EXHIBIT 10.23
TIME WARNER
DEFERRED COMPENSATION PLAN
(AMENDED AND RESTATED AS OF NOVEMBER 1, 1994)
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 ESTABLISHMENT OF PLAN. Time Warner Inc. (the "Company") has
established this plan for certain Employees effective as of September 15, 1993,
known as the Time Warner Deferred Compensation Plan (the "Plan").
The purposes of the Plan are to provide Eligible Employees a means of
irrevocably deferring to a future year the receipt of certain compensation and
to enable Employing Companies that participate in certain qualified defined
contribution plans to provide benefits under this Plan to certain Employees with
respect to certain compensation in excess of the Compensation Limit.
1.2 APPLICABILITY OF PLAN. The provisions of the Plan are applicable only
to Employees of Employing Companies employed on or after the effective date of
the Plan.
The Plan is intended to be an unfunded, non-qualified deferred compensation
plan maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees.
ARTICLE II
DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
have the respective meanings set forth below unless otherwise expressly
provided, and when the defined meaning is intended, the term is capitalized.
2.2 "CODE" means the Internal Revenue Code of 1986, as amended.
2.3 "COMMITTEE" means the committee appointed by the Company as provided
in Section 7.1.
2.4 "COMPANY" means Time Warner Inc.
2.5 "COMPENSATION LIMIT" means the compensation limit of Section
401(a)(17) of the Code, as adjusted under Section 401(a)(17)(B) of the Code for
increases in the cost of living.
2.6 "DEFERRED COMPENSATION ACCOUNT" means the separate account
established
under Article V of the Plan for each Participant representing amounts deferred
by a Participant pursuant to Article III and Employing Company Allocations
credited to a Participant pursuant to Article IV.
2.7 "DISABILITY" means permanent and total disability as determined by
the Social Security Administration or any disability which qualifies a
Participant for benefits under the provisions of the Time Warner Inc. Long Term
Disability Plan or, in the case of an employee covered by a long term disability
plan of TWE or a Related Company, under the provisions of such plan, whichever
shall occur first.
2.8 "ELIGIBLE EMPLOYEE" means an individual who meets the eligibility
requirements of Section 3.1.
2.9 "EMPLOYEE" means an individual employed by an Employing Company.
2.10 "EMPLOYING COMPANY" means: (a) the Company, (b) TWE and (c) each
Related Company which has been authorized by the Committee to participate in the
Plan and has adopted the Plan.
2.11 "EMPLOYING COMPANY ALLOCATIONS" means the allocations made under the
Plan pursuant to Article IV.
2.12 "INACTIVE PARTICIPANT" means a Participant whose employment has
terminated and whose Deferred Compensation Account has not been fully
distributed.
2.13 "PARTICIPANT" means each Employee who participates in the Plan in
accordance with the terms and conditions of the Plan.
2.14 "PLAN" means this plan, the Time Warner Deferred Compensation Plan as
set forth herein and as it may be amended from time to time.
2.15 "RELATED COMPANY" means any entity of which, as of the time of
computation, at least 50% of the outstanding voting stock or ownership interest
is owned, either directly or indirectly, by the Company or TWE.
2.16 "RETIREMENT" means that a Participant, as of the date his or her
employment terminates, is eligible for retirement under the then current
qualified defined benefit plan of the Company, TWE or the Related Company from
which he or she is terminating employment. If such company does not have a
qualified defined benefit plan, eligibility for retirement shall be determined
by the applicable provision in the qualified defined contribution plan of such
company for which the Participant is eligible, and, if more than one, the plan
which would result in the earliest distribution under this Plan.
2.17 "TWE" means Time Warner Entertainment Company, L.P.
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2.18 "VALUATION DATE" means the last day of each calendar month. On and
after December 1, 1994, Valuation Date means each day of each calendar month.
ARTICLE III
PARTICIPANT DEFERRALS
3.1 ELIGIBILITY. The Employees who shall be eligible to make deferral
elections under the Plan are those salaried officers and other key employees of
an Employing Company who at the time of a deferral election pursuant to Section
3.3 below:
(i) are on the U.S. payroll of the Employing Company; and
(ii) have a current base salary plus bonus in excess of the
Compensation Limit or are otherwise designated as eligible
by the Committee. For purposes of this subsection 3.1(ii),
"bonus" means any annual bonus paid pursuant to a regular
program (but excluding long-term cash incentive plan
payments and commission, spot and similar bonuses) for the
year preceding the current calendar year, except that, in
the case of a deferral election to be made by a newly hired
Employee, with respect to a bonus to be earned in (A) the
current year, "bonus" means the target or otherwise
estimated bonus for that portion of the current calendar
year after the date of his or her hire, and (B) the year
following hire, "bonus" means the target or otherwise
estimated bonus for the current calendar year.
The Committee may from time to time, in its sole and absolute discretion,
modify the above eligibility requirements and make such additional or other
requirements for eligibility as it may determine.
3.2 COMPENSATION ELIGIBLE FOR DEFERRAL. An Eligible Employee may elect to
defer receipt of all or a specified portion of any bonus, but only to the extent
the receipt thereof would cause the Eligible Employee's compensation to exceed
the Compensation Limit. Each such deferral shall be expressed as a percentage,
in 10% increments only, but in no event shall any election result in a deferral
of less than $5,000. In the case of a deferral election made on or after
November 1, 1994, the Eligible Employee may elect to have the designated
percentage apply only to that portion of the bonus in excess of a certain dollar
amount that he or she specifies when making the election. For purposes of this
Section 3.2, "bonus" means any annual bonus paid pursuant to a regular program
(but excluding long-term cash incentive plan payments and commission, spot and
similar bonuses) and which would otherwise be payable in cash to an Eligible
Employee for services as an Employee.
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3.3 DEFERRAL ELECTIONS. An Eligible Employee with the consent of the
Committee may annually make an irrevocable election to defer certain
compensation described in Section 3.2 and participate herein by timely
delivering a properly executed election to the Committee on a form prescribed by
the Committee. The election form shall specify with respect to the compensation
to be deferred for the year, pursuant to the provisions of Section 3.2 and
Article VI:
(i) the percentage of the regular bonus to be deferred, or, for
elections made on or after November 1, 1994, the certain
dollar amount of such bonus in excess of which the deferral
has been elected, if applicable; and
(ii) the time for the commencement of payment of the deferred
compensation, which must be either on account of retirement
or at an in-service year to be specified by the Eligible
Employee. Compensation which is to be deferred to an in-
service payment date must be deferred for no fewer than
three calendar years following the year in which it was
earned.
3.4 EFFECTIVE DATE OF ELECTION. (a) An election to defer compensation
must be received by the Committee prior to the beginning of the calendar year in
which such compensation is earned. Such an election shall become irrevocable as
of the last day of the calendar year prior to the calendar year in which such
compensation is earned.
(b) Notwithstanding the date specified in subsection (a) above, the
Committee may prescribe an earlier or later date by which time an Eligible
Employee must elect to defer such compensation.
(c) Under no circumstances may an Eligible Employee at any time defer
compensation to which he or she has attained a legally enforceable right to
receive currently.
ARTICLE IV
EMPLOYING COMPANY ALLOCATIONS
4.1 EMPLOYING COMPANY ALLOCATIONS. (a) Subject to the right of the
Company or the Committee to modify, amend or terminate the Plan, and to modify,
suspend or discontinue the respective Employing Company Allocations under the
Plan, each Employing Company may make Employing Company Allocations with respect
to a designated year, on behalf of the employees of such Employing Company who
are eligible as provided in this Article IV to have Employing Company
Allocations allocated to their Deferred Compensation Accounts under the Plan for
such year.
(b) All Employing Company Allocations shall be allocated and credited to
each such Deferred Compensation Account as provided in Section 5.3(a) in an
amount equal to the
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allocation under such qualified defined contribution plan the Employee would
have received if his or her Compensation in excess of the Compensation Limit
were included, or such other amount determined by the Committee, in its sole and
absolute discretion, under the applicable provisions of this Plan.
(c) An Employee is eligible to have an Employing Company Allocation
credited to his or her Deferred Compensation Account under the Plan for any year
only if the Employee's Compensation exceeds the Compensation Limit in effect for
such plan year.
(d) Employing Company Allocations shall be credited only with respect to an
Employee's Compensation in excess of the Compensation Limit in effect for the
year for which such allocations are credited, up to a maximum Compensation of
$250,000 for 1994. The maximum Compensation shall be increased by 5% annually
for each year after 1994, but shall in no event exceed $350,000.
(e) All Employing Company Allocations shall be distributed in accordance
with the provisions of Article VI, provided however, that the provisions in
Sections 6.1(e) and 6.3 for in-service payments shall not apply to such amounts.
4.2 COMPENSATION. For purposes of this Article, "Compensation" for any
Employee shall have the same meaning as defined in the qualified defined
contribution plan of the Employing Company with respect to which it is making an
Employing Company Allocation on behalf of the Employee, provided however, that
the Compensation Limit in such qualified defined contribution plan's definition
shall be disregarded and any bonuses deferred under this Plan shall be included
in this definition of Compensation unless any such bonus would be excluded under
the definition of compensation in such qualified defined contribution plan,
regardless of the Compensation Limit. The Committee, in its sole and absolute
discretion, may make such modifications to such definition with respect to the
Plan as it considers necessary or desirable.
4.3 ELIGIBILITY, PARTICIPATION AND VESTING. As to any Employee, the rules
regarding eligibility, participation and vesting of the qualified defined
contribution plan of the Employing Company with respect to which it is making an
Employing Company Allocation on behalf of the Employee shall also apply to this
Plan, but only as to such Employing Company Allocation. The Committee, in its
sole and absolute discretion, may make such modifications to such rules with
respect to the Plan as it considers necessary or desirable. Any such Employing
Company Allocations for eligible employees of Time Warner Inc. participating in
the Time Warner Employees' Stock Ownership Plan ("TESOP") and for eligible
employees participating in the Warner Music Group Inc. Profit Sharing Plan (the
"Profit Sharing Plan"), shall become vested, in the case of the TESOP
participants, only after four Periods of Service or Years of Service, and in the
case of the Profit Sharing Plan participants, only after five Years of Service.
"Period of Service" or "Year of Service" shall be as determined under each such
respective qualified plan.
ARTICLE V
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DEFERRED COMPENSATION ACCOUNT
5.1 DEFERRED COMPENSATION ACCOUNT. (a) A Deferred Compensation Account
shall be established for each Participant who makes a deferral election pursuant
to Article III or for whom an Employing Company Allocation is credited pursuant
to Article IV. Compensation deferred by a Participant in any year under the
Plan and Employing Company Allocations, along with the hypothetical income on
such amounts, shall be credited to the Participant's Deferred Compensation
Account.
(b) The Company shall maintain the Deferred Compensation Accounts of
all Participants who are employed, at the time a deferred amount would otherwise
be payable or an Employing Company Allocation is credited, by an Employing
Company other than TWE or an Employing Company owned primarily through TWE. TWE
shall maintain the Deferred Compensation Accounts of all Participants who are
employed, at such times, by TWE or any Employing Company owned primarily through
TWE.
(c) All payments made under the Plan shall be made directly by the
Company or TWE, as applicable pursuant to subsection (b) above, from the
respective company's general assets and no deferred compensation or Employing
Company Allocations shall be segregated or earmarked or held in trust.
5.2 HYPOTHETICAL INVESTMENT. (a) Amounts credited to a Participant's
Deferred Compensation Account shall be deemed to be invested in the following
deemed investment vehicle: A hypothetical fixed income fund which shall be
deemed to accrue interest, compounded monthly on each Valuation Date, for each
month of the deferral period, at a deemed rate which shall be equal to the long-
term applicable federal rate for each such month as announced by the Internal
Revenue Service. On and after December 1, 1994, such interest shall be
compounded daily on each Valuation Date.
(b) If the Committee shall determine in good faith that it is
impossible or impractical to maintain the deemed investment vehicle described in
subsection (a) above, the Committee may, in its sole and absolute discretion,
replace such investment vehicle with a deemed investment vehicle which the
Committee has determined, in its sole and absolute discretion, to be
substantially similar thereto.
5.3 MANNER OF HYPOTHETICAL INVESTMENT. (a) For purposes of the
hypothetical investment under Section 5.2, deferred compensation, including any
Employing Company Allocations, shall be considered to be invested on the date
the recordkeeper of the Plan records the deferral amount. For amounts deferred
pursuant to deferral elections made prior to November 1, 1994, deferred
compensation shall be considered to be invested as of the first day of the month
in which the compensation would otherwise have been payable.
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(b) Distributions from Deferred Compensation Accounts pursuant to
Article VI shall accrue interest only through the Valuation Date immediately
prior to the commencement of processing of any such distribution.
(c) As of each Valuation Date, the value of a Participant's or
Inactive Participant's Deferred Compensation Account shall be equal to the sum
of:
(i) the amounts, if any, deferred by the Participant pursuant to
Article III;
(ii) the amounts, if any, of Employing Company Allocations
credited pursuant to Article IV; and
(iii) interest which has accrued pursuant to this Article V;
reduced by:
(iv) any amounts distributed pursuant to Article VI.
5.4 STATEMENT OF ACCOUNT. As soon as practicable after the end of
each calendar quarter, a statement shall be sent to each Participant and
Inactive Participant with respect to the value of his or her Deferred
Compensation Account as of the end of such quarter.
ARTICLE VI
PAYMENT OF DEFERRED COMPENSATION ACCOUNT
6.1 PAYMENT ON ACCOUNT OF RETIREMENT. (a) In the event of the
termination of the Participant's employment with the Company, TWE or a Related
Company on account of his or her Retirement, the Participant's Deferred
Compensation Account shall be distributed to him or her in five annual
installment payments.
(b) Notwithstanding subsection (a) above, if the value of the
Participant's Deferred Compensation Account is less than $50,000 as of the
Valuation Date immediately prior to the date of Retirement, payment shall be
made in a lump sum.
(c) Notwithstanding subsection (a) above, if the value of the
Participant's Deferred Compensation Account is $50,000 or more and such
Participant has requested a lump sum payment, by delivering written notice to
the Committee on a form prescribed by it, at least one calendar year prior to
his or her Retirement date, the Committee may, in its sole and absolute
discretion, make payment in a lump sum.
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(d) The first installment, or lump sum, as the case may be, shall be
distributed as soon as practicable after the January 1 immediately following the
date of Retirement. Subsequent annual installment payments shall be distributed
as soon as practicable after each following January 1.
(e) Notwithstanding the payment provisions in subsections (a), (b),
(c) and (d) above, the Committee may instead, in its sole and absolute
discretion, prior to a Participant's actual Retirement date, make one special
in-service payment in a lump sum of all or any portion of the Participant's
Deferred Compensation Account (but not less than $5,000), to be distributed as
soon as practicable after the expiration of 36 months following the month in
which the Participant has requested such special in-service payment by
delivering written notice to the Committee on a form prescribed by it.
(i) The value of any such special in-service payment shall not
include amounts payable under existing in-service payment
elections or amounts attributable to Employing Company
Allocations.
(ii) Interest which has accrued with respect to any special in-
service payment shall be payable at the time of such payment
and shall be calculated pursuant to Section 5.2.
(iii) In the event of the termination of the Participant's
employment with the Company, TWE or a Related Company for
any reason, prior to the payment of any such special in-
service payment, any such amount shall be paid in the same
manner and at the same time or times as any other payments
of the Participant's account due under this Article.
Interest on such in-service payment shall be paid at the
time of such payment and shall be calculated pursuant to
Section 5.2. In the event of death, payment shall be made
as provided for in Section 6.5.
6.2 PAYMENT ON ACCOUNT OF DISABILITY. (a) In the event a Participant
meets the definition of Disability, the value of the Participant's Deferred
Compensation Account shall be distributed to him or her in five annual
installment payments.
(b) Notwithstanding subsection (a) above, if the value of the
Participant's Deferred Compensation Account is less than $50,000 as of the
Valuation Date immediately prior to the date the definition of Disability is
met, payment shall be made in a lump sum.
(c) The first installment, or lump sum, as the case may be, shall be
distributed as soon as practicable after the January 1 immediately following the
date the Participant has met the definition of Disability. Subsequent annual
installment payments shall be distributed as soon as practicable after each
following January 1.
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(d) If a Participant or Inactive Participant no longer meets the
definition of Disability and returns to work with the Company, TWE or a Related
Company, no further payments shall be made on account of the prior Disability
and distribution of his or her remaining Deferred Compensation Account shall be
made as otherwise provided in this Article VI.
6.3 IN-SERVICE PAYMENTS (a) An in-service payment elected by a
Participant pursuant to Section 3.3(ii) shall be distributed in a lump sum as
soon as practicable after January 1 in the year specified by the Participant.
(b) Notwithstanding subsection (a) above, if the Participant has
requested, by delivering written notice to the Committee prior to January 1 of
the year preceding that in which the in-service payment is to be made, the
Committee may, in its sole and absolute discretion, defer such payment until
such later year as the Participant may request. Any such additional deferral
(i) must be for full calendar years, and for no fewer than three calendar years
following the year in which payment would have been made but for the additional
deferral, (ii) must be for the whole amount originally deferred, (iii) can only
be made once with respect to any in-service payment, and (iv) shall be
distributed in a lump sum as soon as practicable after January 1 in the year
specified by the Participant.
(c) Interest which has accrued with respect to the amount of any in-
service payment shall be payable at the time of such payment and shall be
calculated pursuant to Section 5.2.
(d) In the event of the termination of a Participant's employment for
any reason prior to the time any in-service payment under this Section 6.3 would
have been made, distribution of such payment shall be made according to the
manner of payment specified in Section 6.1, 6.2, 6.4 or 6.5, based on the
Participant's actual reason for termination of employment.
(e) The Committee may, in its sole and absolute discretion, defer any
in-service payment previously elected by any officer of the Company or TWE who
at the time of the designated in-service payment date is at or above the level
of a senior vice president. In the event of any such deferral by the Committee,
payment shall be made under this Article VI as if such officer had made a
deferral election for payment on account of Retirement.
6.4 PAYMENT ON ACCOUNT OF TERMINATION OF EMPLOYMENT OTHER THAN ON ACCOUNT
OF DEATH, DISABILITY OR RETIREMENT. (a) In the event of the termination of
employment with the Company, TWE or a Related Company for reasons other than
death, Disability or Retirement, the value of the Participant's Deferred
Compensation Account shall be distributed to him or her in five annual
installment payments. A Participant shall not be considered to have terminated
employment for purposes of the Plan if he or she transfers directly to the
Company, TWE or a Related Company.
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(b) Notwithstanding subsection (a) above, if the value of the
Participant's Deferred Compensation Account is less than $50,000 as of the
Valuation Date immediately prior to the date of such termination, payment shall
be made in a lump sum.
(c) The first installment, or lump sum, as the case may be, shall be
distributed as soon as practicable after the January 1 immediately following the
date the Participant has terminated employment. Subsequent annual installment
payments shall be distributed as soon as practicable after each following
January 1.
6.5 PAYMENT TO BENEFICIARY OR ESTATE IN THE EVENT OF DEATH.
Notwithstanding the provisions for payment described in Sections 6.1, 6.2, 6.3
and 6.4 above, in the event of the death of a Participant or Inactive
Participant before the distribution of his or her Deferred Compensation Account
has commenced, or before such account has been fully distributed, such account
shall be determined as of the Valuation Date coincident with or immediately
prior to the date that the Committee commences the processing of the
distribution, after both a written notice of his or her death and a death
certificate have been received by the Committee. Such account shall be
distributed in a lump sum to the person or persons designated from time to time
by a Participant or Inactive Participant by written notice to the Committee as
beneficiary or beneficiaries to receive payments under the Plan after his or her
death, which designation has not been revoked by notice to the Committee at the
date of such death. Any such notice shall be in such form as required by the
Committee or acceptable to it which is properly completed and delivered to the
Committee, any member thereof or its designee and shall be deemed to have been
given when it is actually received by any such individual. If no person has
been designated as beneficiary, or if no person so designated survives the
Participant or Inactive Participant, such account shall be distributed in a lump
sum as soon as practicable thereafter to his or her estate.
6.6 SEVERE UNFORESEEABLE FINANCIAL EMERGENCY PAYMENTS. Notwithstanding
any other provisions of the Plan, if the Committee determines, after
consideration of an application of a Participant or Inactive Participant, that
such individual has a severe unforeseeable financial emergency of such a
substantial nature and beyond the individual's control that a payment of
compensation previously deferred under the Plan is warranted, the Committee may,
in its sole and absolute discretion, direct that all or a portion of the balance
of his or her Deferred Compensation Account be paid to such individual in such
manner and at such time as the Committee shall specify, but only to the extent
reasonably required to satisfy the emergency need.
6.7 INCAPACITY. The Committee may direct that any amounts distributable
under the Plan to a person under a legal disability be made to (and be withheld
until the appointment of) a representative qualified pursuant to law to receive
such payment on such person's behalf.
6.8 VALUATION OF DISTRIBUTIONS. For purposes of distribution pursuant to
this Article VI, the balance of each Deferred Compensation Account shall be
valued as of the Valuation Date immediately preceding the date that the
Committee commences the processing of the
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distribution of the balance of such account, or the particular installment
thereof.
6.9 METHOD OF PAYING INSTALLMENTS. Installment payments as provided for
in this Article VI shall be paid as follows: 20% of the value of the Deferred
Compensation Account subject to installment payments shall be paid in the first
installment; 25% of the remaining value shall be paid in the second installment;
33.3% of the remaining value shall be paid in the third installment; 50% of the
remaining value shall be paid in the fourth installment; and all of the
remaining value in the account shall be paid in the fifth and final installment.
ARTICLE VII
ADMINISTRATION
7.1 THE COMMITTEE. The Plan shall be administered by a Committee,
consisting of not less than three members to be appointed by the Company and to
serve at the pleasure of the Company. Any member of the Committee may resign at
any time by giving notice to the Company. Any such resignation shall take
effect at the date of receipt of such notice or at any later date specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. No member of the
Committee shall receive any compensation for his or her services as such.
Participants and Inactive Participants may be members of the Committee but may
not participate in any decision affecting their own account in any case where
the Committee may take discretionary action under Article VI.
A majority of the members of the Committee shall constitute a quorum for
the transaction of business. All resolutions or other action taken by the
Committee shall be by a vote of a majority of its members present at any meeting
or, without a meeting, by instrument in writing signed by all its members.
Members of the Committee may participate in a meeting of such Committee by means
of a conference telephone or similar communications equipment that enables all
persons participating in the meeting to hear each other, and such participation
in a meeting shall constitute presence in person at the meeting.
The Committee shall be the administrator of the Plan and shall have all
powers necessary to administer the Plan, including discretionary authority to
determine eligibility for benefits and to decide claims under the terms of the
Plan, except to the extent that any such powers are vested in any other
fiduciary by the Plan or by the Committee. The Committee may from time to time
establish rules for the administration of the Plan, and it shall have the
exclusive right to interpret the Plan to decide any matters arising in
connection with the administration and operation of the Plan. All its rules,
interpretations and decisions shall be conclusive and binding on the Employing
Companies and on Eligible Employees, Participants and Inactive Participants.
The Committee may delegate any of its powers or duties to others as it
shall determine and may retain counsel, agents and such clerical and accounting
services as it may require in carrying out the provisions of the Plan.
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The Committee may rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary, accountant,
controller, counsel or other person who is employed or engaged for any purpose
in connection with the administration of the Plan.
Neither the Committee nor a member of the board of directors of the Company
or the board of directors (or governing body) of TWE or a Related Company and no
employee of the Company, TWE or any Related Company shall be liable for any act
or action hereunder, whether of omission or commission, by any other member or
employee or by any agent to whom duties in connection with the administration of
the Plan have been delegated or for anything done or omitted to be done in
connection with the Plan.
The Committee shall keep a record of all its proceedings and of all
payments directed by it to be made to Participants or Inactive Participants or
payments made by it for expenses or otherwise.
7.2 INDEMNIFICATION. The Company and TWE shall, to the fullest extent
permitted by law, indemnify each director, officer or employee of the Company,
TWE or any Related Company (including the heirs, executors, administrators and
other personal representatives of such person) and each member of the Committee
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement, actually and reasonably incurred by such person in connection
with any threatened, pending or actual suit, action or proceeding (whether
civil, criminal, administrative or investigative in nature or otherwise) in
which such person may be involved by reason of the fact that he or she is or was
serving any employee benefit plans of the Company, TWE or any Related Company in
any capacity at the request of such company.
7.3 EXPENSES OF ADMINISTRATION. Any expense incurred by the Company or
the Committee relative to the administration of the Plan shall be paid by the
Employing Companies in such proportions as the Company may direct.
7.4 BENEFIT CLAIMS. All claims for benefits under the Plan by a
Participant or beneficiary shall be made in writing to a person designated by
the Committee for such purpose. If the designated person receiving a claim for
benefits believes that the claim should be denied, he or she shall notify the
claimant in writing of the denial of the claim within ninety (90) days after his
or her receipt thereof. Such notice shall (a) set forth the specific reason or
reasons for the denial, making reference to the pertinent provisions of the Plan
or the Plan documents, if applicable, on which the denial is based, (b) describe
any additional material or information that should be received before the claim
request may be acted upon favorably, and explain why such material or
information, if any, is needed and (c) inform the person making the claim of his
or her right pursuant to this Article to request review of the decision by the
Committee. Any such person who believes that he or she has submitted all
available and relevant information may appeal the denial of a claim to the
Committee by submitting a written request for review to the Committee within
sixty (60) days after the date on which such denial is received. Such period
may be extended by the Committee for good cause shown. The person making the
request for review may examine pertinent Plan documents. The request for review
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may discuss any issues relevant to the claim. The Committee shall decide
whether or not to grant the claim within sixty (60) days after receipt of the
request for review, but this period may be extended by the Committee for up to
an additional sixty (60) days in special circumstances. If such an extension of
time for review is required because of special circumstances, written notice of
the extension shall be furnished to the claimant prior to the commencement of
the extension. The Committee's decision shall be in writing, shall include
specific reasons for the decision and shall refer to pertinent provisions of the
Plan or of Plan documents, if applicable, on which the decision is based.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 AMENDMENTS. The Company (by action of its board of directors) or the
Committee (for the Company, TWE and the other Employing Companies) may at any
time amend the Plan by an instrument in writing.
8.2 TERMINATION OR SUSPENSION. The continuance of the Plan and the
ability of an Eligible Employee to make a deferral for any year are not assumed
as contractual obligations of the Company, TWE or any other Employing Company.
The Company reserves the right (for itself, TWE and the other Employing
Companies) by action of its board of directors or the Committee, to terminate or
suspend the Plan, or to terminate or suspend the Plan with respect to itself,
TWE or an Employing Company. TWE or any Employing Company may terminate or
suspend the Plan with respect to itself by executing and delivering to the
Company or the Committee such documents as the Company or Committee shall deem
necessary or desirable.
8.3 PARTICIPANTS' RIGHTS TO PAYMENT. No termination of the Plan or
amendment thereto shall deprive a Participant or Inactive Participant of the
right to payment of deferred compensation credited as of the date of termination
or amendment, in accordance with the terms of the Plan as of the date of such
termination or amendment; provided, however, that in the event of termination of
the Plan, or termination of the Plan with respect to the Company, TWE or one or
more other Employing Companies, the Committee may, in its sole and absolute
discretion, accelerate the payment of all such credited deferred compensation on
a uniform basis for all Participants and Inactive Participants or, in the case
of termination of the Plan with respect to TWE or one or more other Employing
Companies, for all Participants and Inactive Participants of TWE or such other
Employing Companies only.
ARTICLE IX
PARTICIPATING COMPANIES
9.1 ADOPTION BY OTHER ENTITIES. Upon the approval of the Company or
the Committee, the Plan may be adopted by TWE or any Related Company by
executing and delivering to the Company or the Committee such documents as the
Company or Committee
13
shall deem necessary or desirable. The provisions of the Plan shall be fully
applicable to such entity except as may otherwise be agreed to by such adopting
company and the Company or Committee.
ARTICLE X
GENERAL PROVISIONS
10.1 PARTICIPANTS' RIGHTS UNSECURED. The right of any Participant or
Inactive Participant to receive future payments under the provisions of the
Plan shall be an unsecured claim against the general assets of the Employing
Company employing the Participant at the time that his or her compensation is
deferred. The Company, TWE (except for their respective obligations under
Section 5.1(b) and (c)) and any other Employing Company or former Employing
Company shall not guarantee or be liable for payment of benefits to the
employees of any other Employing Company or former Employing Company under the
Plan.
10.2 NON-ASSIGNABILITY. No right to receive any payment hereunder shall be
transferrable or assignable by a Participant or Inactive Participant other than
by will or by the laws of descent and distribution or by a court of competent
jurisdiction. Any other attempted assignment or alienation of any payment
hereunder shall be void and of no force or effect.
10.3 RELATED COMPANY CEASING TO BE SUCH. (a) In the event that a
corporation or unincorporated entity ceases at any time to meet the definition
of a Related Company, such corporation or entity shall cease as of such time to
be an Employing Company, if it had been such, and those of its Employees who
would have been Eligible Employees under the Plan shall cease to be such.
(b) Payments to Participants employed by any Related Company which
ceases to be such shall be made pursuant to Article VI unless prior to the end
of the year in which such company ceases to be a Related Company, it adopts a
non-qualified deferred compensation plan and agrees to the transfer of the
Deferred Compensation Accounts of all such Participants to its plan and to
assume all obligations accrued under the Plan as of the date of such transfer
with respect to such accounts and subsequent distributions thereof.
10.4 LEGAL FEES. All expenses (including legal fees, court costs and fees
of experts) incurred or expected to be incurred by a Participant or Inactive
Participant in connection with any actual, threatened or contemplated legal,
administrative or other proceeding (whether brought against the Company, TWE,
any Employing Company or former Employing Company or Related Company by a
Participant or Inactive Participant or otherwise)with respect to the
individual's rights (i) to payment, as provided for in Article VI, for all
compensation deferred hereunder pursuant to Articles III or IV, (ii) to the
appropriate investment of all such deferred compensation as provided for in
Article V, or (iii) otherwise relating to Participants' or Inactive
Participants' rights hereunder shall be paid or reimbursed to such Participant
or Inactive Participant by the Company, TWE, Employing Company or former
Employing Company or Related
14
Company within 20 days after the receipt by the Company, TWE or Related Company,
as the case may be, of a statement or statements from such Participant or
Inactive Participant requesting such payment or reimbursement or such payment
from time to time, whether prior to, delivering or after final disposition
thereof. Such statement or statements shall evidence the expenses incurred by
such Participant or Inactive Participant and shall include or be accompanied by
an undertaking by such Participant or Inactive Participant to repay the amounts
paid or reimbursed, without interest, if ultimately such Participant or Inactive
Participant shall wholly fail on his or her claim, but in no other case.
10.5 NO RIGHTS AGAINST THE COMPANY. The establishment of the Plan, any
amendment or other modification thereof, or any payments hereunder, shall not be
construed as giving to any Employee, Eligible Employee, Participant or Inactive
Participant any legal or equitable rights against the Company, TWE or any other
Employing Company or former Employing Company, its shareholders, directors,
officers or other employees, except as may be contemplated by or under the Plan
including, without limitation, the right of any Participant or Inactive
Participant to be paid as provided under the Plan. Participation in the Plan
does not give rise to any actual or implied contract of employment. A
Participant may be terminated at any time for any reason in accordance with the
procedures of the Employing Company.
10.6 WITHHOLDING. Each Employing Company or former Employing Company shall
withhold any federal, state and local income or employment tax (including
F.I.C.A. obligations for both social security and medicare) which by any present
or future law it is, or may be, required to withhold with respect to any
deferral of compensation pursuant to the Plan, any Employing Company Allocation,
any income deemed accrued or any distribution under the Plan, with respect to
any of its former or present Employees. The Committee shall provide or direct
the provision of information necessary or appropriate to enable each such
company to so withhold.
10.7 NO GUARANTEE OF TAX CONSEQUENCES. The Committee, the Company, TWE and
any Employing Company or former Employing Company do not make any commitment or
guarantee that any amounts deferred for the benefit of a Participant or Inactive
Participant will be excludible from the gross income of the Participant or
Inactive Participant in the year of deferral for federal, state or local income
or employment tax purposes, or that any other federal, state or local tax
treatment will apply to or be available to any Participant or Inactive
Participant. It shall be the obligation of each Eligible Employee, Participant
or Inactive Participant to determine whether any deferral under the Plan is
excludible from his or her gross income for federal, state and local income or
employment tax purposes, and to take appropriate action if he or she has reason
to believe that any such deferral is not so excludible.
10.8 SEVERABILITY. If a provision of the Plan shall be held illegal or
invalid, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included in the Plan.
10.9 GOVERNING LAW. The provisions of the Plan shall be governed by and
construed
15
in accordance with the laws of the State of New York.
16
AMENDMENT NO. 1
TO
TIME WARNER DEFERRED COMPENSATION PLAN
STATEMENT OF AMENDMENTS
1. Article III is hereby amended by adding the following new Section 3.5 to the
end thereof:
"3.5 CERTAIN INCENTIVE PLANS. Notwithstanding anything to the
contrary herein, the term "bonus" wherever used in this Article III shall
include any amounts paid to eligible employees of the following divisions of
TWE: Home Box Office and Home Box Office Communications, who participate in the
1993-1995 Cash Flow Incentive Plan, the 1996-1999 Cash Flow Incentive Plan, and
any successor plan, with respect to amounts they may earn under such incentive
plans, provided, however, that any such elections shall be made irrevocably
either before the beginning of the term of the applicable plan or within 30 days
after the signing of an eligible employee's renegotiated or newly negotiated
employment contract."
2. Section 6.3(b) is hereby amended by adding the following new sentence to the
end thereof:
"In lieu of specifying the year in which the payment is to be made,
the Participant may specify that payment of the deferral shall be made on
account of retirement, in which case it shall be distributed in a lump sum as
soon as practicable after the January 1 immediately following the date of
Retirement."
3. Item Numbers 1 and 2 are effective as of December 7, 1994.
AMENDMENT NO. 2
TO
TIME WARNER DEFERRED COMPENSATION PLAN
STATEMENT OF AMENDMENTS
1. The third sentence of Section 4.3 is hereby amended to read in its entirety
as follows:
"Any such Employing Company Allocations for (i) eligible employees
participating in the Time Warner Employees' Savings Plan (the "Savings Plan"),
(ii) eligible employees participating in the Time Warner Employees' Stock
Ownership Plan ("TESOP"), (iii) eligible employees participating in the Time
Warner Thrift Plan (the "Thrift Plan"), and (iv) eligible employees
participating in the Warner Music Group Inc. Profit Sharing Plan (the "Profit
Sharing Plan"), shall become vested, in the case of the (i) Savings Plan or
TESOP participants, only after four Periods of Service or Years of Service, (ii)
Thrift Plan participants, only after five Periods of Service or Years of
Service, and (iii) Profit Sharing Plan participants, only after five Years of
Service."
2. Item Number 1 is effective as of January 1, 1994.