FCC Form 312 Exhibits E & F September 2020 Explanatory Statement This application is one of approximately fifty-seven applications (the “Applications”) filed concurrently with the Media, International and Wireless Telecommunication Bureaus that seek the Commission’s consent to the involuntary transfer of control (the “Transfer of Control”) of Commission licensees (the “Licensees”) under the ultimate control of ViacomCBS Inc. (“ViacomCBS”).1 As explained below, the involuntary Transfer of Control of the Licensees results from the death on August 11, 2020 of Mr. Sumner M. Redstone (“Mr. Redstone”). A list of the Licensees, and the types of Commission licenses held by each of them, is attached as Attachment A. I. Description of the Involuntary Transfer of Control ViacomCBS is controlled by National Amusements, Inc. (“NAI”), its single majority shareholder, which holds approximately 79% of the voting stock of ViacomCBS.2 Until the death of Mr. Redstone, NAI was controlled by Mr. Redstone, who had sole control over the 80% voting stock and equity of NAI held by the Sumner M. Redstone National Amusements Trust u/d/t dated June 28, 2002 (the “SMR Trust”). 3 In addition to Mr. Redstone, the other trustees of the SMR Trust were David R. Andelman, Norman I. Jacobs, Thaddeus P. Jankowski, Jill S. Krutick, Leonard L. Lewin and Phyllis Redstone. Because ViacomCBS is controlled by a single majority shareholder, NAI, and NAI was controlled by Mr. Redstone through the SMR Trust, Mr. Redstone controlled ViacomCBS and the Licensees until his death. Upon Mr. Redstone’s death, the voting stock and equity of NAI held by the SMR Trust were automatically and involuntarily divided equally between two continuing trusts created under the same trust agreement that created the SMR Trust: the Sumner M. Redstone National Amusements Life Income Trust (the “SMR Life Income Trust”) and the Sumner M. Redstone National Amusements Part B General Trust (the “SMR Part B Trust” and collectively with the SMR Life Income Trust, the “Continuing Trusts”). As a result, each of the Continuing Trusts holds 40% of the voting stock and 40% of the equity of NAI. The Continuing Trusts are required to share seven common voting trustees, who currently are: Shari E. Redstone, Tyler J. Korff, David R. Andelman, Norman I. Jacobs, Thaddeus P. Jankowski, Jill S. Krutick and 1 While involuntary, the change in control of ViacomCBS became effective immediately upon Mr. Redstone’s death, and there is no interim arrangement to effectuate control of the Licensees pending or attendant to the administration of Mr. Redstone’s estate. Therefore, in lieu of filing pro forma applications, which generally contemplate such an interim arrangement, ViacomCBS is filing concurrent applications that seek approval of the transfer of control of the Licensees to the Continuing Trusts as described herein. 2 The remainder of the voting stock in ViacomCBS is owned by other shareholders, none of which has an attributable interest in the company. 3 The remaining 20 percent of the voting stock and equity in NAI are held by the Shari Ellin Redstone Trust, which is controlled by Shari E. Redstone. - 1 - FCC Form 312 Exhibits E & F September 2020 Leonard L. Lewin (collectively, the “Trustees”). 4 Organizational charts showing control of the relevant entities prior to and following Mr. Redstone’s death are attached to this Explanatory Statement as Attachment B. Pursuant to the document creating and governing the SMR Trust and the Continuing Trusts, each of the Trustees has an equal vote, and decisions with respect to the NAI stock are made by majority vote of the Trustees, except for decisions pertaining to any sale, merger, reorganization or similar business transaction, including the disposition of NAI’s interests in ViacomCBS. Such decisions require approval by a majority of disinterested Trustees (i.e., Mr. Andelman, Mr. Jacobs, Mr. Jankowski, Ms. Krutick and Mr. Lewin) and by a majority of all Trustees. The Trustees are required to cause each of the two Continuing Trusts to vote the NAI shares held by such Continuing Trust in the same manner as the shares held by the other Continuing Trust. Consequently, upon Mr. Redstone’s death, the Continuing Trusts automatically and involuntarily succeeded Mr. Redstone (through the SMR Trust) as the controlling entities of NAI and therefore the indirect controllers of the Licensees. The Applications request Commission consent to the involuntary Transfer of Control of the Licensees to the Continuing Trusts. The Licensees respectfully request the prompt grant of this and the associated applications.5 4 Phyllis Redstone is a non-voting trustee of the Life Income Trust, of which she is the beneficiary. 5 The parties intend that the applications filed in connection with the Transfer of Control include all of the licenses and other FCC authorizations held by ViacomCBS and all of its direct and indirect subsidiaries. Such companies may now have on file, and may hereafter file, additional requests for authorizations for new or modified facilities that may be granted before the Commission takes action on the transfer applications. Accordingly, the applicants request that any Commission approval of the applications relating to the Transfer of Control include authority for the Continuing Trusts to acquire control of: (1) any authorization issued to ViacomCBS or its subsidiaries while the Transfer of Control is pending before the Commission and during the period required for consummation of the Transfer of Control; and (2) any applications filed by ViacomCBS or its subsidiaries that are pending at the time of consummation. Such action would be consistent with prior decisions of the Commission. See, e.g., Applications of AT&T Inc. and Cellco Partnership d/b/a Verizon Wireless, Memorandum Opinion and Order, 25 FCC Rcd 8704, 8773, ¶ 165 (2010); SBC Communications Inc. and AT&T Corp. Applications for Approval of Transfer of Control, Memorandum Opinion and Order, 20 FCC Rcd 18290, 18392, ¶ 212 (2005); Applications of AT&T Wireless Services, Inc. and Cingular Wireless Corp. for Consent to Transfer Control of Licenses and Authorizations, Memorandum Opinion and Order, 19 FCC Rcd 21522, 21626 ¶ 275 (2004). The parties also request that Commission approval include any authorizations that may have been inadvertently omitted. Similarly, pursuant to Sections 1.927(h), 1.929(a)(2), and 1.933(b) of the Commission’s Rules, to the extent necessary, the applicants request a blanket exemption from any applicable cut-off rules in cases where the licensees in this Transfer of Control file amendments to pending applications in order to reflect consummation of the proposed Transfer of Control so that such amendments are not treated as disqualifying amendments. The nature of the proposed Transfer of Control demonstrates that the ownership changes are not being made for the purpose of acquiring any particular pending application, but are the result of the death of Mr. Redstone, who, at the time of his death, was the controlling person of ViacomCBS. Grant of this request would be consistent with prior Commission decisions that routinely have granted a blanket exemption in cases involving multiple-license transactions. See, e.g., Applications of PacifiCorp Holdings, Inc., and Century Telephone Enterprises, Inc. for Consent - 2 - FCC Form 312 Exhibits E & F September 2020 II. Transaction Agreements As described above, as a result of the death of Mr. Redstone, the Continuing Trusts automatically and involuntarily succeeded Mr. Redstone (through the SMR Trust) as the controlling entities of NAI. Consequently, there are no contracts or agreements specifically relating to the Transfer of Control. A summary of the relevant terms of the governing document for the Continuing Trusts follows: SMR Part B Trust (A) Name of trust: Sumner M. Redstone National Amusements Part B General Trust. (B) Duration of trust: Until the death of the last of Shari Redstone, Brent Redstone, or Phyllis Redstone. (C) Number of shares of voting stock owned: 33 1/3, representing 40 percent of total voting interest in NAI. (D) Names of beneficiaries of trust: Phyllis Redstone and the descendants of Sumner M. Redstone. Distributions from the trust are at the sole discretion of the Trustees. (E) Name of record owner of stock: Sumner M. Redstone National Amusements Part B General Trust. (F) Name of the party or parties who have the power to vote or control the vote of the shares: Shari E. Redstone, Tyler J. Korff, David R. Andelman, Norman I. Jacobs, Thaddeus P. Jankowski, Jill S. Krutick and Leonard L. Lewin, as Trustees. (G) Any conditions on the powers of voting the stock or any unusual characteristics of the trust: Each of the Trustees has an equal vote, and decisions with respect to the NAI stock are made by majority vote of the Trustees, except for decisions pertaining to any sale, merger, reorganization or similar business transaction. including the disposition of NAI’s interests in ViacomCBS. Such decisions require approval by a majority of disinterested Trustees (i.e., Mr. Andelman, Mr. Jacobs, Mr. Jankowski, Ms. Krutick, and Mr. Lewin) and by a majority of all Trustees. to Transfer Control of Pacific Telecom, Inc., a Subsidiary of PacifiCorp Holdings, Inc., Memorandum Opinion and Order, 13 FCC Rcd 8891, 8915 ¶ 47 (1997); Applications of NYNEX Corp. and Bell Atlantic Corp., Memorandum Opinion and Order, 12 FCC Rcd 19985, 20091, 20092 ¶ 234 (1997). - 3 - FCC Form 312 Exhibits E & F September 2020 SMR Life Income Trust (A) Name of trust: Sumner M. Redstone National Amusements Life Income Trust. (B) Duration of trust: Until the death of Phyllis Redstone. (C) Number of shares of voting stock owned: 33 1/3, representing 40 percent of total voting interest in NAI. (D) Name of beneficiary of trust: Phyllis Redstone. (E) Name of record owner of stock: Sumner M. Redstone National Amusements Life Income Trust.