment. The Company represents and warrants that no member
of the Company Group has assigned any of the Claims being released under this
paragraph 5(b).

(iii)         Claims. The Company agrees that neither it nor any member of the
Company Group has instituted, assisted or otherwise participated in connection
with, any action, complaint, claim, charge, grievance, arbitration, lawsuit, or
administrative agency proceeding, or action at law or otherwise against the
Executive, any of the Releasors or any of their respective officers, employees,
directors, shareholders or agents.

6.            Revocation. This Agreement may be revoked by the Executive by a
written instrument within the seven (7)-day period commencing on the date the
Executive signs this Agreement (the “Revocation Period”). In the event of any
such revocation by the Executive, all obligations of the parties under this
Agreement shall terminate and be of no further force and effect as of the date
of such revocation. No such revocation by the Executive shall be effective
unless it is in writing and signed by the Executive and received by the Company
prior to the expiration of the Revocation Period.

7.            Effective Date of Agreement. This Agreement shall become effective
as of the date first set forth above.

8.            Death. In the event of the Executive's death, with respect to any
payments, entitlements or benefits payable or due hereunder, references in this
Agreement to, respectively, “the Executive” shall be deemed to refer, where
appropriate, to the Executive's legal representatives or his beneficiary or
beneficiaries.

 

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9.            Indemnification. The provisions of paragraph 12 (concerning
indemnification) of the Employment Agreement are hereby incorporated by
reference in their entirety as if they were set forth herein.

10.          Notices. All notices required to be given hereunder shall be given
in writing, by personal delivery or by mail at the respective addresses of the
parties hereto set forth above, or at such other address as may be designated in
writing by either party, and in the case of The Company, to the attention of the
General Counsel of The Company. Any notice given by mail shall be deemed to have
been given three days following such mailing. Copies of all notices to the
Executive shall be given to Blank Rome LLP, 405 Lexington Avenue, New York, NY
10174, Attention: Ronald S. Katz.

11.          Assignment and Successors. This Agreement may not be assigned by
the Executive or the Company except that the Company may assign this Agreement
to any successor in interest to the Company, provided that such assignee assumes
all of the obligations of the Company hereunder. As used in this Agreement, the
“the Company” shall mean the Company as defined above and any successor to its
business and/or assets which by reason hereof assumes and agrees to perform this
Agreement by operation of law, or otherwise.

12.          New York Law. This Agreement and all matters or issues collateral
thereto shall be governed by the laws of the State of New York, without giving
effect to the conflicts of laws principles thereof.

13.          No Implied Contract. The parties intend to be bound only upon
execution of a written agreement and no negotiation, exchange of draft or
partial performance shall be deemed to imply an agreement.

14.          Entire Understanding; Amendments; Definitions. This Agreement
contains the entire understanding of the parties hereto relating to the subject
matter herein contained, supersedes all prior agreements, understandings and
writings except to the extent specifically provided herein, and can be amended
only by a writing signed by both parties hereto.

15.          Waivers. Waiver by either the Executive or by the Company of any
breach or default by the other party of any of the terms of this Agreement shall
not operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties hereto
or from any failure by either party hereto to assert its or his rights hereunder
on any occasion or series of occasions.

16.          Deductions and Withholdings. All amounts payable under this
Agreement shall be paid less deductions and income and payroll tax withholdings
as may be required under applicable law and any benefits and perquisites
provided to the Executive under this Agreement shall be taxable to the Executive
as may be required under applicable law.

 

17.

Section 409A.

(a)          The Company acknowledges that the Executive is a “specified
employee” as defined and applied in Section 409A of the Internal Revenue Code,
as amended (the “Code”),

 

7

and as such, may be subject to the imposition of certain excise taxes, interest
and other penalties with respect to amounts or benefits payable under his
Employment Agreement and this Agreement in connection with his resignation
hereunder in the event such payments or other benefits are found to constitute
deferred compensation payments under Section 409A of the Code. Therefore,
notwithstanding anything to the contrary in the Employment Agreement or this
Agreement, as of the Resignation Date, any Termination Payments and Benefits or
other payments due hereunder, that may constitute deferred compensation payments
under Section 409A of the Code may not commence to the Executive until the
Payment Date, except to the extent any regulations or guidance issued by the
Internal Revenue Service under Section 409A of the Code does not subject such
payments or benefits to Section 409A; provided, that any payments in respect of
any Salary Amount or Bonus/Deferred Amount due to the Executive under paragraph
2(a) (whether payable in a lump sum or in installments in accordance with the
Company’s regular payroll practices or otherwise) that were so delayed during
such six-month period shall be paid in the aggregate as soon as administratively
practicable following the Payment Date; provided, further, that the delivery to
the Executive of any equity of the Company pursuant to paragraph 2(a) that was
also so delayed during such six-month period (including, without limitation, any
shares of Class B Common Stock due in payment for any vested Restricted Stock
Units), will be delivered to him as soon as practicable following the Payment
Date; and provided, further, that the Executive, for the six-month period
following his termination date, will pay the full amounts due for any premium or
payment (or any portion thereof) which would be treated as deferred compensation
under Section 409A, that the Company is required to pay under paragraph 2(a),
which amounts will be reimbursed to him in a lump sum as soon as practicable
following the Payment Date.

(b)          Furthermore, if prior to the Payment Date, Section 409A is modified
to allow for any of the payments to be provided hereunder to the Executive to be
made prior to the Payment Date without additional cost to the Executive by
reason of such earlier payments, then all such payments shall be accelerated and
shall be made as promptly as practicable following the release of the
modifications to Section 409A, in accordance with the terms of these
modifications.

(c)       If any provision of this Agreement contravenes any regulations or
Department of Treasury guidance promulgated under Section 409A of the Code, or
could cause any amounts or benefits hereunder to be subject to taxes, interest
or penalties under Section 409A of the Code, the Company may, in its sole
discretion and without the Executive’s consent, modify the Agreement to: (i)
comply with, or avoid being subject to, Section 409A of the Code and avoid the
imposition of taxes, interest and penalties under Section 409A of the Code, and
(ii) maintain, to the maximum extent practicable, the original intent of the
applicable provision without contravening the provisions of Section 409A of the
Code. This paragraph 17 is not intended to create an obligation on the part of
the Company to modify this Agreement and does not guarantee that the amounts or
benefits owed under the Agreement will not be subject to interest and penalties
under Section 409A of the Code.

18.          Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

 

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19.          Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement. Unless otherwise expressly provided
for in this Agreement, the word “including” or ay variation thereof means
“including, without limitation” and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

VIACOM INC.

 

 

 

By:

/s/ Michael D. Fricklas

 

Name:

Michael J. Dolan

 

Title:

Executive Vice Presient, General Counsel and Secretary

 

 

 

 

By:

/s/ Michael J. Dolan

 

 

Michael J. Dolan

 

 

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