Exhibit 10.47

 

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WARNER MUSIC GROUP CORP.

SENIOR MANAGEMENT FREE CASH FLOW PLAN

Deferral Election Form

If you elect to enroll in the Warner Music Group Corp. Senior Management Free
Cash Flow Plan, please complete this form. This election to defer compensation
is irrevocable.

Deferral Election

By signing below, I elect to participate in the Warner Music Group Corp.
Senior Management Free Cash Flow Plan (as it may be amended from time to time,
the “Plan”; capitalized terms used herein but not defined have the meaning set
forth in the Plan), on the terms and conditions described in the Plan, the LLC
agreement and this election form.

 

I. Eligible Compensation Deferral Election. I elect to defer (in 1 percentage
point increments from 50% up to and including 100%) the following percentage of
annual “free cash flow” bonuses (the “Annual FCF Bonus”) that may be payable to
me in respect of the Company’s 2013, 2014 and 2015 fiscal years, and for any
fiscal year thereafter through the 2019 fiscal year to the extent that I have
not purchased the maximum number of my allocated Deferred Equity Units:

    % Annual “Free Cash Flow” Bonus [insert a number between 50 and 100]

I understand that, notwithstanding the foregoing, my Deferral Election for the
2013 fiscal year shall not exceed 75% of my Annual FCF Bonus for such fiscal
year.

The maximum number of Deferred Equity Units that I may acquire under the Plan is
[—].

 

II. Acknowledgements. I agree and understand as follows:

 

1. The terms and conditions of my deferrals are governed by the terms of the
Plan, including my minimum and maximum deferral amount, and my minimum and
maximum number of Deferred Equity Units and Matching Equity Units.

 

2. My deferral election may not be changed after 11:59pm EST on December 28,
2012, except as permitted by law and the terms of the Plan.

 

3. The percentage of my Annual FCF Bonuses that I now elect to defer will apply
to each fiscal year after 2013 through 2019 if, by such time, I have not
acquired all of my allocated Deferred Equity Units.

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4. If I have not elected to defer the minimum amount required to be deferred, I
will receive my entire Annual FCF Bonus, if any, in cash at the time the Annual
FCF Bonuses are earned and paid, and I will not defer any amounts into the Plan.

 

5. Once I have acquired a number of Deferred Equity Units equal to my Maximum
Unit Allocation, I shall cease to have a right to defer any additional amount of
my Annual FCF Bonuses into the Plan or acquire any additional Deferred Equity
Units or be granted any additional Matching Equity Units, and any of my Annual
FCF Bonuses that are not deferred shall be paid to me in cash at the time Annual
FCF Bonuses are earned and paid.

 

6. My being offered an opportunity to participate in the Plan in no way
guarantees that I will receive an Annual FCF Bonus in respect of any of the
Company’s 2013, 2014, 2015 or any other fiscal years.

 

7. All amounts payable to me under the Plan and certain amounts payable from the
LLC are subject to applicable withholding taxes.

 

8. All amounts deferred pursuant to my election will be unfunded and I will have
the status of an unsecured creditor of the Company with respect to such amounts.

 

9. My participation in the Plan does not give me any right to continued
employment in any capacity whatsoever with the Company or its subsidiaries.

 

10. (i) If my employment with the Company and its Affiliates terminates for any
reason:

(a) the Company may repurchase all or a portion of my Deferred Equity Units on
the terms and conditions set forth in the Plan; and

(b) all of my unvested Matching Equity Units will be forfeited without any
payment to me;

(ii) if my employment is terminated by the Company and its Affiliates for Cause
or I resign without Good Reason (other than due to a disability), I will forfeit
an Annual FCF Bonus in respect of the year in which my employment terminates and
all of my vested Matching Equity Units will be forfeited without any payment to
me; and

(iii) if my employment is terminated by the Company and its Affiliates without
Cause, by me for Good Reason or due to my death or disability (i.e., for any
reason that does not result in forfeiture as described in item 10(ii) above),
the Company will pay me a pro rata amount of an Annual FCF Bonus in respect of
the year in which my employment terminates and the LLC may repurchase all or a
portion of my Matching Equity Units on the terms and conditions set forth in the
Plan and the LLC agreement.

 

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11. Any Deferred Equity Units, vested Matching Equity Units or LLC interests
that I hold in December 2020 will then be redeemed, and any unvested Matching
Equity Units that I hold on that date will then be forfeited.

 

12. I acknowledge receipt of a copy of the Plan and the LLC Agreement, and I
confirm that I have carefully read and understood the Plan and the LLC Agreement
prior to electing to participate. I agree to be bound by all the terms and
conditions of the LLC Agreement, and I have executed a counterpart to the LLC
Agreement (as set forth on Exhibit A hereto).

 

13. This election will be considered null and void if any of the following shall
occur:

(i) our Compensation Committee fails to approve the Plan or my participation in
it by 11:59pm EST on December 28, 2012;

(ii) I am not employed by the Company at 11:59pm EST on December 28, 2012;

(iii) with respect to any Plan Year, if my employment is terminated by the
Company for Cause or by me without Good Reason or I am not otherwise entitled to
receive an Annual FCF Bonus in respect of such Plan Year;

(iv) if this election does not meet the requirements of Section 409A of the
Code; or

(v) if I do not otherwise meet the Plan eligibility requirements.

 

14. I acknowledge that any information provided to me in connection with my
eligibility for or participation in Plan, including tax information, is subject
to change and is not a representation influencing my election to participate in
the Plan. I also acknowledge that I am personally responsible for obtaining
advice concerning any legal, taxation or investment matters relating to my
participation in the Plan. In particular, I confirm that I have obtained such
independent personal advice as required or consider such advice to be
unnecessary.

 

15. I understand that the value of shares of the Company can decrease as well as
increase and that my Deferred Equity Units and Matching Equity Units may be
settled for a value that is lower than the amount of my Annual FCF Bonus that I
defer or for no value. My financial situation is such that I can afford to bear
the economic risk of participating in the Plan and can afford to suffer complete
loss of my investment in the Deferred Equity Units and Matching Equity Units. My
knowledge and experience in financial and business matters are such that I am
capable of evaluating the merits and risks of participating in the Plan and
acquiring Deferred Equity Units and receiving Matching Equity Units.

 

16. I understand and agree that, from and after October 1, 2012, my annual bonus
will be determined solely based on the Company’s free cash flow as provided in
the Plan and that any other bonus entitlements that I may have, whether
contained in my employment agreement or otherwise, shall terminate.

 

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17. I understand and agree that my participation in the Plan and my being a
party to the LLC Agreement constitute the entire agreement and understanding
between the Company and its Affiliates and me with respect to my incentive,
bonus, equity and equity-based compensation from the Company and its
subsidiaries and supersedes all prior agreements and understandings (whether
written or oral) between me and the Company and its Affiliates relating to
bonus, incentive, equity and equity-based compensation.

 

18. I am an “accredited investor” as such term is defined in Rule 501 of
Regulation D promulgated under the 1933 Securities Act, as amended, because
either (i) my individual net worth or my joint net worth with my spouse
(excluding the positive net value, if any, of my primary residence) exceeds
$1,000,000 or (ii) my individual income was in excess of $200,000 in each of
2010 and 2011 or my joint income with my spouse was in excess of $300,000 in
each of those years, and I (or we) have a reasonable expectation of reaching the
same income level in 2012.

 

19. For employees in the UK only, I am a “certified high net worth individual”
for the purposes of the Financial Services and Market Act (Financial Promotion)
Order 2005, because either (i) I had, during the financial year immediately
preceding the date below, an annual income to the value of £100,000 or more; or
(ii) I held, throughout the financial year immediately preceding the date below,
net assets to the value of £250,000 or more (not including the property which is
my primary residence or any loan secured on that residence; any rights of mine
under a qualifying contract of insurance within the meaning of the Financial
Services and Markets Act 2000 (Regulated Activities) Order 2001; or any benefits
(in the form of pensions or otherwise) which are payable on the termination of
my service or on my death or retirement and to which I am (or my dependants
are), or may be, entitled).

 

20. If tax rates change or my deferred amounts appreciate in value, I may be
liable for a greater amount of tax than I would have been liable for had I
received my Annual FCF Bonus in cash.

 

21. I may have a U.S. federal and state income tax liability with respect to any
FICA or Medicare tax liability that is considered paid on my behalf with respect
to any Annual FCF Bonus. I understand that I am solely responsible for all U.S.
federal, state, local and non-U.S. taxation with respect to my participation in
the Plan and any Deferred Equity Units, Matching Equity Units, cash or other
securities received in connection with my participation.

U.S. Internal Revenue Service regulations require the Company to inform you that
the discussion of U.S. federal income tax considerations included in this form
is not intended or written to be used, and cannot be used, by any taxpayer for
the purpose of avoiding penalties that the I.R.S. might seek to impose on such
taxpayer. This

 

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discussion was written to support promotion or marketing of the Plan. This
discussion does not address tax considerations for any non-U.S. person. You
should consult your own tax advisors regarding the tax consequences of
participation in the Plan, as well as any tax consequences that may arise under
the laws of any state, local, foreign or other non-U.S. taxing jurisdiction and
the possible effects of changes in U.S. federal or other tax laws.

 

III. SIGN, DATE AND RETURN BY DECEMBER 19, 2012.

This Election Form will not be effective unless it is received by 5:00pm EST,
December 19, 2012. The completed form should be sent to:

Mark Ansorge

Executive Vice President, Human Resources

& Chief Compliance Officer

Warner Music Group Corp.

75 Rockefeller Plaza, 30th Floor

New York, NY 10019

Mark.Ansorge@wmg.com

Phone: 212-275-1348

Fax: 212-275-2099

 

 

    

 

    

December     , 2012

PARTICIPANT SIGNATURE      NAME      DATE

 

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Exhibit A

Counterpart to LLC Agreement

In executing this counterpart, dated as of [—], to the Limited Liability Company
Agreement of WMG Management Holdings, LLC, in the form previously provided to me
(the “LLC Agreement”), in connection with the receipt of Matching Equity Units
in WMG Management Holdings, LLC, the undersigned hereby (i) agrees to accept,
adopt and be bound by the LLC Agreement and (ii) acknowledges and agrees that he
or she has become a “Member” thereunder.

 

 

Name:

 

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Exhibit B

STATEMENT FOR CERTIFIED HIGH NET WORTH INDIVIDUAL

I declare that I am a certified high net worth individual for the purposes of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

I understand that this means:

 

a) I can receive financial promotions that may not have been approved by a
person authorised by the Financial Services Authority;

 

b) the content of such financial promotions may not conform to rules issued by
the Financial Services Authority;

 

c) by signing this statement I may lose significant rights;

 

d) I may have no right to complain to either of the following -

 

  i) the Financial Services Authority; or

 

  ii) the Financial Ombudsman Scheme; and

 

e) I may have no right to seek compensation from the Financial Services
Compensation Scheme.

I am a certified high net worth individual because at least one of the following
applies -

 

a) I had, during the financial year immediately preceding the date below, an
annual income to the value of £100,000 or more; or

 

b) I held, throughout the financial year immediately preceding the date below,
net assets to the value of £250,000 or more. Net assets for these purposes do
not include -

 

  i) the property which is my primary residence or any loan secured on that
residence;

 

  ii) any rights of mine under a qualifying contract of insurance within the
meaning of the Financial Services and Markets Act 2000 (Regulated Activities)
Order 2001; or

 

  iii) any benefits (in the form of pensions or otherwise) which are payable on
the termination of my service or on my death or retirement and to which I am (or
my dependants are), or may be, entitled.

I accept that I can lose my property and other assets from making investment
decisions based on financial promotions.

I am aware that it is open to me to seek advice from someone who specialises in
advising on investments.

 

  Signature  

 

     Date  

 

  

 

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