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EXHIBIT 10.39
EMLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into as of the 20th day
of December, 1993, by and between W. THOMAS JOHNSON, an individual resident of
the State of Georgia (hereinafter referred to as "Employee"), and TURNER
BROADCASTING SYSTEM, INC., a corporation organized under the laws of the State
of Georgia (hereinafter referred to as the "Company");
W I T N E S S E T H:
WHEREAS, Employee is presently employed by the Company;
WHEREAS, the Board of Directors of the Company (the "Board of
Directors") recognizes that Employee's contribution to the growth and success
of the Company has been substantial and desires to provide for the continued
employment of Employee and to make certain changes in Employee's employment
arrangements with the Company that the Board of Directors has determined will
reinforce and encourage Employee's continued attention and dedication to the
affairs of the Company;
WHEREAS, Employee is willing to commit himself to continue to serve
the Company on the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and Employee
wish to enter into an employment agreement on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section 1. Scope of Employment.
1.1 Employment. Subject to terms hereof, the Company hereby agrees
to the continued employment of Employee, and Employee hereby accepts such
continued employment. Employee shall hold the office(s) set forth on Schedule
1.1(a) hereto and, as such, shall perform the executive-level services
(collectively, "Services") described on Schedule 1.1(b) hereto. Employee shall
report directly to the Chief Executive Officer of the Company, currently Mr.
R.E. Turner. Employee shall devote substantially all of Employee's productive
business time, energy and skill (except on vacation days and holidays) to
performing his obligations hereunder and shall perform his obligations
hereunder diligently, faithfully and to the best of Employee's abilities.
Notwithstanding the foregoing provisions, Employee shall be entitled to serve
on the board of directors of any civic,
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charitable or professional organization, provided that such service does not
materially interfere or conflict with Employee's provision of the Services or
his fulfillment of any of his other obligations under this Agreement.
1.2 Place of Performance. During the term of his continued
employment hereunder (the "Term"), Employee shall be based in Atlanta, Georgia
at the principal executive offices of the Company, except for reasonably
required travel on business.
1.3 Compliance with Policies. Subject to the terms of this
Agreement, during the Term, Employee shall comply in all material respects with
all policies and procedures applicable to senior executives of the Company
generally and to Employee specifically, including, without limitation, the
Company's Code of Ethics and Business Conduct.
Section 2. Term. The Term shall commence on the date of this
Agreement and continue until the earlier to occur of the following: (a) the
date that is four (4) years after the date of this Agreement; or (b) in the
event Employee's employment is terminated pursuant to Section 6 with an
effective date that is prior to the date set forth in (a), then the effective
date of such termination. References in this Agreement to the "Four-Year Term"
shall refer to the period of time from the date of this Agreement to the date
that is four (4) years after the date of this Agreement.
Section 3. Cash Compensation; Expenses.
3.1 Base Salary. Employee shall be paid a base salary (the "Base
Salary") during the Term as described on Schedule 3.2 hereof. The Base Salary
(and all other payments to be made to Employee pursuant to this Section 3)
shall be (a) payable on the schedule that the Company may implement from time
to time for such payments, and (b) subject to any withholdings and deductions
required by applicable law.
3.2 Bonus. During the Term, Employee shall be paid an annual bonus
(the "Annual Bonus"), if earned, as set forth on Schedule 3.2 hereof. The
Annual Bonus shall be earned, paid, administered and governed by the terms and
conditions of the Turner Incentive Plan (the "TIP") and any plan that is a
successor thereto, provided, however, that the bonus amounts set forth on
Schedule 3.2 are the maximum annual bonus amounts for Employee notwithstanding
the terms and conditions of the TIP. Notwithstanding the foregoing, if the TIP
is terminated by the Company, Employee will continue to remain eligible to
receive the Annual Bonus on terms and conditions substantially similar to those
of the TIP during the last year that Employee's Annual Bonus was administered
and governed by the TIP.
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3.3 Long-Term Incentive Plan. During the Term, Employee shall be
entitled to participate in the Long-Term Incentive Plan (together with any
successor plan, "LTIP"). All awards under the LTIP shall be made in accordance
with and subject to the terms of all relevant LTIP documentation and shall be
based upon the LTIP cycle in effect at the time of the award. The LTIP shall
continue in effect during the Term.
3.4 Expense Reimbursement. The Company shall pay or reimburse
Employee for all reasonable business expenses incurred or paid by Employee in
the course of performing his duties hereunder (it being agreed by the parties
hereto that business expenses incurred by Employee shall be deemed to be
reasonable if such expenses would have been reimbursed under current practices
or the expense reimbursement policy of the Company that is applicable to
Employee on the date hereof). As a condition to such payment or reimbursement,
however, Employee shall maintain and provide to the Company, upon the Company's
request, reasonable documentation and receipts for such expenses.
Section 4. Stock-Based Compensation; Special Bonus.
4.1 Stock Option Plan. During the Term, Employee shall be entitled
to participate in the Turner Broadcasting System, Inc. 1988 Stock Option Plan
and any successor stock-based employee incentive plans (collectively, the "Stock
Option Plan"). Contemporaneously with the execution of this Agreement (or as
soon thereafter as reasonably practicable), Employee will be granted the shares
of the Company's Class B Common Stock (the "Grant Shares") and the options to
purchase shares of the Company's Class B Common Stock (the "Option Shares")
under the Stock Option Plan in the number of shares described on Schedule 3.2
hereof. Contemporaneously with the execution of this Agreement, the Company
and the Employee shall enter into a Stock Option Agreement in the form of
Exhibit A hereto with respect to the Option Shares (the "Option Agreement"). For
purposes of Employee's future participation for possible additional grants of
stock options or grants under the Stock Option Plan, he will be reviewed and
considered for a grant at the same time as, and on a basis and subject to terms
that are consistent with, the basis and terms that govern grants to other
senior executive officers of the Company, taking into account Employee's
position and responsibilities.
4.2 Special Bonus. In addition to any payments made by the Company
to Employee hereunder or otherwise, contemporaneously with the transfer of the
Grant Shares to Employee pursuant to Section 4.1, the Company shall pay to
Employee the Special Bonus described on Schedule 3.2, less any withholding and
deductions required under applicable law.
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Section 5. Additional Employee Benefits.
5.1 Benefit Plans. During the Term, Employee shall be entitled to
participate in all other employee benefit plans and executive compensation
arrangements listed on Schedule 5.1, together with any additional plans or
arrangements available to employees generally or to executives or senior
executives of the Company as a group, subject in each case to terms and
conditions set forth in the plan or program documentation (collectively, the
"Benefit Plans"). During the Term, the Company agrees not to modify or amend
any material terms of the Benefit Plans or LTIP in any respect that would cause
the benefit that Employee would otherwise receive thereunder to be materially
reduced unless the Company makes up for such reduction by providing Employee
with supplemental benefits (or, in the Company's discretion, cash) with a value
that is substantially equivalent to the reduction.
5.2 Vacation. Employee shall be entitled to at least four (4) paid
weeks of vacation per year during the Term, to be accrued and taken in
accordance with a policy that is no less favorable for Employee than the
Company's normal vacation policy applicable to senior executive employees.
5.3 Automobile Allowance; Travel Benefits. The Company shall pay
Employee no less than Eight Hundred Fifty Dollars ($850.00) per month during
the Term as an automobile allowance. To the extent such benefits are normally
extended to other executive officers of the Company, during the Term, Employee
shall be entitled to first class air travel for all employment-related air
travel, subject to availability of first class seating on a particular flight.
5.4 Memberships. During the Term, the Company shall continue to
reimburse Employee for all costs and expenses associated with the maintenance
of Employee's current memberships in those business and social clubs and
associations for which he is as of the date of this Agreement being reimbursed
by the Company. In addition, the Company shall reimburse Employee for all costs
and expenses associated with Employee's obtaining and maintaining membership in
one additional club or association.
5.5 Financial Counseling. During the Term, the Company shall
reimburse Employee for up to $5,000 per year for costs and expenses incurred by
Employee in connection with financial and tax counseling and tax return
preparation.
5.6 Company-Paid Life Insurance. In combination with life
insurance currently provided at the Company's expense, during the Term,
Employee shall be provided with life insurance coverage equal to 2.5 times his
then current Base Salary.
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5.7 Long-Term Disability Salary Replacement. During the Term,
regardless of the limitations on the maximum salary level covered in the
current Long-Term Disability Plan or any future plan (collectively, the
"Disability Plan"), Employee shall, subject to the other provisions of the
Disability Plan, be entitled to purchase insurance under the Disability Plan
providing disability compensation of up to two-thirds of his then current Base
Salary for no more than the maximum annual cost (adjusted on a pro rata basis
to reflect the percentage increase in coverage over the standard coverage) as
currently in effect under the Disability Plan. In the event that the
Disability Plan does not permit the purchase of coverage of up to two-thirds of
Employee's then current Base Salary or coverage is otherwise not reasonably
available, the Company shall purchase or otherwise provide Employee with
supplemental coverage to the extent of any shortfall (up to a maximum
additional coverage to be provided by the Company of $200,000) in such coverage
that may be purchased by Employee under the Disability Plan. Disability
payments will commence three (3) months after Employee becomes disabled and
shall continue until Employee reaches 65 years of age (whether or not Employee
has retired previously) in accordance with the terms of the current Disability
Plan. The disability triggering Employee's rights under this Section 5.7 must
occur prior to the date of any Notice of Termination hereunder. Notwithstanding
anything to the contrary in this Agreement, the Company shall be entitled to
deduct without duplication from the aggregate of compensation related or
similar payments otherwise payable to Employee pursuant to this Agreement an
amount equal to all disability payments received by Employee pursuant to any
disability insurance, and worker's compensation and social security policies
maintained by the Company.
5.8 Post Retirement Medical Benefits. Each year commencing on the
date (the "Retirement Date") after (a) Employee becomes 65 years of age or (b)
Employee retires from the Company by giving notice to the Company that the
Employee intends to retire and does not intend to seek other full-time
employment, whichever occurs first, the Company shall reimburse Employee an
amount (the "Annual Premium Amount") of up to an aggregate of Three Thousand
Dollars ($3,000.00) (an amount which shall be increased each year in the manner
as set forth below) for insurance premiums with respect to medical insurance
covering Employee, his spouse and dependents, if any. Immediately prior to the
Retirement Date, the Annual Premium Amount shall be adjusted by multiplying the
Annual Premium Amount by a fraction (expressed a percentage), the numerator of
which is the most recently published "CPI" (as hereinafter defined) as of the
Retirement Date and the denominator of which shall be the most recently
published CPI as of the date of this Agreement. In addition, at the beginning
of each calendar year thereafter, the Annual Premium Amount shall be adjusted
by multiplying the then current Annual Premium Amount by a fraction (expressed
as a percentage), the numerator of which shall be the most recently published
CPI as of the end of the immediately preceding year and the denominator of
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which shall be the numerator used in the calculation relating to the previous
calendar year. For the purposes of this Agreement, "CPI" shall mean the
Consumer Price Index for All Urban Consumers, U.S. City Average, Medical Care
Index (1982-84 = 100) (unadjusted) published by the Bureau of labor Statistics,
United States Department of Labor. Notwithstanding anything to the contrary in
this Agreement, the benefits covered by this Section 5.8 shall not be available
to Employee if Employee is terminated by the Company for "Good Cause."
5.9 Indemnification. The Company shall indemnify and hold harmless
Employee if Employee is made a party, or is threatened to be made a party, to
any threatened, pending or completed action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, whether formal or informal,
including any action or suit by or in the right of the Company (for purposes of
this Section 5.9, collectively, a "Proceeding") because he is or was an
officer, employee, or agent of the Company, against any judgment, settlement,
penalty, fine, or reasonable expenses (including, but not limited to,
attorneys' fees and disbursements, court costs, and expert witness fees)
incurred with respect to the Proceeding (for purposes of this Section 5.9, a
"Liability"), if he acted in a manner he believed in good faith to be in or not
opposed to the best interests of the Company, and, in the case of any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful. The
Company shall indemnify Employee to the maximum extent permitted by Georgia
law.
Section 6. Termination.
6.1 Termination by the Company. Employee's employment hereunder
may be terminated by the Company under the circumstances set forth in (a), (b)
and (c) below.
(a) Death or Total Disabilitv. The Company may terminate
Employee's employment hereunder upon the death of Employee or Employee's total
disability (total disability meaning the inability of Employee to perform
substantially all of his current duties as required hereunder for a continuous
period of 183 days because of a mental or physical condition, illness or
injury).
(b) Good Cause. The Company may terminate Employee's
employment hereunder for "Good Cause." For the purposes of this Agreement, the
Company shall have "Good Cause" for termination of Employee's employment only
(i) if Employee is convicted of or pleads guilty to any felony (except if
committed upon advice from counsel to the Company), or (ii) if Employee has
engaged in conduct or activities involving moral turpitude materially damaging
to the business or reputation of the Company or any Affiliate of the Company,
or (iii) if Employee habitually engages in the immoderate use of alcoholic
beverages or engages in the illegal use of a controlled substance; or (iv) if
Employee
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violates any law, rule, regulation or order of any governmental authority,
thereby exposing the Company or any Affiliate of the Company (as defined in
Section 9.1(a)) to potential material civil or criminal penalties unless the
Employee has done so upon advice from counsel to the Company; or (v) in the
event of Employee's default, gross misfeasance, fraud, embezzlement in the
performance of his obligations hereunder or if Employee breaches or fails to
observe the terms of this Agreement in any material respect and fails to cure
such breach or failure within ten (10) days after notice thereof from the
Company or if any representation or warranty of Employee in this Agreement
shall be incorrect in any material respect, or (vi) if Employee persistently
and willfully fails or refuses to obey any proper written direction of the
Board of Directors or Chief Executive Officer of the Company, or (vii) if
Employee knowingly, and with intent, misappropriates for his own purpose and
benefit, any property of the Company or any Affiliate of the Company or
unlawfully appropriates any corporate opportunity of the Company or any
Affiliate of the Company.
(c) Discretionarv Termination. The Company shall have the
right at any point during the Term to terminate the employment of Employee
hereunder for any reason or for no reason; provided, however, that the Company's
termination of Employee pursuant to Section 6.1(a) or 6.1(b) shall not, for any
purpose, also be construed as a termination pursuant to this Section 6.1(c).
If the Company commits a breach of any of its material obligations under this
Agreement and fails to cure the breach within ten (10) days of being provided
written notice of the breach by Employee, then if Employee so chooses (and
indicates such choice in such ten-day written notice), the Company shall be
deemed to have exercised its right to terminate Employee's employment pursuant
to this Section 6.1(c).
6.2 Change in Control Termination by Employee. Employee may
terminate his employment for any reason within ninety (90) days after the
occurrence of a Change of Control of the Company. For all purposes under this
Agreement, a "Change of Control" of the Company shall be deemed to have
occurred if any of the following events have occurred (a) both of the following
events have occurred: (i) R.E. Turner is no longer the Chief Executive Officer
of the Company and its consolidated operations; and (ii) "Continuing Common
Stock Directors" (as defined below) no longer constitute (except by reason of a
temporary vacancy lasting no longer than six months among the Common Stock
Directors) a majority of the Company's Board of Directors; or (b) the Company
shall sell, transfer or otherwise dispose of all or substantially all of the
assets of the Company or the assets, if any, identified on Schedule 6.2 hereof;
or (c) the shareholders and the Board of Directors shall have approved any plan
or proposal for liqidation or dissolution of the Company; or (d) R.E. Turner
dies. For purposes of this Section 6.2, "Continuing Common Stock Directors"
shall include only (i) all persons who are initially elected (if elected at a
shareholders meeting) or appointed (if filling a vacancy on the Company's Board
of Directors) to the
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Company's Board of Directors as Common Stock Directors (as defined in Article
XII, Section 2(b) of the Company's By-laws) and at a time when R.E. Turner owns
in excess of 50% of the voting power of all classes of the outstanding Common
Stock of the Company; and (ii) all persons who are initially nominated for
election (if elected at a shareholders meeting) or appointed (if filling a
vacancy on the Company's Board of Directors) by at least a majority of the
Common Stock Directors described in (i) then serving on the Company's Board of
Directors; and (iii) all persons who are initially nominated for election (if
elected at a shareholders meeting) or appointed (if filling a vacancy on the
Board) by at least a majority of the Common Stock Directors and persons then
serving on the Company's Board of Directors who would constitute Continuing
Common Stock Directors under either (i) or (ii). A person shall no longer be a
Continuing Common Stock Director after his or her service on the Company's
Board of Directors is terminated unless reelected or reappointed in the manner
described in (i) - (iii) above. Until Article XII of the Company's By-laws is
amended or eliminated in such a way as to eliminate the two classes of the
Company's directors, of which Common Stock Directors constitute one, then all
Continuing Common Stock Directors must be Common Stock Directors. For purposes
of this Section 6.2, reference to the Company or the Company's Board of
Directors includes the current corporation on the date hereof and any
corporation which is the legal successor to the current corporation by virtue
of common stock merger or share exchange, provided that such successor
corporation is not the subsidiary of, or 50% or more of its common stock is not
beneficially owned by, any person, corporation or legal entity other than R.E.
Turner.
6.3 Termination by Employee for "Good Reason." Employee may
terminate his employment hereunder for "Good Reason" (assuming he has not
given the Company notice of his intention to terminate pursuant to Section 6.2)
within ninety (90) days after the occurrence of any of the following events
prior to the end of the Term: (i) Employee is not reelected to or is removed
(other than for cause) from any of the offices set forth on Schedule 1.1(a); or
(ii) Employee is not reelected to or is removed (other than for cause) from the
Board of Directors of the Company; or (iii) action is taken by the Company or
the Board of Directors of the Company that has the effect of divesting
Employee, or materially interfering with the exercise by Employee, of authority
to perform the Services; or (iv) Employee or the Company's executive offices
are relocated more than thirty (30) miles from the Company's current executive
offices located at One CNN Center, Atlanta, Georgia; or (v) the Company fails
to obtain the written assumption of this Agreement by any successor of the
Company or any assignee of all or substantially all of its assets at or prior
to such succession or assignment; or (vi) the Company breaches or fails to
observe any of the terms of this Agreement in any material respect and fails to
cure such breach or failure within ten (10) days after the Company has received
written notice thereof from Employee, or any representation or warranty of the
Company in this Agreement shall be incorrect in
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any material respect. Notwithstanding anything to the contrary in this
Agreement, Employee shall not be entitled to terminate for Good Reason if the
Company at such time is entitled to (and has not otherwise waived its right or
indicated its election not to) terminate Employee pursuant to Section 6.1(a) or
6.1(b) unless one hundred twenty (120) days has elapsed since the first date
the Company could have terminated Employee pursuant to Section 6.1(a) or
6.1(b).
6.4 Other Termination by Employee. If Employee's responsibilities
no longer include reporting directly to R. E. Turner, Employee may elect to
terminate his employment.
6.5 Termination Date and Notice of Termination.
(a) Any termination of Employee's employment by the
Company or by Employee (other than termination upon the death of Employee)
shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated.
(b) "Termination Date" shall mean (i) if Employee's
employment is terminated by his death, the date of his death, (ii) if
Employee's employment is terminated pursuant to Section 6.1(a) hereof as a
result of Employee's total disability, thirty (30) days after Notice of
Termination is given (provided that, with respect to a termination pursuant to
Section 6.1(a) as a result of Employee's total disability, Employee shall not
have returned to the performance of duties on a full-time basis during such
thirty (30) day period), (iii) if Employee's employment is terminated pursuant
to Section 6.1(b) hereof, the date on which such Notice of Termination is
given, (iv) if Employee's employment is terminated by Employee for Good Reason
or by the Company pursuant to Section 6.1(c), thirty (30) days after Notice of
Termination is given by Employee, and (v) if Employee's employment is
terminated for any other reason, the date on which a Notice of Termination is
given.
Section 7. Compensation Uon Termination
or During Disability.
7.1 Incapacity. During any period in which Employee fails to
perform his duties hereunder as a result of incapacity due to physical or
mental injury or illness, Employee shall continue to receive his then current
full Base Salary, including the minimum increases thereto contemplated in
Section 3.1, for such period until his employment is terminated pursuant to
Section 6.1(a).
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7.2 Termination by the Company Due to Death or Total Disability.
If Employee's employment is terminated as a result of his death or his total
disability under Section 6.1(a), the Company shall, in the case of Employee's
death, pay to Employee's wife, or such different person as Employee designates
in writing, and, in the case of Employee's total disability, pay to Employee
(a) an amount equal to his then current full Base Salary, including the minimum
increases thereto set forth on Schedule 3.2, through the Termination Date and
during the remainder of the Four-Year Term, (b) if the Termination Date occurs
prior to the end of any LTIP cycle during which Employee is participating in
the LTIP, an "Adjusted LTIP Award," which shall consist of an award of cash
equal to (i) the amount of cash that would have been awarded to Employee if
Employee's Termination Date had coincided with the end of the then current LTIP
cycle less (ii) a prorated amount attributable to the unexpired portion of the
then current LTIP cycle, and (c) an "Adjusted Annual Bonus," with respect to
the fiscal year that includes the Temination Date, which Adjusted Annual Bonus
shall consist of an amount equal to the Annual Bonus that would otherwise be
due and payable hereunder with respect to such fiscal year multiplied by a
fraction, the numerator of which is the total number of days during the fiscal
year that Employee was employed hereunder and the denominator of which is 365.
In addition to the above payments, if Employee's employment is terminated as a
result of his total disability pursuant to Section 6.1(a), the Company shall
provide Employee during the remainder of the Four-Year Term with benefits
substantially similar to the benefits Employee would be entitled to receive
under the Benefit Plans had Employee not been terminated (or, in lieu of
providing Employee such benefits, the Company may provide Employee with cash
equal to the value of such benefits). Notwithstanding any provision contained
herein to the contrary, the Company shall have the right to offset any amount
to be paid to or benefit to be provided to Employee by the Company pursuant to
clause (a) of this Section 7.2 during any particular month against amounts that
will be paid to Employee during such month under the Company's Disability Plan.
7.3 Termination by Company for Good Cause. If the Employee's
employment is terminated for Good Cause pursuant to Section 6.1(b), the Company
shall pay Employee his then current full Base Salary through the Termination
Date and such other benefits (including stock grants, stock options, LTIP, and
Adjusted Annual Bonus) as are otherwise vested and due to Employee as of the
Termination Date (calculated as provided in Section 7.2).
7.4 Termination by Employee After a Change in Control. If Employee
terminates his employment pursuant to Section 6.2 following a Change in Control
or pursuant to Section 6.4, the Company shall pay Employee all earned and
vested rights as of the Termination Date, including, without limitation, his
then current Base Salary through the Termination Date, an Adjusted Annual Bonus
(calculated as provided in Section 7.2), an Adjusted LTIP Award
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(calculated as provided in Section 7.2) and all vested stock grants or stock
options.
7.5 Termination by Employee with Good Reason or by the Company
Pursuant to Section 6.1(c). If Employee shall terminate his employment for Good
Reason pursuant to Section 6.3 or the Company shall terminate Employee pursuant
to Section 6.1(c), the following provisions shall govern:
(i) Base Salary Equivalent. The Company shall pay
Employee an amount equal to Employee's Base Salary as shown on
Schedule 3.2 for the respective years, after the Termination Date for
a period equal to the greater of (A) the number of months (and partial
months) otherwise remaining in the Four-Year Term as of the
Termination Date or (B) thirty-six (36) months from the Termination
Date. To any extent that the period in the preceding clause (B)
extends past December 20, 1997, the annual amount payable pursuant to
this Section 7.5(i) shall be equal to the base salary for 1997 shown
on Schedule 3.2. Except as may be elected by either party pursuant to
Section 9.9, payments pursuant to this Section 7.5(i) shall be at such
times and in accordance with such procedures as apply to payments
governed by Section 3.
(ii) Annual Bonus Equivalent. The Company shall pay
Employee an amount equal to Employee's bonus as shown on Schedule
3.2 for the respective years after the Termination Date for a period
equal to the greater of (A) the number of months (and partial months)
otherwise remaining in the Four-Year Term as of the Termination Date
or (B) thirty-six (36) months from the Termination Date, with such
Annual Bonus equivalents to be prorated to reflect any partial year
falling within the period specified in (A) or (B), as the case may be.
To any extent that the period in the preceding clause (B) extends past
December 20, 1997, the annual amount payable pursuant to this Section
7.5(ii) shall be equal to the bonus amount for 1997 shown on Schedule
3.2.
(iii) Adjusted LTIP Award. The Company shall pay Employee
an Adjusted LTIP Award (calculated as provided in Section 7.2) if the
Termination Date occurs prior to the end of any LTIP cycle during
which Employee is participating in the LTIP.
(iv) Acceleration of Stock Option Vesting. The Company
shall cause the vesting of any Company stock options held by Employee
to be accelerated to the Termination Date and provide that Employee
shall be entitled to give notice of exercise of all such options for
thirty (30) days after the Termination Date.
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(v) Vested Plan Benefits. The Company shall pay or make
available to Employee all vested benefits accrued or available under
any Benefit Plan in accordance with and subject to the terms of such
Benefit Plans.
(vi) Miscellaneous Health, Death and Disability Benefits.
The Company shall provide Employee with life insurance and other death
benefits, health and medical benefits and long term disability
benefits substantially similar to those benefits provided to Employee
prior to the Termination Date under the Benefit Plans on Schedule
7.5(vi) after the Termination Date for a period equal to the greater
of (A) the number of months (including partial months) otherwise
remaining in the Four-Year Term as of the Termination Date or (B)
thirty-six (36) months from the Termination Date.
(vii) Supplemental Compensation Benefits. The Company shall
provide supplemental compensation benefits (current and deferred) to
Employee substantially similar to those provided to Employee under the
Benefit Plans listed on Schedule 7.5(vii) (which supplemental benefits
shall be determined as if Employee had continued after the
Termination Date to receive the same level of total compensation as in
effect immediately before the Termination Date) until the end of the
period equal to the greater of (A) the number of months (including
partial months) otherwise remaining in the Four-Year Term as of the
Termination Date or (B) thirty-six (36) months from the Termination
Date, and such supplemental benefits shall be provided to him at the
same time and in the same manner as a benefit that would be payable to
him under each such Benefit Plan had Employee actually continued to
work until the end of such period.
(viii) Office Space. The Company shall furnish Employee with
office space, secretarial assistance and such other facilities and
services as are provided to senior executives of the Company for a
period of twelve (12) months following the Termination Date; provided,
however, the Company shall not be required to continue to provide
Employee with the items set forth in this clause (viii) in the event
that Employee begins other full time employment during such
twelve-month period.
(ix) Placement Services. The Company shall provide
Employee with the assistance of a nationally recognized executive
placement firm for a period of twelve months following the Termination
Date; provided, however, the Company shall not be required to continue
to provide Employee with such assistance in the event that Employee
begins other full time employment during such period.
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7.6 Discontinuation of Benefits. Notwithstanding anything to the
contrary in this Agreement, after the Termination Date, the Company shall not
be required to continue to provide Employee with any benefits pursuant to
Section 7.5(vi) and (vii) if and to the extent that Employee has obtained new
employment and the new employer provides Employee with equal or better coverage
at no or comparable cost to Employee. Nothing in this Agreement is intended to
permit Employee to receive, after the Termination Date, a greater package of
benefits than he would have been entitled to receive during the same period
from the Company had his employment not terminated.
7.7 Conditional Receipt of Benefits. Employee acknowledges and
agrees that his right to any compensation or benefits as provided in this
Agreement is conditioned on his compliance with all of his obligations in
Section 9. Accordingly, Employee agrees that if he fails to comply with any
covenant of his contained in Section 9 (regardless of whether such
non-compliance occurs during or after the Term), he will not be entitled to any
further payment by the Company of compensation or benefits (including those
that have vested as of the date of such non-compliance).
7.8 No Duty to Mitigate. Employee shall not be required to
mitigate the amount of any payment provided for in this Section 7 by seeking
other employment or otherwise. Except as otherwise expressly set forth in this
Section 7, no amounts due to Employee by the Company under this Section 7 shall
be reduced or offset by any compensation whatsoever received by Employee from
any other employment of Employee.
Section 8. Representations of the Parties. The Company
represents and warrants to Employee that (a) this Agreement and the Option
Agreement have been duly executed and delivered by the Company, (b) the
execution, delivery and performance of this Agreement and the Option Agreement
by the Company has been duly authorized by all necessary corporate action on
the part of the Company including all applicable committees of the Board of
Directors or otherwise, (c) this Agreement and the Option Agreement constitute
the legal, valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms, (d) the execution, delivery and
performance of this Agreement and the Option Agreement by the Company do not
and will not conflict with, violate, or constitute a breach of or default
under, (i) the Articles of Incorporation or By-laws of the Company or any of
its subsidiaries, (ii) any provision of law or regulations applicable to the
Company or any of its subsidiaries, (iii) any provision of any indenture,
agreement or other instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound or
affected, with respect to which any such conflict, violation, breach or default
would render this Agreement unenforceable or would have a material adverse
effect on the financial condition of
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the Company or any of its subsidiaries, or (iv) the Company's 1988 Stock Option
Plan, (e) the Option Shares are and at all times during the period of the
Option Agreement shall be available under the Plan and there is and will be no
violation of Section 5(a) of the Plan with respect to the Option Shares, and
(f) the Company has not received any legal advice contrary to the Company's
representations and warranties set forth in this Section 8. Employee represents
and warrants to the Company that (A) his execution, delivery and performance of
this Agreement do not and will not conflict with, violate, or constitute a
breach of or default under any provision of law or regulation applicable to him
or any provision of any agreement, contract or other instrument to which he is
a party or otherwise bound, (B) this Agreement constitutes the legal, valid and
binding obligation of Employee, enforceable against Employee in accordance with
its terms, and (C) he has not received any legal advice contrary to his
representations and warranties set forth in this Section 8.
Section 9. Certain Covenants.
9.1 Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(a) "Affiliate of the Company" shall mean any corporation,
partnership or other entity or enterprise which, directly or indirectly, is
controlled by the Company and, if the Company becomes wholly-owned by any other
corporation, partnership or other entity or enterprise ("Parent"), then
"Affiliate of the Company" shall also include Parent and any corporation,
partnership or other entity or enterprise which, directly or indirectly,
controls, is controlled by, or is under common control with the Company or
Parent. For purposes of the preceding sentence, the word "control" (including
the terms "controlling," "controlled by" and "under common control with") shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of an entity or enterprise, whether
through the ownership of voting securities or partnership interests, by
contract or otherwise.
(b) "Business" shall mean, to the extent engaged in by
Turner during the Employment Term, and together with any other business engaged
in by Turner during the Employment Term, any one or more of the following
businesses, provided that such business is a material part of Turner's business
at the date of Termination: ownership, creation, production and/or distribution
of audio-visual, audio or visual programming, whether fixed on film, videotape
or otherwise ("Programming") by any and all means, whether now known or
hereafter created, including, without limitation, satellite transmission (of
any kind), over-the-air broadcast, VHF or UHF television, microwave, wire,
video cassette, radio, computer, telephone or any combination of the foregoing
for ultimate viewing by the public (in public or private, with or without
charges); ownership and operation of a television station; ownership, operation
and distribution of cable television
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entertainment program services; ownership, operation and distribution of cable
television news services; syndication and licensing of films or television
Programming; production and/or syndication of theatrical motion pictures;
ownership of a professional baseball club; ownership of an interest in a
professional basketball club; ownership of an interest in a multimedia sports
network; ownership or operation of a sports or entertainment stadium or arena,
the sale or marketing of Programming to distributors of Programming, such as
cable television system operators, the sale of advertising time in and adjacent
to Programming; the merchandising and licensing of consumer products derived
from Programming; and the book publishing business.
(c) "Competitive Position" shall mean: (i) Employee's
direct or indirect equity ownership (excluding equity ownership of less than
five percent (5%)) or control of any portion of any entity or enterprise (other
than the Company or any Affiliate of the Company) engaged, wholly or partly, in
any Business or (ii) any employment, consulting, partnership, joint venture,
advisory, directorship, agency, promotional or independent contractor
arrangement between Employee and any entity or enterprise (other than the
Company or any Affiliate of the Company) engaged, wholly or partly, in any
Business whereby Employee is required to or does perform services similar to
the "Services" (as defined in Section 1.1) on behalf of or for the benefit of
such an entity or enterprise.
(d) "Confidential Information" shall mean valuable,
non-public, competitively sensitive data and information relating to Turner's
business, other than Trade Secrets (as defined in Section 9.1(j).
(e) "Employment Term" shall mean the entire duration of
Employee's employment with the Company, including Employee's employment prior
to and during the Term through the Termination Date.
(f) "Employment Territory" shall mean the entire
continental United States. Given Employee's high level of executive
responsibility with respect to Turner's business and the fact that Turner's
business extends throughout the world, Employee acknowledges that Employee will
be expected to perform the Services throughout the entire continental United
States and beyond.
(g) "Parties" shall mean collectively the Company and
Employee.
(h) "Trade Secrets" shall mean information or data of or
about Turner, including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, products plans, or lists
of actual or potential
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customers, clients, distributees, or licenses, that: (i) derive economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from their disclosure or use; and (ii) are the subject of efforts that are
reasonable under the circumstances to maintain their secrecy. To the extent
that the foregoing definition is inconsistent with a definition of
"trade secret" mandated under applicable law, the latter definition shall
govern for purposes of interpreting Employee's obligations under this Agreement.
(i) "Turner" shall mean, collectively, the Company and all
Affiliates of the Company.
(j) "Work Product" shall mean work product, property,
data, documentation or information or materials prepared, conceived,
discovered, developed or created by Employee in connection with performing the
Services or any other of his employment responsibilities during the Employment
Term.
9.2 Limitation on Competition. Employee agrees that during the
Employment Term, Employee will not, either directly or indirectly, alone or in
conjunction with any other party, accept, enter into or take any action in
conjunction with or in furtherance of a Competitive Position (other than action
to reject an offer of a Competitive Position) except with the prior written
permission of the Company. Employee agrees that Employee will not, anywhere in
the Employment Territory, either directly or indirectly, alone or in
conjunction with any other party, accept, enter into or take any action in
conjunction with or in furtherance of a Competitive Position (other than action
to reject an offer of a Competitive Position and except with the prior written
permission of the Company) for a period of twelve (12) months after the
Termination Date if Employee is terminated by the Company for Good Cause
pursuant to Section 6.1(b)(iii), (v), (vi) or (vii) or Employee terminates his
employment pursuant to Section 6.2 or Section 6.3; provided, however, that
Employee may accept a Competitive Position or other position in the print media
without violating this Section 9.2. There shall be no limitation on competition
if either (i) Employee terminates his employment pursuant to Section 6.4 or
(ii) notwithstanding any other provision of this Agreement, the entity
controlling the Company after a Change of Control is not a Class C stockholder
of the Company as of the date of this Agreement or an entity 100% owned by such
a Class C stockholder.
9.3 Limitation on Soliciting Personnel. Employee agrees that,
except to the extent that Employee is required to do so in connection with his
employment responsibilities on behalf of the Company or except with the
Company's prior, written permission, during the Term, Employee will not, either
directly or indirectly, alone or in conjunction with any other party, solicit
or attempt to solicit any employee, consultant, contractor or other personnel
of Turner to terminate, alter or lessen that
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party's affiliation with Turner or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or other person and
Turner. Employee agrees that, unless he has received the Company's prior
written permission to do so, Employee will not, either directly or indirectly,
alone or in conjunction with any other party, solicit or attempt to solicit any
"key" (as that term is defined in the next sentence) employee, consultant,
contractor or other personnel of Turner residing at the time of the
solicitation in the Employment Territory to terminate, alter or lessen that
party's affiliation with Turner or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or other person and
Turner for a period of twelve (12) months after the Termination Date if
Employee is terminated by the Company for Good Cause pursuant to Section
6.1(b)(iii), (v), (vi), or (vii) or if Employee terminates his employment
pursuant to Sections 6.2 or 6.3. For purposes of the preceding sentence, "key"
employees, consultants, contractors or other personnel are those with knowledge
of or access to Trade Secrets and Confidential Information.
9.4 Trade Secrets and Confidential Information.
(a) Rights to Work Product. Except as expressly provided
in this Agreement, the Company alone shall be entitled to all benefits, profits
and results arising from or incidental to Employee's performance of the
Services. To the greatest extent possible, any Work Product shall be deemed to
be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. Section
101 et seq., as amended) and owned exclusively by the Company. Employee hereby
unconditionally and irrevocably transfers and assigns to the Company all
intellectual property or other rights, title and interest Employee may
currently have (or in the future may have) by operation of law or otherwise in
or to any Work Product. Employee agrees to execute and deliver to the Company
any transfers, assignments, documents or other instruments which the Company
may deem necessary or appropriate to vest complete title and ownership of any
Work Product, and all associated rights, exclusively in the Company.
(b) Non-disclosure Covenant. Through exercise of his
rights and performance of his obligations under this Agreement Employee will be
exposed to Trade Secrets and Confidential Information. Employee acknowledges
and agrees that any unauthorized disclosure or use of any of the Trade Secrets
or Confidential Information would be wrongful and would likely result in
immediate and irreparable injury to Turner. Except as required to perform his
obligations under this Agreement or except with Company's prior written
permission, Employee shall not, without the express prior written consent of
the Company, redistribute, market, publish, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly in any way
for any person or entity: (i) any Trade Secrets at any time (during or after
the Term) during which such information or data shall continue to constitute a
"trade secret" under applicable
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law; and (ii) any Confidential Information during the Term and until the later
of (A) for a period of twelve (12) months after the Termination Date if
Employee is terminated by the Company for Good Cause pursuant to Section 6.1(b)
or if Employee terminates his employment pursuant to Sections 6.2, 6.3 or 6.4;
or (B) the last day following the Termination Date on which the Employee is
receiving severance benefits under Section 7.5. Employee agrees to cooperate
with any reasonable confidentiality requirements of the Company. Employee shall
immediately notify the Company of any unauthorized disclosure or use of any
Trade Secrets or Confidential Information of which Employee becomes aware.
9.5 Acknowledqment. The Parties acknowledge and agree that the
covenants of Employee in this Section 9 (collectively, the "Protective
Covenants") are reasonable as to time, scope and territory given Turner's need
to protect its substantial investment in its Confidential Information, Trade
Secrets and Customer relationships, and particularly given (a) the generous
compensation and benefits that are to be provided Employee both before and
after the Term, (b) Turner's investment of time, effort and capital in enhancing
Employee's business skills and opportunities, (c) the complexity and
competitive nature of the Company, and (d) that Employee has sufficient skills
to find alternative, commensurate employment or consulting work in Employee's
field of expertise that would not entail a violation of the Protective
Covenants. The Parties further acknowledge and agree that if the nature of
Employee's responsibilities for or on behalf of the Company and the
geographical areas in which Employee must fulfill them materially change, the
Parties will execute appropriate amendments to the scope of the Protective
Covenants. The Parties also acknowledge that the Company shall have the
discretion at any point to waive, in writing, Employee's full or partial
compliance with any one or more of the Protective Covenants. The Company agrees
to make appropriate executive officers available (before and after the Term) to
review and discuss the Protective Covenants with Employee. Employee represents
and warrants to the Company that during the Employment Term (up to the date of
this Agreement) he has not taken any action or failed to take any action that
could reasonably be construed as a breach of his covenants in this Section 9
(assuming for purposes of this sentence that the covenants in this Section 9
applied during the duration of the Employment Term).
9.6 Tolling. The running of the applicable time period of any
Protective Covenant shall be tolled: (a) during the continuation of any breach
by Employee of the Protective Covenant; and (b) during the pendency of any
litigation involving a good faith claim by the Company that Employee has
breached the Protective Covenant.
9.7 Return of Materials. At any point during the Term at the
specific request of the Company, or, in any event, as promptly as practicable
after Employee's employment hereunder has been terminated Employee will return
to the Company all Work
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Product (including any copies or reproductions thereof and any materials
constituting or containing Trade Secrets or Confidential Information of the
Company that are in Employee's possession or control.
9.8 Remedies.
(a) Notwithstanding anything to the contrary in this
Agreement, in the event of a breach by Employee of any provision of this
Agreement, the Company shall have the right to set-off against any sums the
Company owes Employee the amount any damages incurred or suffered by the
Company as a result of the breach. Any such set-off shall not be presumed to be
in full satisfaction of or as liquidated damages for or as a release of any
claim for damages against Employee that may accrue to the Company as a result
of the breach. Notwithstanding Section 10 below, the Parties further
acknowledge that any breach or threatened breach of a Protective Covenant by
Employee is reasonably likely to result in irreparable injury to the Company,
and therefore, in addition to all remedies provided at law or in equity (which
remedies shall be cumulative and not mutually exclusive), Employee agrees that
the Company shall be entitled to file suit in a court of competent
jurisdiction, to seek a temporary restraining order and a permanent injunction
to prevent a breach or contemplated breach of the Protective Covenant. The
existence of any claim, demand, action or cause of action of Employee against
Turner, whether predicated upon this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of Employee's
obligations under this Agreement.
(b) The payments and benefits provided to Employee
pursuant to this Agreement shall constitute Employee's sole and exclusive
remedy against the Company in the event of any claim of Employee arising out of
any termination of his employment by the Company. The parties agree that such
payments and benefits shall constitute liquidated damages for any liability of
the Company as a result of such termination, and that the value of such
payments and benefits is a reasonable forecast of damages that the Employee
would sustain as a result of a wrongful termination of Employee's employment.
Accordingly, Employee hereby releases and discharges the Company and any of its
past, current or future directors, officers or employees or other personnel
from any and all liabilities, whether known or unknown, whether currently
existing or arising in the future, relating to or arising out of the
termination of Employee's employment with the Company, except for the Company's
stated obligations under this Agreement.
9.9 Cash Out. At the end of the twelve month noncompete period
pursuant to Section 9.2, either the Company or the Employee may elect, by
notice within thirty (30) days of such date, to pay or receive, as the case may
be, the present value of all then remaining cash payments and benefits to be
paid or made available to Employee pursuant to this Agreement. The present
value shall be calculated by using as a discount factor the yield
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of U.S. Treasury obligations as of the date such noncompete period ends having
maturities most closely approximating the last date on which such cash payments
or benefits would otherwise have been paid or made available pursuant to this
Agreement. The value of all benefits other than cash payments shall be
determined by Towers, Perrin or such other expert in employee benefits as may
be acceptable to the parties and such value converted to present value in
accordance with this Section 9.9.
Section 10. Arbitration. Any controversy or claim arising from,
out of or relating to this Agreement, or the breach thereof (other than
controversies or claims arising from, out of or relating to the provisions in
Section 9), shall be determined by final and binding arbitration in Atlanta,
Georgia, in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association, by a panel of one (1) arbitrator appointed by
the American Arbitration Association. The decision of the arbitrator may be
entered and enforced in any court of competent jurisdiction by either the
Company or Employee.
The parties indicate their acceptance of the foregoing arbitration
requirement by initialing below:
/s/ WHP /s/ WTJ
--------------------------- ---------------------------
For the Employee
Company
Section 11. Miscellaneous.
11.1 Bindinq Effect. This Agreement shall inure to the benefit of
and shall be binding upon Employee and his executor, administrator, heirs,
personal representative and assigns, and the Company and its successors and
assigns; provided, however, neither party hereto shall be entitled to assign
any of its rights, or delegate any of its duties (except, in the case of
Employee, customary delegation of executive authority not inconsistent with
this Agreement; and except, in the case of the Company, and subject to
Employee's right to terminate pursuant to Section 6.2, to any person or entity
acquiring all or substantially all of the assets of the Company), hereunder
without the prior written consent of the other party. The Parties intend that
each Affiliate of the Company shall be the beneficiary of all the Company's
rights under this Agreement.
11.2 Governinq Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia.
11.3 Certain Fees and Expenses. The Company shall pay, following
submission of statements therefor, the reasonable fees and expenses of counsel
incurred by Employee in connection with the negotiation and preparation of this
Agreement and the arrangements contemplated hereby. In the event of any
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arbitration, litigation or dispute whatsoever arising from a claim brought by
Employee to enforce the provisions of Section 7 of this Agreement, if Employee
prevails the Company shall pay, or reimburse Employee for, all reasonable legal
fees and expenses incurred by Employee in connection with such litigation or
dispute. Employee shall be deemed to have prevailed if he substantially obtains
the relief sought, either through a judgment or the Company's voluntary action
before arbitration (after it is scheduled), trial or judgment.
11.4 Headinqs. The section and subsection headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
11.5 Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when delivered if delivered in person or by telecopy or
five (5) business days after being sent by first-class mail, registered or
certified, return receipt requested, with proper postage prepaid, and
(a) If to Employee, addressed to:
W. Thomas Johnson
Turner Broadcasting System, Inc.
One CNN Center
Atlanta, Georgia 30348
with a copy to:
Walter W. Driver, Jr., Esquire
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303
(b) If to the Company, addressed to:
Mr. R.E. Turner
Chairman and President
Turner Broadcasting System, Inc.
One CNN Center
Atlanta, Georgia 30348
with a copy to:
Steven W. Korn, Esq.
Vice President and General Counsel
Turner Broadcasting System, Inc.
One CNN Center
Atlanta, Georgia 30348
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or to such other person or address as shall be furnished in writing by any
party to the other prior to the giving of the applicable notice or
communication.
11.6 Schedules. All Schedules to this Agreement are attached and
are hereby made a part of this Agreement by this reference.
11.7 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
11.8 Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by each of the parties hereto.
11.9 Severability. All provisions of this Agreement are severable
from one another, and the unenforceability or invalidity of any provision of
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement; provided, however, that should any judicial body
interpreting this Agreement deem any provision to be unreasonably broad in
time, territory, scope or otherwise, the Company and Employee intend for the
judicial body, to the greatest extent possible, to reduce the breadth of the
provision to the maximum legally allowable parameters rather than deeming such
provision totally unenforceable or invalid.
11.10 Waiver. The waiver by either the Company or Employee to this
Agreement of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any prior or subsequent breach of the same
provision by the other party or a waiver of a breach of another provision of
this Agreement by the other party. No waiver or modification of any provision
of this Agreement shall be valid unless in writing and duly executed by the
party to be charged with the waiver or modification.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TURNER BROADCASTING SYSTEM, INC.
By: /s/ Wayne H. Pace
------------------------------
Name: Wayne H. Pace
------------------------
Title: Vice President &
-----------------------
Chief Financial Officer
Attest: /s/ Steven W. Korn -----------------------
-------------------------------
Name: Steven W. Korn
---------------------------------
Title: Vice President
-------------------------------
EMPLOYEE
/s/ W. Thomas Johnson
------------------------------
W. Thomas Johnson
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W. THOMAS JOHNSON
EMPLOYMENT CONTRACT
SCHEDULE 1.1 (a)
President, Cable News Network, Inc.
Vice-President-News, Turner Broadcasting System, Inc.
Director, Turner Broadcasting System, Inc.
25
W. THOMAS JOHNSON
EMPLOYMENT CONTRACT
SCHEDULE 1.1 (b)
In charge of Headline News and CNN International.
Responsible for all news divisions of Turner Broadcasting System,
Inc., including overseeing newsgathering, news presentations, news
standards and all operations of news divisions (accounting, finance,
promotion, marketing, new technology, business news, sports news,
production, operations, international news, domestic news offices,
anchors, all bureaus, CNN public affairs).
Reporting directly to Ted Turner, Chairman and President of Turner
Broadcasting System, Inc.
26
W. THOMAS JOHNSON
EMPLOYMENT CONTRACT
SCHEDULE 3.2
Salary:
1994 - $700,000
1995 - $735,000
1996 - $770,000
1997 - $810,000
Bonus:
1994 - $350,000
1995 - $365,000
1996 - $385,000
1997 - $405,000
Special Bonus:
$299,000
Stock Grant:
13,800 shares Class B common stock
Stock Options:
300,000 shares Class B common stock at 27-1/8 dollars per
share, vesting in four equal installments, 75,000 shares on
December 20, 1994 and 75,000 shares on December 20 of each of
1995, 1996 and 1997.
27
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") is made and
entered into as of the 26th day of January, 1994 by and between W. Thomas
Johnson, an individual resident of the State of Georgia (hereinafter referred
to as "Employee"), and Turner Broadcasting System, Inc., a corporation
organized under the laws of the State of Georgia (hereinafter referred to as
the "Company");
W I T N E S S E T H:
WHEREAS, Employee and the Company are parties to that certain
employment agreement of December 20, 1993 (the "Employment Agreement");
WHEREAS, the parties desire to enter into this Amendment to amend the
Employment Agreement so as to accurately reflect their original understanding
and intentions with respect to a certain aspect of the Employment Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree to amend the Employment Agreement as follows:
1. All of the second sentence of Section 3.2 of the Employment Agreement
beginning with the underlined phrase "provided, however," is hereby deleted and
------------------
is replaced with the following: "the provision in the TIP which affords
eligible employees the opportunity to earn up to 150% of their Target Award
under certain circumstances shall be applicable hereunder. Accordingly,
pursuant to TIP, Employee shall be eligible to earn up to 150% of the Annual
Bonus set forth on Schedule 3.2 of the Employment Agreement."
2. Except as expressly amended hereby, the terms and conditions of the
Employment Agreement shall remain in full force and effect.
3. This Amendment shall be governed by and construed in accordance with
the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
TURNER BROADCASTING SYSTEM, INC.
By: /s/ Wayne H. Pace
----------------------------
Its: Vice President - Finance
----------------------------
ATTEST: /s/ Steven W. Korn
-------------------------
NAME: Steven W. Korn
-------------------------
TITLE: Vice President
-------------------------
EMPLOYEE
/s/ W. Thomas Johnson
--------------------------------
W. Thomas Johnson