EMPLOYMENT AGREEMENT made as of November 9, 1999, effective as of July 12,
1999 (the "Effective Date"), between TIME WARNER INC., a Delaware corporation
(the "Company"), and Xxxxxx X. Xxxx.
You and the Company desire to set forth the terms and conditions of your
employment by the Company and agree as follows:
1. Term of Employment. Your "term of employment", as this phrase is used
throughout this Agreement, shall be for the period beginning on the Effective
Date and ending on July 11, 2004 ("Term Date"), subject, however, to earlier
termination as set forth in this Agreement.
2. Employment. You shall serve as Executive Vice President and Chief
Financial Officer of the Company during the term of employment, and you shall
have the authority, functions, duties, powers and responsibilities normally
associated with such position and as the Board of Directors, the Chief Executive
Officer or the President of the Company may from time to time delegate to you in
addition thereto. During the term of employment, (i) your services shall be
rendered on a substantially full-time, exclusive basis and you will apply on a
full-time basis all of your skill and experience to the performance of your
duties, (ii) you shall report only to the Company's Board of Directors, its
Chief Executive Officer or its President, (iii) you shall have no other
employment and, without the prior written consent of the Chief Executive Officer
or the President of the Company, no outside business activities which require
the devotion of substantial amounts of your time and (iv) the place for the
performance of your services shall be the principal executive offices of the
Company which shall be in the New York City metropolitan area, subject to such
reasonable travel as may be required in the performance of your duties. The
foregoing shall be subject to the Company's written policies, as in effect from
time to time, regarding vacations, holidays, illness and the like.
3. Compensation.
3.1 Base Salary. The Company shall pay you a base salary of not less
than $450,000 per annum during the term of employment (the "Base Salary"). The
Company
may increase, but not decrease, the Base Salary during the term of
employment. Base Salary shall be paid in accordance with the Company's customary
payroll practices.
3.2 Bonus. In addition to Base Salary, you may be entitled to receive
during the term of employment an annual cash bonus ("Bonus") based on your
performance and the performance of the Company. The determination of any such
Bonus is entirely within the Company's discretion.
3.3 Deferred Compensation. In addition to Base Salary and Bonus, you
shall be credited with a defined contribution which shall be determined and paid
out on a deferred basis as provided in this Agreement. During the term of
employment, the Company shall credit to an account maintained for you (the
"Deferred Account"), in the Deferred Compensation Plan established by the
Company on November 18, 1998, as the same may be amended from time to time (as
so amended, the "Deferred Plan"), annually, an amount equal to 50% of your then
current Base Salary ("Deferred Compensation"). Such amount shall be credited pro
rata during each year of the term of employment at the same time you receive
payments of Base Salary.
3.4 Indemnification. You shall be entitled throughout the term of
employment to the benefit of the indemnification provisions contained on the
date hereof in the Certificate of Incorporation and By-Laws of the Company (not
including any amendments or additions after the date hereof that limit or
narrow, but including any that add to or broaden, the protection afforded to you
by those provisions).
4. Termination.
4.1 Termination for Cause. The Company may terminate the term of
employment and all of the Company's obligations under this Agreement, other than
its obligations set forth below in this Section 4.1, for "cause" but only if the
term of employment has not previously been terminated pursuant to any other
provision of this Agreement. Termination by the Company for "cause" shall mean
termination by action of the Company's Board of Directors, or a committee
thereof, because of your conviction (treating a nolo contendere plea as a
conviction) of a felony (whether or not any right to appeal has been or may be
exercised) or willful refusal without proper cause to perform your obligations
under this Agreement or because of your breach of any of the covenants provided
for in Section 9. Such termination shall be effected by written notice thereof
delivered by the Company to you and
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shall be effective as of the date of such notice; provided, however,
that if (i) such termination is because of your willful refusal without proper
cause to perform any one or more of your obligations under this Agreement, (ii)
such notice is the first such notice of termination for any reason delivered by
the Company to you under this Section 4.1, and (iii) within 15 days following
the date of such notice you shall cease your refusal and shall use your best
efforts to perform such obligations, the termination shall not be effective.
In the event of termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligations to you other than (i) to
pay Base Salary and make credits of Deferred Compensation through the effective
date of termination, (ii) to pay any Bonus that has been determined but not yet
paid as of the date of such termination and (iii) with respect to any rights you
have pursuant to any insurance or other benefit plans or arrangements of the
Company. You hereby disclaim any right to receive a pro rata portion of any
Bonus with respect to the year in which such termination occurs.
4.2 Termination by You for Material Breach by the Company and
Termination by the Company Without Cause. Unless previously terminated pursuant
to any other provision of this Agreement and unless a Disability Period shall be
in effect, you shall have the right, exercisable by written notice to the
Company, to terminate the term of employment effective 15 days after the giving
of such notice, if, at the time of the giving of such notice, the Company is in
material breach of its obligations under this Agreement; provided, however,
that, with the exception of clause (i) below, this Agreement shall not so
terminate if such notice is the first such notice of termination delivered by
you pursuant to this Section 4.2 and within such 15-day period the Company shall
have cured all such material breaches. A material breach by the Company shall
include, but not be limited to, (i) the Company violating Section 2 with respect
to your title, reporting lines, duties or place of employment or (ii) the
Company failing to cause any successor to all or substantially all of the
business and assets of the Company expressly to assume the obligations of the
Company under this Agreement.
The Company shall have the right, exercisable by written notice to
you, to terminate your employment under this Agreement without cause, which
notice shall specify the effective date of such termination.
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4.2.1 After the effective date of a termination pursuant to this
Section 4.2 (a "termination without cause"), you shall receive Base Salary,
Deferred Compensation and a pro rata portion of your Average Annual Bonus (as
defined below) through the effective date of termination. Your Average Annual
Bonus shall be equal to the average of the regular annual bonus amounts
(excluding the amount of any special or spot bonuses) in respect of the two
calendar years during the most recent five calendar years for which the annual
bonus received by you from the Company or Time Inc. was the greatest.
4.2.2 After the effective date of a termination without cause,
you shall remain an employee of the Company for the period ending on the later
of (i) the Term Date and (ii) the date which is one year after the effective
date of such termination and during such period you shall be entitled to
receive, whether or not you become disabled during such period but subject to
Section 6, (a) Base Salary at an annual rate equal to your Base Salary in effect
immediately prior to the notice of termination, (b) an annual Bonus in respect
of each calendar year or portion thereof (in which case a pro rata portion of
such Bonus will be payable) during such period equal to the Average Annual Bonus
and (c) credits of Deferred Compensation. Except as provided in the second
succeeding sentence, if you accept other full-time employment during such period
or notify the Company in writing of your intention to terminate your status as
an employee during such period, you shall cease to be an employee of the Company
effective upon the commencement of such other employment or the effective date
of such termination as specified by you in such notice, whichever is applicable,
and you shall be entitled to receive, as severance, a lump sum payment within 30
days after such commencement or such effective date (provided that if you were
named in the compensation table in the Company's then most recent proxy
statement, such lump sum payment shall be made within 30 days after the end of
the calendar year in which such commencement or effective date occurred),
discounted as provided in the immediately following sentence, equal to the
balance of the payments you would have received pursuant to this Section 4.2.2
had you remained on the Company's payroll. That lump sum shall be discounted to
present value as of the date of payment from the times at which such amounts
would otherwise have become payable absent such termination at an annual
discount rate for the relevant periods equal to 120% of the "applicable Federal
rate" (within the meaning of Section 1274(d) of the Internal Revenue Code of
1986, as amended (the "Code"), in effect on the date of such termination,
compounded semi-annually. Notwithstanding the foregoing, if you accept
employment with any not-for-profit entity, then you shall be entitled to remain
an employee of the Company and receive the payments as provided in the first
sentence of this Section 4.2.2; and if you accept full-time employment with
any affiliate of the Company, then the payments provided for in this
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Section 4.2.2 shall immediately cease and you shall not be entitled to any
lump sum payment. For purposes of this Agreement, the term "affiliate" shall
mean any entity which, directly or indirectly, controls, is controlled by,
or is under common control with, the Company.
4.3 After the Term Date. If at the Term Date, the term of employment
shall not have been previously terminated pursuant to the provisions of this
Agreement, no Disability Period is then in effect and the parties shall not have
agreed to an extension or renewal of this Agreement or on the terms of a new
employment agreement, then the term of employment shall continue and you shall
continue to be employed by the Company pursuant to the terms of this Agreement,
subject to termination by either party hereto on 60 days written notice
delivered to the other party (which notice may be delivered by either party at
any time on or after the date which is 60 days prior to the Term Date). If the
Company shall terminate the term of employment on or after the Term Date for any
reason (other than for cause as defined in Section 4.1, in which case Section
4.1 shall apply), which the Company shall have the right to do so long as no
Disability Date (as defined in Section 5) has occurred prior to the delivery by
the Company of written notice of termination, then such termination shall be
deemed for all purposes of this Agreement to be a "termination without cause"
under Section 4.2 and the provisions of Sections 4.2.1 and 4.2.2 shall apply.
4.4 Office Facilities. In the event of a termination without cause,
then for the period beginning on the effective date of such termination and
ending one year thereafter, the Company shall, without charge to you, make
available to you office space at or near your principal job location immediately
prior to such termination, together with secretarial services, office
facilities, services and furnishings, in each case reasonably appropriate to an
employee of your position and responsibilities prior to such termination but
taking into account your reduced need for such office space, secretarial
services and office facilities, services and furnishings as a result of you no
longer being a full-time employee.
4.5 Release. A condition precedent to the Company's obligation to make
the payments associated with a termination without cause shall be your execution
and delivery of a release in the form attached hereto as Annex A. If you shall
fail to execute and deliver such release, or if you revoke such release as
provided therein, then in lieu of the payments provided for herein, you shall
receive a severance payment determined in accordance with the Company's policies
relating to notice and severance.
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4.6 Retirement. Notwithstanding the provisions of this Agreement
relating to a termination without cause and Disability, on the date you first
become eligible for normal retirement (which is currently at age 65 under the
Time Warner Employees' Pension Plan) as defined in any applicable retirement
plan of the Company or any subsidiary of the Company (the "Retirement Date"),
then this Agreement shall terminate automatically on such date and your
employment with the Company shall thereafter be governed by the policies
generally applicable to employees of the Company, and you shall not thereafter
be entitled to the payments provided in this Agreement to the extent not
received by you on or prior to the Retirement Date. In addition, no benefits or
payments provided in this Agreement relating to termination without cause and
Disability shall include any period after the Retirement Date and if the
provision of benefits or calculation of payments provided in this Agreement with
respect thereto would include any period subsequent to the Retirement Date, such
provision of benefits shall end on the Retirement Date and the calculation of
payments shall cover only the period ending on the Retirement Date.
4.7 Mitigation. The payments provided for in this Agreement in the
event of a termination without cause are not subject to mitigation unless your
failure to mitigate would result in the Company losing tax deductions to which
it would otherwise have been entitled. In such an event, you will engage in
whatever mitigation is necessary to preserve the Company's tax deductions. In
addition to any obligation under the preceding sentence, and without duplication
of any amounts required to be paid to the Company thereunder, if after a
termination without cause you obtain other employment with any entity other than
a not-for-profit entity, then the total cash salary and bonus received in
connection with such other employment, whether paid to you or deferred for your
benefit, for services through the later of (i) the Term Date or (ii) one year
after the effective date of such termination without cause, up to an amount
equal to (a) the discounted lump sum payment received by you or for your account
with respect to Base Salary, Bonus and Deferred Compensation for such period,
minus (b) the amount of severance you would have received in accordance with the
personnel policies of the Company if you had been job eliminated, shall reduce,
pro tanto, any amount which the Company would otherwise be required to pay to
you as a result of such termination and, to the extent amounts have theretofore
been paid to you as a result of such termination, such cash salary and bonus
shall be paid over to the Company as received with respect to such period, but
the provisions of this sentence shall not apply to any type of equity interest,
bonus unit, phantom or restricted stock, stock option, stock appreciation right
or similar benefit received as a result of such other employment. With respect
to the preceding sentences, any payments or rights to which you are entitled by
reason of the termination of employment without cause shall
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be considered as damages hereunder. With respect to the second preceding
sentence, you shall in no event be required to pay the Company with respect to
any calendar year more than the discounted amount received by you or credited to
the Deferred Plan with respect to Base Salary, Bonus and Deferred Compensation
for such year. Any obligation to mitigate your damages pursuant to this Section
4.7 shall not be a defense or offset to the Company's obligation to pay you in
full the amounts provided in this Agreement upon the occurrence of a termination
without cause, at the time provided herein, or the timely and full performance
of any of the Company's other obligations under this Agreement.
4.8 Payments. So long as you remain on the payroll of the Company or
any subsidiary of the Company, payments of Base Salary, Deferred Compensation
and Bonus required to be made after a termination without cause shall be made at
the same times as similar payments are made to other senior executives of the
Company.
5. Disability.
5.1 Disability Payments. If during the term of employment and prior to
any termination without cause, you become physically or mentally disabled,
whether totally or partially, so that you are prevented from performing your
usual duties for a period of six consecutive months, or for shorter periods
aggregating six months in any twelve-month period, the Company shall,
nevertheless, continue to pay your full compensation and continue to make the
Deferred Compensation credits when otherwise due, through the last day of the
sixth consecutive month of disability or the date on which the shorter periods
of disability shall have equaled a total of six months in any twelve-month
period (such last day or date being referred to herein as the "Disability
Date"). If you have not resumed your usual duties on or prior to the Disability
Date, the Company shall pay you a pro rata Bonus for the year in which the
Disability Date occurs and shall pay you disability benefits for the longer of
(i) the period ending on the Term Date or (ii) one year (in the case of either
(i) or (ii) (the "Disability Period"), in an annual amount equal to 75% of (a)
your Base Salary at the time you become disabled (and this reduced amount shall
also be deemed to be the Base Salary for purposes of determining the amounts to
be credited by the Company as Deferred Compensation) and (b) the Average Annual
Bonus.
5.2 Recovery from Disability. If during the Disability Period you
shall fully recover from your disability, the Company shall have the right
(exercisable within 60 days after notice from you of such recovery), but not the
obligation, to restore you to full-time
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service at full compensation. If the Company elects to restore you to full-time
service, then this Agreement shall continue in full force and effect in all
respects and the Term Date shall not be extended by virtue of the occurrence of
the Disability Period. If the Company elects not to restore you to full-time
service, you shall be entitled to obtain other employment, subject, however, to
the following: (i) you shall perform advisory services during any balance of the
Disability Period; and (ii) you shall comply with the provisions of Sections 9
and 10 during the Disability Period. The advisory services referred to in clause
(i) of the immediately preceding sentence shall consist of rendering advice
concerning the business, affairs and management of the Company as requested by
the Chief Executive Officer or the President of the Company but you shall not be
required to devote more than five days (up to eight hours per day) each month to
such services, which shall be performed at a time and place mutually convenient
to both parties. Any income from such other employment shall not be applied to
reduce the Company's obligations under this Agreement.
5.3 Other Disability Provisions. The Company shall be entitled to
deduct from all payments to be made to you during the Disability Period pursuant
to this Section 5 an amount equal to all disability payments received by you
during the Disability Period from Worker's Compensation, Social Security and
disability insurance policies maintained by the Company; provided, however, that
for so long as, and to the extent that, proceeds paid to you from such
disability insurance policies are not includible in your income for federal
income tax purposes, the Company's deduction with respect to such payments shall
be equal to the product of (i) such payments and (ii) a fraction, the numerator
of which is one and the denominator of which is one less the maximum marginal
rate of federal income taxes applicable to individuals at the time of receipt of
such payments. All payments made under this Section 5 after the Disability Date
are intended to be disability payments, regardless of the manner in which they
are computed. Except as otherwise provided in this Section 5, the term of
employment shall continue during the Disability Period and you shall be entitled
to all of the rights and benefits provided for in this Agreement, except that
Sections 4.2 and 4.3 shall not apply during the Disability Period and unless the
Company has restored you to full-time service at full compensation prior to the
end of the Disability Period, the term of employment shall end and you shall
cease to be an employee of the Company at the end of the Disability Period and
shall not be entitled to notice and severance or to receive or be paid for any
accrued vacation time or unused sabbatical.
6. Death. If you die during the term of employment, this Agreement and all
obligations of the Company to make any payments hereunder shall terminate except
that your
8
estate (or a designated beneficiary) shall be entitled to receive Base
Salary and Deferred Compensation to the last day of the month in which your
death occurs and Bonus compensation (at the time bonuses are normally paid)
based on the Average Annual Bonus, but prorated according to the number of whole
or partial months you were employed by the Company in such calendar year.
7. Life Insurance. During your employment with the Company, the Company
shall (i) provide you with $50,000 of group life insurance and (ii) pay you
annually an amount equal to two times the premium you would have to pay to
obtain life insurance under the Group Universal Life ("GUL") insurance program
made available by the Company in an amount equal to $4 million. You shall be
under no obligation to use the payments made by the Company pursuant to the
preceding sentence to purchase GUL insurance or to purchase any other life
insurance. If the Company discontinues its GUL insurance program, the Company
shall nevertheless make the payments required by this Section 7 as if such
program were still in effect. The payments made to you hereunder shall not be
considered as "salary" or "compensation" or "bonus" in determining the amount of
any payment under any pension, retirement, profit-sharing or other benefit plan
of the Company or any subsidiary of the Company.
8. Other Benefits.
8.1 General Availability. To the extent that (a) you are eligible
under the general provisions thereof and (b) the Company maintains such plan or
program for the benefit of its senior executives, during the term of employment
and so long as you are an employee of the Company, you shall be eligible to
participate in any pension, profit-sharing, stock option or similar plan or
program and in any group life insurance (to the extent set forth in Section 7),
hospitalization, medical, dental, accident, disability or similar plan or
program of the Company now existing or established hereafter. In addition, you
shall be entitled during the term of employment and so long as you are an
employee of the Company, to receive other benefits generally available to all
senior executives of the Company, including, without limitation, to the extent
maintained in effect by the Company for its senior executives, an automobile
allowance and financial services.
8.2 Benefits After a Termination or Disability. During the period you
remain on the payroll of the Company after a termination without cause or during
the Disability Period, you shall continue to be eligible to participate in the
benefit plans and to receive the
9
benefits required to be provided to you under this Agreement to the extent such
benefits are maintained in effect by the Company for its senior executives;
provided, however, you shall not be entitled to any additional awards or grants
under any stock option, restricted stock or other stock based incentive plan.
You shall continue to be an employee of the Company for purposes of any stock
option and restricted shares agreements and any other incentive plan awards
until such time as you leave the payroll of the Company. At the time you leave
the payroll of the Company, your rights to benefits and payments under any
benefit plans or any insurance or other death benefit plans or arrangements of
the Company or under any stock option, restricted stock, stock appreciation
right, bonus unit, management incentive or other plan of the Company shall be
determined in accordance with the terms and provisions of such plans and any
agreements under which such stock options, restricted stock or other awards were
granted; provided, however, that notwithstanding the foregoing or any more
restrictive provisions of any such plan or agreement, if you leave the payroll
of the Company as a result of a termination pursuant to Section 4.2, then (i)
all stock options granted to you by the Company after the date of this Agreement
shall vest and become immediately exercisable at the time you leave the payroll
of the Company, (ii) all stock options granted to you by the Company after the
date of this Agreement shall remain exercisable (but not beyond the term
thereof) during the remainder of the term of employment and for a period of
three months thereafter or such longer period as may be specified in any stock
option agreement and (iii) the Company shall not be permitted to determine that
your employment was terminated for "unsatisfactory performance" within the
meaning of any stock option agreement between the you and the Company.
8.3 Payments in Lieu of Other Benefits. In the event the term of
employment and your employment with the Company is terminated pursuant to any
section of this Agreement, you shall not be entitled to notice and severance or
to be paid for any accrued vacation time or unused sabbatical, the payments
provided for in such sections being in lieu thereof.
9. Protection of Confidential Information; Non-Compete.
9.1 Confidentiality Covenant. You acknowledge that your employment by
the Company (which, for purposes of this Section 9 shall mean Time Warner Inc.
and its affiliates) will, throughout the term of employment, bring you into
close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, technical processes and other business
affairs and methods and other information not readily available to the
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public, and plans for future development. You further acknowledge that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products are
marketed throughout the world, that the Company competes in nearly all of its
business activities with other entities that are or could be located in nearly
any part of the world and that the nature of your services, position and
expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant
and agree:
9.1.1 You shall keep secret all confidential matters of the
Company and shall not disclose such matters to anyone outside of the Company,
either during or after the term of employment, except with the Company's written
consent, provided that (i) you shall have no such obligation to the extent such
matters are or become publicly known other than as a result of your breach of
your obligations hereunder and (ii) you may, after giving prior notice to the
Company to the extent practicable under the circumstances, disclose such matters
to the extent required by applicable laws or governmental regulations or
judicial or regulatory process;
9.1.2 You shall deliver promptly to the Company on termination of
your employment, or at any other time the Company may so request, all memoranda,
notes, records, reports and other documents (and all copies thereof) relating to
the Company's business, which you obtained while employed by, or otherwise
serving or acting on behalf of, the Company and which you may then possess or
have under your control; and
9.1.3 If the term of employment is terminated pursuant to Section
4, for a period of one year after such termination, without the prior written
consent of the Company, you shall not employ, and shall not cause any entity of
which you are an affiliate to employ, any person who was a full-time employee of
the Company at the date of such termination or within six months prior thereto
but such prohibition shall not apply to your secretary or executive assistant or
to any other employee eligible to receive overtime pay.
9.2 Non-Compete. During the term of employment and through the later
of (i) the Term Date, (ii) the date you leave the payroll of the Company and
(iii) twelve months after the effective date of any termination of the term of
employment pursuant to Section 4, you shall not, directly or indirectly, without
the prior written consent of the Chief Executive Officer or the President of the
Company, render any services to any Competitive
11
Entity (as defined in the next sentence) or acquire any interest of any type in
any Competitive Entity; provided, however, that the foregoing shall not be
deemed to prohibit you from (a) acquiring, solely as an investment and through
market purchases, securities of any Competitive Entity which are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which
are publicly traded, so long as you are not part of any control group of such
Competitive Entity and such securities, if converted, do not constitute more
than one percent (1%) of the outstanding voting power of that Competitive
Entity; (b) acquiring, solely as an investment, any securities of an entity
(other than a Competitive Entity that has outstanding securities covered by the
preceding clause(a)) so long as you remain a passive investor in such entity and
do not become part of any control group thereof and so long as such entity is
not a Competitive Entity, or (c) serving as a director of any entity that is not
a Competitive Entity. For purposes of the foregoing, a Competitive Entity shall
mean a person or entity that engages in any line of business that is
substantially the same as either (i) any line of operating business which the
Company engages in, conducts or, to your knowledge, has definitive plans to
engage in or conduct or (ii) any operating business that is engaged in or
conducted by the Company and as to which, to your knowledge, the Company
covenants in writing, in connection with the disposition of such business, not
to compete therewith; provided, however, that after you are no longer on the
payroll of the Company, the provisions of this Section 9.2 shall apply only to a
Competitive Entity that had, or the parent entity or predecessor entity of such
Competitive Entity had, consolidated gross revenues from all sources, including
non-competitive businesses, of $2 billion or more for the fiscal year preceding
your commencement of service for such Competitive Entity.
9.3 Specific Remedy. In addition to such other rights and remedies as
the Company may have at equity or in law with respect to any breach of this
Agreement, if you commit a material breach of any of the provisions of Sections
9.1 or 9.2, the Company shall have the right and remedy to have such provisions
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company.
10. Ownership of Work Product. You acknowledge that during the term of
employment, you may conceive of, discover, invent or create inventions,
improvements, new contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all of the foregoing
being collectively referred to herein as "Work Product"), and that various
business opportunities shall be presented to you by reason of your employment by
the Company. You acknowledge that all of the foregoing shall be owned by
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and belong exclusively to the Company and that you shall have no personal
interest therein, provided that they are either related in any manner to the
business (commercial or experimental) of the Company, or are, in the case of
Work Product, conceived or made on the Company's time or with the use of the
Company's facilities or materials, or, in the case of business opportunities,
are presented to you for the possible interest or participation of the Company.
You shall (i) promptly disclose any such Work Product and business opportunities
to the Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of your inventorship or creation in any appropriate case.
You agree that you will not assert any rights to any Work Product or business
opportunity as having been made or acquired by you prior to the date of this
Agreement except for Work Product or business opportunities, if any, disclosed
to and acknowledged by the Company in writing prior to the date hereof.
11. Notices. All notices, requests, consents and other communications
required or permitted to be given under this Agreement shall be effective only
if given in writing and shall be deemed to have been duly given if delivered
personally or sent by a nationally recognized overnight delivery service, or
mailed first-class, postage prepaid, by registered or certified mail, as follows
(or to such other or additional address as either party shall designate by
notice in writing to the other in accordance herewith):
11.1 If to the Company:
Time Warner Inc.
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
(with a copy, similarly addressed
but Attention: General Counsel)
11.2 If to you, to your residence address set forth on the records of
the Company.
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12. General.
12.1 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the substantive laws of the State of New York
applicable to agreements made and to be performed entirely in New York.
12.2 Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
12.3 Entire Agreement. This Agreement, including Annex A, sets forth
the entire agreement and understanding of the parties relating to the subject
matter of this Agreement and supersedes all prior agreements, arrangements and
understandings, written or oral, between the parties, including without
limitation, the Employment Agreement between you and Time Inc. dated January 12,
1996 and any side letters related thereto.
12.4 No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or be liable for any alleged representation,
promise or inducement not so set forth.
12.5 Assignability. This Agreement and your rights and obligations
hereunder may not be assigned by you and except as specifically contemplated in
this Agreement, neither you, your legal representative nor any beneficiary
designated by you shall have any right, without the prior written consent of the
Company, to assign, transfer, pledge, hypothecate, anticipate or commute to any
person or entity any payment due in the future pursuant to any provision of this
Agreement, and any attempt to do so shall be void and shall not be recognized by
the Company. The Company may assign its rights together with its obligations
hereunder, in connection with any sale, transfer or other disposition of all or
substantially all of its business and assets; and such rights and obligations
shall inure to, and be binding upon, any successor to all or substantially all
of the business and assets of the Company, whether by merger, purchase of stock
or assets or otherwise. The Company shall cause any such successor expressly to
assume such obligations.
12.6 Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by both of the parties hereto, or
in the case of a
14
waiver, by the party waiving compliance. The failure of either party at any time
or times to require performance of any provision hereof shall in no manner
affect such party's right at a later time to enforce the same. No waiver by
either party of the breach of any term or covenant contained in this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
12.7 Resolution of Disputes. Any dispute or controversy arising with
respect to this Agreement and your employment hereunder (whether based on
contract or tort or upon any federal, state or local statute, including but not
limited to claims asserted under the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, as amended, any state Fair Employment
Practices Act and/or the Americans with Disability Act) shall, at the election
of either you or the Company, be submitted to JAMS/ENDISPUTE for resolution in
arbitration in accordance with the rules and procedures of JAMS/ENDISPUTE.
Either party shall make such election by delivering written notice thereof to
the other party at any time (but not later than 45 days after such party
receives notice of the commencement of any administrative or regulatory
proceeding or the filing of any lawsuit relating to any such dispute or
controversy) and thereupon any such dispute or controversy shall be resolved
only in accordance with the provisions of this Section 12.7. Any such
proceedings shall take place in New York City before a single arbitrator (rather
than a panel of arbitrators), pursuant to any streamlined or expedited (rather
than a comprehensive) arbitration process, before a nonjudicial (rather than a
judicial) arbitrator, and in accordance with an arbitration process which, in
the judgment of such arbitrator, shall have the effect of reasonably limiting or
reducing the cost of such arbitration. The resolution of any such dispute or
controversy by the arbitrator appointed in accordance with the procedures of
JAMS/ENDISPUTE shall be final and binding. Judgment upon the award rendered by
such arbitrator may be entered in any court having jurisdiction thereof, and the
parties consent to the jurisdiction of the New York courts for this purpose. The
prevailing party shall be entitled to recover the costs of arbitration
(including reasonable attorneys fees and the fees of experts) from the losing
party. If at the time any dispute or controversy arises with respect to this
Agreement, JAMS/ENDISPUTE is not in business or is no longer providing
arbitration services, then the American Arbitration Association shall be
substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions of
this Section 12.7. If you shall be the prevailing party in such arbitration, the
Company shall promptly pay, upon your demand, all legal fees, court costs and
other costs and expenses incurred by you in any legal action seeking to enforce
the award in any court.
15
12.8 Beneficiaries. Whenever this Agreement provides for any payment
to your estate, such payment may be made instead to such beneficiary or
beneficiaries as you may designate by written notice to the Company. You shall
have the right to revoke any such designation and to redesignate a beneficiary
or beneficiaries by written notice to the Company (and to any applicable
insurance company) to such effect.
12.9 No Conflict. You represent and warrant to the Company that this
Agreement is legal, valid and binding upon you and the execution of this
Agreement and the performance of your obligations hereunder does not and will
not constitute a breach of, or conflict with the terms or provisions of, any
agreement or understanding to which you are a party (including, without
limitation, any other employment agreement). The Company represents and warrants
to you that this Agreement is legal, valid and binding upon the Company and the
execution of this Agreement and the performance of the Company's obligations
hereunder does not and will not constitute a breach of, or conflict with the
terms or provisions of, any agreement or understanding to which the Company is a
party.
12.10 Withholding Taxes. Payments made to you pursuant to this
Agreement shall be subject to withholding and social security taxes and other
ordinary and customary payroll deductions.
12.11 No Offset. Neither you nor the Company shall have any right
to offset any amounts owed by one party hereunder against amounts owed or
claimed to be owed to such party, whether pursuant to this Agreement or
otherwise, and you and the Company shall make all the payments provided for in
this Agreement in a timely manner.
12.12 Severability. If any provision of this Agreement shall be
held invalid, the remainder of this Agreement shall not be affected thereby;
provided, however, that the parties shall negotiate in good faith with respect
to equitable modification of the provision or application thereof held to be
invalid. To the extent that it may effectively do so under applicable law, each
party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
12.13 Survival. Sections 3.4, 8.2, 8.3 and 9 through 12 shall
survive any termination of the term of employment by the Company for cause.
Sections 3.4, 4.4, 4.5, 4.7 and 6 through 12 shall survive any termination of
the term of employment without cause.
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12.14 Definitions. The following terms are defined in this
Agreement in the places indicated:
affiliate - Section 4.2.2
Average Annual Bonus - Section 4.2.1
Base Salary - Section 3.1
Bonus - Section 3.2
cause - Section 4.1
Code - Section 4.2.2
Company - the first paragraph on page 1 and Section 9.1
Deferred Compensation - Section 3.3
Deferred Plan - Section 3.3
Disability Date - Section 5
Disability Period - Section 5
Effective Date - the first paragraph on page 1
Retirement Date - Section 4.6
Term Date - Section 1
term of employment - Section 1
termination without cause - Section 4.2.1
Work Product - Section 10
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
TIME WARNER INC.
By /s/ Xxxxxxx X Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx
President
/s/ Xxxxxx X. Xxxx
---------------------------
Xxxxxx X. Xxxx
17
ANNEX A
RELEASE
Pursuant to the terms of the Employment Agreement made as of _____________,
between TIME WARNER INC., a Delaware corporation (the "Company"), 00 Xxxxxxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 and the undersigned (the "Agreement"), and in
consideration of the payments made to me and other benefits to be received by me
pursuant thereto, I, [Name], being of lawful age, do hereby release and forever
discharge the Company and its officers, shareholders, subsidiaries, agents, and
employees, from any and all actions, causes of action, claims, or demands for
general, special or punitive damages, attorney's fees, expenses, or other
compensation, which in any way relate to or arise out of my employment with the
Company or any of its subsidiaries or the termination of such employment, which
I may now or hereafter have under any federal, state or local law, regulation or
order, including without limitation, under the Age Discrimination in Employment
Act, as amended, through and including the date of this Release; provided,
however, that the execution of this Release shall not prevent the undersigned
from bringing a lawsuit against the Company to enforce its obligations under the
Agreement.
I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.
I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP VALAUBLE
LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE SIGNING. I
further state that I have read this document and the Agreement referred to
herein, that I know the contents of both and that I have executed the same as my
own free act.
WITNESS my hand this ____ day of ___________, ____.
---------------------------
[Name]
