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EXHIBIT 10.44
TURNER BROADCASTING SYSTEM, INC.
THE LONG-TERM INCENTIVE PLAN (LTIP)
Effective January 1992
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THE LONG-TERM INCENTIVE PLAN (LTIP)
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PAGE
2 AN INTRODUCTION
A basic overview of the purpose and administrative
procedures of LTIP.
3 PLAN PARTICIPATION
An outline of the selection process for participation in the
Plan.
4 AWARD OPPORTUNITIES AND PERFORMANCE MEASURES
A broad overview of the plan award opportunities and
performance measures.
6 AWARD PAYMENTS
A description of the award payment process.
7 TERMINATION AND TRANSFER
A basic description of the consequences of a participant's
termination or transfer during a plan cycle.
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AN INTRODUCTION
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The Long-Term Incentive Plan (LTIP) has been designed to:
- - enable TBS to attract and retain key executives by providing a
competitive and diversified total compensation package; and
- - help focus executives' attention on the long-term performance of the
Company as reflected by growth in operating income over a three-year
period.
The Compensation Committee of the Board of Directors has the ultimate
responsibility for management of the Plan. However, the Plan Administrator
(i.e., the Vice President - Administration) will conduct the daily business of
the LTIP and will report directly to the Compensation Committee concerning the
Plan.
This plan will enable TBS to reward executives for superior long-term
performance and will assist the Company in retaining executives of high calibre
such as those currently running TBS.
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PLAN PARTICIPATION
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Participation criteria for the LTIP are completely discretionary. The
selection process and guidelines are established solely by the Compensation
Committee. Participation in the LTIP is determined for each three-year plan
cycle. Before each cycle begins, the Plan Administrator and the Committee will
discuss the participants for the upcoming cycle.
Selection as a participant in one cycle in no way guarantees participation in
future plan cycles.
In general, participation in the LTIP is limited to officers and other key
executives who can significantly and directly affect the Company's long-term
perfomance. However, the Compensation Committee, in its discretion, may
approve any TBS employee as a plan participant.
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AWARD OPPORTUNITIES AND PERFORMANCE MEASURES
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AWARD OPPORTUNITIES
The plan's award opportunities are based on a competitive market analysis of
long-term incentive award opportunities in other entertainment companies. On
the basis of this analysis and TBS's compensation philosophy, a target cash
award is established for eligible employees.
To recognize a range of performance around "target," participants may earn up
to 150% of their target award opportunities based on actual performance
compared to the specified Plan goals. The threshold level of performance is
designed to be the minimal level of performance for which any cash LTIP award
will be earned. At threshold, 75% of the target award opportunity will be
earned. Performance below threshold will not generate any award payment. The
maximum level of performance is the highest, reasonable level of performance
that may be achieved. Maximum performance will result in an award of 150% of
the target opportunity.
THE PERFORMANCE MEASURES
The Plan's performance measures have been established as compounded growth in
operating income and revenues during the performance cycle over benchmark
levels set at the beginning of each cycle. Growth in operating income will
provide 75% of the award opportunity; the remaining 25% will come from growth
in revenues.
Operating Income Revenues
Compounded Compounded
Annual Growth % of Target Annual Growth % of Target
Over Benchmark Award Earned Over Benchmark Award Earned
<3% 0% <8% 0%
3% 75% 8% 75%
4% 100% 10% 100%
6% 150% 12% 150%
and higher and higher
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THE PERFORMANCE MEASURES (continued)
The benchmark levels of operating income and revenues will be approved by the
Compensation Committee for each plan cycle. The Plan Administrator will
calculate annual compounded growth for each performance measure, apply the
appropriate weightings, and notify plan participants of these results.
PLAN CYCLE LENGTH AND FREQUENCY
Each plan cycle in the LTIP will consist of three consecutive calendar years.
The first plan cycle will run from January 1, 1992 through December 31, 1994.
New plan cycles may start no sooner than three years after the first plan
cycle. It is anticipated that plan cycles will run "end to end."
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AWARD PAYMENTS
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Awards will be paid in cash to participants after the end of the plan cycle as
administratively possible. TBS's annual financial results must be compiled
before awards can be calculated and paid.
Goal
Contribution to
Goal % of Goal % Target
Weighting Attained Award Earned
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Operating Income 75% * [________] = [____________]
Revenue 25% * [________] = [____________]
PERCENT OF TARGET OPPORTUNITY EARNED ____________
Subject to thc approval of the Compensation Committee, operating income may be
adjusted for the effects of any acquisitions, dispositions or extraordinary
items.
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TERMINATION AND TRANSFER
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The LTIP provides specific provisions in the case of a participant's
termination from TBS or transfer between Company units during a plan year.
If a participant's employment at TBS is terminated during a plan cycle because
of disability, death or approved retirement, he or she would receive a prorated
award payment based on performance through the end of the plan cycle. For any
other type of termination, the participant would earn no award for that plan
cycle. However, if termination occurred after the end of the plan year but
prior to actual payment of the award, the participant would then be entitled to
full payment under the Plan, except in the case of termination for cause or
"behavior not in the best interests of TBS."
Lateral transfers within TBS generally would not require any adjustments to the
LTIP opportunities for a participant. In the event of a promotion or demotion
during a plan cycle, the Compensation Committee would determine if the LTIP
opportunity needed to be adjusted. If adjusted, the new LTIP opportunity would
be a prorated award based on the number of full months in the plan cycle spent
in each position.
Individuals hired during a plan cycle for a position that is approved for plan
participation may receive a prorated award based on the Company's performance,
the number of full months the new hire was in the plan cycle, and the approval
of the Compensation Committee.
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