Exhibit 10.39
     EMPLOYMENT AGREEMENT made 12/20, 2007 effective as of January 1, 2008 (the
“Effective Date”), between TIME WARNER INC., a Delaware corporation (the
“Company”), and JOHN MARTIN (“You”).
     You and the Company desire to set forth the terms and conditions of your
employment by the Company and agree as follows:
     1. Term of Employment. Your “term of employment” as this phrase is used
throughout this Agreement shall be for the period beginning on the Effective
Date and ending on December 31, 2010 (the “Term Date”), subject, however, to
earlier termination as set forth in this Agreement.
     2. Employment. During the term of employment, you shall serve as Executive
Vice President and Chief Financial Officer of the Company or in such other
senior position as the Company may determine and you shall have the authority,
functions, duties, powers and responsibilities normally associated with such
position and such additional authority, functions, duties, powers and
responsibilities as may be assigned to you from time to time by the Company
consistent with your senior position with the Company. During the term of
employment, (i) your services shall be rendered on a substantially full-time,
exclusive basis and you will apply on a full-time basis all of your skill and
experience to the performance of your duties, (ii) you shall have no other
employment and, without the prior written consent of your manager or other more
senior officer of the Company in your reporting line, no outside business
activities which require the devotion of substantial amounts of your time,
(iii) you shall report to the Chief Executive Officer of the Company, and
(iv) the place for the performance of your services shall be the principal
executive offices of the Company in the New York City metropolitan area, subject
to such reasonable travel as may be required in the performance of your duties.
The foregoing shall be subject to the Company’s written policies, as in effect
from time to time, regarding vacations, holidays, illness and the like.
     3. Compensation.
          3.1 Base Salary. The Company shall pay you a base salary at the rate
of not less than $1,000,000 per annum during the term of employment (“Base
Salary”). The Company may increase, but not decrease, your Base Salary during
the term of employment. Base Salary shall be paid in accordance with the
Company’s customary payroll practices.

 

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     3.2 Bonus. In addition to Base Salary, you may be entitled to receive
during the term of employment an annual cash bonus (“Bonus”) subject to and
pursuant to the Company’s Annual Bonus Plan for Executive Officers (such plan,
together with any successor plan of Company intended to comply with Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), being
hereinafter referred to as the “Annual Bonus Plan”). Although your Bonus is
fully discretionary, your target annual Bonus is $2,000,000, but the parties
acknowledge that your actual Bonus will vary depending on the actual performance
of you and the Company from a minimum of $0 and up to a maximum Bonus of
$3,000,000 as determined by the Compensation and Human Development Committee of
the Board of Directors of the Company (the “Compensation Committee”). Each year,
your personal performance will be considered in the context of your executive
duties and any individual goals set for you, and your actual Bonus will be
determined. Although as a general matter the Company expects to pay bonuses at
the target level in cases of satisfactory individual performance, it does not
commit to do so, and your Bonus may be negatively affected by the exercise of
the Compensation Committee’s discretion or by overall Company performance.
Payments of any bonus compensation under this Section 3.2 shall be paid to you
between January 1 and March 15 of the calendar year immediately following the
performance year in respect of which such Bonus is earned.
     3.3 Long Term Incentive Compensation. So long as the term of employment has
not terminated the Company annually shall provide you with long term incentive
compensation with a value of $3,000,000 (based on the valuation method used by
the Company of its senior executives) through a combination of stock option
grants, restricted stock units, performance shares or other equity-based awards,
cash-based long-term plans or other components as may be determined by the
Compensation Committee of the Company’s Board of Directors from time to time in
its sole discretion.
     3.4 Indemnification. You shall be entitled throughout the term of
employment (and after the end of the term of employment, to the extent relating
to service during the term of employment) to the benefit of the indemnification
provisions contained on the date hereof in the Restated Certificate of
Incorporation and By-laws of the Company (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add
to or broaden, the protection afforded to you by those provisions).

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     3.5 Signing Equity Grant. You will be awarded options to purchase 81,300
shares of Time Warner common stock and 65,810 restricted stock units (the
“Make-Whole RSUs” and, together with the stock options, the “Make-Whole
Awards”). The “Make-Whole Awards will be granted on January 2, 2008 if this
Agreement has been fully executed prior to such date or will be granted on the
next regular granting date (1st and 15th of each month) following the execution
of this Agreement if it has not been fully executed prior to January 2, 2008.
The Make-Whole Awards are intended to have a combined valuation of approximately
$1,550,000 based on calculations as of October 31, 2007, and are being granted
to replace equity awards granted by Time Warner Cable Inc. and amounts you
expected to receive pursuant to a cash long-term incentive plan maintained by
Time Warner Cable Inc. You agree that you will irrevocably agree to cancel all
outstanding stock options, restricted stock units or other awards based on any
class of common stock of Time Warner Cable Inc. granted to you by Time Warner
Cable Inc. effective January 1, 2008. The Make-Whole Awards will be reflected in
award agreements entered into between you and the Company, with the standard
form of restricted stock units agreement modified to provide that the Make-Whole
RSUs will have accelerated vesting on a pro-rated based on the Severance Term
Date in the event of a termination of employment pursuant to Section 4.2.
     4. Termination.
          4.1 Termination for Cause. The Company may terminate the term of
employment and all of the Company’s obligations under this Agreement, other than
its obligations set forth below in this Section 4.1, for “cause”. Termination by
the Company for “cause” shall mean termination because of your (a) conviction
(treating a nolo contendere plea as a conviction) of a felony (whether or not
any right to appeal has been or may be exercised), (b) willful failure or
refusal without proper cause to perform your duties with the Company, including
your obligations under this Agreement (other than any such failure resulting
from your incapacity due to physical or mental impairment),
(c) misappropriation, embezzlement or reckless or willful destruction of Company
property, (d) breach of any statutory or common law duty of loyalty to the
Company; (e) intentional and improper conduct materially prejudicial to the
business of the Company or any of its affiliates, or (f) breach of any of the
covenants provided for in Section 8 hereof. Such termination shall be effected
by written notice thereof delivered by the Company to you and shall be effective
as of the date of such notice; provided, however, that if (i) such termination
is because of your willful failure or refusal without proper cause to perform

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any one or more of your obligations under this Agreement, (ii) such notice is
the first such notice of termination for any reason delivered by the Company to
you under this Section 4.1, and (iii) within 15 days following the date of such
notice you shall cease your refusal and shall use your best efforts to perform
such obligations, the termination shall not be effective.
     In the event of termination by the Company for cause, without prejudice to
any other rights or remedies that the Company may have at law or in equity, the
Company shall have no further obligation to you other than (i) to pay Base
Salary through the effective date of termination, (ii) to pay any Bonus for any
year prior to the year in which such termination occurs that has been determined
but not yet paid as of the date of such termination, and (iii) with respect to
any rights you have pursuant to any insurance or other benefit plans or
arrangements of the Company. You hereby disclaim any right to receive a pro rata
portion of any Bonus with respect to the year in which such termination occurs.
     4.2 Termination by You for Material Breach by the Company and Termination
by the Company Without Cause. Unless previously terminated pursuant to any other
provision of this Agreement and unless a Disability Period shall be in effect,
you shall have the right, exercisable by written notice to the Company, to
terminate the term of employment effective 30 days after the giving of such
notice, if, at the time of the giving of such notice, the Company is in material
breach of its obligations under this Agreement; provided, however, that, with
the exception of clause (i) below, this Agreement shall not so terminate if such
notice is the first such notice of termination delivered by you pursuant to this
Section 4.2 and within such 30-day period the Company shall have cured all such
material breaches; and provided further, that such notice is provided to the
Company within 90 days after the occurrence of such material breach. A material
breach by the Company shall include, but not be limited to, (i) the Company
violating Section 2 with respect to authority, reporting lines, duties, or place
of employment or (ii) the Company failing to cause any successor to all or
substantially all of the business and assets of the Company expressly to assume
the obligations of the Company under this Agreement.
     The Company shall have the right, exercisable by written notice to you
delivered before the date which is 60 days prior to the Term Date, to terminate
your employment under this Agreement without cause, which notice shall specify
the effective

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date of such termination. If such notice is delivered on or after the date which
is 60 days prior to the Term Date, the provisions of Section 4.3 shall apply.
     4.2.1 After the effective date of a termination pursuant to this
Section 4.2 (a “termination without cause”), you shall receive Base Salary and a
pro rata portion of your Average Annual Bonus (as defined below) through the
effective date of termination. Your Average Annual Bonus shall be equal to the
average of the regular annual bonus amounts (excluding the amount of any special
or spot bonuses) in respect of the two calendar years during the most recent
five calendar years for which the annual bonus received by you from the Company
was the greatest; provided, however, if the Company has previously paid you no
annual Bonus, then your Average Annual Bonus shall equal your target Bonus and
if the Company has previously paid you one annual Bonus, then your Average
Annual Bonus shall equal the average of such Bonus and your target Bonus. Your
pro rata Average Annual Bonus pursuant to this Section 4.2.1 shall be paid to
you at the times set forth in Section 4.6.
     4.2.2 After the effective date of a termination without cause, you shall
remain an employee of the Company for a period ending on the date (the
“Severance Term Date”) which is the later of (i) the Term Date and (ii) the date
which is two years after the effective date of such termination and during such
period you shall be entitled to receive, whether or not you become disabled
during such period but subject to Section 6, (a) Base Salary (on the Company’s
normal payroll payment dates as in effect immediately prior to the effective
date of your termination without cause) at an annual rate equal to your Base
Salary in effect immediately prior to the notice of termination, and (b) an
annual Bonus in respect of each calendar year or portion thereof (in which case
a pro rata portion of such Bonus will be payable) during such period equal to
your Average Annual Bonus. Except as provided in the succeeding sentence, if you
accept other full-time employment during such period or notify the Company in
writing of your intention to terminate your status as an employee during such
period, you shall cease to be treated as an employee of the Company for purposes
of your rights to receive certain post-termination benefits under Section 7.2
effective upon the commencement of such other employment or the effective date
of such termination as specified by you in such notice, whichever is applicable
(the “Benefit Cessation Date”), and you shall receive the remaining payments of
Base Salary and Bonus pursuant to this Section 4.2.2 at the times specified in
Section 4.6 of the Agreement. Notwithstanding the foregoing, if you accept
employment with any not-for-profit entity or governmental entity, then you
continue to be treated as an employee of

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the Company for purposes of your rights to receive certain post-termination
benefits pursuant to Section 7.2 and you will continue to receive the payments
as provided in the first sentence of this Section 4.2.2; and if you accept
full-time employment with any affiliate of the Company, then the payments
provided for in this Section 4.2.2 shall immediately cease and you shall not be
entitled to any further payments. For purposes of this Agreement, the term
“affiliate” shall mean any entity which, directly or indirectly, controls, is
controlled by, or is under common control with, the Company.
     4.3 After the Term Date. If at the Term Date, the term of employment shall
not have been previously terminated pursuant to the provisions of this
Agreement, no Disability Period is then in effect and the parties shall not have
agreed to an extension or renewal of this Agreement or on the terms of a new
employment agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the Company
pursuant to the terms of this Agreement, subject to termination by either party
hereto on 60 days written notice delivered to the other party (which notice may
be delivered by either party at any time on or after the date which is 60 days
prior to the Term Date). If the Company shall terminate the term of employment
on or after the Term Date for any reason (other than for cause as defined in
Section 4.1, in which case Section 4.1 shall apply), which the Company shall
have the right to do so long as no Disability Date (as defined in Section 5) has
occurred prior to the delivery by the Company of written notice of termination,
then such termination shall be deemed for all purposes of this Agreement to be a
“termination without cause” under Section 4.2 and the provisions of Sections
4.2.1 and 4.2.2 shall apply.
     4.4 Release. A condition precedent to the Company’s obligation to make or
continue the payments associated with a termination without cause shall be your
execution and delivery of a release in the form attached hereto as Annex A. If
you shall fail to execute and deliver such release, or if you revoke such
release as provided therein, then in lieu of the payments provided for herein,
you shall receive a severance payment determined in accordance with the
Company’s policies relating to notice and severance reduced by the aggregate
amount of severance payments paid pursuant to this Agreement, if any, prior to
the date of your refusal to deliver, or revocation of, such release.
     4.5 Mitigation. In the event of a termination without cause under this
Agreement, you shall not be required to seek other employment or take other
actions

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in order to mitigate your damages hereunder, unless Section 280G of the Internal
Revenue Code would apply to any payments to you by the Company and your failure
to mitigate would result in the Company losing tax deductions to which it would
otherwise have been entitled. In such an event, you will engage in whatever
mitigation is necessary to preserve the Company’s tax deductions. With respect
to the preceding sentences, any payments or rights to which you are entitled by
reason of the termination of employment without cause shall be considered as
damages hereunder. In addition, whether or not you are required to mitigate your
damages hereunder, if following a termination without cause you obtain other
employment with any entity, other than a not-for-profit entity or government
institution, then you shall pay over to the Company the total cash salary and
bonus (of any kind) payable to you in connection with such other employment for
services during the period prior to the Severance Term Date (whether paid or
deferred), at the time received by you, to the extent of the amounts previously
paid to you by the Company following your termination with respect to such
period, as damages or severance, in excess of the Company’s standard policy.
(The provisions of the foregoing sentence shall not apply to any equity
interest, stock option, phantom or restricted stock or similar benefit received
in connection with such other employment.) Any obligation to mitigate your
damages pursuant to this Section 4.5 shall not be a defense or offset to the
Company’s obligation to pay you in full the amounts provided in this Agreement
upon the occurrence of a termination without cause, at the time provided herein,
or the timely and full performance of any of the Company’s other obligations
under this Agreement.
          4.6 Payments. Payments of Base Salary and Bonus required to be made to
you after any termination shall be made at the same times as such payments
otherwise would have been paid to you pursuant to Sections 3.1 and 3.2 if you
had not been terminated, subject to Section 11.17.
     5. Disability.
          5.1 Disability Payments. If during the term of employment and prior to
the delivery of any notice of termination without cause, you become physically
or mentally disabled, whether totally or partially, so that you are prevented
from performing your usual duties for a period of six consecutive months, or for
shorter periods aggregating six months in any twelve-month period, the Company
shall, nevertheless, continue to pay

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your full compensation through the last day of the sixth consecutive month of
disability or the date on which the shorter periods of disability shall have
equaled a total of six months in any twelve-month period (such last day or date
being referred to herein as the “Disability Date”), subject to Section 11.17. If
you have not resumed your usual duties on or prior to the Disability Date, the
Company shall pay you a pro rata Bonus (based on your Average Annual Bonus) for
the year in which the Disability Date occurs and thereafter shall pay you
disability benefits for the period ending on the later of (i) the Term Date or
(ii) the date which is twelve months after the Disability Date (in the case of
either (i) or (ii), the “Disability Period”), in an annual amount equal to 75%
of (a) your Base Salary at the time you become disabled and (b) the Average
Annual Bonus, in each case, subject to Section 11.17.
     5.2 Recovery from Disability. If during the Disability Period you shall
fully recover from your disability, the Company shall have the right
(exercisable within 60 days after notice from you of such recovery), but not the
obligation, to restore you to full-time service at full compensation. If the
Company elects to restore you to full-time service, then this Agreement shall
continue in full force and effect in all respects and the Term Date shall not be
extended by virtue of the occurrence of the Disability Period. If the Company
elects not to restore you to full-time service, you shall be entitled to obtain
other employment, subject, however, to the following: (i) you shall perform
advisory services during any balance of the Disability Period; and (ii) you
shall comply with the provisions of Sections 8 and 9 during the Disability
Period. The advisory services referred to in clause (i) of the immediately
preceding sentence shall consist of rendering advice concerning the business,
affairs and management of the Company as requested by the Chief Executive
Officer or other more senior officer of the Company but you shall not be
required to devote more than five days (up to eight hours per day) each month to
such services, which shall be performed at a time and place mutually convenient
to both parties. Any income from such other employment shall not be applied to
reduce the Company’s obligations under this Agreement.
     5.3 Other Disability Provisions. The Company shall be entitled to deduct
from all payments to be made to you during the Disability Period pursuant to
this Section 5 an amount equal to all disability payments received by you during
the Disability Period from Worker’s Compensation, Social Security and disability
insurance policies maintained by the Company; provided, however, that for so
long as, and to the extent that, proceeds paid to you from such disability
insurance policies are not includible in your

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income for federal income tax purposes, the Company’s deduction with respect to
such payments shall be equal to the product of (i) such payments and (ii) a
fraction, the numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to individuals at
the time of receipt of such payments. All payments made under this Section 5
after the Disability Date are intended to be disability payments, regardless of
the manner in which they are computed. Except as otherwise provided in this
Section 5, the term of employment shall continue during the Disability Period
and you shall be entitled to all of the rights and benefits provided for in this
Agreement, except that Sections 4.2 and 4.3 shall not apply during the
Disability Period, and unless the Company has restored you to full-time service
at full compensation prior to the end of the Disability Period, the term of
employment shall end and you shall cease to be an employee of the Company at the
end of the Disability Period and shall not be entitled to notice and severance
or to receive or be paid for any accrued vacation time or unused sabbatical.
     6. Death. If you die during the term of employment, this Agreement and all
obligations of the Company to make any payments hereunder shall terminate except
that your estate (or a designated beneficiary) shall be entitled to receive Base
Salary to the last day of the month in which your death occurs and Bonus
compensation (at the time bonuses are normally paid) based on the Average Annual
Bonus, but prorated according to the number of whole or partial months you were
employed by the Company in such calendar year.
     7. Other Benefits.
          7.1 General Availability. To the extent that (a) you are eligible
under the general provisions thereof (including without limitation, any plan
provision providing for participation to be limited to persons who were
employees of the Company or certain of its subsidiaries prior to a specific
point in time) and (b) the Company maintains such plan or program for the
benefit of its executives, during the term of your employment with the Company,
you shall be eligible to participate in any savings plan, or similar plan or
program and in any group life insurance, hospitalization, medical, dental,

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accident, disability or similar plan or program of the Company now existing or
established hereafter.
     7.2 Benefits After a Termination or Disability. After the effective date of
a termination of employment pursuant to Section 4.2 and prior to the Severance
Term Date or, if earlier, the Benefit Cessation Date, or during the Disability
Period, you shall continue to be treated as an employee of the Company for
purposes of eligibility to participate in the Company’s health and welfare
benefit plans other than disability programs and to receive the health and
welfare benefits (other than disability programs) required to be provided to you
under this Agreement to the extent such health and welfare benefits are
maintained in effect by the Company for its executives. After the effective date
of a termination of employment pursuant to Section 4 or during a Disability
Period, you shall not be entitled to any additional awards or grants under any
stock option, restricted stock or other stock-based incentive plan and you shall
not be entitled to continue elective deferrals in or accrue additional benefits
under any qualified or nonqualified retirement programs maintained by the
Company. At the Severance Term Date or , if earlier, the Benefit Cessation Date,
your rights to benefits and payments under any health and welfare benefit plans
or any insurance or other death benefit plans or arrangements of the Company or
under any stock option, restricted stock, stock appreciation right, bonus unit,
management incentive or other plan of the Company shall be determined in
accordance with the terms and provisions of such plans and any agreements under
which such stock options, restricted stock or other awards were granted.
However, consistent with the terms of the employment agreement dated as of
February 13, 2002 between the Company and you (which terms were carried forward
to the employment agreement between you and Time Warner Entertainment Company,
L.P.), notwithstanding the foregoing or any more restrictive provisions of any
such plan or agreement, if your employment with the Company is terminated as a
result of a termination pursuant to Section 4.2, then, (i) all stock options to
purchase shares of Time Warner Common Stock shall continue to vest, and any such
vested stock options shall remain exercisable (but not beyond the term of such
options) through the earlier of the Severance Term Date or the Benefit Cessation
Date; (ii) except if you shall then qualify for retirement under the terms of
the applicable stock option agreement and would receive more favorable treatment
under the terms of the stock option agreement, (x) all stock options to purchase
shares of Time Warner Common Stock granted to you on or after February 1, 2002
(the “Term Options”) that would have vested on or before the Severance Term Date
(or the comparable date under any employment agreement that amends, replaces or
supersedes

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this Agreement) shall vest and become immediately exercisable upon the earlier
of the Severance Term Date or the Benefit Cessation Date, and (y) all your
vested Term Options shall remain exercisable for a period of three years after
the earlier of the Severance Term Date or the Benefit Cessation Date (but not
beyond the term of such stock options); and (iii) the Company shall not be
permitted to determine that your employment was terminated for “unsatisfactory
performance” within the meaning of any stock option agreement between you and
the Company. .With respect to awards of restricted stock units for Time Warner
Common Stock (“RSUs”) held at the time of a termination of employment pursuant
to Section 4.2, subject to potential further delay in payment pursuant to
Section 11.17, (i) if you are eligible for retirement treatment at the effective
date of the termination, then for all awards of RSUs that contain special
accelerated vesting upon retirement, the vesting of the RSUs will accelerate
upon, and the shares of Time Warner Common Stock will be paid to you promptly
following, the effective date of termination of employment, and (ii) if you are
not eligible for retirement treatment at the effective date of the termination
of employment, then the treatment of the RSUs (other than the Make-Whole RSU
grant made pursuant to Section 3.5) will be determined at the earlier of the
Severance Term Date or the Benefit Cessation Date in accordance with the terms
of the applicable award agreement(s), but the shares of Time Warner Common Stock
underlying any vested RSUs will not be paid to you until promptly following the
next regular vesting date(s) for such award(s) of RSUs. With respect to the
Make-Whole RSUs, if there is a termination of employment pursuant to Section 4.2
at a time when you are not eligible for retirement treatment, then, subject to
potential further delay in payment pursuant to Section 11.17, a pro-rated
portion of the Make-Whole RSU, representing the number of RSUs that would vest
through the Severance Term Date, shall vest and be paid to you promptly
following the effective date of termination of employment.
     7.3 Payments in Lieu of Other Benefits. In the event the term of employment
and your employment with the Company is terminated pursuant to any section of
this Agreement, you shall not be entitled to notice and severance under the
Company’s general employee policies or to be paid for any accrued vacation time
or unused sabbatical, the payments provided for in such sections being in lieu
thereof.
     7. 4 Life Insurance. During your employment with the Company, the Company
shall (i) provide you with $50,000 of group life insurance and (ii) pay you
annually an amount equal to 2x the premium you would have to pay to obtain life
insurance under the Group Universal Life (“GUL”) insurance program made
available by

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the Company in an amount equal to $3,000,000. You shall be under no obligation
to use the payments made by the Company pursuant to the preceding sentence to
purchase GUL insurance or to purchase any other life insurance. If the Company
discontinues its GUL insurance program, the Company shall nevertheless make the
payments required by this Section 7 as if such program were still in effect. The
payments made to you hereunder shall not be considered as “salary” or
“compensation” or “bonus” in determining the amount of any payment under any
pension, retirement, profit-sharing or other benefit plan of the Company or any
subsidiary of the Company.
     8. Protection of Confidential Information; Non-Compete.
          8.1 Confidentiality Covenant. You acknowledge that your employment by
the Company (which, for purposes of this Section 8 shall mean Time Warner Inc.
and its affiliates) will, throughout the term of employment, bring you into
close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, technical processes and other business
affairs and methods and other information not readily available to the public,
and plans for future development. You further acknowledge that the services to
be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products and
services are marketed throughout the world, that the Company competes in nearly
all of its business activities with other entities that are or could be located
in nearly any part of the world and that the nature of your services, position
and expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant
and agree:
               8.1.1 You shall keep secret all confidential matters of the
Company and shall not disclose such matters to anyone outside of the Company, or
to anyone inside the Company who does not have a need to know or use such
information, and shall not use such information for personal benefit or the
benefit of a third party, either during or after the term of employment, except
with the Company’s written consent, provided that (i) you shall have no such
obligation to the extent such matters are or become publicly known other than as
a result of your breach of your obligations hereunder and (ii) you may, after
giving prior notice to the Company to the extent practicable under the

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circumstances, disclose such matters to the extent required by applicable laws
or governmental regulations or judicial or regulatory process;
          8.1.2 You shall deliver promptly to the Company on termination of your
employment, or at any other time the Company may so request, all memoranda,
notes, records, reports and other documents (and all copies thereof) relating to
the Company’s business, which you obtained while employed by, or otherwise
serving or acting on behalf of, the Company and which you may then possess or
have under your control; and
          8.1.3 If the term of employment is terminated pursuant to Section 4,
for a period of one year after such termination, without the prior written
consent of the Company, you shall not employ, and shall not cause any entity of
which you are an affiliate to employ, any person who was a full-time employee of
the Company at the date of such termination or within six months prior thereto
but such prohibition shall not apply to your secretary or executive assistant or
to any other employee eligible to receive overtime pay.
     8.2 Non-Compete. During the term of employment and through the later of
(i) the Term Date, (ii) the Severance Term Date, (iii) the Benefit Cessation
Date, if applicable, and, (iv) and twelve months after the effective date of any
termination of the term of employment pursuant to Section 4, you shall not,
directly or indirectly, without the prior written consent of the Chief Executive
Officer of the Company, render any services to, or act in any capacity for, any
Competitive Entity, or acquire any interest of any type in any Competitive
Entity; provided, however, that the foregoing shall not be deemed to prohibit
you from acquiring, (a) solely as an investment and through market purchases,
securities of any Competitive Entity which are registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934 and which are publicly traded, so
long as you are not part of any control group of such Competitive Entity and
such securities, including converted securities, do not constitute more than one
percent (1%) of the outstanding voting power of that entity and (b) securities
of any Competitive Entity that are not publicly traded, so long as you are not
part of any control group of such Competitive Entity and such securities,
including converted securities, do not constitute more than three percent (3%)
of the outstanding voting power of that entity. For purposes of the foregoing,
the following shall be deemed to be a Competitive Entity: (x) during the period
that you are actively employed with the Company, any person or entity that
engages in any line of

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business that is substantially the same as either (i) any line of business which
the Company engages in, conducts or, to your knowledge, has definitive plans to
engage in or conduct or (ii) any operating business that is engaged in or
conducted by the Company as to which, to your knowledge, the Company covenants,
in writing, not to compete with in connection with the disposition of such
business, and (y) during the period following a termination of your term of
employment pursuant to Section 4, any of the following: AT&T Corporation,
Bertelsmann A.G., CBS Corporation, Comcast Corporation, The Walt Disney Company,
EarthLink, Inc., General Electric Corporation, Google Inc., Microsoft
Corporation, The News Corporation Ltd., Sony Corporation, Viacom Inc. and Yahoo!
Inc., and their respective subsidiaries and affiliates and any successor to the
internet service provider, media or entertainment businesses thereof.
     9. Ownership of Work Product. You acknowledge that during the term of
employment, you may conceive of, discover, invent or create inventions,
improvements, new contributions, literary property, material, ideas and
discoveries, whether patentable or copyrightable or not (all of the foregoing
being collectively referred to herein as “Work Product”), and that various
business opportunities shall be presented to you by reason of your employment by
the Company. You acknowledge that all of the foregoing shall be owned by and
belong exclusively to the Company and that you shall have no personal interest
therein, provided that they are either related in any manner to the business
(commercial or experimental) of the Company, or are, in the case of Work
Product, conceived or made on the Company’s time or with the use of the
Company’s facilities or materials, or, in the case of business opportunities,
are presented to you for the possible interest or participation of the Company.
You shall (i) promptly disclose any such Work Product and business opportunities
to the Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of your inventorship or creation in any appropriate case.
You agree that you will not assert any rights to any Work Product or business
opportunity as having been made or acquired by you prior to the date of this
Agreement except for Work Product or business opportunities, if any, disclosed
to and acknowledged by the Company in writing prior to the date hereof.
     10. Notices. All notices, requests, consents and other communications
required or permitted to be given under this Agreement shall be effective only
if given in writing and shall be deemed to have been duly given if delivered
personally or sent by a

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nationally recognized overnight delivery service, or mailed first-class, postage
prepaid, by registered or certified mail, as follows (or to such other or
additional address as either party shall designate by notice in writing to the
other in accordance herewith):
          10.1 If to the Company:
Time Warner Inc.
One Time Warner Center
New York, New York 10019
Attention: Senior Vice President — Global
Compensation and Benefits
(with a copy, similarly addressed
but Attention: General Counsel)
          10.2 If to you, to your residence address set forth on the records of
the Company.
     11. General.
          11.1 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the substantive laws of the State of New York
applicable to agreements made and to be performed entirely in New York.
          11.2 Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
          11.3 Entire Agreement. This Agreement, including Annexes A and B, set
forth the entire agreement and understanding of the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties.
          11.4 No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or be liable for any alleged representation,
promise or inducement not so set forth.

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          11.5 Assignability. This Agreement and your rights and obligations
hereunder may not be assigned by you and except as specifically contemplated in
this Agreement, neither you, your legal representative nor any beneficiary
designated by you shall have any right, without the prior written consent of the
Company, to assign, transfer, pledge, hypothecate, anticipate or commute to any
person or entity any payment due in the future pursuant to any provision of this
Agreement, and any attempt to do so shall be void and shall not be recognized by
the Company. The Company shall assign its rights together with its obligations
hereunder in connection with any sale, transfer or other disposition of all or
substantially all of the Company’s business and assets, whether by merger,
purchase of stock or assets or otherwise, as the case may be. Upon any such
assignment, the Company shall cause any such successor expressly to assume such
obligations, and such rights and obligations shall inure to and be binding upon
any such successor.
          11.6 Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by both of the parties hereto, or
in the case of a waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any provision hereof shall
in no manner affect such party’s right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.
          11.7 Specific Remedy. In addition to such other rights and remedies as
the Company may have at equity or in law with respect to any breach of this
Agreement, if you commit a material breach of any of the provisions of
Sections 8.1, 8.2, or 9, the Company shall have the right and remedy to have
such provisions specifically enforced by any court having equity jurisdiction,
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company.
          11.8 Resolution of Disputes. Except as provided in the preceding
Section 11.7, any dispute or controversy arising with respect to this Agreement
and your employment hereunder (whether based on contract or tort or upon any
federal, state or local statute, including but not limited to claims asserted
under the Age Discrimination in Employment Act, Title VII of the Civil Rights
Act of 1964, as amended, any state Fair

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Employment Practices Act and/or the Americans with Disability Act) shall, at the
election of either you or the Company, be submitted to JAMS/ENDISPUTE for
resolution in arbitration in accordance with the rules and procedures of
JAMS/ENDISPUTE. Either party shall make such election by delivering written
notice thereof to the other party at any time (but not later than 45 days after
such party receives notice of the commencement of any administrative or
regulatory proceeding or the filing of any lawsuit relating to any such dispute
or controversy) and thereupon any such dispute or controversy shall be resolved
only in accordance with the provisions of this Section 11.8. Any such
proceedings shall take place in New York City before a single arbitrator (rather
than a panel of arbitrators), pursuant to any streamlined or expedited (rather
than a comprehensive) arbitration process, before a non-judicial (rather than a
judicial) arbitrator, and in accordance with an arbitration process which, in
the judgment of such arbitrator, shall have the effect of reasonably limiting or
reducing the cost of such arbitration. The resolution of any such dispute or
controversy by the arbitrator appointed in accordance with the procedures of
JAMS/ENDISPUTE shall be final and binding. Judgment upon the award rendered by
such arbitrator may be entered in any court having jurisdiction thereof, and the
parties consent to the jurisdiction of the New York courts for this purpose. The
prevailing party shall be entitled to recover the costs of arbitration
(including reasonable attorneys fees and the fees of experts) from the losing
party. If at the time any dispute or controversy arises with respect to this
Agreement, JAMS/ENDISPUTE is not in business or is no longer providing
arbitration services, then the American Arbitration Association shall be
substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions of
this Section 11.8. If you shall be the prevailing party in such arbitration, the
Company shall promptly pay, upon your demand, all legal fees, court costs and
other costs and expenses incurred by you in any legal action seeking to enforce
the award in any court.
          11.9 Beneficiaries. Whenever this Agreement provides for any payment
to your estate, such payment may be made instead to such beneficiary or
beneficiaries as you may designate by written notice to the Company. You shall
have the right to revoke any such designation and to redesignate a beneficiary
or beneficiaries by written notice to the Company (and to any applicable
insurance company) to such effect.
          11.10 No Conflict. You represent and warrant to the Company that this
Agreement is legal, valid and binding upon you and the execution of this
Agreement and the performance of your obligations hereunder does not and will
not constitute a breach of, or conflict with the terms or provisions of, any
agreement or

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understanding to which you are a party (including, without limitation, any other
employment agreement). The Company represents and warrants to you that this
Agreement is legal, valid and binding upon the Company and the execution of this
Agreement and the performance of the Company’s obligations hereunder does not
and will not constitute a breach of, or conflict with the terms or provisions
of, any agreement or understanding to which the Company is a party.
          11.11 Conflict of Interest. Attached as Annex B and made part of this
Agreement is the Time Warner Corporate Standards of Business Conduct. You
confirm that you have read, understand and will comply with the terms thereof
and any reasonable amendments thereto. In addition, as a condition of your
employment under this Agreement, you understand that you may be required
periodically to confirm that you have read, understand and will comply with the
Standards of Business Conduct as the same may be revised from time to time.
          11.12 Withholding Taxes. Payments made to you pursuant to this
Agreement shall be subject to withholding and social security taxes and other
ordinary and customary payroll deductions.
          11.13 No Offset. Neither you nor the Company shall have any right to
offset any amounts owed by one party hereunder against amounts owed or claimed
to be owed to such party, whether pursuant to this Agreement or otherwise, and
you and the Company shall make all the payments provided for in this Agreement
in a timely manner.
          11.14 Severability. If any provision of this Agreement shall be held
invalid, the remainder of this Agreement shall not be affected thereby;
provided, however, that the parties shall negotiate in good faith with respect
to equitable modification of the provision or application thereof held to be
invalid. To the extent that it may effectively do so under applicable law, each
party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
          11.15 Survival. Sections 3.4, 7.3 and 8 through 11 shall survive any
termination of the term of employment by the Company for cause pursuant to
Section

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4.1. Sections 3.4, 4.4, 4.5, 4.6 and 7 through 11 shall survive any termination
of the term of employment pursuant to Sections 4.2, 5 or 6.
          11.16 Definitions. The following terms are defined in this Agreement
in the places indicated:
affiliate — Section 4.2.2
Average Annual Bonus – Section 4.2.1
Base Salary — Section 3.1
Benefit Cessation Date – Section 4.2.2
Bonus – Section 3.2
cause — Section 4.1
Code — Section 4.2.2
Company — the first paragraph on page 1 and Section 8.1
Competitive Entity – Section 8.2
Disability Date — Section 5
Disability Period — Section 5
Effective Date — the first paragraph on page 1
Make-Whole Awards – Section 3.5
Make-Whole RSUs – Section 3.5
Severance Term Date – Section 4.2.2
Term Date – Section 1
term of employment — Section 1
termination without cause – Section 4.2.1
Work Product — Section 9
     11.17 Compliance with IRC Section 409A. This Agreement is intended to
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code” and will be interpreted in a manner intended to comply with Section 409A
of the Code. Notwithstanding anything herein to the contrary, (i) if at the time
of your termination of employment with the Company you are a “specified
employee” as defined in Section 409A of the Code (and any related regulations or
other pronouncements thereunder) and the deferral of the commencement of any
payments or benefits otherwise payable hereunder as a result of such termination
of employment is necessary in order to prevent any accelerated or additional tax
under Section 409A of the Code, then the Company will defer the commencement of
the payment of any such payments or benefits hereunder (without any reduction in
such payments or benefits ultimately paid or provided to you) until the date
that is six months following your termination of employment with the Company (or
the earliest date as is permitted under Section 409A of the Code) and (ii) if
any other payments

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of money or other benefits due to you hereunder could cause the application of
an accelerated or additional tax under Section 409A of the Code, such payments
or other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Company, that does not cause such an accelerated or additional
tax. To the extent any reimbursements or in-kind benefits due to you under this
Agreement constitutes “deferred compensation” under Section 409A of the Code,
any such reimbursements or in-kind benefits shall be paid to you in a manner
consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Each payment made under
this Agreement shall be designated as a “separate payment” within the meaning of
Section 409A of the Code. The Company shall consult with you in good faith
regarding the implementation of the provisions of this Section 11.17; provided
that neither the Company nor any of its employees or representatives shall have
any liability to you with respect to thereto.
          IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.

            TIME WARNER INC.
      By   /s/ Mark A. Wainger                      

                  /s/ John K. Martin, Jr.       John Martin           

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ANNEX A
RELEASE
          Pursuant to the terms of the Employment Agreement made as of ___,
between TIME WARNER INC., a Delaware corporation (the “Company”), One Time
Warner Center, New York, New York 10019 and the undersigned (the “Agreement”),
and in consideration of the payments made to me and other benefits to be
received by me pursuant thereto, I, John Martin, being of lawful age, do hereby
release and forever discharge the Company and any successors, subsidiaries,
affiliates, related entities, predecessors, merged entities and parent entities
and their respective officers, directors, shareholders, employees, benefit plan
administrators and trustees, agents, attorneys, insurers, representatives,
affiliates, successors and assigns from any and all actions, causes of action,
claims, or demands for general, special or punitive damages, attorney’s fees,
expenses, or other compensation or damages (collectively, “Claims”), which in
any way relate to or arise out of my employment with the Company or any of its
subsidiaries or the termination of such employment, which I may now or hereafter
have under any federal, state or local law, regulation or order, including
without limitation, Claims related to any stock options held by me or granted to
me by the Company that are scheduled to vest subsequent to my termination of
employment and Claims under the Age Discrimination in Employment Act (with the
exception of Claims that may arise after the date I sign this Release), Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the
Fair Labor Standards Act, the Family and Medical Leave Act and the Employee
Retirement Income Security Act, each as amended through and including the date
of this Release; provided, however, that the execution of this Release shall not
prevent the undersigned from bringing a lawsuit against the Company to enforce
its obligations under the Agreement.
          I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.
          I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP
VALAUBLE LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE
SIGNING. I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.
          WITNESS my hand this         day of            ,        .

                        John Martin           

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