AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) made July 29,
\n2011 effective as of January 1, 2011 (the “Effective Date”) between TIME WARNER
\nINC., a Delaware corporation (the “Company”), and John Martin (“You”). You are
\ncurrently employed by the Company pursuant to an Amended and Restated Employment
\nAgreement made April 29, 2010, effective as of January 1, 2010, which amended
\nand superseded an agreement made December 19, 2008, effective as of December 1,
\n2008, and an agreement made December 20, 2007, effective as of January 1, 2008
\n(the “Initial Effective Date”) (the “Prior Agreements”). The Company wishes to
\namend and restate the terms of your employment with the Company and to secure
\nyour services on a full-time basis for the period to and including December 31,
\n2013 on and subject to the terms and conditions set forth in this Agreement, and
\nyou are willing to provide such services on and subject to the terms and
\nconditions set forth in this Agreement. You and the Company therefore agree as
\nfollows: 1. Term of Employment<\/u>. Your “term of employment” as this phrase
\nis used throughout this Agreement shall be for the period beginning on the
\nEffective Date and ending on December 31, 2013 (the “Term Date”), subject,
\nhowever, to earlier termination as set forth in this Agreement. 2.
\nEmployment<\/u>. During the term of employment, you shall serve as Chief
\nFinancial and Administrative Officer of the Company or in such other senior
\nposition as the Company may determine and you shall have the authority,
\nfunctions, duties, powers and responsibilities normally associated with such
\nposition and such additional authority, functions, duties, powers and
\nresponsibilities as may be assigned to you from time to time by the Company
\nconsistent with your senior position with the Company. During the term of
\nemployment, (i) your services shall be rendered on a substantially full-time,
\nexclusive basis and you will apply on a full-time basis all of your skill and
\nexperience to the performance of your duties, (ii) you shall have no other
\nemployment and, without the prior written consent of your manager or other more
\nsenior officer of the Company in your reporting line, no outside business
\nactivities which require the devotion of substantial amounts of your time, (iii)
\nyou shall report to the Chief Executive Officer of the Company, and (iv) the
\nplace for the performance of your services shall be the principal executive
\noffices of the Company in the New York City metropolitan area, subject to such
\nreasonable travel as may be required in the performance of your duties. The
\nforegoing shall be subject<\/p>\n
\n
to the Company’s written policies, as in effect from time to time, regarding
\nvacations, holidays, illness and the like. 3. Compensation<\/u>. 3.1 Base
\nSalary<\/u>. The Company shall pay you a base salary at the rate of not less than
\n$1,600,000 per annum during the term of employment (“Base Salary”). The Company
\nshall make a payment promptly following the execution of this Agreement of the
\ndifference between the former salary and the increased salary for the period
\nfrom the Effective Date to the date of execution. The Company may increase, but
\nnot decrease without your consent, your Base Salary during the term of
\nemployment. Base Salary shall be paid in accordance with the Company’s customary
\npayroll practices. 3.2 Bonus<\/u>. In addition to Base Salary, the Company
\ntypically pays its executives an annual cash bonus (“Bonus”). Although your
\nBonus is fully discretionary your target annual Bonus as a percentage of Base
\nSalary is 300%. The Company may increase, but not decrease without your consent,
\nyour target annual Bonus during the term of employment. Each year, your personal
\nperformance will be considered in the context of your executive duties and any
\nindividual goals set for you, and your actual Bonus will be determined based on
\nyour personal performance and the Company’s performance. Your Bonus amount, if
\nany, will be paid to you between January 1 and March 15 of the calendar year
\nimmediately following the performance year in respect of which such Bonus is
\nearned. 3.3 Long Term Incentive Compensation<\/u>. So long as the term of
\nemployment has not terminated the Company annually shall provide you with long
\nterm incentive compensation with a target value of $4,300,000 (based on the
\nvaluation method used by the Company for its senior executives) through a
\ncombination of stock option grants, restricted stock units, performance shares
\nor other equity-based awards, cash-based long-term plans or other components as
\nmay be determined by the Compensation and Human Development Committee of the
\nCompany’s Board of Directors from time to time in its sole discretion. 3.4
\nIndemnification<\/u>. You shall be entitled throughout the term of employment
\n(and after the end of the term of employment, to the extent relating to service
\nduring the term of employment) to the benefit of the indemnification provisions\n<\/p>\n
2<\/p>\n
contained on the Effective Date in the Restated Certificate of Incorporation
\nand By-laws of the Company (not including any amendments or additions after the
\nEffective Date that limit or narrow, but including any that add to or broaden,
\nthe protection afforded to you by those provisions). 3.5. Make-Whole
\nRSUs<\/u>. In accordance with Section 3.5 of the Prior Agreements, on January 2,
\n2008, you were awarded 31,682 restricted stock units (the “Make Whole RSUs,”
\nreflecting the adjustments made to outstanding RSUs in connection with the
\nseparations of Time Warner Cable Inc. and AOL Inc. in 2009 and the 1 for 3
\nreverse stock split that that became effective March 27, 2009. The Make Whole
\nRSUs are reflected in a restricted stock units agreement that provides that the
\nMake Whole RSUs will have accelerated vesting on a pro rated basis on the
\nSeverance Term Date in the event of a termination of employment pursuant to
\nSection 4.2. 4. Termination<\/u>. 4.1 Termination for Cause<\/u>. The
\nCompany may terminate the term of employment and all of the Company’s
\nobligations under this Agreement, other than its obligations set forth below in
\nthis Section 4.1, for “cause”. Termination by the Company for “cause” shall mean
\ntermination because of your (a) conviction (treating a nolo contendere plea as a
\nconviction) of a felony (whether or not any right to appeal has been or may be
\nexercised), (b) willful failure or refusal without proper cause to perform your
\nduties with the Company, including your obligations under this Agreement (other
\nthan any such failure resulting from your incapacity due to physical or mental
\nimpairment), (c) misappropriation, embezzlement or reckless or willful
\ndestruction of Company property, (d) breach of any statutory or common law duty
\nof loyalty to the Company, (e) intentional and improper conduct materially
\nprejudicial to the business of the Company or any of its affiliates, or (f)
\nbreach of any of the covenants provided for in Section 8 hereof. Such
\ntermination shall be effected by written notice thereof delivered by the Company
\nto you and shall be effective as of the date of such notice; provided, however,
\nthat if (i) such termination is because of your willful failure or refusal
\nwithout proper cause to perform any one or more of your obligations under this
\nAgreement, (ii) such notice is the first such notice of termination for any
\nreason delivered by the Company to you under this Section 4.1, and (iii) within
\n15 days following the date of such notice you shall cease your refusal and shall
\nuse your best efforts to perform such obligations, the termination shall not be
\neffective.<\/p>\n
3<\/p>\n
In the event of termination by the Company for cause, without prejudice to
\nany other rights or remedies that the Company may have at law or in equity, the
\nCompany shall have no further obligation to you other than (i) to pay Base
\nSalary through the effective date of the termination of employment (the
\n“Effective Termination Date”), (ii) to pay any Bonus for any year prior to the
\nyear in which such termination occurs that has been determined but not yet paid
\nas of the Effective Termination Date, and (iii) with respect to any rights you
\nhave pursuant to any insurance or other benefit plans or arrangements of the
\nCompany. You hereby disclaim any right to receive a pro rata portion of any
\nBonus with respect to the year in which such termination occurs. 4.2
\nTermination by You for Material Breach by the Company and Termination by the
\nCompany Without Cause<\/u>. Unless previously terminated pursuant to any other
\nprovision of this Agreement and unless a Disability Period shall be in effect,
\nyou shall have the right, exercisable by written notice to the Company, to
\nterminate the term of employment under this Agreement with an Effective
\nTermination Date 30 days after the giving of such notice, if, at the time of the
\ngiving of such notice, the Company is in material breach of its obligations
\nunder this Agreement; provided, however, that, with the exception of clause (i)
\nbelow, this Agreement shall not so terminate if such notice is the first such
\nnotice of termination delivered by you pursuant to this Section 4.2 and within
\nsuch 30-day period the Company shall have cured all such material breaches; and
\nprovided further, that such notice is provided to the Company within 90 days
\nafter the occurrence of such material breach. A material breach by the Company
\nshall include, but not be limited to, (i) the Company violating Section 2 with
\nrespect to authority, reporting, duties, or place of employment or (ii) the
\nCompany failing to cause any successor to all or substantially all of the
\nbusiness and assets of the Company expressly to assume the obligations of the
\nCompany under this Agreement. The Company shall have the right, exercisable by
\nwritten notice to you delivered before the date which is 60 days prior to the
\nTerm Date, to terminate your employment under this Agreement without cause,
\nwhich notice shall specify the Effective Termination Date. If such notice is
\ndelivered on or after the date which is 60 days prior to the Term Date, the
\nprovisions of Section 4.3 shall apply. 4.2.1 In the event of a termination of
\nemployment pursuant to this Section 4.2 (a “termination without cause”), you
\nshall receive Base Salary and a pro<\/p>\n
4<\/p>\n
rata portion of your Average Annual Bonus (as defined below) through the
\nEffective Termination Date. Your Average Annual Bonus shall be equal to the
\naverage of the regular annual bonus amounts (excluding the amount of any special
\nor spot bonuses) in respect of the two calendar years during the most recent
\nthree calendar years for which the annual bonus received by you from the Company
\nwas the greatest. Your pro rata Average Annual Bonus pursuant to this Section
\n4.2.1 shall be paid to you at the times set forth in Section 4.6. 4.2.2 After
\nthe Effective Termination Date, you shall continue to be treated as an employee
\nof the Company for a period ending on the date which is twenty-four months after
\nthe Effective Termination Date if the Effective Termination Date occurs prior to
\nthe Term Date and twelve months after the Effective Termination Date if the
\nEffective Termination Date occurs on or after the Term Date (such date, the
\n“Severance Term Date”), and during such period you shall be entitled to receive,
\nwhether or not you become disabled during such period but subject to Section 6,
\n(a) Base Salary (on the Company’s normal payroll payment dates as in effect
\nimmediately prior to the Effective Termination Date) at an annual rate equal to
\nyour Base Salary in effect immediately prior to the notice of termination, and
\n(b) an annual Bonus in respect of each calendar year or portion thereof (in
\nwhich case a pro rata portion of such Bonus will be payable) during such period
\nequal to your Average Annual Bonus. Except as provided in the next sentence, if
\nyou accept other full-time employment during such period or notify the Company
\nin writing of your intention to terminate your status of being treated as an
\nemployee during such period, you shall cease to be treated as an employee of the
\nCompany for purposes of your rights to receive certain post-termination benefits
\nunder Section 7.2 effective upon the commencement of such other employment or
\nthe date specified by you in such notice, whichever is applicable (the “Equity
\nCessation Date”), and you shall receive the remaining payments of Base Salary
\nand Bonus pursuant to this Section 4.2.2 at the times specified in Section 4.6
\nof the Agreement. Notwithstanding the foregoing, if you accept employment with
\nany not-for-profit entity or governmental entity, then you may continue to be
\ntreated as an employee of the Company for purposes of your rights to receive
\ncertain post-termination benefits pursuant to Section 7.2 and you will continue
\nto receive the payments as provided in the first sentence of this Section 4.2.2;
\nand if you accept full-time employment with any affiliate of the Company, then
\nthe payments provided for in this Section 4.2.2 shall immediately cease and you
\nshall not be entitled to any further payments. For purposes of this Agreement,
\nthe term “affiliate” shall mean any entity which, directly or indirectly,
\ncontrols, is controlled by, or is under common control<\/p>\n
5<\/p>\n
with, the Company. 4.3 After the Term Date<\/u>. If at the Term Date, the
\nterm of employment shall not have been previously terminated pursuant to the
\nprovisions of this Agreement, no Disability Period is then in effect and the
\nparties shall not have agreed to an extension or renewal of this Agreement or on
\nthe terms of a new employment agreement, then the term of employment shall
\ncontinue on a month-to-month basis and you shall continue to be employed by the
\nCompany pursuant to the terms of this Agreement, subject to termination by
\neither party hereto on 60 days written notice delivered to the other party
\n(which notice may be delivered by either party at any time on or after the date
\nwhich is 60 days prior to the Term Date). If the Company shall terminate the
\nterm of employment on or after the Term Date for any reason (other than for
\ncause as defined in Section 4.1, in which case Section 4.1 shall apply), which
\nthe Company shall have the right to do so long as no Disability Date (as defined
\nin Section 5) has occurred prior to the delivery by the Company of written
\nnotice of termination, then such termination shall be deemed for all purposes of
\nthis Agreement to be a “termination without cause” under Section 4.2; and the
\nprovisions of Sections 4.2.1 and 4.2.2 shall apply, except that the period for
\nwhich you shall continue to be treated as an employee following the Effective
\nTermination Date will be twelve months. 4.4 Release<\/u>. A condition
\nprecedent to the Company’s obligation to make or continue the payments
\nassociated with a termination without cause shall be your execution and delivery
\nof a release in the form attached hereto as Annex A, or as such form may be
\nupdated by the Company as required by law, within 60 days following your
\nEffective Termination Date. If you shall fail to timely execute and deliver such
\nrelease, or if you revoke such release as provided therein, then in lieu of
\ncontinuing to receive the payments provided for herein, you shall receive a
\nseverance payment determined in accordance with the Company’s policies relating
\nto notice and severance reduced by the aggregate amount of severance payments
\npaid pursuant to this Agreement, if any, prior to the date of your refusal to
\ndeliver, or revocation of, such release. Any such severance payments shall be
\npaid in the form of Base Salary continuation payments at the annual rate equal
\nto your Base Salary in effect immediately prior to your notice of termination,
\nwith such amounts paid until your severance benefit has been exhausted. 4.5
\nMitigation<\/u>. In the event of a termination without cause under<\/p>\n
6<\/p>\n
this Agreement, you shall not be required to take actions in order to
\nmitigate your damages hereunder, unless Section 280G of the Internal Revenue
\nCode of 1986, as amended (the “Code”),would apply to any payments to you by the
\nCompany and your failure to mitigate would result in the Company losing tax
\ndeductions to which it would otherwise have been entitled. In such an event,
\nSection 4.7.1 shall govern. With respect to the preceding sentences, any
\npayments or rights to which you are entitled by reason of the termination of
\nemployment without cause shall be considered as damages hereunder. Any
\nobligation to mitigate your damages pursuant to this Section 4.5 shall not be a
\ndefense or offset to the Company’s obligation to pay you in full the amounts
\nprovided in this Agreement upon the occurrence of a termination without cause,
\nat the time provided herein, or the timely and full performance of any of the
\nCompany’s other obligations under this Agreement. 4.6 Payments<\/u>. Payments
\nof Base Salary and Bonus required to be made to you after any termination shall
\nbe made at the same times as such payments otherwise would have been paid to you
\npursuant to Sections 3.1 and 3.2 if you had not been terminated, subject to
\nSection 11.17. 4.7 Limitation on Certain Payments<\/u>. Notwithstanding any
\nother provision of this Agreement: 4.7.1. In the event the Company (or its
\nsuccessor) determines, based on the advice of an independent nationally
\nrecognized public accounting firm engaged by the Company, that part or all of
\nthe consideration, compensation or benefits to be paid to you under this
\nAgreement constitute “parachute payments” under Section 280G(b)(2) of the Code,
\nthen, if the aggregate present value of such parachute payments, singularly or
\ntogether with the aggregate present value of any consideration, compensation or
\nbenefits to be paid to you under any other plan, arrangement or agreement which
\nconstitute “parachute payments” (collectively, the “Parachute Amount”) exceeds
\n2.99 times your “base amount”, as defined in Section 280G(b)(3) of the Code (the
\n“Base Amount”), the amounts constituting “parachute payments” which would
\notherwise be payable to you or for your benefit shall be reduced to the extent
\nnecessary so that the Parachute Amount is equal to 2.99 times the Base Amount
\n(the “Reduced Amount”); provided that such amounts shall not be so reduced if
\nthe Company determines, based on the advice of such public accounting firm, that
\nwithout such reduction you would be entitled to receive and retain, on a net
\nafter tax basis (including, without limitation, any excise taxes payable under
\nSection 4999 of the Code), an amount which is greater than the<\/p>\n
7<\/p>\n
amount, on a net after tax basis, that you would be entitled to retain upon
\nreceipt of the Reduced Amount. 4.7.2. If the determination made pursuant to
\nSection 4.7.1 results in a reduction of the payments that would otherwise be
\npaid to you except for the application of Section 4.7.1, such reduction in
\npayments shall be first applied to reduce any cash severance payments that you
\nwould otherwise be entitled to receive hereunder and shall thereafter be applied
\nto reduce other payments and benefits in a manner that would not result in
\nsubjecting you to additional taxation under Section 409A of the Code, unless you
\nelect to have the reduction in payments applied in a different order. Within ten
\ndays following such determination, the Company shall pay or distribute to you or
\nfor your benefit such amounts as are then due to you under this Agreement and
\nshall promptly pay or distribute to you or for your benefit in the future such
\namounts as become due to you under this Agreement. 4.7.3. As a result of the
\nuncertainty in the application of Sections 280G and 4999 of the Code at the time
\nof a determination hereunder, it is possible that payments will be made by the
\nCompany that should not have been made under Section 4.7.1 (an “Overpayment”).
\nIn the event that there is a final determination by the Internal Revenue
\nService, or a final determination by a court of competent jurisdiction, that an
\nOverpayment has been made, the Company shall have no further liability or
\nobligation to you for any excise taxes, interest or penalty that you are
\nrequired to pay as a result of such final determination. 4.8 Retirement<\/u>.
\nNotwithstanding the provisions of this Agreement relating to a termination
\nwithout cause and Disability, on the date you first become eligible for normal
\nretirement as defined in any applicable retirement plan (i.e., age 65) of the
\nCompany or any subsidiary of the Company (the “Retirement Date”), then this
\nAgreement shall terminate automatically on such date and your employment with
\nthe Company shall thereafter be governed by the policies generally applicable to
\nemployees of the Company, and you shall not thereafter be entitled to the
\npayments provided in this Agreement to the extent not received by you on or
\nprior to the Retirement Date. In addition, no benefits or payments provided in
\nthis Agreement relating to termination without cause and Disability shall
\ninclude any period after the Retirement Date and if the provision of benefits or
\ncalculation of payments provided in this Agreement with respect thereto would
\ninclude any period subsequent to the Retirement Date, such provision of benefits
\nshall end on the<\/p>\n
8<\/p>\n
Retirement Date and the calculation of payments shall cover only the period
\nending on the Retirement Date. 5. Disability<\/u>. 5.1 Disability
\nPayments<\/u>. If during the term of employment and prior to the delivery of any
\nnotice of termination without cause, you become physically or mentally disabled,
\nwhether totally or partially, so that you are prevented from performing your
\nusual duties for a period of six consecutive months, or for shorter periods
\naggregating six months in any twelve-month period, the Company shall,
\nnevertheless, continue to pay your full compensation through the last day of the
\nsixth consecutive month of disability or the date on which the shorter periods
\nof disability shall have equaled a total of six months in any twelve-month
\nperiod (such last day or date being referred to herein as the “Disability
\nDate”), subject to Section 11.17. If you have not resumed your usual duties on
\nor prior to the Disability Date, the Company shall pay you a pro rata Bonus
\n(based on your Average Annual Bonus) for the year in which the Disability Date
\noccurs and thereafter shall pay you disability benefits for the period ending on
\nthe later of (i) the Term Date or (ii) the date which is twelve months after the
\nDisability Date (in the case of either (i) or (ii), the “Disability Period”), in
\nan annual amount equal to 75% of (a) your Base Salary at the time you become
\ndisabled and (b) the Average Annual Bonus, in each case, subject to Section
\n11.17. 5.2 Recovery from Disability<\/u>. If during the Disability Period you
\nshall fully recover from your disability, the Company shall have the right
\n(exercisable within 60 days after notice from you of such recovery), but not the
\nobligation, to restore you to full-time service at full compensation. If the
\nCompany elects to restore you to full-time service, then this Agreement shall
\ncontinue in full force and effect in all respects and the Term Date shall not be
\nextended by virtue of the occurrence of the Disability Period. If the Company
\nelects not to restore you to full-time service, you shall be entitled to obtain
\nother employment, subject, however, to the following: (i) you shall perform
\nadvisory services during any balance of the Disability Period; and (ii) you
\nshall comply with the provisions of Sections 8 and 9 during the Disability
\nPeriod. The advisory services referred to in clause (i) of the immediately
\npreceding sentence shall consist of rendering advice concerning the business,
\naffairs and management of the Company as requested by the<\/p>\n
9<\/p>\n
Chief Executive Officer or other senior officer of the Company but you shall
\nnot be required to devote more than five days (up to eight hours per day) each
\nmonth to such services, which shall be performed at a time and place mutually
\nconvenient to both parties. Any income from such other employment shall not be
\napplied to reduce the Company’s obligations under this Agreement. 5.3 Other
\nDisability Provisions<\/u>. The Company shall be entitled to deduct from all
\npayments to be made to you during the Disability Period pursuant to this Section
\n5 an amount equal to all disability payments received by you during the
\nDisability Period from Worker’s Compensation, Social Security and disability
\ninsurance policies maintained by the Company; provided, however, that for so
\nlong as, and to the extent that, proceeds paid to you from such disability
\ninsurance policies are not includible in your income for federal income tax
\npurposes, the Company’s deduction with respect to such payments shall be equal
\nto the product of (i) such payments and (ii) a fraction, the numerator of which
\nis one and the denominator of which is one less the maximum marginal rate of
\nfederal income taxes applicable to individuals at the time of receipt of such
\npayments. All payments made under this Section 5 after the Disability Date are
\nintended to be disability payments, regardless of the manner in which they are
\ncomputed. Except as otherwise provided in this Section 5, the term of employment
\nshall continue during the Disability Period and you shall be entitled to all of
\nthe rights and benefits provided for in this Agreement, except that Sections 4.2
\nand 4.3 shall not apply during the Disability Period, and unless the Company has
\nrestored you to full-time service at full compensation prior to the end of the
\nDisability Period, the term of employment shall end and you shall cease to be an
\nemployee of the Company at the end of the Disability Period and shall not be
\nentitled to notice and severance or to receive or be paid for any accrued
\nvacation time or unused sabbatical. 6. Death<\/u>. If you die during the term
\nof employment, this Agreement and all obligations of the Company to make any
\npayments hereunder shall terminate except that your estate (or a designated
\nbeneficiary) shall be entitled to receive Base Salary to the last day of the
\nmonth in which your death occurs and Bonus compensation (at the time bonuses are
\nnormally paid) based on the Average Annual Bonus, but prorated according to the
\nnumber of whole or partial months you were employed by the Company in such
\ncalendar year.<\/u> 7. Other Benefits<\/u>.<\/p>\n
10<\/p>\n
7.1 General Availability<\/u>. To the extent that (a) you are eligible
\nunder the general provisions thereof (including without limitation, any plan
\nprovision providing for participation to be limited to persons who were
\nemployees of the Company or certain of its subsidiaries prior to a specific
\npoint in time) and (b) the Company maintains such plan or program for the
\nbenefit of its executives, during the term of your employment with the Company,
\nyou shall be eligible to participate in any savings plan, or similar plan or
\nprogram and in any group life insurance, hospitalization, medical, dental,
\naccident, disability or similar plan or program of the Company now existing or
\nestablished hereafter. 7.2 Benefits After a Termination or Disability<\/u>.
\nAfter the Effective Termination Date of employment pursuant to Section 4.2 and
\nprior to the Severance Term Date or during the Disability Period, you shall
\ncontinue to be treated as an employee of the Company for purposes of eligibility
\nto participate in the Company’s health and welfare benefit plans other than
\ndisability programs and to receive the health and welfare benefits (other than
\ndisability programs) required to be provided to you under this Agreement to the
\nextent such health and welfare benefits are maintained in effect by the Company
\nfor its executives. After the Effective Termination Date of a termination of
\nemployment pursuant to Section 4 or during a Disability Period, you shall not be
\nentitled to any additional awards or grants under any stock option, restricted
\nstock or other stock-based incentive plan and you shall not be entitled to
\ncontinue elective deferrals in or accrue additional benefits under any qualified
\nor nonqualified retirement programs maintained by the Company. At the Severance
\nTerm Date your rights to benefits and payments under any health and welfare
\nbenefit plans or any insurance or other death benefit plans or arrangements of
\nthe Company shall be determined in accordance with the terms and provisions of
\nsuch plans. At the Severance Term Date or, if earlier, the Equity Cessation
\nDate, your rights to benefits and payments under any stock option, restricted
\nstock, stock appreciation right, bonus unit, management incentive or other
\nlong-term incentive plan of the Company shall be determined in accordance with
\nthe terms and provisions of such plans and any agreements under which such stock
\noptions, restricted stock or other awards were granted. However, consistent with
\nthe terms of the employment agreement dated as of February 13, 2002 between the
\nCompany and you (which terms were carried forward to the employment agreement
\nbetween you and Time Warner Entertainment Company, L.P. and to the Prior
\nAgreements), notwithstanding the foregoing or any more restrictive provisions of
\nany such plan or agreement, if your employment with the Company is<\/p>\n
11<\/p>\n
terminated as a result of a termination pursuant to Section 4.2, then, (i)
\nall stock options to purchase shares of Time Warner Common Stock shall continue
\nto vest, and any such vested stock options shall remain exercisable (but not
\nbeyond the term of such options), through the earlier of the Severance Term Date
\nor the Equity Cessation Date; (ii) except if you shall then qualify for
\nretirement under the terms of the applicable stock option agreement and would
\nreceive more favorable treatment under the terms of the stock option agreement,
\n(x) all stock options to purchase shares of Time Warner Common Stock granted to
\nyou on or after February 1, 2002 (the “Term Options”) that would have vested on
\nor before the Severance Term Date (or the comparable date under any employment
\nagreement that amends, replaces or supersedes this Agreement) shall vest and
\nbecome immediately exercisable upon the earlier of the Severance Term Date or
\nthe Equity Cessation Date, and (y) all your vested Term Options shall remain
\nexercisable for a period of three years after the earlier of the Severance Term
\nDate or the Equity Cessation Date (but not beyond the term of such stock
\noptions); and (iii) the Company shall not be permitted to determine that your
\nemployment was terminated for “unsatisfactory performance” within the meaning of
\nany stock option agreement between you and the Company. With respect to awards
\nof restricted stock units for Time Warner Common Stock (“RSUs”) held at the
\nEffective Termination Date of a termination of employment pursuant to Section
\n4.2, subject to potential further delay in payment pursuant to Section 11.17,
\n(i) if you are eligible for retirement treatment at the Effective Termination
\nDate, then for all awards of RSUs that contain special accelerated vesting upon
\nretirement, the vesting of the RSUs will accelerate upon, and the shares of Time
\nWarner Common Stock will be paid to you promptly following, the Effective
\nTermination Date; and (ii) if you are not eligible for retirement treatment at
\nthe Effective Termination Date, then the treatment of the RSUs (other than the
\nMake-Whole RSU grant made pursuant to Section 3.5) will be determined at the
\nearlier of the Severance Term Date or the Equity Cessation Date in accordance
\nwith the terms of the applicable award agreement(s), but the shares of Time
\nWarner Common Stock underlying any vested RSUs will not be paid to you until
\npromptly following the next regular vesting date(s) for such award(s) of RSUs.
\nWith respect to the Make-Whole RSUs, if there is a termination of employment
\npursuant to Section 4.2 prior to their vesting, then, subject to potential
\nfurther delay in payment pursuant to Section 11.17, a pro-rated portion of the
\nMake-Whole RSU, representing the number of RSUs that would vest through the
\nSeverance Term Date, shall vest and be paid to you promptly following the
\nEffective Termination Date.<\/p>\n
12<\/p>\n
7.3 Payments in Lieu of Other Benefits<\/u>. In the event the term of
\nemployment and your employment with the Company is terminated pursuant to any
\nsection of this Agreement, you shall not be entitled to notice and severance
\nunder the Company’s general employee policies or to be paid for any accrued
\nvacation time or unused sabbatical, the payments provided for in such sections
\nbeing in lieu thereof. 7.4 Life Insurance<\/u>. During your employment with
\nthe Company, the Company shall (i) provide you with $50,000 of group life
\ninsurance and (ii) pay you annually an amount equal to two times the premium you
\nwould have to pay to obtain life insurance under a standard group universal life
\ninsurance program in an amount equal to $3,000,000. The Company shall pay you
\nsuch amount no later than March 15 of the calendar year following any calendar
\nyear in which you are entitled to this amount. You shall be under no obligation
\nto use the payments made by the Company pursuant to the preceding sentence to
\npurchase any additional life insurance. The payments made to you hereunder shall
\nnot be considered as “salary” or “compensation” or “bonus” in determining the
\namount of any payment under any retirement, profit-sharing or other benefit plan
\nof the Company or any subsidiary of the Company. 8. Protection of
\nConfidential Information; Non-Compete<\/u>. 8.1 Confidentiality Covenant<\/u>.
\nYou acknowledge that your employment by the Company (which, for purposes of this
\nSection 8 shall mean Time Warner Inc. and its affiliates) will, throughout your
\nemployment, bring you into close contact with many confidential affairs of the
\nCompany, including information about costs, profits, markets, sales, products,
\nkey personnel, pricing policies, operational methods, technical processes, trade
\nsecrets, plans for future development, strategic plans of the most valuable
\nnature and other business affairs and methods and other information not readily
\navailable to the public. You further acknowledge that the services to be
\nperformed under this Agreement are of a special, unique, unusual, extraordinary
\nand intellectual character. You further acknowledge that the business of the
\nCompany is global in scope, that its products and services are marketed
\nthroughout the world, that the Company competes in nearly all of its business
\nactivities with other entities that are or could be located in nearly any part
\nof the world and that the nature of your services, position and expertise are
\nsuch<\/p>\n
13<\/p>\n
that you are capable of competing with the Company from nearly any location
\nin the world. In recognition of the foregoing, you covenant and agree: 8.1.1 You
\nshall keep secret all confidential matters of the Company and shall not disclose
\nsuch matters to anyone outside of the Company, or to anyone inside the Company
\nwho does not have a need to know or use such information, and shall not use such
\ninformation for personal benefit or the benefit of a third party, either during
\nor after the term of employment, except with the Company’s written consent,
\nprovided that (i) you shall have no such obligation to the extent such matters
\nare or become publicly known other than as a result of your breach of your
\nobligations hereunder and (ii) you may, after giving prior notice to the Company
\nto the extent practicable under the circumstances, disclose such matters to the
\nextent required by applicable laws or governmental regulations or judicial or
\nregulatory process; 8.1.2 You shall deliver promptly to the Company on
\ntermination of your employment, or at any other time the Company may so request,
\nall memoranda, notes, records, reports and other documents (and all copies
\nthereof) relating to the Company’s business, which you obtained while employed
\nby, or otherwise serving or acting on behalf of, the Company and which you may
\nthen possess or have under your control; and 8.1.3 For a period of one year
\nafter the effective date of your retirement or other termination by you of your
\nemployment with the Company or the Effective Date of a termination of employment
\npursuant to Section 4, without the prior written consent of the Company, you
\nshall not employ, and shall not cause any entity of which you are an affiliate
\nto employ, any person who was a full-time employee of the Company at the date of
\nsuch termination of employment or within six months prior thereto but such
\nprohibition shall not apply to your secretary or executive assistant or to any
\nother employee eligible to receive overtime pay. 8.2. Non-Compete
\nCovenant<\/u>. 8.2.1 During the term of employment and for the twelve-month
\nperiod after (i) the effective date of your retirement or other termination by
\nyou of your employment or (ii) the Effective Termination Date of a termination
\nof employment pursuant to Section 4, you shall not, directly or indirectly,
\nwithout the prior written consent of the Chief Executive Officer of the Company:
\n(x) render any services to, manage,<\/p>\n
14<\/p>\n
operate, control, or act in any capacity (whether as a principal, partner,
\ndirector, officer, member, agent, employee, consultant, owner, independent
\ncontractor or otherwise and whether or not for compensation) for, any person or
\nentity that is a Competitive Entity, or (y) acquire any interest of any type in
\nany Competitive Entity, including without limitation as an owner, holder or
\nbeneficiary of any stock, stock options or other equity interest (except as
\npermitted by the next sentence). Nothing herein shall prohibit you from
\nacquiring solely as an investment and through market purchases (i) securities of
\nany Competitive Entity that are registered under Section 12(b) or 12(g) of the
\nSecurities Exchange Act of 1934 (the “Exchange Act”) and that are publicly
\ntraded, so long as you or any entity under your control are not part of any
\ncontrol group of such Competitive Entity and such securities, including
\nconverted or convertible securities, do not constitute more than one percent
\n(1%) of the outstanding voting power of that entity and (ii) securities of any
\nCompetitive Entity that are not registered under Section 12(b) or 12(g) of the
\nExchange Act and are not publicly traded, so long as you or any entity under
\nyour control is not part of any control group of such Competitive Entity and
\nsuch securities, including converted securities, do not constitute more than
\nthree percent (3%) of the outstanding voting power of that entity, provided that
\nin each case you have no active participation in the business of such entity.
\n8.2.2 “Competitive Entity” shall be defined as a business (whether conducted
\nthrough an entity or by individuals including employee in self-employment) that
\nis engaged in any business that competes, directly or indirectly through any
\nparent, subsidiary, affiliate, joint venture, partnership or otherwise, with (x)
\nany of the business activities carried on by the Company in any geographic
\nlocation where the Company conducts business (including without limitation a
\nCompetitive Activity as defined below), (y) any business activities being
\nplanned by the Company or in the process of development at the time of your
\ntermination of employment (as evidenced by written proposals, market research,
\nRFPs and similar materials) or (z) any business activity that the Company has
\ncovenanted, in writing, not to compete with in connection with the disposition
\nof such a business. 8.2.3 “Competitive Activity” refers to business activities
\nwithin the lines of business of the Company, including without limitation, the
\nfollowing:<\/p>\n
| <\/td>\n | \n (a)<\/p>\n<\/td>\n | <\/td>\n | \n The operation of domestic and international networks and premium pay 15<\/p>\n \n
|