EXHIBIT 10.17
Time Warner Inc. 2003 Stock Incentive Plan
RSU Agreement, Version 1
For Use from January 2005
Restricted Stock Units Agreement
General Terms and Conditions
WHEREAS, the Company has adopted the Plan (as defined below), the terms of
which are hereby incorporated by reference and made a part of this Agreement;
and
WHEREAS, the Committee has determined that it would be in the best
interests of the Company and its stockholders to grant the restricted stock
units (the "RSUs") provided for herein to the Participant pursuant to the Plan
and the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:
1. Definitions. Whenever the following terms are used in this Agreement, they
shall have the meanings set forth below. Capitalized terms not otherwise
defined herein shall have the same meanings as in the Plan.
a) "Cause" means, "Cause" as defined in an employment agreement between
the Company or any of its Affiliates and the Participant or, if not
defined therein or if there is no such agreement, "Cause" means (i)
Participant's continued failure substantially to perform such
Participant's duties (other than as a result of total or partial
incapacity due to physical or mental illness) for a period of ten (10)
days following written notice by the Company or any of its Affiliates
to the Participant of such failure, (ii) dishonesty in the performance
of the Participant's duties, (iii) Participant's conviction of, or
plea of nolo contendere to, a crime constituting (A) a felony under
the laws of the United States or any state thereof or (B) a
misdemeanor involving moral turpitude, (iv) Participant's
insubordination, willful malfeasance or willful misconduct in
connection with Participant's duties or any act or omission which is
injurious to the financial condition or business reputation of the
Company or any of its Affiliates, or (v) Participant's breach of any
non-competition, non-solicitation or confidentiality provisions to
which the Participant is subject. The determination of the Committee
as to the existence of "Cause" will be conclusive on the Participant
and the Company.
b) "Disability" means, "Disability" as defined in an employment agreement
between the Company or any of its Affiliates and the Participant or,
if not defined therein or if there shall be no such agreement,
"disability" of the Participant shall have the meaning ascribed to
such term in the Company's long-term disability plan or policy, as in
effect from time to time.
c) "Good Reason" means "Good Reason" as defined in an employment
agreement between the Company or any of its Affiliates and the
Participant or, if not defined therein or if there is no such
agreement, "Good Reason" means (i) the failure of the Company to pay
or cause to be paid the Participant's base salary or annual bonus when
due or (ii) any substantial and sustained diminution in the
Participant's authority or responsibilities materially inconsistent
with the Participant's position; provided that either of the events
described in clauses (i) and (ii) will constitute Good Reason only if
the Company fails to cure such event within 30 days after receipt from
the Participant of written notice of the event which constitutes Good
Reason; provided, further, that "Good Reason" will cease to exist for
an event on the sixtieth (60th) day following the later of its
occurrence or the Participant's knowledge thereof, unless the
Participant has given the Company written notice of his or her
termination of employment for Good Reason prior to such date.
d) "Plan" means the Time Warner Inc. 2003 Stock Incentive Plan, as the
same may be amended, supplemented or modified from time to time.
e) "Retirement" means a voluntary termination of employment by the
Participant (i) following the attainment of age 55 with ten (10) or
more years of service as an employee or a director with the Company or
any Affiliate or (ii) pursuant to a retirement plan or early
retirement program of the Company or any Affiliate.
f) "Vesting Date" means each vesting date set forth in the Notice.
2. Grant of Restricted Stock Units. The Company hereby grants to the
Participant (the "Award"), on the terms and conditions hereinafter set
forth, the number of RSUs set forth on the Notice of Grant of Restricted
Stock Units (the "Notice"). Each RSU represents the unfunded, unsecured
right of the Participant to receive a Share on the date(s) specified
herein. RSUs do not constitute issued and outstanding shares of Common
Stock for any corporate purposes and do not confer on the Participant any
right to vote on matters that are submitted to a vote of holders of Shares.
3. Dividend Equivalents and Retained Distributions. If on any date while RSUs
are outstanding hereunder the Company shall pay any regular cash dividend
on the Shares, the Participant shall be paid, for each RSU held by the
Participant on the record date, an amount of cash equal to the dividend
paid on a Share (the "Dividend Equivalents") at the time that such
dividends are paid to holders of Shares. If on any date while RSUs are
outstanding hereunder the Company shall pay any dividend other than a
regular cash dividend or make any other distribution on the Shares, the
Participant shall be credited with a bookkeeping entry equivalent to such
dividend or distribution for each RSU held by the Participant on the record
date for such dividend or distribution, but the Company shall retain
custody of all such dividends and distributions unless the Board has in its
sole discretion determined that an amount equivalent to such dividend or
distribution shall be paid currently to the Participant (the "Retained
Distributions"); provided, however, that if the Retained Distribution
relates to a dividend paid in Shares, the Participant shall receive an
additional amount of RSUs equal to the product of (I) the aggregate number
of RSUs held by the Participant pursuant to this Agreement through the
related dividend record date, multiplied by (II) the number of Shares
(including any fraction thereof) payable as a dividend on a Share. Retained
Distributions will not bear interest and will be subject to the same
restrictions as the RSUs to which they relate. Notwithstanding anything
else contained in this paragraph 3, no payment of Dividend Equivalents or
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Retained Distributions shall occur before the first date on which a payment
could be made without subjecting the Participant to tax under the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code").
4. Vesting and Delivery of Vested Securities.
a) Subject to the terms and provisions of the Plan and this Agreement,
after each Vesting Date with respect to the Award, the Company shall
issue or transfer to the Participant the number of Shares
corresponding to such Vesting Date and the Retained Distributions, if
any, covered by that portion of the Award. Except as otherwise
provided in paragraphs 6 and 7, the vesting of such RSUs and any
Retained Distributions relating thereto shall occur only if the
Participant has continued in Employment of the Company or any of its
Affiliates on the Vesting Date and has continuously been so employed
since the Date of Grant (as defined in the Notice).
b) RSUs Extinguished. Upon each issuance or transfer of Shares in
accordance with this Agreement, a number of RSUs equal to the number
of Shares issued or transferred to the Participant shall be
extinguished and such number of RSUs will not be considered to be held
by the Participant for any purpose.
c) Final Issuance. Upon the final issuance or transfer of Shares and
Retained Distributions, if any, to the Participant pursuant to this
Agreement, in lieu of a fractional Share, the Participant shall
receive a cash payment equal to the Fair Market Value of such
fractional Share.
d) Section 409A. Notwithstanding anything else contained in this
Agreement, no Shares shall be issued or transferred to a Participant
before the first date on which a payment could be made without
subjecting the Participant to tax under the provisions of Section 409A
of the Code.
5. Termination of Employment.
(a) If the Participant's Employment with the Company and its Affiliates is
(i) terminated by the Participant for any reason other than those
described in clauses (b) and (c) below prior to the Vesting Date with
respect to any portion of the Award, then the RSUs covered by any such
portion of the Award and all Retained Distributions relating thereto
shall be completely forfeited on the date of any such termination,
unless otherwise provided in an employment agreement between the
Participant and the Company or an Affiliate.
(b) If the Participant's Employment terminates (i) as a result of his or
her death or Disability or (ii) as a result of his or her Retirement
or is terminated by the Company and its Affiliates for any reason
other than for Cause on a date when the Participant satisfies the
requirements for Retirement, then the RSUs for which a Vesting Date
has not yet occurred and all Retained Distributions relating thereto
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shall, to the extent the RSUs were not extinguished prior to such
termination of Employment, fully vest on the date of any such
termination and Shares subject to the RSUs shall be issued or
transferred to the Participant, as soon as practicable following such
termination of Employment.
(c) If the Participant's Employment is terminated by the Company and its
Affiliates for any reason other than for Cause (unless such
termination is due to death or Disability), then a pro rata portion of
the RSUs that would vest on the next Vesting Date, and any Retained
Distributions relating thereto, shall, to the extent the RSUs were not
extinguished prior to such termination of Employment, become vested,
and Shares subject to such RSUs shall be issued or transferred to the
Participant as soon as practicable following such termination of
Employment, determined as follows:
(x) the number of RSUs covered by the portion of the Award that
would vest on the next Vesting Date multiplied by;
(y) a fraction, the numerator of which shall be the number of
days from the last Vesting Date (or the Date of Grant if
there has not yet occurred a Vesting Date) preceding the
date of such termination of Employment through the date of
such termination, and the denominator of which shall be the
number of days from the last Vesting Date (or the Date of
Grant if there has not yet occurred a Vesting Date) through
the next succeeding Vesting Date.
If the product of (x) and (y) results in a fractional share, such
fractional share shall be rounded to the next higher whole share.
The RSUs and any Retained Distributions related thereto that have not
vested shall be completely forfeited on the date of any such
termination.
For purposes of this paragraph 5, a temporary leave of absence shall not
constitute a termination of Employment or a failure to be continuously
employed by the Company or any Affiliate regardless of the Participant's
payroll status during such leave of absence if such leave of absence is
approved in writing by the Company or any Affiliate. Notice of any such
approved leave of absence should be sent to the Company at One Time Warner
Center, New York, New York 10019, attention: Director, Global Stock Plans
Administration, but such notice shall not be required for the leave of
absence to be considered approved.
In the event the Participant's Employment with the Company or any of its
Affiliates is terminated, the Participant shall have no claim against the
Company with respect to the RSUs and related Retained Distributions, if
any, other than as set forth in this paragraph 5, the provisions of this
paragraph 5 being the sole remedy of the Participant with respect thereto.
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6. Acceleration of Vesting Date. In the event a Change in Control, subject to
paragraph 7, has occurred, (A) the Award will vest in full upon the earlier
of (i) the expiration of the one-year period immediately following the
Change in Control, provided the Participant's Employment with the Company
and its Affiliates has not terminated, (ii) the original Vesting Date with
respect to each portion of the Award, or (iii) the termination of the
Participant's Employment by the Company or any of its Affiliates (I) by the
Company other than for Cause (unless such termination is due to death or
Disability) or (II) by the Participant for Good Reason and (B) Shares
subject to the RSUs shall be issued or transferred to the Participant, as
soon as practicable following such Vesting Date, along with the Retained
Distributions related thereto. In the event of any such vesting as
described in clauses (i) and (iii) of the preceding sentence, the date
described in such clauses shall be treated as the Vesting Date.
7. Limitation on Acceleration. Notwithstanding any provision to the contrary
in the Plan or this Agreement, if the Payment (as hereinafter defined) due
to the Participant hereunder as a result of the acceleration of vesting of
the RSUs pursuant to paragraph 6 of this Agreement, either alone or
together with all other Payments received or to be received by the
Participant from the Company or any of its Affiliates (collectively, the
"Aggregate Payments"), or any portion thereof, would be subject to the
excise tax imposed by Section 4999 of the Code (or any successor thereto),
the following provisions shall apply:
a) If the net amount that would be retained by the Participant after all
taxes on the Aggregate Payments are paid would be greater than the net
amount that would be retained by the Participant after all taxes are
paid if the Aggregate Payments were limited to the largest amount that
would result in no portion of the Aggregate Payments being subject to
such excise tax, the Participant shall be entitled to receive the
Aggregate Payments.
b) If, however, the net amount that would be retained by the Participant
after all taxes were paid would be greater if the Aggregate Payments
were limited to the largest amount that would result in no portion of
the Aggregate Payments being subject to such excise tax, the Aggregate
Payments to which the Participant is entitled shall be reduced to such
largest amount.
The term "Payment" shall mean any transfer of property within the meaning
of Section 280G of the Code.
The determination of whether any reduction of Aggregate Payments is
required and the timing and method of any such required reduction in
Payments under this Agreement or in any such other Payments otherwise
payable by the Company or any of its Affiliates consistent with any such
required reduction, shall be made by the Participant, including whether any
portion of such reduction shall be applied against any cash or any shares
of stock of the Company or any other securities or property to which the
Participant would otherwise have been entitled under this Agreement or
under any such other Payments, and whether to waive the right to the
acceleration of the Payment due under this
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Agreement or any portion thereof or under any such other Payments or
portions thereof, and all such determinations shall be conclusive and
binding on the Company and its Affiliates. To the extent that Payments
hereunder or any such other Payments are not paid as a consequence of the
limitation contained in this paragraph 7, then the RSUs and Retained
Distributions related thereto (to the extent not so accelerated) and such
other Payments (to the extent not vested) shall be deemed to remain
outstanding and shall be subject to the provisions hereof and of the Plan
as if no acceleration or vesting had occurred. Under such circumstances, if
the Participant terminates Employment for Good Reason or is terminated by
the Company or any of its Affiliates without Cause, the RSUs and Retained
Distributions related thereto (to the extent that they have not already
become vested) shall become immediately vested in their entirety upon such
termination and Shares subject to the RSUs shall be issued or transferred
to the Participant, as soon as practicable following such termination of
Employment, subject to the provisions relating to Section 4999 of the Code
set forth herein.
The Company shall promptly pay, upon demand by the Participant, all legal
fees, court costs, fees of experts and other costs and expenses which the
Participant incurred in any actual, threatened or contemplated contest of
the Participant's interpretation of, or determination under, the provisions
of this paragraph 7.
8. Withholding Taxes. The Participant agrees that,
a) Obligation to Pay Withholding Taxes. Upon the payment of any Dividend
Equivalents and the vesting of any portion of the Award of RSUs and
the Retained Distributions relating thereto, the Participant will be
required to pay to the Company any applicable Federal, state, local or
foreign withholding tax due as a result of such payment or vesting.
The Company's obligation to deliver the Shares subject to the RSUs or
to pay any Dividend Equivalents or Retained Distributions shall be
subject to such payment. The Company and its Affiliates shall, to the
extent permitted by law, have the right to deduct from the Dividend
Equivalent, Shares issued in connection with the vesting or Retained
Distribution, as applicable, or any payment of any kind otherwise due
to the Participant any Federal, state, local or foreign withholding
taxes due with respect to such vesting or payment.
b) Payment of Taxes with Stock. Subject to the Committee's right to
disapprove any such election and require the Participant to pay the
required withholding tax in cash, the Participant shall have the right
to elect to pay the required withholding tax associated with a vesting
with Shares to be received upon vesting. Unless the Company shall
permit another valuation method to be elected by the Participant,
Shares used to pay any required withholding taxes shall be valued at
the average of the high and low sales price of a Share on the New York
Stock Exchange on the date the withholding tax becomes due
(hereinafter called the "Tax Date"). Notwithstanding anything herein
to the contrary, if a Participant who is required to pay the required
withholding tax in cash fails to do so within the time period
established by the Company, then the Participant shall be deemed
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to have elected to pay such withholding taxes with Shares to be
received upon vesting. Elections must be made in conformity with
conditions established by the Committee from time to time
c) Conditions to Payment of Taxes with Stock. Any election to pay
withholding taxes with stock must be made on or prior to the Tax Date
and will be irrevocable once made.
9. Changes in Capitalization and Government and Other Regulations. The Award
shall be subject to all of the terms and provisions as provided in this
Agreement and in the Plan, which are incorporated by reference herein and
made a part hereof, including, without limitation, the provisions of
Section 10 of the Plan (generally relating to adjustments to the number of
Shares subject to the Award, upon certain changes in capitalization and
certain reorganizations and other transactions).
10. Forfeiture. A breach of any of the foregoing restrictions or a breach of
any of the other restrictions, terms and conditions of the Plan or this
Agreement, with respect to any of the RSUs or any Dividend Equivalents and
Retained Distributions relating thereto, except as waived by the Board or
the Committee, will cause a forfeiture of such RSUs and any Dividend
Equivalents or Retained Distributions relating thereto.
11. Right of Company to Terminate Employment. Nothing contained in the Plan or
this Agreement shall confer on any Participant any right to continue in the
employ of the Company or any of its Affiliates and the Company and any such
Affiliate shall have the right to terminate the Employment of the
Participant at any such time, with or without cause, notwithstanding the
fact that some or all of the RSUs and related Retained Distributions
covered by this Agreement may be forfeited as a result of such termination.
The granting of the RSUs under this Agreement shall not confer on the
Participant any right to any future Awards under the Plan.
12. Notices. Any notice which either party hereto may be required or permitted
to give the other shall be in writing and may be delivered personally or by
mail, postage prepaid, addressed to Time Warner Inc., at One Time Warner
Center, New York, NY 10019, attention Director, Global Stock Plans
Administration, and to the Participant at his or her address, as it is
shown on the records of the Company or its Affiliate, or in either case to
such other address as the Company or the Participant, as the case may be,
by notice to the other may designate in writing from time to time.
13. Interpretation and Amendments. The Board and the Committee (to the extent
delegated by the Board) have plenary authority to interpret this Agreement
and the Plan, to prescribe, amend and rescind rules relating thereto and to
make all other determinations in connection with the administration of the
Plan. The Board or the Committee may from time to time modify or amend this
Agreement in accordance with the provisions of the Plan, provided that no
such amendment shall adversely affect the rights of the Participant under
this Agreement without his or her consent.
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14. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the Company and its successors and assigns, and shall be
binding upon and inure to the benefit of the Participant and his or her
legatees, distributees and personal representatives.
15. Copy of the Plan. By entering into the Agreement, the Participant agrees
and acknowledges that he or she has received and read a copy of the Plan.
16. Governing Law. The Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to any
choice of law rules thereof which might apply the laws of any other
jurisdiction.
17. Waiver of Jury Trial. To the extent not prohibited by applicable law which
cannot be waived, each party hereto hereby waives, and covenants that it
will not assert (whether as plaintiff, defendant or otherwise), any right
to trial by jury in any forum in respect of any suit, action, or other
proceeding arising out of or based upon this Agreement.
18. Submission to Jurisdiction; Service of Process. Each of the parties hereto
hereby irrevocably submits to the jurisdiction of the state courts of the
State of New York and the jurisdiction of the United States District Court
for the Southern District of New York for the purposes of any suit, action
or other proceeding arising out of or based upon this Agreement. Each of
the parties hereto to the extent permitted by applicable law hereby waives,
and agrees not to assert, by way of motion, as a defense, or otherwise, in
any such suit, action or proceeding brought in such courts, any claim that
it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that
such suit, action or proceeding in the above-referenced courts is brought
in an inconvenient forum, that the venue of such suit, action or
proceedings, is improper or that this Agreement may not be enforced in or
by such court. Each of the parties hereto hereby consents to service of
process by mail at its address to which notices are to be given pursuant to
paragraph 12 hereof.
19. Personal Data. The Company, the Participant's local employer and the local
employer's parent company or companies may hold, collect, use, process and
transfer, in electronic or other form, certain personal information about
the Participant for the exclusive purpose of implementing, administering
and managing the Participant's participation in the Plan. Participant
understands that the following personal information is required for the
above named purposes: his/her name, home address and telephone number,
office address (including department and employing entity) and telephone
number, e-mail address, date of birth, citizenship, country of residence at
the time of grant, work location country, system employee ID, employee
local ID, employment status (including international status code),
supervisor (if applicable), job code, title, salary, bonus target and
bonuses paid (if applicable), termination date and reason, tax payer's
identification number, tax equalization code, US Green Card holder status,
contract type (single/dual/multi), any shares of stock or directorships
held in the Company, details of all grants of RSUs (including number of
grants, grant dates, vesting type, vesting dates, and any other information
regarding RSUs that have been granted, canceled, vested, or
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forfeited) with respect to the Participant, estimated tax withholding rate,
brokerage account number (if applicable), and brokerage fees (the "Data").
Participant understands that Data may be collected from the Participant
directly or, on Company's request, from Participant's local employer.
Participant understands that Data may be transferred to third parties
assisting the Company in the implementation, administration and management
of the Plan, including the brokers approved by the Company, the broker
selected by the Participant from among such Company-approved brokers (if
applicable), tax consultants and the Company's software providers (the
"Data Recipients"). Participant understands that some of these Data
Recipients may be located outside the Participant's country of residence,
and that the Data Recipient's country may have different data privacy laws
and protections than the Participant's country of residence. Participant
understands that the Data Recipients will receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Participant's participation in
the Plan, including any requisite transfer of such Data as may be required
for the administration of the Plan and/or the subsequent holding of Shares
on the Participant's behalf by a broker or other third party with whom the
Participant may elect to deposit any Shares acquired pursuant to the Plan.
Participant understands that Data will be held only as long as necessary to
implement, administer and manage the Participant's participation in the
Plan. Participant understands that Data may also be made available to
public authorities as required by law, e.g., to the U.S. government.
Participant understands that the Participant may, at any time, review Data
and may provide updated Data or corrections to the Data by written notice
to the Company. Except to the extent the collection, use, processing or
transfer of Data is required by law, Participant may object to the
collection, use, processing or transfer of Data by contacting the Company
in writing. Participant understands that such objection may affect his/her
ability to participate in the Plan. Participant understands that he/she may
contact the Company's Stock Plan Administration to obtain more information
on the consequences of such objection.