Casey v. Redstone Et Al - Viacom Derivative Shareholder Complaint PDF

INDEX NO.
653515/2015
FILED: NEW YORK COUNTY CLERK 10/22/2015 04:21 PM

NYSCEF DOC. NO. 1
RECEIVED NYSCEF: 10/22/2015
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
ROBERT J. CASEY II, derivatively on
behalf of VIACOM INC.,
Plaintiff,
v.
SUMNER M. REDSTONE, SHARI
REDSTONE, GEORGE S. ABRAMS,
PHILIPPE DAUMAN, THOMAS E.
DOOLEY, ROBERT K. KRAFT,
BLYTHE J. MCGARVIE, CHARLES E.
PHILLIPS, JR., FREDERIC V.
SALERNO, WILLIAM SCHWARTZ,
CRISTIANA FALCONE SORRELL,
DEBORAH NORVILLE, KATHERINE
GILL-CHAREST and, WADE DAVIS,
Defendants,
and
VIACOM INC.,
Nominal Defendant.
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Index No.
Purchased and filed on:

Plaintiff designates New York County
as the place of trial
The basis of the venue is the place of
business of the Defendants
Plaintiff resides in Allegheny County,
Pennsylvania
SUMMONS
YOU ARE HEREBY SUMMONED to answer the complaint in this

action and to serve a copy of your answer, or, if the complaint is not served with this
summons, to serve a notice of appearance, on the Plaintiffs' Attorneys within 20 days after
service of this summons, exclusive of the day of service (or within 30 days after the service
is complete if this summons is not personally delivered to you within the State of New
York); and in case of your failure to appear or answer, judgment will be taken against you
by default for the relief demanded in the complaint.
Defendants' addresses:
SEE ATTACHED DEFENDANTS SERVICE LIST
Dated: October 22, 2015

HARWOOD FEFFER LLP
By: s/ Robert I. Harwood
Robert I. Harwood
488 Madison Avenue
New York, New York 10022
(212) 935-7400
Attorneys for Plaintiff
DEFENDANTS SERVICE LIST

VIACOM INC.
1515 Broadway,
New York, NY 10036
SUMNER M. REDSTONE,
1515 Broadway,
New York, NY 10036
SHARI REDSTONE,
1515 Broadway,
New York, NY 10036
GEORGE S. ABRAMS,
1515 Broadway,
New York, NY 10036
PHILIPPE DAUMAN,
1515 Broadway,
New York, NY 10036
THOMAS E. DOOLEY,
1515 Broadway,
New York, NY 10036
ROBERT K. KRAFT,
1515 Broadway,
New York, NY 10036
BLYTHE J. MCGARVIE,
1515 Broadway,
New York, NY 10036
CHARLES E. PHILLIPS, JR.,
1515 Broadway,
New York, NY 10036
FREDERIC V. SALERNO,
1515 Broadway,
New York, NY 10036
WILLIAM SCHWARTZ,
1515 Broadway,
New York, NY 10036
1515 Broadway,
New York, NY 10036
DEBORAH NORVILLE,
1515 Broadway,
New York, NY 10036
1
KATHERINE GILL-CHAREST
1515 Broadway,
New York, NY 10036
WADE DAVIS,
1515 Broadway,
New York, NY 10036
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
ROBERT J. CASEY II, derivatively on
behalf of VIACOM INC.,
Index No.
Plaintiff,
v.
SUMNER M. REDSTONE, SHARI
REDSTONE, GEORGE S. ABRAMS,
PHILIPPE DAUMAN, THOMAS E.
DOOLEY, ROBERT K. KRAFT,
BLYTHE J. MCGARVIE, CHARLES E.
PHILLIPS, JR., FREDERIC V.
SALERNO, WILLIAM SCHWARTZ,
DEBORAH NORVILLE, KATHERINE
GILL-CHAREST and, WADE DAVIS,
VERIFIED SHAREHOLDER
DERIVATIVE COMPLAINT
JURY TRIAL DEMANDED
Defendants,
and
VIACOM INC.,
Nominal Defendant.
Plaintiff Robert J. Casey II ("Plaintiff'), by and through his undersigned

attorneys, hereby submits this Verified Shareholder Derivative Complaint (the
"Complaint") for the benefit of nominal defendant Viacom Inc. ("Viacom" or the
"Company") against certain current and/or former members of its Board of Directors (the
" Board") and executive officers seeking to remedy defendants' breaches of fiduciary
duties and unjust enrichment from January 2014 through the present (the " Relevant
Period").
NATURE OF THE ACTION
1.
According to its public filings, the Company is headquartered in New
York, New York and operates as an entertainment content company in the United States
and internationally. The Company creates television programs, motion pictures, shortform video, applications, games, consumer products, social media, and other
entertainment content. Currently, it is the world's sixth largest broadcasting and cable
company in terms of revenue.
The Company has media networks that reach
approximately 700 million global subscribers and its leading brands include MTV, VH 1,
CMT, BET, Nickelodeon, Comedy Central, SPIKE, and TV Land. The current Viacom
was created on December 31, 2005, as a spinofT from CBS Corporation. The current
Viacom 1 operates approximately 170 networks reaching approximately 700 million
subscribers in 160 countries.
2.
In the Company's public filings, defendants repeatedly touted the
Company's financial results and strong internal controls. For instance, on November 13,
2014, defendants caused the Company to file its Annual Report on Form 10-K (the "2014
Form 10-K") with the U.S. Securities and Exchange Commission (the "SEC"), which
touted purportedly "record" profit for fiscal 2014. Specifically, the 2014 Form 10-K
reported record adjusted operating income of $4.13 billion and record full-year adjusted
diluted earnings per share of $5.40. Additionally, the 2014 Form 10-K (along with every
other Relevant Period filing) contained certifications that the Company's financial
statements were accurate and its internal controls were adequate.
3.
Defendants likewise issued positive financial results and certifications in
The current Viacom was created on December 31, 2005, as a spinoff from CBS
Corporation, which changed its name from Viacom to CBS at the same time.
2
the Company's quarterly and annual financial reports filed with the SEC on Fonns 10-Q
and 10-K, respectively on January 30, 2014, May l, 2014, August 6, 2014, and January
29, 2015.
4.
The financial results that were disseminated to shareholders and filed with
the SEC during the Relevant Period and the certifications that accompanied them were
false and/or misleading because, inter alia: (1) they failed to disclose that the Company's
programming was significantly underperfonning; (2) they failed to disclose that in light
of this underperformance, the Company was going to be forced to make workforce
reductions and faced accelerated amortization of programming expenses; (3) they failed
to disclose that as a result of the foregoing, the Company was going to be forced to
"pause" its $20 billion stock repurchase program, which had been in existence for years;
and (4) they failed to disclose that the Company, under the defendants' direction, was
operating in violation of the laws of the European Union (the "EU").
5.
The truth began to emerge on April 6, 2015, when defendants caused the
Company to issue a press release attached to a Form 8-K, which was filed with the SEC,
entitled "Viacom Details Strategic Realignment to Create Efficiencies and Drive LongTenn Growth" (the "April 61h Press Release"). The April 61h Press Release revealed for
the first time that the Company, under defendants' direction and on their watch, was
being forced to recognize a pre-tax charge of nearly $785 million. Defendants further
disclosed that of the nearly $785 million, $430 million reflected the impact of writedowns of underperforming programming and the remainder related to costs associated
with workforce reductions, as well as accelerated amortization of programming expenses
associated with a change in the Company's ultimate revenue projections for certain
original programming genres.

6.
Additionally, the April 61h Press Release revealed that as a result of
defendants' breaches, "Viacom will temporarily pause share purchases under its current
$20 billion stock repurchase program," which had been in existence for years prior.
7.
Predictably, the financial press was not kind upon learning that the
Company would be forced to take a nearly $785 million charge and halt its stock
repurchase program. For example, an April 7, 2015 Financial Times article entitled
"Viacom Punished After Taking $785m Charge" reported that the Company market
valuation declined by 11early $500 million immediately after tlte issuance of t/1e April 6'1'
Press Release. Additionally, an April 7, 2015 Bloomberg article entitled "Viacom Halts
Buybacks, Sees $785 Million Restructuring Costs" quoted Bloomberg Intelligence

analyst, Paul Sweeney, as stating that "[p]ersistent ratings weakness across [Viacom's]
networks, job cuts, restricting charges and now a suspension of the buyback represent a
distressing trend for investors."
8.
In the aftermath of defendants' illicit activities, which ultimately caused
the Company to take a nearly $785 million charge, matters have only continued to
deteriorate for the Company. For example, in July 2015, EU regulators filed formal
charges against Viacom's subsidiary, Paramount Pictures ("Paramount"), over alleged
illegal licensing agreements.
The EU accused Paramount and five other studios of
violating competition laws by using clauses that restrict access to the services of Sky UK
Ltd. ("Sky") outside Britain.
9.
Then, on August 6, 2015, defendants caused the Company to issue its
quarterly report on Form I 0-Q for the second quarter of 2015. Therein, defendants
admitted that the Company's stock repurchase program was still "temporarily paused"
and was not anticipated to be resumed for months. Further, regarding the Company's
issues with the EU, defendants admitted that the "full process, including appeals, could
last several years," which undoubtedly will be very costly for the Company.
10.
Accordingly, as a result of Defendants' breaches, the Company has been
not only forced to take a nearly $785 million charge, but also it has been forced to
"pause" the Company's stock repurchase program (which has been in operation for years
prior), and is now the subject of charges brought by EU regulators.
11.
Further, the price of the Company's stock has continued to freefall
throughout the entire Relevant Period. Specifically, the price of the Company's Class B
common stock has declined by over 44% from its Relevant Period high of approximately
$88 per share and currently trades for around $49 per share.
Thus, as a result of
defendants' breaches, the Company has been (and continues to be) damaged.
12.
In light of the foregoing, on April 13, 2015, Plaintiff issued a demand
pursuant to Delaware law (the "Demand") on the Board to investigate and commence an
action against certain current and/or former directors and executive officers of the
Company related to the Company's announcement that it was going to be forced to take a
nearly $785 million charge. A true and correct copy of the Demand is attached hereto at
Exhibit A.
13.
On April 28, 2015, Plaintiff's counsel received a letter from Jaculin Aaron
of the law firm Shearman & Sterling LLP, which stated that "[b]efore the Company' s
Board of Directors (the "Board"), or its counsel, responds to the Demand, both the
Company and the Board must be satisfied that Mr. Casey currently owns Viacom stock
and owned Viacom stock continuously during the Period of time referred to in the
Demand. Accordingly. please forward to us appropriate proof of your client's continuous
ownership of Viacom stock." A true and correct copy of the April 28, 2015 letter is
attached hereto as Exhibit B.
14.
Even though the April 28, 2015 letter provided no legal authority to
condition a response and/or investigation of the Demand on the receipt of proof of

Plaintiffs stock holdings, on May 12, 2015, Plaintiff provided Ms. Aaron with redacted
proof of Plaintiffs ownership of Viacom stock.
15.
After numerous other correspondences with Ms. Aaron regarding the
investigation of the original Demand and immediately after the announcement that EU
regulators were considering formal charges against the Company, on July 27, 2015,
Plaintiff issued a supplemental shareholder demand on the Board to investigate and
commence an action against certain current and/or former directors and executive officers
of the Company in connection with the EU regulator' s investigation into the Company's
potential anti-competitive activities in the EU (the "Supplemental Demand"). A true and
correct copy of the Supplemental Demand is attached hereto as Exhibit C.
16.
Next, on August 11, 2015, Plaintiffs counsel received a letter from
Edward B. Micheletti of the law firm Skadden, Arps, Slate, Meagher & Flom LLP
("Skadden"), which revealed that Skadden had "been retained by the Audit Committee of
the Board of Directors ... to assist in connection with the consideration of the
[Demand] ..."
17.
After numerous correspondences with Mr. Michelleti regarding, inter alia,
the Supplemental Demand, on September 15, 2015, Plaintiff's counsel received a letter,
which fonnally refused the Demand (the "Refusal"). A true and correct copy of the
Refusal is attached hereto as Exhibit D.
18.
The Refusal stated that at "a meeting held on September 10, 2105 [sic],
the Audit Committee, based on the investigation, unanimously voted to recommend that
the Viacom board reject the Demand" and that "[a]t a subsequently held Viacom board
meeting, the Viacom board considered and agreed with the Audit Committee'
recommendation, and unanimously voted to reject the Demand."
19.
The Refusal is most notable not for its contents, but for what it shockingly
lacks - literally any substantive analysis of the claims set forth in the Demand and/or the
Supplemental Demand. Further, outside of bald assertion that the Audit Committee's socalled "investigation" "revealed no support for the allegations of misconduct raised in the
Demand," the Refusal does not even so much as mention the claims set forth in the
Demand and Supplemental Demand, nor does it provide even the faintest amount of
insight into what the purported "investigation" entailed.
20.
Accordingly, on September 22, 2015, Plaintiffs counsel was forced to
send another letter to Mr. Michelleti, which sought to "obtain clarification and insight"
on numerous parts of the Refusal and the Board's and/or Audit Committee's so-called
investigation. A true and correct copy of the September 22, 2015 letter is attached hereto
as Exhibit E.
21.
Specifically, the September 22, 2015 letter requested a copy of all
documents reviewed in connection with the demand. a list of any and all witnesses
interviewed as part of the investigation, and a list of all other factors not specifically
listed in the Refusal (which would be none) that the Refusal was based upon.
22.
On September 28, 2015, Mr. Michelleti responded to Plaintiffs September
22, 2015 letter. However, his response failed to provide any meaningful additional
insight and wholly ignored Plaintiff's document requests. A true and correct copy of the
September 28, 2015 letter is attached hereto as Exhibit F. Further, while the September
28, 2015 letter appears to attempt to provide more substantive insight into the rationale
behind the issuance of the Refusal, it still fails to provide even the most basic details of
the so-called investigation (i.e., who the Audit Committee even interviewed) or any
substantive legal analysis of any of the claims.
23.
Accordingly, given the Board's deliberate and repeated efforts to hide
everything concerning the process (and substance) of Audit Committee's investigation,

Plaintiff is wholly unaware of the substantive legal reasons regarding why the Refusal
was issued and why the Board has declined to pursue these valuable claims or whether
the process undertaken to purportedly investigate the Demand was adequate and in good
faith.
Clearly, the Board's complete disregard of the merits of the claims set forth
Demand is improper and demonstrates the Board's lack of diligence and good faith.
Further, the Board's and/or Audit Committee's failure to provide even the most basic
details concerning the scope of the purported investigation likewise renders the Refusal
improper. Thus, Plaintiff has been left with no other recourse other than filing this
Action and, given the Board's and/or Audit Committee's complete secrecy at every tum,
this Action must be allowed to proceed.
THE PARTIES
24.
Plaintiff is a current holder of Class B common stock of Viacom and has
continuously held Viacom stock since 1986.
25.
Nominal defendant Viacom is a Delaware corporation with its principal
executive offices located at 1515 Broadway, New York, NY 10036. According to its
public filings, Viacom operates as an entertainment content company both domestically
and internationally, which creates television programs, motion pictures, short-form video,
applications, games, consumer products, social media, and other entertainment content.
The current Viacom was created on December 31, 2005, as a spinoff from CBS
Corporation, which changed its name from Viacom to CBS at the same time.
26.
Defendant Sumner M. Redstone ("Redstone") is a founder of the
Company and has served as the Executive Chairman of the Board since January l, 2006.
Defendant Redstone was previously Chief Executive Officer ("CEO") of the former
Viacom Inc. from 1996 until 2005 and Chairman of the Board since 1986.
27.
Defendant Shari Redstone (''S. Redstone"), daughter of defendant
Redstone, has served as the Non-Executive Vice Chair of the Board since January 1,
2006. Previously, defendant S. Redstone served as a director of the former Viacom Inc.
beginning in 1994 and became Vice Chairman in June 2005.
28.
Defendant George S. Abrams ("Abrams") has served as a director of the
Company since January 1, 2006. In addition, defendant Abrams previously served as a

director of the former Viacom Inc. since 1987.
29.
Defendant Philippe Dauman ("Dauman") has served as the Company's
President and CEO since September 5, 2006 and as a director since January I, 2006.
Previously, defendant Dauman served as a director of the former Viacom Inc. since I 987.
30.
Defendant Thomas E. Dooley ("Dooley") has served as the Company's
Chief Operating Officer since May 20 I 0 and as a director of the Company since January
1, 2006. Previously, defendant Dooley served as the Company's Chief Financial Officer
("CFO").
31.
Defendant Robert K. Kraft ("Kraft'') served as a director of the Company
from January 1, 2006 until August 2015.

32.
Defendant Blythe J. McGarvie C'McGarvie") has served as a director of
the Company since April 12, 2007. In addition, defendant McGarvie served as a member
of the Board's Audit Committee (the "Audit Committee") during the Relevant Period.
33.
Defendant Charles E. Phillips, Jr. ("Phillips") has served as a director of
the Company since January 1, 2006. Previously, defendant Phillips served as a director
of the former Viacom Inc. since 2004. In addition, defendant Phillips has served as a
member of the Audit Committee during the Relevant Period.
34.
Defendant Frederic V. Salemo ("Salemo") has served as a director of the
Company since January 1, 2006. Previously, defendant Salemo served as a director of

the former Viacom Inc. since 1994.
In addition, defendant Salemo has served as a

35.
Defendant William Schwartz ("Schwartz") has served as a director of the
Company since January I, 2006. Previously, defendant Schwartz served as a director of

the former Viacom Inc. since 1987.
36.
Defendant Cristiana Falcone Sorrell ("Sorrell") has served as a director of
the Company since March 21, 2013.
In addition, defendant Sorrell has served as a

37.
Defendant Deborah Norville ("Norville") has served as a director of the
Company since March 2 I, 2013.
IO
38.
Defendant Wade Davis ("Davis") has served as the Company's CFO and
Executive Vice President since November 2012.

39.
Defendant Katherine Gill-Charest ("Gill-Charest") has served as the
Company's Senior Vice President, Controller and Chief Accounting Officer since
October 1, 2010.
40.
Collectively, defendants Redstone, S. Redstone, Abrams, Dauman,
Dooley, Kraft, McGarvie, Phillips, Salemo, Schwartz, Sorrell, Norville, Gill-Charest, and
Davis shall be referred to herein as "Defendants."
41.
Collectively, defendants McGarvie, Phillips, Salemo, and Sorrell shall be
referred to as the ''Audit Committee Defendants."

DEFENDANTS' DUTIES
42.
By reason of their positions as officers, directors, and/or fiduciaries of
Viacom and because of their ability to control the business and corporate affairs of
Viacom, Defendants owed Viacom and its shareholders fiduciary obligations of good
faith, loyalty, and candor, and were and are required to use their utmost ability to control
and manage Viacom in a fair, just, honest, and equitable manner. Defendants were and
are required to act in furtherance of the best interests of Viacom and its shareholders so as
to benefit all shareholders equally and not in furtherance of their personal interest or
benefit. Each director and officer of the Company owes to Viacom and its shareholders
the fiduciary duty to exercise good faith and diligence in the administration of the affairs
of the Company and in the use and preservation of its property and assets, and the highest
obligations of fair dealing.
43.
Defendants, because of their positions of control and authority as directors
11
and/or officers of Viacom, were able to and did, directly and/or indirectly, exercise
control over the wrongful acts complained of herein.
Because of their advisory,
executive, managerial, and directorial positions with Viacom, each of the Defendants had
knowledge of material non-public information regarding the Company.
44.
To discharge their duties, the officers and directors of Viacom were
required to exercise reasonable and prudent supervision over the management, policies,
practices and controls of the Company.
By virtue of such duties, the officers and
directors of Viacom were required to, among other things:

a. Exercise good faith to ensure that the affairs of the Company were
conducted in an efficient, business-like manner so as to make it
possible to provide the highest quality performance of their business;
b. Exercise good faith to ensure that the Company was operated in a
diligent, honest and prudent manner and complied with all applicable
federal and state laws, rules, regulations and requirements, and all
contractual obligations, including acting only within the scope of its
legal authority; and
c. When put on notice of problems with the Company' s business
practices and operations, exercise good faith in taking appropriate
action to correct the misconduct and prevent its recurrence.
45.
Pursuant to the Company's Business Practices Statement (the "BPS"),
which expressly applies to all of the Company's employees, officers, and directors, the
Company is "committed to maintaining complete and accurate financial records in order
to make responsible business decisions and provide truthful information in compliance
12
with applicable legal standards." Further, according to the BPS, all ..accounting and
financial reporting practices must be fair and proper, in accordance with, as applicable,
generally accepted accounting principles (GAAP) in the United States of America."
Accordingly, each of the Defendants "must refrain from any misleading or deceptive
financial practice and report immediately any such practices of which we become
aware." (emphasis in original).
46.
Pursuant to the terms of the Audit Committee's Charter, the Audit
Committee Defendants were responsible for, inter alia:

a. Reviewing and discussing the annual audited financial statements and
quarterly financial statements with management and the independent
auditor, including reviewing the Company's specific disclosures under
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," before the filing of the Company's Form 10-K
and Form I 0-Qs;
b. Discussing generally with management earnings press releases before
they are issued, as well as financial information and earnings guidance
provided to analysts and rating agencies;
c. Discussing with management and the independent auditor: (a) all
critical accounting policies and practices to be used by the Company in
preparing its financial statements (including the quality, not just
acceptability, of accounting principles), and any significant changes in
the Company's selection or application of accounting principles, (b) all
alternative treatments of financial information within GAAP that have
13
been discussed with management, ramifications of the use of these

alternative disclosures and treatments, and the treatment preferred by
the independent auditor, and (c) other material communications
between the independent auditor and management, such as any
management letter or schedule of unadjusted differences. In addition,
the Committee shall review with the independent auditor any audit
problems or difficulties and management's response;
d. Reviewing with management, the Senior Vice President, Chief Audit
Officer and Chief Compliance Officer, and the independent auditor the
quality, adequacy and effectiveness of the Company's internal control
over financial reporting, including reports regarding (a) all significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting and (b} any fraud, whether or
not material, that involves management or other employees who have
a significant role in the Company's internal control over financial
reporting and discuss the appropriate corrective action;
e. Reviewing and discussing with management, the Senior Vice
President, Chief Audit Officer and Chief Compliance Officer, and the
independent auditor
management's annual
assessment of the
effectiveness of the Company's internal control over financial

reporting and the independent auditor's report on the effectiveness of
the Company's internal control over financial reporting;
f.
Reviewing with management, and any outside professionals as the
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Committee considers appropriate, the effectiveness of the Company's

disclosure controls and procedures;
g. Reviewing with management, and any outside professionals as the
Committee considers appropriate, important trends and developments
in financial reporting practices and requirements and their effect on the
Company's financial statements;
h. Reviewing with management, and any internal or external counsel as
the Committee considers appropriate, any legal matters (including the
status of pending litigation) that may have a material impact on the
Company and any material reports or inquiries from regulatory or
governmental agencies; and
i. Reviewing with the General Counsel and the Senior Vice President,
Chief Audit Officer and Chief Compliance Officer the adequacy and
effectiveness of the Company's procedures to ensure compliance with
its legal and regulatory responsibilities, including internationally.
SUBSTANTIVE ALLEGATIONS
A.
Background of the Company and its Business
47.
According to its public filings, the Company is headquartered in New
York, New York and operates as an entertainment content company in the United States
and internationally. The Company creates television programs, motion pictures, shortform video, applications, games, consumer products, social media, and other
entertainment content. Currently, it is the world' s sixth largest broadcasting and cable
company in terms of revenue.
The Company has media networks that reach
15
approximately 700 million global subscribers and its leading brands include MTV, VH l,
CMT, BET, Nickelodeon, Comedy Central, SPIKE, and TV Land. The current Viacom
was created on December 31, 2005, as a spinoff from CBS Corporation. The current
Viacom operates approximately 170 networks reaching approximately 700 million
subscribers in 160 countries.
The Company's current market capitalization is
approximately $18. 9 billion.

48.
In light of the Company's pnor successes throughout the years, the
Company has had numerous stock repurchase programs. For instance, on November 10,
2011 , Defendants announced that the Company's already-existing stock repurchase
program would be expanded from $4 billion to $10 billion. Then, on August 2, 2013,
Defendants caused the Company to again expand its stock repurchasing program from
$10 billion to $20 billion. As discussed herein, as a result of Defendants' breaches, the
Company was ultimately forced to "temporarily pause" its long-standing stock
repurchasing program.
B.
Defendants' False and Misleading Statements

1.
49.
First Quarter 2014 Financial Results
On January 30, 2014, Defendants caused the Company to issue a press
release entitled "Viacom Reports Strong Double-Digit Earnings Growth for First Quarter
2014," which announced the Company's financial results for the first quarter of 2014.
The January 30, 2014 press release stated, in pertinent part:
New York, N.Y., January 30, 2014 - Viacom Inc. (NASDAQ: VIAB,
VIA) today reported financial results including significant earnings growth
for the fiscal first quarter of 20 J4, ended December 31, 2013.
Revenues of $3.20 billion declined 4%, reflecting higher Media Networks
revenues, which were more than offset by declines in Filmed
16
Entertainment. Operating income rose 20% to $960 million, representing

improved operating results across the company. Adjusted net earnings
from continuing operations attributable to Viacom increased 19% to $547
million, and adjusted diluted earnings per share from continuing
operations were up 32% to $1.20 per diluted share.
Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom
continues to deliver on its proven strategy of creating the world's best
entertainment content, and engaging audiences in new and powerful ways.
We look forward to continuing to deliver for shareholders."
Philippe Dauman, President and Chief Executive Officer of Viacom, said,
"Once again, Viacom's results reflect our significant investments in
content, our deep connection with audiences and our ongoing financial
discipline. Our Media Networks continue to lead on television while also
pioneering new, multi-screen experiences for users and expanded
opportunities for advertising and distribution partners. With high profile
films this quarter in Anchorman 2: The Legend Continues, Jackass
Presents: Bad Grandpa, Nebraska and Wolf of Wall Street, Paramount is
off to a strong start as the studio continues building its animation and
television production capabilities alongside a promising slate for fiscal
20 J4. "Viacom delivered $1. l billion of capital directly to shareholders in
the first quarter of 2014 through share repurchases and dividends,
underscoring our continuing commitment to return significant value to
investors."
***
Quarterly revenues were $3.20 billion for the quarter. Media Networks
revenues rose 6% to $2.54 billion, driven by increases in affiliate fees and
advertising revenues. Affiliate revenues grew I 0% on a domestic and
worldwide basis, primarily due to rate increases. Domestic advertising
revenues increased 3% due to favorable ratings trends. Worldwide
advertising revenues increased 4% to $1.33 billion in the quarter. Filmed
Entertainment revenues declined 30% to $681 million. Theatrical revenues
decreased 52% from the prior year, due to fewer titles released in the
quarter and lower carryover revenues. Home entertainment revenues
declined 37%.
***
Quarterly operating income increased 20% to $960 million in the
quarter. Media Networks adjusted operating income increased 8%,
reflecting higher revenues partially offset by increased programming
investment and distribution costs. Filmed Entertainment generated an
adjusted operating loss of $74 million, a 47% improvement over the prior
17
year quarter, reflecting lower expenses associated with the reduced

number of theatrical releases in the current quarter.
Quarterly adjusted net earnings from continuing operations

attributable to Viacom increased 19% to $547 million, principally driven
by higher operating income and a lower effective tax rate. Adjusted
diluted earnings per share from continuing operations for the quarter were
$1.20, a 32% improvement from the prior year's comparable quarter.
Stock Repurchase Program
For the quarter ended December 31, 2013, Viacom repurchased 10.3
million shares under its stock repurchase program, for an aggregate
purchase price of $850 million. As of January 29, 2014, Viacom had $8.87
billion remaining in its $20 billion stock repurchase program. As of
December 31, 2013, Viacom had 440 million shares of common stock
outstanding.
50.
Also, on January 30, 2014, Defendants caused the Company to file a Form
10-Q with the SEC, which repeated the financial results provided in the January 30, 2014
press release. The Form 10-Q was signed by defendants Davis and Gill-Charest, and also
contained certifications required by The Sarbanes-Oxley Act of 2002 ("SOX
Certifications") made by defendants Dauman and Davis, which stated as follows:
I, [Dauman/Davis], certify that:
1.
Inc.;
I have reviewed this Quarterly Report on Form I 0-Q of Viacom
2.
Based on my knowledge, this report does not contain any untrue

statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other

financial infonnation included in this report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this report;
4.
The registrant's other certifying officer and I are responsible for

18
establishing and maintaining disclosure controls and procedures

(as defined in Exchange Act Rules 13a-l 5(e) and l 5d-l 5(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules l 3a-l 5(t) and l Sd-l S(t)) for the registrant and have:
5.
a.
Designed such disclosure controls and procedures, or

caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material
information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in
which this report is being prepared;
b.
Designed such internal control over financial reporting, or

caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
c.
Evaluated the effectiveness of the registrant's disclosure

controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant's

internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely
to materially affect, the registrant' s internal control over
financial reporting; and
The registrant's other certifying officer and I have disclosed, based

on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the
equivalent functions):
a.
All significant deficiencies and material weaknesses in the

design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
19
b.
Any fraud, whether or not material, that involves

management or other employees who have a significant
role in the registrant's internal control over financial
reporting.
***
1.
the Report fully complies with the requirements of section 13{a) or

15(d) of the Securities Exchange Act of 1934; and
2.
the information contained in the Report fairly presents, in all

material respects, the financial condition and results of operations
of the Company.
2.
51.
Second Quarter 2014 Financial Results
On May 1, 2014, Defendants caused the Company to issue a press release
entitled "Viacom Reports Results for Second Quarter 2014," which announced the
Company's financial results for the second quarter of 2014. The May 1, 2014 press
release stated, in pertinent part:
New York, NY, May 1, 2014 - Viacom Inc. (NASDAQ: VIAB, VIA)
today reported revenue, earnings and EPS growth for the fiscal second
quarter of 2014, ended March 31, 2014. Revenues of $3.17 billion
increased 1%, reflecting higher affiliate fees and advertising revenues,
partially offset by declines in Filmed Entertainment. Operating income
rose 3% to $872 million, primarily due to higher Media Networks
revenues. Adjusted net earnings from continuing operations attributable to
Viacom increased to $482 million, and adjusted diluted earnings per share
from continuing operations were up 13% to $1.08 per diluted share.
Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom's
solid results were driven by pioneering content and outstanding leadership.
Our management team is committed to building on this success and
capturing the exciting long-term opportunities in our industry."
"Viacom posted another strong quarter, resulting from our relentless focus
on developing quality creative content and delivering it around the world
in innovative ways. Our Media Networks remain in high demand,
commanding a premium position with advertisers and achieving
significant continued growth with both traditional and emerging
20
distribution partners. In addition, Paramount kicked off its highlyanticipated summer slate with the successful release of Noah at the end of
the quarter, to be followed by Transformers: Age of Extinction, Hercules
and Teenage Mutant Ninja Turtles in the coming months.
"In the first half of the fiscal year, Viacom returned another $2 billion to
investors through our share buyback and dividends, highlighting our
continued focus on delivering value to shareholders."
***
Quarterly revenues were $3.17 billion for the quarter. Media Networks
revenues increased 6%, to $2.38 billion in the quarter, driven by higher
affiliate fees and advertising revenues. Domestic affiliate revenues grew
11 %, driven by rate increases, and worldwide affiliate revenues increased
l 0% in the quarter. Domestic advertising revenues increased 2%.
Worldwide advertising revenues increased 3% to $1.12 billion in the
quarter. Filmed Entertainment revenues declined 12% to $831 million,
primarily due to lower carryover revenues from prior period releases.
Theatrical revenues decreased 17% from the prior year, as strong domestic
carryover revenues from The Wolf of Wall Street were more than offset
by lower international theatrical revenues. Worldwide home entertainment
revenues decreased 30%, primarily driven by fewer current quarter
releases and a decrease in carryover revenues.
***
Quarterly operating income increased 3% to $872 million in the quarter.
Media Networks adjusted operating income increased 9%, reflecting
higher revenues partially offset by an increase in programming expenses.
Filmed Entertainment adjusted operating income declined to $11 million
reflecting the number and mix of current fiscal year releases.
attributable to Viacom increased to $482 million. Adjusted diluted
earnings per share from continuing operations for the quarter were $1.08,
a 13% improvement from the prior year's comparable quarter.
For the quarter ended March 31, 2014, Viacom repurchased 10.0 million
shares under its stock repurchase program, for an aggregate purchase price
of $850 million. As of April 30, 2014, Viacom had $8.01 billion
remaining in its $20 billion stock repurchase program. As of March 31,
2014, Viacom had 432 million shares of common stock outstanding.
21
52.
Also, on May 1, 2014, Defendants caused the Company to file a Form 10-
Q with the SEC, which repeated the financial results provided in the May 1, 2014 press
release. The Form 10-Q was signed by defendants Davis and Gill-Charest, and contained
SOX Certifications made by defendants Dauman and Davis which were substantially
similar to those quoted above.
3.
53.
Third Quarter 2014 Financial Results
On August 6, 2014, Defendants caused the Company to issue a press
release entitled "Viacom Reports Results for Third Quarter 2014," which announced the
Company's financial results for the third quarter of 2014. The August 6, 2014 press
release stated, in pertinent part:
New York, NY, August 6, 2014 - Viacom Inc. (NASDAQ: VIAB, VIA)
today reported results for the fiscal third quarter of 2014, ended June 30,
2014. Revenues were $3.42 billion, a decrease of 7%, with declines in
Filmed Entertainment partially offset by an increase in Media Networks
revenues. Operating income was $1.09 billion, as gains in Filmed
Entertainment were offset by lower Media Networks operating income.
Adjusted net earnings from continuing operations attributable to Viacom
decreased to $618 million, and adjusted diluted earnings per share from
continuing operations were up 10% to $1.42 per diluted share.
Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom
continues its mission to develop the world's most exciting media brands
and compelling entertainment. As the industry landscape continues to
evolve, our business is very well positioned."
"It was a solid quarter for Viacom. We delivered nearly $1 billion to
shareholders through buybacks and dividends and continued to build on
our success in creating outstanding content and focused brands that
connect deeply with audiences across all platforms. Our Media Networks
distribution relationships continue to expand, providing broader
opportunities for fans to enjoy Viacom's content. Successful series and
high-profile event programming on our networks create powerful
experiences for audiences and valuable opportunities for advertisers, while
driving industry-leading social engagement. We announced our agreement
to acquire major British broadcaster Channel 5 in the quarter, which will
22
increase our presence in an important global market. Paramount is poised

for an outstanding summer, kicked off by Transfonners: Age of Extinction
which is already a record-setting global hit and the number one film of all
time in China. In addition, the highly-anticipated Teenage Mutant Ninja
Turtles premieres Friday for fans around the world."
***
Quarterly revenues were $3.42 billion. Media Networks revenues
increased l %, to $2.59 billion, driven by higher advertising revenues;
which rose 1% domestically and 2% on a worldwide basis. Worldwide
affiliate fee revenues were flat in the quarter, as rate increases were more
than offset by lower revenues from certain distribution arrangements
which are affected by the timing of available programming. Excluding the
impact of these distribution arrangements, the domestic affiliate revenue
growth rate in the quarter was in the low double-digits. Filmed
Entertainment revenues declined to $856 million, driven by a 43%
decrease in theatrical revenues due to the number and timing of releases.
Worldwide home entertainment revenues decreased 24%, impacted by a
decline in revenue from carryover and current quarter titles.
***
Operating income was $1.09 billion in the quarter. Media Networks
adjusted operating income decreased 3%, reflecting lower revenues from
certain distribution arrangements and an increase in programming
expense. Filmed Entertainment adjusted operating income increased by
$38 million, reflecting lower film and distribution expenses.
attributable to Viacom decreased 3% to $618 million. Adjusted diluted
earnings per share from continuing operations for the quarter were $1.42,
a l 0% increase from the prior year's comparable quarter.
For the quarter ended June 30, 2014, Viacom repurchased 10.0 million
shares under its stock repurchase program, for an aggregate purchase price
of $850 million. As of August 5, 2014, Viacom had $7.15 billion
remaining in its $20 billion stock repurchase program. As of June 30,
2014, Viacom had 424 million shares of common stock outstanding.
54.
Also, on August 6, 2014, Defendants caused the Company to file a Form
10-Q with the SEC, which repeated the financial results provided in the August 6, 2014
23
press release. The Form l 0-Q was signed by defendants Davis and Gill-Charest, and
contained SOX Certifications made by defendants Dauman and Davis substantially
4.
55.
Fourth Quarter and Full Year 2014 Financial Results
On November 13, 2014, Defendants caused the Company to issue a press
release entitled "Viacom Reports Record Profit for Fiscal 2014," which announced the
Company's financial results for both the fourth quarter of2014 and for the full fiscal year
of 2014. The November 13, 2014 press release stated, in pertinent part:
New York, NY, November 13, 2014 - Viacom Inc. (NASDAQ: VIAB,
VIA) today reported record results for the fiscal year ended September 30,
2014, driven by gains in its Media Networks segment. Results for the
fourth quarter of 2014 reflected a 9% increase in revenues to $3.99 billion,
adjusted net earnings from continuing operations attributable to Viacom of
$729 million and adjusted diluted earnings per share of $1. 71, an increase
of 10%.
Revenues for the full fiscal year were $13. 78 billion, substantially
unchanged from the previous year, as higher Media Networks revenues
were offset by lower Filmed Entertainment revenues. Full-year adjusted
operating income grew 5% to a record $4.13 billion and adjusted net
earnings from continuing operations attributable to Viacom rose 3% to
$2.38 billion. Full-year adjusted diluted earnings per share from
continuing operations increased 15% to an all-time high of $5.40.
***
Sumner M. Redstone, Executive Chairman of Viacom, said, "As we
conclude another fiscal year, Viacom remains well-positioned as a creative
leader with many of the world' s most innovative media properties and best
entertainment brands."
"Viacom's record financial results in 2014 demonstrate the strength of our
brands and continuing momentum for our strategy of investing in
creativity, with a relentless focus on growing demographic and geographic
markets and embracing new distribution platforms. Our Media Networks
achieved continued growth in the fourth quarter and the fiscal year.
Viacom's affiliate distribution business remains a reliable engine for high-
24
margin revenue expansion and provides significant opportunities to build

new consumer experiences with long term distributors and emerging
technology partners alike. Despite ratings challenges and uncertainty in
the scatter advertising market at the close of the year, Viacom's
advertising revenues grew in fiscal 2014, as our creative and marketing
teams rolled out innovative new offerings. We also continue to take the
lead in defining the next generation of measurement tools that will more
fully capture the growing multiplatform engagement of our audiences. Our
September acquisition of Channel 5 has already made a positive impact on
our business, and points the way to further significant long-term growth of
our international business. Paramount delivered the top movie of 2014 and
the largest-ever theatrical release in China - Transformers: Age of
Extinction - and the studio successfully launched another long-term
franchise with the Teenage Mutant Ninja Turtles.
"This performance allowed us to continue the strong delivery of value
directly to investors. Over the past five years, Viacom has returned $16. l
billion to shareholders."
Quarterly revenues increased 9% to $3.99 billion. Media Networks

revenues grew 8% to $2.66 billion, principally due to growth in affiliate
fees. Domestic and worldwide affiliate revenues increased 21 % and 22%,
respectively, primarily due to rate increases and higher revenues related to
the timing of available programming from certain distribution agreements.
Excluding the impact of these arrangements, the domestic affiliate revenue
growth rate was in the high single digits. Domestic advertising revenues
declined 5%, reflecting ratings challenges. Worldwide advertising
revenues decreased 2%, reflecting the domestic decline partially offset by
a 33% increase in international advertising revenues. International
advertising revenues benefited from the acquisition of Channel 5 on
September 10, 2014.
Filmed Entertainment revenues grew 12% to $1.36 billion, due to growth
in theatrical revenues. Strong results from current quarter releases and the
carryover performance of Transformers: Age of Extinction drove
Theatrical revenues up 226% to $557 million. Home entertainment
revenues declined 38%, reflecting two fewer releases in the current
quarter.
Full-year revenues were $13.78 billion, substantially flat compared to the
prior fiscal year. Media Networks revenues rose 5% to $10.17 billion,
reflecting a 10% increase in affiliate fees and a 2% gain in advertising
revenues driven by higher international advertising revenues. Filmed
Entertainment revenues decreased 13%, principally due to lower revenues
25
across the distribution windows reflecting the number and mix of films.
***
Quarterly adjusted operating income was $1.21 billion, flat compared
to the prior year. Media Networks adjusted operating income rose 5% due
to higher affiliate revenues, partially offset by increased expenses. Filmed
Entertainment adjusted operating income declined 27%, reflecting the
contribution of Marvel distribution rights sales in the fourth quarter of
2013. Corporate expenses declined by 21 %, due to lower deferred
compensation costs.
Full-year adjusted operating income increased 5%, to $4.13 billion, a
record for the company. Media Networks adjusted operating income
increased $175 million, or 4%, driven by higher revenues partially offset
by an increase in expenses. Filmed Entertainment adjusted operating
income decreased $29 million, reflecting the contribution of Marvel
distribution rights sales in the prior year. Corporate expenses decreased
10% in the period, primarily due to lower deferred compensation costs.
attributable to Viacom were down slightly to $729 million, driven by an
increase in interest expense. Adjusted diluted earnings per share from
continuing operations for the quarter were $1. 71, a 10% increase from the
prior year's comparable quarter.
Full-year adjusted net earnings from continuing operations
attributable to Viacom increased 3%, to $2.38 billion. The increase
resulted from higher adjusted operating income, higher equity in net
earnings of investee companies and a lower effective income tax rate,
partially offset by an increase in interest expense and higher net earnings
attributable to noncontrolling interests. Adjusted diluted earnings per share
from continuing operations increased 15% to $5.40.
For the quarter ended September 30, 2014, Viacom repurchased 10.4
purchase price of $850 million. As of November 12, 2014, Viacom had
$6.24 billion remaining in its $20 billion stock repurchase program. As of
September 30, 2014, Viacom had 414 million shares of common stock
outstanding.
56.
Also, on November 13, 2014, Defendants caused the Company to file the
2014 Form 10-K with the SEC, which repeated the financial results provided in the
26
November 13, 2014 press release.
The 2014 Form 10-K was signed by defendants
Dauman, Dooley, Davis, Redstone, S. Redstone, Abrams, Sorrell, Kraft, McGarvie,

Norville, Phillips, Salerno, Gill-Charest and Schwartz, and contained SOX Certifications
made by defendants Dauman and Davis which were substantially similar to those quoted
above.
5.
57.
First Quarter 2015 Financial Results
On January 29, 2015, Defendants caused the Company to issue a press
release entitled "Viacom Reports Higher Revenue and Record Earnings Per Share for
December Quarter," which announced the Company's financial results for the first
quarter of2015. The January 29, 2015 press release stated, in pertinent part:
Sumner M. Redstone, Executive Chairman of Viacom, said, "Viacom's
powerful entertainment brands continue to lead the way in reaching global
audiences with groundbreaking content. Our outstanding management
team has positioned Viacom for continued success."
"Viacom's focus on developing popular franchise properties and
constantly expanding our growing international presence drove solid top
line results and record earnings per share this quarter. We continued to
deliver increased revenues in our media networks operations driven by
steady growth in affiliate revenues, and also benefited from Paramount
Pictures' Oscar-nominated Interstellar and our very successful companywide franchise, Teenage Mutant Ninja Turtles.
The media business is evolving faster than ever, but our mission remains
unchanged: to continually develop more and better entertainment
programming and deliver it to our engaged audiences on every screen and
on every platform worldwide. To maintain our leadership position, we will
continue to innovate and to manage our business as effectively and
efficiently as possible, embracing change and adopting new technologies
to better measure and monetize our content and meet industry-wide
challenges. Viacom is financially strong and extremely well positioned for
the future, with the talent and the creativity to grow our core business and
continue to deliver increasing value to our investors."
***
27
Quarterly revenues rose 5% to $3.34 billion, driven by increases across

the business. Media Networks revenues increased 4% to $2.65 billion, due
to higher affiliate fees and advertising revenues. Domestic affiliate
revenues rose 8% and worldwide affiliate revenues grew 6%, primarily
due to rate increases. Domestic advertising revenues declined 6%,
reflecting lower ratings. Worldwide advertising revenues rose 3%,
reflecting a 60% increase in international advertising revenues driven by
contributions from Channel 5, which was acquired in September 2014.
The 4% increase in Media Networks revenues includes an unfavorable 1%
impact of foreign exchange.
Filmed Entertainment revenues grew 6% to $720 million. Released
theatrically in the fiscal fourth quarter of 2014, Teenage Mutant Ninja
Turtles remained a strong performer in the current quarter, complementing
the current quarter releases and helping to drive a 6% increase in theatrical
revenues and a 16% gain in home entertainment revenues. Home
entertainment revenues reflect two film releases in the current quarter,
compared with none in the same prior year period. License fees declined
9% resulting from the mix of available titles.
***
Quarterly adjusted operating income of $959 million was flat versus the
prior year. Media Networks adjusted operating income declined l % due to
higher programming expenses partially offset by revenue gains. Excluding
the impact of foreign exchange, Media Networks adjusted operating
income was flat for the quarter. Filmed Entertainment generated an
adjusted operating loss of $60 million, an improvement of 19%, as higher
revenues more than offset increases in film and distribution expenses.
Quarterly adjusted net earnings attributable to Viacom declined 2%,
principally due to the 4% negative impact of foreign currency exchange
rates, as well as higher interest costs. Adjusted diluted earnings per share
for the quarter increased 8% to $1 .29, a record for the fiscal quarter ended
December 31. Foreign exchange had an unfavorable $0.05 impact on
adjusted diluted EPS.
For the quarter ended December 31 , 2014, Viacom repurchased 10.2
purchase price of$750 million. As of January 28, 2015, Viacom had $5.62
billion remaining in its $20 billion stock repurchase program. As of
December 31, 2014, Viacom had 407 million shares of common stock
outstanding.
28
58.
Also, on January 29, 2015, Defendants caused the Company to file a Form
10-Q with the SEC. which repeated the financial results provided in the January 29, 2015
press release. The Form 10-Q was signed by defendants Davis and Gill-Charest. and
contained SOX Certifications made by Dauman and Davis which were substantially
59.
The financial results (that Defendants caused the Company to disseminate
to shareholders and file with the SEC during the Relevant Period) were false and/or
misleading because, inter alia: (1) they failed to disclose that the Company's
programming was significantly underperforming; (2) they failed to disclose that in light
of this underperformance, the Company was going to be forced to make workforce
reductions and faced accelerated amortization of programming expenses; (3) they failed
to disclose that as a result of the foregoing, the Company was going to be forced to
"pause" its $20 billion stock repurchase program that had been in operation for years; and
(4) they failed to disclose that the Company, under the Defendants' direction, was
operating in violation of the laws of the EU.
60.
Defendants' breaches ultimately resulted in the Company being forced to
take a pre-tax charge of nearly $785 millio11, as alleged herein. Thus, as a result of
Defendants' breaches, the Company has been (and continues to be) damaged.
C.
The Truth Begins to Emerge
61.
On April 6, 20 I 5, Defendants caused the Company to issue the April 6111
Press Release, which was attached to a Form 8-K that was filed with the SEC. The April
61h Press Release revealed that the Company, under Defendants' direction and on their
watch, was being forced to recognize a pre-tax charge of nearly $785 million.
29
Defendants further disclosed that of the nearly $785 million, $430 million reflected the
impact of write-downs of underperforming programming and the remainder related to
costs associated with workforce reductions, as well as accelerated amortization of
programming expenses associated with a change in the Company's ultimate revenue
projections for certain original programming genres.
62.
Additionally, the April 61h Press Release revealed that as a result of
Defendants' breaches, "Viacom will temporarily pause share purchases under its current
$20 billion stock repurchase program," which had been in existence for years prior. The
April 61h Press Release stated, in pertinent part:
NEW YORK, April 6, 2015 - Viacom Inc. (NASDAQ: VIAB, VIA) today
announced the elements of its strategic realignment, including initiatives
designed to promote greater cross-brand collaboration, focus on new
growth areas, and improve operational efficiency and financial
performance.
Following a company-wide review across its worldwide Media Networks,
Filmed Entertainment operations and corporate functions, Viacom is
implementing significant strategic and operational improvements,
including reorganizing three of its domestic network groups into two new
organizations. The new structure realigns sales, marketing, creative and
support functions, increases efficiencies in program and product
development, enhances opportunities to share expertise, and promotes
greater cross-marketing and cross channel programming activity. The
Company is also reallocating resources to expand its capabilities in critical
business areas including data analysis, technology development and
consumer insights, reflecting the rapidly changing media marketplace,
shifting consumer behavior and evolving measurement practices.
President and CEO Philippe Dauman said, "Viacom has a powerful
combination of world-class brands and popular content that is driving our
business across the globe. We will continue to lead the way in connecting
our vibrant brands to audiences through both traditional and innovative
new platforms. This strategic realignment, which is largely completed,
will allow us to sharpen our focus on driving long-term growth in a
rapidly changing industry. We will transition rapidly into the future,
generate substantial cost savings and continue to increase our investment
in original programming to bring our audiences great content in new and
30
groundbreaking ways."
In connection with the realignment, Viacom will recognize a pre-tax
charge in the second fiscal quarter of 2015 of approximately $785 million.
The charge reflects the impact of write-downs of underperforming
programming, including the abandonment of select acquired titles, as well
as costs associated with workforce reductions. The charge also reflects
accelerated amortization of programming expenses associated with a
change in the Company's ultimate revenue projections for certain original
programming genres that have been impacted by changing media
consumption habits.
The initiatives are expected to provide ongoing annual savings of
approximately $350 million. The savings in fiscal 2015 are expected to be
approximately $175 million.
In light of these actions and previously discussed strategic acquisitions
anticipated in the current fiscal year that could total approximately $400
million, Viacom will temporarily pause share purchases under its current
$20 billion stock repurchase program in order to stay within its target
leverage ratio. The repurchase program has returned $15 billion to
shareholders since its inception in October 2010, including $1.5 billion in
the first half of fiscal 2015. The Company anticipates resuming stock
repurchases no later than October 2015, when it begins its next fiscal year.
Mr. Dauman added, "We remain steadfastly committed to returning
capital to shareholders through stock buybacks as well as our ongoing
dividend program. This temporary pause reflects our history of sound
financial management and our commitment to operating within Viacom's
target leverage ratio."
Viacom will report results for the fiscal second quarter ended March 31,
on April 30, 2015.
63.
Predictably, the financial press was not kind upon learning that the
Company would be forced to take a nearly $785 million charge and halt its long-standing
stock repurchase program. For example, an April 7, 2015 Financial Times article entitled
"Viacom Punished After Taking $785m Charge" reported that the Company market
valuation 1/ecli11ed by 11early $500 millio11 immediately after tile iss11a11ce of tile April 61h
Press Release.
31
64.
Additionally, an April 7, 2015 Bloomberg article entitled "Viacom Halts
Buybacks, Sees $785 Million Restructuring Costs" quoted Bloomberg Intelligence

analyst, Paul Sweeney, as stating that "(p]ersistent ratings weakness across [Viacom's)
networks, job cuts, restricting charges and now a suspension of the buyback represent a
distressing trend for investors." The April 7, 2015 Bloomberg article further stated, in
pertinent part:
Viacom Inc., the media company controlled by billionaire Sumner
Redstone, is suspending stock buybacks for as long as six months to pay
for a restructuring and acquisitions.
The company said it will record a $785 million second-quarter charge to
write down TV shows including "CSI," "Community" and "30 Rock," and
pay for job cuts. New York-based Viacom expects to resume buybacks,
which totaled $1.5 billion in the first half of the fiscal year, by the start of
its new year in October, according to a statement Monday.
The owner of Comedy Central, Nickelodeon and MTV is cutting jobs to
save a targeted $350 million a year, while still investing in areas that can
spur growth. Chief Executive Officer Philippe Dauman, grappling with a
drop in ratings and advertising, merged three U.S. network groups into
two in February. The company on Monday reiterated plans for as much as
$400 million in acquisitions by September.
"The pressure is building on Philippe Dauman to tum things around," said
Paul Sweeney, an analyst at Bloomberg Intelligence. "Persistent ratings
weakness across it networks, job cuts, restructuring charges and now a
suspension of the buyback represent a distressing trend for investors."
Dauman said in the statement that the pause in buybacks reflected a
commitment to operating within Viacom's target leverage ratio. The
restructuring is largely completed, the company said.
Job Cuts
Details of job cuts have trickled out over the past several months. The
company filed a notice in New York in March saying it was firing 236
people in the state. Cuts at Viacom's Los Angeles-based Paramount
Pictures totaled fewer than 40, according to a person with knowledge of
the matter who sought anonymity because the numbers aren't being made
public.
32
Viacom had 9,900 employees at the end of fiscal 2014.

The restructuring was a reaction to "shifting consumer behavior and
evolving measurement practices," according to the statement. Resources
are being reallocated to areas such as data analysis and technology
development.
"We will transition rapidly into the future, generate substantial cost
savings and continue to increase our investment in original programming,"
Dauman said.
In February, Viacom merged its three domestic cable-network groups into
two, Viacom Music & Entertainment Group and a Viacom Kids & Family
Group.
The shift away from linear TV has lessened the value of acquired reruns
that air on cable networks owned by Viacom. Ratings for its kids'
channels, such as Nickelodeon, have been falling as consumers tum to
Netflix Inc. and other online outlets.
While the charge is larger than expected, the savings could increase
earnings in Viacom's next fiscal year, Tuna Amobi, equity analyst at S&P
Capital IQ, said in an interview.
Viacom, which declined 14 percent last year, has lost another 8.8 percent
in 2015. The Class B shares fell 2 percent to $67.26 at 1:27 p.m. in New
York.
65.
On April 30, 2015, Defendants caused the Company to issue its quarterly
report on Form 10-Q for the first quarter of 2015. Therein, Defendants provided more
details regarding the charges that the Company was being forced to take. The Form 10-Q
set forth, in pertinent part:
Following a company-wide review across our worldwide Media
Networks, Filmed Entertainment operations and corporate functions, we
are implementing significant strategic and operational improvements. This
includes reorganizing three of our operating segments (Music,
Entertainment and Nickelodeon) into two new segments (Music &
Entertainment and Kids & Family). The new structure realigns sales,
marketing, creative and support functions, increases efficiencies in
program and product development, enhances opportunities to share
expertise, and promotes greater cross-marketing and cross channel
programming activity. We are also reallocating resources to expand our
33
capabilities in critical business areas including data analysis, technology

development and consumer insights, reflecting the rapidly changing media
marketplace, shifting consumer behavior and evolving measurement
practices. In connection with the strategic realignment, we recognized a
pre-tax charge of $784 million in the quarter ending March 31, 2015,
reflecting $578 million of programming charges, of which $432 million
reflect write-downs, and a $206 million restructuring charge associated
with workforce reductions. The programming charges are included within
Operating expenses in the Consolidated Statement of Earnings.
Media Networks recognized programming charges of $411 million for the
write-down of underperfonning programming, including the abandonment
of select acquired titles, and $123 million of accelerated amortization of
programming expenses associated with a change in our ultimate revenue
projections for certain original programming genres that have been
impacted by changing media consumption habits. Filmed Entertainment
recognized charges of $21 million for the write-down of certain films not
yet released and $23 million related to the abandonment of development
projects. The strategic realignment is largely complete and we anticipate
that a majority of the severance will be paid by March 31, 2016.
66.
Regarding the effects on the Company's operating income and other
financial metrics that the nearly $785 million charge had inflicted, the April 30, 2015
Form 10-Q stated, in pertinent part:
Operating Income
Adjusted operating income decreased $50 million, or 6%, to $822 million
in the quarter. Media Networks adjusted operating income declined $46
million, reflecting an increase in programming and promotional expenses,
partially offset by higher revenues, and Filmed Entertainment adjusted
operating income declined $I 0 million due to the number and mix of
available titles in the television licensing windows. Adjusted results
exclude the impact of restructuring and programming charges totaling
$784 million. Including the impact of the restructuring and programming
charges, operating income decreased $834 million, or 96%.
Adjusted operating income decreased $51 million, or 3%, to $1.781 billion
in the six months. Media Networks adjusted operating income declined
$56 million, driven by an increase in programming and promotional
expenses partially offset by higher revenues. Filmed Entertainment
generated an adjusted operating loss of $59 million in the six months,
compared to an adjusted operating loss of $63 million in the prior period.
Adjusted results exclude the impact of restructuring and programming
34
charges totaling $784 million and a non-cash pension settlement loss of

$24 million. Including the impact of the restructuring and programming
charges and pension settlement loss, operating income decreased $859
million, or 47%.
D.
Matters Have Continued to Worsen for the Company
67.
In the aftermath of Defendants' illicit activities, which ultimately caused
the Company to take a nearly $785 million charge, matters have only continued to
deteriorate for the Company. For example, in July 2015, EU regulators filed formal
charges against Viacom's subsidiary, Paramount, over alleged illegal licensing
agreements. The EU accused Paramount and five other studios of violating competition
laws by using clauses that restrict access to the services of Sky outside Britain.
68.
On July 23, 2015, The Wall Street Journal ("WSJ') published an article
entitled 44EU Files Antitrust Charges Against U.S. Film Studios," which reported on the
EU's charges. The WSJ article set forth, in relevant part:
Europe's antitrust regulator took aim at Hollywood on Thursday, filing
formal charges against six major U.S. film studios and pay-TV broadcaster
Sky UK Ltd. over alleged illegal licensing agreements.
The European Union accused the companies of violating competition laws
by using clauses that restrict access to Sky's services outside Britain, in a
move that could recast how pay-TV is sold and viewed in Europe.
The six studios are Walt Disney Co. 's Disney, Comcast Corp.'s
NBCUniversal, Viacom Inc.'s Paramount Pictures, Sony Corp.'s Sony
Pictures Entertainment Inc., 21 Century Fox's Twentieth Century Fox and
Time Warner Inc. 's Warner Bros. Entertainment.
The charges come amid a broader push by the European Union to
eradicate barriers to a single market for digital services in the region.
Regulators are focusing in particular on eliminating 4 'geo-blocking,"
where companies restrict access to films or other online content outside a
particular licensed territory.
The European Commission, the bloc's top antitrust authority, said
Thursday that contracts between Sky and the six studios may have
35
prevented Sky from offering its U.K. and Irish pay-TV services to EU
consumers elsewhere. If that preliminary view is confirmed, "the clauses
would constitute a serious violation of EU rules that prohibit
anticompetitive agreements," the EU said.
Sky said it had received the commission's charge sheet and would
"respond in due course."
In a strongly worded statement, Disney hit back at the EU's move. The
studio said its current approach "supports local creative industries, local
digital and broadcast partners and most importantly consumers." It said it
would "vigorously" oppose the EU's analysis, which it said was
"destructive of consumer value."
21st Century Fox declined to comment. 21st Century Fox was until mid2013 part of the same company as Wall Street Journal owner News Corp.
Sky is 39%-owned by 21st Century Fox.
NBCUniversal said it was "communicating constructively" with the
European Commission. Warner Bros. said it was cooperating with the
investigation. The other studios didn't respond to a request for comment.
"European consumers want to watch the pay-TV channels of their choice
regardless of where they live or travel in the EU," said Margrethe
Vestager, the EU's antitrust chief. "Our investigation shows that they
cannot do this today."
If pay-television barriers between European countries were to fall, it could

complicate the business models of studios and independents producers,
which have long counted on selling the rights to their movies country-bycountry, with certain titles being more valuable in some European nations
than in others.
In Europe, U.S. film studios typically license audiovisual content, such as
films, to a single pay-TV broadcaster in each country, or to several
countries that share a common language.
The companies involved now have a chance to respond to the EU's
concerns before Brussels reaches a final decision, which can then be
appealed to the EU's top courts in Luxembourg.
The EU opened a formal investigation 18 months ago to examine licensing
agreements between major studios and the biggest European pay-TV
broadcasters, including British Sky Broadcasting of the U.K., now known
as Sky UK Ltd., Italy's Sky Italia, Sky Deutschland of Germany, Vivendi
SA's Canal Plus of France, and DTS of Spain. (Sky Italia and the majority
of Sky Deutschland are owned by Sky UK Ltd.)
36
Regulators were concerned that clauses granting ''absolute territorial

protection" to broadcasters might prevent them from providing services
across national borders.
The EU said its investigation had identified clauses that require Sky to
block access to films through its online or satellite pay-TV services to
consumers outside the U.K. and Ireland. Those clauses "eliminate crossborder competition between pay-TV broadcasters and partition the internal
market along national borders," the EU said.
Brussels continues to investigate licensing agreements in other EU
countries, the commission said. The EU can fine firms up to 10% of their
global annual revenues for violating its antitrust laws, and require changes
to their business practices. In practice, fines have been far lower.
Policy makers hope unifying the EU's fragmented digital market will
spawn European digital giants to rival Google Inc. and Facebook Inc.
In May, the EU unveiled its grand plan to achieve that goal. The plan calls
for an overhaul of EU telecommunications rules, reconciling tax and
copyright rules within the 28-nation bloc, and simplifying regulations for
companies that sell goods electronically or send data across European
borders.
The reform of copyright rules aims to ensure that consumers purchasing
online content such as films, music or articles at home can also enjoy them
while traveling across Europe.
There is no legal deadline for the EU to complete antitrust inquiries.
Regulators frequently take many months to consider plaintiffs' arguments
before making a final decision.
Since taking office in November, Ms. Vestager has shown few qualms
about taking on the biggest companies, in the U.S. and elsewhere. In a
single week in April, her agency filed formal charges against Google and
OAO Gazprom, pushing forward with landmark cases that her predecessor
Joaquin Almunia had held back on for years.
69.
On August 6, 2015, Defendants caused the Company to issue its quarterly
report on Form 10-Q for the second quarter of 2015. Therein, Defendants admitted that
the Company's stock repurchase program was still "temporarily paused" and was not
anticipated to be resumed for months. Further, regarding the Company's issues with the
37
EU, Defendants admitted that the "full process, including appeals, could last several
years."
70.
Further, the price of the Company's stock has continued to freefall
throughout the entire Relevant Period. Specifically, the price of the Company's Class B
stock (VIAB) has declined by over 44% from its Relevant Period high of approximately
$88 per share and currently trades for around $49 per share. The dramatic decline in the
Company's stock price is illustrated in the following chart:
..
1.
.. .. J'
: r
cut
_,,.
,,.., ..
71.
(
Jui I U
,._ u
cc
J.111 '"
rx1t
1~
Accordingly, as a result of Defendants' breaches, the Company has been
not only forced to take a nearly $785 million charge, but also it has been forced to
"pause" the Company' s stock repurchase program (which has been in operation for years
prior), and is now the subject of charges brought by EU regulators. Further, as a result of
Defendants' breaches, the Company's stock price has been decimated and shareholder
value has plummeted. Thus, as a result of Defendants' breaches, the Company has been
(and continues to be) damaged.
DERIVATIVE AND DEMAND ALLEGATIONS
72.
Plaintiff brings this action derivatively in the right and for the benefit
38
Viacom to redress the breaches of fiduciary duty and other violations of law by
Defendants.
73.
Plaintiff will adequately and fairly represent the interests of Viacom and
its shareholders in enforcing and prosecuting its rights.

74.
On April 13, 2015, Plaintiff issued the Demand on the Board to investigate
and commence an action against certain current and/or former directors and executive
officers of the Company related to the Company's announcement that it was going to be
forced to take a nearly $785 million charge. See Exhibit A.
75.
On April 28, 2015, Plaintifrs counsel received a letter from Ms. Aaron of
the law firm Shearman & Sterling LLP, which stated that ..[b]efore the Company' s Board
of Directors (the "Board"), or its counsel, responds to the Demand, both the Company
and the Board must be satisfied that Mr. Casey currently owns Viacom stock and owned
Viacom stock continuously during the Period of time referred to in the Demand.
Accordingly, please forward to us appropriate proof of your client's continuous
ownership of Viacom stock." See Exhibit B.
76.
Even though the April 28, 2015 letter provided no legal authority to
condition a response and/or investigation of the Demand on the receipt of proof of

Plaintiffs stock holdings, on May 12, 2015, Plaintiff provided Ms. Aaron with redacted
proof of Plaintiff's ownership of Viacom stock.
77.
After numerous other correspondences with Ms. Aaron regarding the
investigation of the original Demand, on July 27, 2015, Plaintiff issued the Supplemental
Demand on the Board to investigate and commence an action against certain current
and/or fonner directors and executive officers of the Company in connection with EU
39
regulator's investigation into and charges regarding the Company's anti-competitive

activities in the EU. See Exhibit C.
78.
On August 11, 2015, Plaintiffs counsel received a letter from Mr.
Micheletti of Skadden, which revealed that Skadden had "been retained by the Audit
Committee of the Board of Directors... to assist in connection with the consideration of
the [Demand] ... "
79.
After numerous correspondences with Mr. Michelleti regarding, inter a/ia,
the Supplemental Demand, on September 15, 2015, Plaintiff's counsel received the
Refusal from Mr. Michelleti, which stated that at "a meeting held on September 10, 21 OS
[sic], the Audit Committee, based on the investigation, unanimously voted to recommend
that the Viacom board reject the Demand" and that "[a]t a subsequently held Viacom
board meeting, the Viacom board considered and agreed with the Audit Committee'
recommendation, and unanimously voted to reject the Demand." See Exhibit D.
80.
The Refusal is most notable not for its contents, but for what it shockingly
lacks - literally any substantive analysis of the claims set forth in the Demand and/or the
Supplemental Demand. Further, outside of bald assertion that the Audit Committee's socalled investigation "revealed no support for the allegations of misconduct raised in the
Demand," the Refusal does not even so much as mention the claims set forth in the
Demand and Supplemental Demand, nor does it provide even the faintest amount of
insight into what the purported investigation entailed.
81.
Accordingly, on September 22, 2015, Plaintiffs counsel was forced to
send another letter to Mr. Michelleti, which south to "obtain clarification and insight" on
numerous parts of the Refusal and the Board's and/or Audit Committee's so-called
40
investigation. See Exhibit E. Specifically, the September 22, 2015 letter required a copy
of all documents reviewed in connection with the demand, a list of any and all witnesses
interviewed as part of the investigation, and a list of all other factors not specifically
listed in the Refusal {which would be none) that the Refusal was based upon.
82.
On September 28, 2015, Mr. Michelleti responded to Plaintiff's September
22, 2015 letter, however his response failed to provide any additional substantive or
procedural insight and wholly ignored Plaintiffs document requests.
See Exhibit F.
Further, while the September 28, 2015 letter appears to try and provide more substantive
insight into the issuance of the Refusal, it still fails to provide even the most basic details
of the so-called "investigation" (i.e., who the Audit Committee even interviewed) or any
substantive legal analysis whatsoever.
83.
Accordingly, given the Board's deliberate and repeated efforts to hide
everything concerning the process (and substance) of Audit Committee's investigation,

Plaintiff is wholly unaware of the substantive reasons regarding why the Refusal was
issued and why the Board has declined to pursue these valuable claims or whether the
process they undertook to purportedly investigate the Demand was adequate and in good
faith. Clearly, the Board's complete disregard of the merits of the claims set forth in the
Demand is improper and demonstrates the Board's lack of diligence and good faith.
Further, the Board's and/or Audit Committee's failure to provide even the most basic
details concerning the scope of the purported investigation renders the Refusal wrongful.
Thus, Plaintiff has been left with no other recourse other than filing this Action and,
given the Board's complete secrecy at every tum, this Action must be allowed to proceed.
41
AS AND FOR A FIRST CAUSE OF ACTION

AGAINST ALL DEFENDANTS FOR BREACH OF FIDUCIARY DUTY FOR
DISSEMINATING FALSE AND MISLEADING INFORMATION
84.
Plaintiff incorporates by reference and realleges each and every allegation
set forth above, as though fully set forth herein.

85.
As alleged in detail herein, each of the Defendants (and particularly the
Audit Committee Defendants) had a duty to ensure that Viacom disseminated accurate,
truthful and complete information to its shareholders.
86.
Defendants violated their fiduciary duties of care, loyalty, and good faith
by causing or allowing the Company to disseminate to Viacom shareholders materially

misleading and inaccurate information through, inter a/ia, SEC filings and other public
statements and disclosures as detailed herein. These actions could not have been a good
faith exercise of prudent business judgment.
87.
As a direct and proximate result of Defendants' foregoing breaches of
fiduciary duties, the Company has suffered significant damages, as alleged herein.
AS AND FOR A SECOND CAUSE OF ACTION

AGAINST ALL DEFENDANTS FOR BREACH OF FIDUCIARY DUTIES
FOR FAILING TO MAINTAIN INTERNAL CONTROLS
88.
Plaintiff incorporates by reference all preceding and subsequent
paragraphs as if fully set forth herein.

89.
As alleged herein, each of the Defendants had a fiduciary duty to, among
other things, ensure that the Company was operated in a lawful manner and to exercise
good faith to ensure that the Company's financial statements were prepared in accordance
with GAAP, and, when put on notice of problems with the Company's business practices
and operations, exercise good faith in taking appropriate action to correct the misconduct
and prevent its recurrence.
42
90.
Defendants willfully ignored the obvious and pervasive problems with
Viacom's internal controls practices and procedures and failed to make a good faith effort
to correct the problems or prevent their recurrence.
91.
As a direct and proximate result of the Defendants' foregoing breaches of
fiduciary duties, the Company has sustained damages.

AS AND FOR A THIRD CAUSE OF ACTION AGAINST ALL DEFENDANTS
FOR UNJUST ENRICHMENT
92.

93.
By their wrongful acts and omissions, the Defendants were unjustly
enriched at the expense of and to the detriment of Viacom.

94.
Plaintiff, as a shareholder and representative of Viacom, seeks restitution
from these Defendants, and each of them, and seeks an order of this Court disgorging all
profits, benefits and other compensation obtained by these Defendants, and each of them,
from their wrongful conduct and fiduciary breaches.
AS AND FOR A FOURTH CAUSE OF ACTION AGAINST ALL DEFENDANTS
FOR ABUSE OF CONTROL
95.
contained above, as though fully set forth herein.

96.
Defendants' misconduct alleged herein constituted an abuse of their ability
to control and influence Viacom, for which they are legally responsible. In particular,
Defendants abused their positions of authority by causing or allowing Viacom to
misrepresent material facts regarding its business practices, financial position and
business prospects.
43
97.
As a direct and proximate result of Defendants' abuse of control, Viacom
has sustained significant damages.

98.
As a result of the misconduct alleged herein, Defendants are liable to the
Company.
99.
Plaintiff, on behalf of Viacom, has no adequate remedy at law.
AS AND FOR A FIFTH CAUSE OF ACTION AGAINST ALL DEFENDANTS

FOR GROSS MISMANAGEMENT
I 00.

101.
Defendants had a duty to Viacom and its shareholders to prudently
supervise, manage and control the operations, business and internal financial accounting
and disclosure controls of Viacom.
102.
Defendants, by their actions and by engaging in the wrongdoing described
herein, abandoned and abdicated their responsibilities and duties with regard to prudently
managing the businesses of Viacom in a manner consistent with the duties imposed upon
them by law. By committing the misconduct alleged herein, Defendants breached their
duties of due care, diligence and candor in the management and administration of
Viacom's affairs and in the use and preservation ofViacom's assets.
103.
During the course of the discharge of their duties, Defendants knew or
recklessly disregarded the unreasonable risks and losses associated with their misconduct,
yet Defendants caused Viacom to engage in the scheme complained of herein which they
knew had an unreasonable risk of damage to Viacom, thus breaching their duties to the
Company. As a result, Defendants grossly mismanaged Viacom.
44
PRAYER FOR RELIEF
WHEREFORE, Plaintiff demands judgment as follows:

A.
Against all Defendants and in favor of the Company for the amount of
damages sustained by the Company as a result of Defendants' breaches of fiduciary

duties;
B.
Directing Viacom to take all necessary actions to reform and improve its
corporate governance and internal procedures to comply with applicable laws and to
protect the Company and its shareholders from a repeat of the damaging events described
herein, including, but not limited to, putting forward for shareholder vote resolutions for
amendments to the Company's By-Laws or Articles of Incorporation and taking such
other action as may be necessary to place before shareholders for a vote a proposal to
strengthen the Board's supervision of operations and develop and implement procedures
for greater shareholder input into the policies and guidelines of the Board;
C.
Awarding to Viacom restitution from Defendants, and each of them, and
ordering disgorgement of all profits, benefits and other compensation obtained by the
Defendants;
D.
Awarding to Plaintiff the costs and disbursements of the action, including
reasonable attorneys' fees, accountants' and experts' fees, costs, and expenses; and
E.
Granting such other and further relief as the Court deems just and proper.
45
JURY DEMAND
Plaintiff demands a trial by jury.
Dated: October 22, 2015
HARWOOD FEFFER LLP
Qtt+D t[ 7U30
-0
Robert I. Harwood
Daniella Quitt
488 Madison A venue, 81h Floor
New York, NY 10022
Phone: (212) 935-7400
Fax: (212) 753-3630
Profy Promisloff & Ciarlanto, P.C.

Jeffrey J. Ciarlanto
Joseph M. Profy
David M. Promisloff
100 N 22"d Street, Unit I 05
Phi ladel phi a, PA 19103
Phone: (215) 259-5156
Fax: (215) 600-2642
Law Office of Alfred G. Yates, Jr.,

P.C.
Alfred G. Yates, Jr.
Gerald L. Rutledge
519 Allegheny Building
429 Forbes Avenue
Pittsburgh, PA 15219
Phone: (412) 391-5164
Fax: (412) 471-1033
Counsel for Plaintiff
46
VIACOM INC. VERIFICATION
I, Robert J. Casey II, hereby verify that I am familiar with the allegations in the
Complaint, that I have authorized the filing .of the Complaint, and that the foregoing
true and correct to the best of my knowledge, information, 119- belief.
~s

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INDEX NO.

FILED: NEW YORK COUNTY CLERK 10/22/2015 04:21 PM

RECEIVED NYSCEF: 10/22/2015

SUPREME COURT OF THE STATE OF NEW YORK

Purchased and filed on:

YOU ARE HEREBY SUMMONED to answer the complaint in this

SEE ATTACHED DEFENDANTS SERVICE LIST

Dated: October 22, 2015

DEFENDANTS SERVICE LIST

SUPREME COURT OF THE STATE OF NEW YORK

JURY TRIAL DEMANDED

Plaintiff Robert J. Casey II ("Plaintiff'), by and through his undersigned

NATURE OF THE ACTION

According to its public filings, the Company is headquartered in New

The Company has media networks that reach

In the Company's public filings, defendants repeatedly touted the

Defendants likewise issued positive financial results and certifications in

original programming genres.

Additionally, the April 61h Press Release revealed that as a result of

Buybacks, Sees $785 Million Restructuring Costs" quoted Bloomberg Intelligence

In the aftermath of defendants' illicit activities, which ultimately caused

The EU accused Paramount and five other studios of

Then, on August 6, 2015, defendants caused the Company to issue its

Accordingly, as a result of Defendants' breaches, the Company has been

Further, the price of the Company's stock has continued to freefall

In light of the foregoing, on April 13, 2015, Plaintiff issued a demand

condition a response and/or investigation of the Demand on the receipt of proof of

After numerous other correspondences with Ms. Aaron regarding the

Next, on August 11, 2015, Plaintiffs counsel received a letter from

After numerous correspondences with Mr. Michelleti regarding, inter alia,

Accordingly, on September 22, 2015, Plaintiffs counsel was forced to

Specifically, the September 22, 2015 letter requested a copy of all

On September 28, 2015, Mr. Michelleti responded to Plaintiffs September

Accordingly, given the Board's deliberate and repeated efforts to hide

everything concerning the process (and substance) of Audit Committee's investigation,

Plaintiff is a current holder of Class B common stock of Viacom and has

continuously held Viacom stock since 1986.

Nominal defendant Viacom is a Delaware corporation with its principal

Defendant Sumner M. Redstone ("Redstone") is a founder of the

Defendant Shari Redstone (''S. Redstone"), daughter of defendant

Defendant George S. Abrams ("Abrams") has served as a director of the

Company since January 1, 2006. In addition, defendant Abrams previously served as a

Defendant Philippe Dauman ("Dauman") has served as the Company's

Defendant Thomas E. Dooley ("Dooley") has served as the Company's

Defendant Robert K. Kraft ("Kraft'') served as a director of the Company

from January 1, 2006 until August 2015.

Defendant Blythe J. McGarvie C'McGarvie") has served as a director of

Defendant Charles E. Phillips, Jr. ("Phillips") has served as a director of

Defendant Frederic V. Salemo ("Salemo") has served as a director of the

Company since January 1, 2006. Previously, defendant Salemo served as a director of

In addition, defendant Salemo has served as a

member of the Audit Committee during the Relevant Period.

Defendant William Schwartz ("Schwartz") has served as a director of the

Company since January I, 2006. Previously, defendant Schwartz served as a director of

Defendant Cristiana Falcone Sorrell ("Sorrell") has served as a director of

the Company since March 21, 2013.

In addition, defendant Sorrell has served as a

member of the Audit Committee during the Relevant Period.

Defendant Deborah Norville ("Norville") has served as a director of the

Company since March 2 I, 2013.

Executive Vice President since November 2012.

Defendant Katherine Gill-Charest ("Gill-Charest") has served as the