EXHIBIT 10.27
TIME WARNER INC.
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
1. PURPOSE OF THE PLAN
The purpose of the Plan is to enhance the Company's ability to attract
and retain talented individuals to serve as members of the Board.
2. DEFINITIONS
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) "ACT" means The Securities Exchange Act of 1934, as amended,
or any successor thereto.
(b) "AFFILIATE" means any entity that is consolidated with the
Company for financial reporting purposes or any other entity
designated by the Board in which the Company or an Affiliate
has a direct or indirect equity interest of at least twenty
percent (20%), measured by reference to vote or value.
(c) "ANNUAL DEFERRAL AMOUNT" means the portion of a Participant's
Cash Compensation that is to be deferred.
(d) "BOARD" means the Board of Directors of the Company.
(e) "CASH COMPENSATION" means cash compensation earned by a
Participant as a director of the Company (including, but not
limited to, annual retainer, board meeting fees, committee
meeting fees and committee chairman fees).
(f) "CODE" means The Internal Revenue Code of 1986, as amended,
or any successor thereto.
(g) "COMPANY" means Time Warner Inc., formerly named AOL Time
Warner Inc., a Delaware corporation.
(h) "DEFERRAL ELECTION FORM" means an election form approved by
the Board.
(i) "DEFERRED CASH" means a bookkeeping entry credited in
accordance with an election made by a Participant pursuant to
Section 5.
(j) "DEFERRED SHARE UNIT" means a bookkeeping entry, equivalent
in value to one Share, credited in accordance with an
election made by a Participant pursuant to Section 5.
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(k) "DEFERRED ACCOUNT" means a bookkeeping account maintained by
the Company pursuant to which the Company records amounts
deferred by a Participant as Deferred Cash and/or Deferred
Share Units.
(l) "EFFECTIVE DATE" means the date the Board approves the Plan.
(m) "ELIGIBLE DIRECTOR" means any director of the Company who is
not an employee of the Company or any Affiliate during any
years of service covered by the election made on a Deferral
Election Form.
(n) "FAIR MARKET VALUE" means, on a given date, (i) if there
should be a public market for the Shares on such date, the
average of the high and low prices of the Shares on the New
York Stock Exchange, or, if the Shares are not listed or
admitted on any national securities exchange, the average of
the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such market
in which such prices are regularly quoted)(the "NASDAQ"), or,
if no sale of Shares shall have been reported on the New York
Stock Exchange or quoted on the NASDAQ on such date, then the
immediately preceding date on which sales of the Shares have
been so reported or quoted shall be used, and (ii) if there
should not be a public market for the Shares on such date,
the Fair Market Value shall be the value established by the
Board in good faith.
(o) "PARTICIPANT" means any Eligible Director who elects to
participate in the Plan.
(p) "PLAN" means the Time Warner Inc. Non-Employee Directors'
Deferred Compensation Plan.
(q) "PRIME RATE" means, with respect to each annual period ending
on any April 30, the prime rate of interest per annum
reported by the Wall Street Journal on the May 1 with which
such annual period commenced (or if such May 1 is not a
business day, the immediately preceding business day).
(r) "SHARES" means shares of common stock of the Company, $.01
par value per share.
3. ADMINISTRATION
The Plan shall be administered by the Board, which may delegate its
duties and powers in whole or in part as it deems appropriate. The Board is
authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations that it
deems necessary or desirable for the administration of the Plan. The Board may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan in the manner and to the extent the Board deems necessary or desirable.
Any decision of the
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Board in the interpretation and administration of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned (including, but not limited to,
Participants and their beneficiaries or successors).
4. ELIGIBILITY
All Eligible Directors shall be eligible to participate in the Plan.
5. VOLUNTARY DEFERRAL OF CASH COMPENSATION
An Eligible Director may voluntarily elect to defer his or her Cash
Compensation in the following manner:
(a) Method of Election. In order to make a voluntary election
pursuant to the Plan, the Eligible Director must complete a
Deferral Election Form, not later than the commencement date
of the Participant's term for which the Cash Compensation to
be deferred will be earned (with respect to newly elected
Eligible Directors, no later than 30 days after the date on
which such Eligible Director commences service as a director
of the Company). Notwithstanding the foregoing, no later than
30 days following the Effective Date, each Eligible Director
may make a voluntary election to defer Cash Compensation
pursuant to the Plan. The Deferral Election Form shall
designate (i) the Annual Deferral Amount, (ii) the portion of
the Annual Deferral Amount that is to be deferred into (A)
Deferred Share Units and/or (B) Deferred Cash and (iii) the
timing of payments. Such an election shall only be effective
with respect to the Cash Compensation earned after the date
of the election. Such election shall remain effective for all
future terms of service as an Eligible Director unless the
Participant revokes the election or makes a new election with
respect to a subsequent term.
(b) Deferred Share Units. If a Participant elects to defer his or
her Annual Deferral Amount into Deferred Share Units, such
Participant will have Deferred Share Units credited (as of
each date on which his or her Cash Compensation would
otherwise have been paid) to the Participant's Deferred
Account. The number of Deferred Share Units (including
fractional Deferred Share Units) to be credited shall be
determined by dividing (i) the amount of Cash Compensation to
be deferred into Deferred Share Units by (ii) the Fair Market
Value of one Share on the date credited. Deferred Share Units
outstanding as of the record date of a dividend on the Shares
shall be credited with dividend equivalents when such
dividend is paid on the Shares, and such dividend equivalents
shall be converted into additional Deferred Share Units based
on the Fair Market Value of a Share on the date such dividend
is paid.
(c) Deferred Cash. If a Participant makes a voluntary election to
defer his or her Annual Deferral Amount into Deferred Cash,
such Participant will have Deferred Cash credited (as of each
date on which his or her Cash
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Compensation would otherwise have been paid) to the
Participant's Deferred Account. The amount of Deferred Cash
to be credited shall equal the amount of Cash Compensation to
be deferred into Deferred Cash. A Participant's Deferred
Account shall be credited with additional Deferred Cash on
April 30 of each calendar year equal to the amount of
notional interest earned on the Deferred Cash in the
Participant's Deferred Account. For this purpose, such
notional interest shall be earned at the Prime Rate plus two
percent (2%).
6. TIMING AND FORM OF PAYMENT
Payments in settlement of Deferred Accounts shall be made in cash as
soon as practicable after the date or dates, and in such number of
installments, as may be directed by the Participant in the Participant's
Deferral Election Form. If a Participant has elected to receive installment
payments, the amount of the distribution payable is based upon the value of a
Deferred Account on the installment payment date.
7. NONTRANSFERABILITY OF DEFERRED ACCOUNTS
Deferred Accounts shall not be transferable or assignable by the
Participant otherwise than by will or by the laws of descent and distribution.
During the lifetime of a Participant, Deferred Accounts shall be payable only
to such Participant. Deferred Accounts payable after the death of a Participant
shall be paid to the beneficiary designated by the Participant on the Deferral
Election Form; provided, that if no such beneficiary is designated the Deferred
Accounts may be paid to the legatees, personal representatives or distributees
of the Participant.
8. UNFUNDED PLAN
The Plan is intended to constitute an unfunded obligation of the
Company, and Participants shall rely solely on the unsecured promise of the
Company for payment hereunder. Nothing contained in the Plan shall give a
Participant any rights that are greater than those of a general unsecured
creditor of the Company. The Company may authorize the creation of a trust or
other arrangements to meet the Company's obligations under the Plan, which
trusts or other arrangements shall be consistent with the unfunded status of
the Plan.
9. ADJUSTMENTS UPON CERTAIN EVENTS
In the event of any change in the outstanding Shares after the
Effective Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or transaction
or exchange of Shares or other corporate exchange, or any distribution to
shareholders of Shares other than regular cash dividends or any transaction
similar to the foregoing, the Board in its sole discretion and without
liability to any person may make such substitution or adjustment, if any, as it
deems to be equitable, to any Deferred Share Units.
10. SUCCESSORS AND ASSIGNS
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The Plan shall be binding on all successors and assigns of the Company
and a Participant, including without limitation, the estate of such Participant
and the executor, administrator or trustee of such estate, or any receiver or
trustee in bankruptcy or representative of the Participant's creditors.
11. AMENDMENTS OR TERMINATION
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would reduce the value of any
Participant's Deferred Account without such Participant's consent.
12. CHOICE OF LAW
The Plan shall be governed by and construed in accordance with the
laws of the State of New York without regard to conflicts of laws and any and
all disputes between a Participant and the Company or any Affiliate relating to
the Plan shall be brought only in a state or federal court of competent
jurisdiction sitting in Manhattan, New York.
13. EFFECTIVENESS OF THE PLAN
The Plan shall be effective as of the Effective Date.