Exhibit 10.37


 


EXECUTION
COPY


 


EMPLOYMENT AGREEMENT


by and between


WARNER MUSIC GROUP INC.


and 


Michael D. Fleisher


 


THIS EMPLOYMENT AGREEMENT (this “Agreement’’)
is entered into as of this 21st day of December, 2004 by and between Warner
Music Group Inc., a Delaware corporation (the “Company”), and Michael D.
Fleisher (the “Executive”).


 


RECITALS:


 


WHEREAS, the Company wishes to engage the Executive to serve as
Executive Vice President and Chief Financial Officer of the Company on the terms
and conditions contained herein and the Executive wishes to accept such
engagement on the terms and conditions contained herein.


 


AGREEMENT:


 


NOW, THEREFORE, for good and valuable consideration, including the
mutual covenants herein, the parties hereby agree as follows:


 


1.                                       Employment
Period. This Agreement and the Executive’s employment with the Company
hereunder (hereinafter referred to as the “Employment Period”) shall be
effective on the January 1, 2005 (the “Effective Date”) and, unless
earlier terminated pursuant to Section 4 hereof, shall expire on the
fourth anniversary of the Effective Date.


 


2.                                       Position,
Duties and Representations.


 


(a)                                  During
the Employment Period, the Executive shall be employed as the Executive Vice
President and Chief Financial Officer of the Company and shall report solely to
the Chief Executive Officer of the Company (the “CEO”). Subject to the
ultimate authority of the CEO, the Executive shall have direct management
responsibility for, and authority for the operations of, the treasury, tax,
accounting, investor relations, financial analysis, information technology and
real estate departments of the Company. The Executive’s services to the Company
shall be performed primarily at the offices of the Company located in New York
City, subject to travel requirements necessary to discharge the
responsibilities and duties assigned to the Executive hereunder.


 


(b)                                 Excluding
periods of vacation, sick leave and disability to which the Executive is
entitled during the Employment Period, the Executive agrees, to the extent
necessary to discharge the responsibilities and duties assigned to the
Executive hereunder, to use the Executive’s best efforts to perform faithfully
and efficiently such responsibilities. During the Employment Period, the
Executive may (i) serve on corporate boards or committees with the consent of
the CEO, which consent shall not be


 





















 


unreasonably
withheld, (ii) serve on civic, educational, philanthropic or charitable boards
or committees, (iii) passively own not more than three percent (3%) of the
outstanding capital stock or any corporation whose stock is publicly traded and
(iv) manage personal investments.


 


(c)                                  The
Executive represents and warrants to the Company that, other than prohibitions
generally imposed by law, there is no “Contract” (as defined in Section 6(d))
or other restriction or agreement in effect that would prohibit or otherwise
limit the Executive’s ability to enter into or negotiate this Agreement, become
an employee or officer of the Company or to discharge the responsibilities and
duties assigned to the Executive hereunder.


 


3.                                       Compensation.


 


(a)                                  Base
Salary. During the Employment Period, the Company shall pay to the
Executive a base salary at an annual rate equal to $800,000 (“Base Salary”),
payable in regular installments in accordance with the Company’s usual payroll
practices.


 


(b)                                 Annual
Bonus. The Executive shall be eligible to receive an annual cash bonus (the
“Annual Bonus”) in respect of each calendar year ending during the
Employment Period, with a target of $800,000. The amount of each Annual Bonus
shall be established by the Board or the Compensation Committee thereof in
consultation with the CEO and shall be based on individual and Company
performance. The Annual Bonus may be higher or lower than the target using
criteria consistent with that applicable to the annual bonuses of other senior
executives of the Company other than the CEO and the Chairman of United States
recorded music operation of the Warner Recorded Music Business. Notwithstanding
the above, the Annual Bonus in respect of the first 2005 calendar year shall be
no less than $800,000. For the avoidance of doubt, if the Employment Period
ends due to the expiration of the Agreement on the fourth anniversary of the
Effective Date, the Executive shall nevertheless be eligible to receive an
Annual Bonus in respect of the last calendar year of the Employment Term, and
the amount of such Annual Bonus shall be determined using criteria consistent
with those generally used in respect of prior calendar years.


 


(c)                                  Equity.
On the Effective Date, the Executive shall purchase from WMG Parent Corp.
shares of Parent’s Class A Common Stock (the “Restricted Stock Award”)
pursuant to the Restricted Stock Award Agreement annexed hereto as Exhibit A.


 


(d)                                 Benefit
Plans. During the Employment Period, the Executive shall be eligible to
participate in the employee benefit plans and arrangements of the Company and
its affiliates on terms and conditions no less favorable in the aggregate than
those generally provided to other senior executive officers of the Company.


 


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(e)                                  Business
Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable out-of-pocket expenses incurred
by the Executive in the performance of his duties hereunder, subject to the
submission of such written documentation as the Company may reasonably require
in accordance with its standard expense reimbursement practices and policies.
Without limiting the generality of the foregoing, the Company will reimburse
the Executive for first class travel and first class hotel accommodations in
connection with travel undertaken in the performance of his duties hereunder.


 


(f)                                    Vacation.
During the Employment Period, the Executive shall be entitled to no less paid
vacation for each year commencing with the Effective Date as is made available generally
to senior executives of the Company; provided that such paid vacation shall be
no less than four weeks per year; and provided further that unused vacation pay
in any year may not be carried forward.


 


4.                                       Termination.
The Employment Period and the Executive’s employment with the Company shall
terminate under the following circumstances:


 


(a)                                  Death
or Disability. The Executive’s employment and the Employment Period shall
terminate automatically upon the Executive’s death. The Company may terminate
the Executive’s employment and the Employment Period after having established
the Executive’s Disability, by giving to the Executive a “Notice of Termination”
(as defined in Section 4(d)). For purposes of this Agreement, “Disability”
means personal injury, illness or other cause which has rendered the Executive
unable to substantially perform his material duties and responsibilities
hereunder for a period of 120 consecutive days, or 120 out of 180 consecutive
days, as determined jointly by a physician selected by the Company reasonably
acceptable to the Executive (or, if he is incapacitated, his legal
representative) and a physician selected by the Executive (or, if he is
incapacitated, his legal representative) and reasonably acceptable to the
Company. If such physicians cannot agree as to whether the Executive has
suffered a Disability, they shall jointly select a third physician who shall
make such determination.


 


(b)                                 With
or Without Cause. The Company may terminate the Executive’s employment and
the Employment Period with or without “Cause” (as defined below) by giving to
the Executive a Notice of Termination. For purposes of this Agreement, “Cause”
means (i) the willful and continued failure of the Executive to perform
substantially his material duties with the Company (other than any such failure
resulting from the Executive’s incapacity due to physical or mental illness)
after a written demand for performance is delivered to the Executive by the
Board which identifies the manner in which the Board believes that the
Executive has not performed the Executive’s duties and the Executive, after a
period established by the Board and communicated in writing to the Executive
(which period may be no less than 20 days), has failed to cure such failure to
the reasonable satisfaction of the Board, (ii) the willful engaging by the
Executive in gross misconduct which is demonstrably and materially injurious to
the Company or its affiliates, (iii) the Executive’s conviction of, or pleading
guilty to, a felony or misdemeanor involving moral turpitude or dishonesty or
(iv) a determination by the Board that any of the Executive’s representations
made in Section 2(c) of this


 


3





















 


Agreement were
untrue when made (provided that the Company informs the Executive within ninety
(90) days of the majority of the members of the Board having actual knowledge
of such breach). A termination of the Executive by the Company for Cause shall
not be effective unless and until the Company has delivered to the Executive,
along with the Notice of Termination, a copy of a resolution duly adopted by a
majority of the Board (excluding the Executive, if he is a member of the Board)
stating that the Board has determined to terminate the Executive for Cause; provided,
however, that no such resolution shall be permitted to be adopted
without the Company having afforded the Executive the opportunity to make a
presentation to the Board and to answer any questions its members may ask him.


 


(c)                                  With
or Without Good Reason. The Executive may terminate his employment and the
Employment Period with “Good Reason” (as defined below) or, on and after the
first anniversary of the Effective Date, without Good Reason, in each case by
giving to the Company a Notice of Termination. For purposes of this Agreement, “Good
Reason” means, without the Executive’s express written consent:


 


(i)                                     (x) a change in
the duties or responsibilities (including reporting responsibilities) of the
Executive that is inconsistent in any material and adverse respect with the
Executive’s position(s), duties, responsibilities or status with the Company
and its affiliates on the Effective Date, or (y) an adverse change in the
Executive’s title or offices;


 


(ii)                                  any failure by the
Company to comply with any of the provisions of Section 3 of this
Agreement, including but not limited to any reduction in the target or maximum
attainable Annual Bonus;


 


(iii)                               the Company requiring
the Executive to be based at any office or location other than at an office
commensurate with the Executive’s position at the headquarters of the Company
in the Borough of Manhattan, New York;


 


(iv)                              any purported termination
by the Company of the Executive’s employment otherwise than as permitted by
this Agreement, it being understood that any such purported termination shall
not be effective for any purpose of this Agreement; or


 


(v)                                 a failure by the
Company to cause any successor to expressly assume this Agreement pursuant to Section 8(c)
hereof.


 


Without limiting the generality of any of the foregoing, Good Reason
shall include (i) any change in reporting line such that the Executive no
longer reports to the CEO, (ii) the appointment of any person other than the
Executive or Lyor Cohen as the Company’s President, Chief Operating Officer or
the equivalent or (iii) the appointment of a Co-Chief Financial Officer.


 


4





















 


A termination
by the Executive with Good Reason shall be effective only if the Executive
delivers to the Company a Notice of Termination for Good Reason within 60 days
after learning of
the circumstances constituting Good Reason; provided, however, that if such Notice of
Termination describes, as Good Reason, only one or more of the circumstances
described in clause (i), (ii), (iii) and (iv) of this Section 4(c) and,
within 30 days following the delivery of such Notice of Termination, the Company
has cured such circumstances to the reasonable satisfaction of the Executive,
then such Notice of Termination shall be ineffective and no Good Reason shall
be deemed to exist.


 


(d)                                 Notice
of Termination. Any termination by the Company with or without Cause or on
account of Disability, or by the Executive with or without Good Reason, shall
be communicated by a Notice of Termination to the other party given in
accordance with Section 9(e). For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific
termination provision of this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the termination date is other than the date of receipt of such notice,
specifies the proposed termination date; provided, however, that
the information in clause (ii) shall not be required in the event of any
termination by the Company without Cause or by the Executive without Good
Reason.


 


5.                                       Obligations
of the Company Upon Termination.


 


(a)                                  Death
or Disability. lf the Executive’s employment is terminated by reason of the
Executive’s death or on account of Disability, the Company shall:


 


(i)                                     pay to the
Executive or the Executive’s estate, as applicable, a lump sum cash payment
within ten (10) days after such termination equal to, to the extent not
previously paid: (A ) the Executive’s Base Salary through the end of the month in
which such termination occurred, (B) any earned and accrued but unpaid Annual
Bonus for any Fiscal Year ending prior to such termination, (C) any accrued
vacation pay, (D) any unpaid reimbursable business expenses due to the
Executive in accordance with Section 3(e) (the amounts described in the
preceding clauses (A) – (D), the “Accrued Amounts”), (E) the Executive’s
Base Salary for an additional twelve month period and (F) a pro-rated target
Annual Bonus for the Fiscal Year of termination determined by multiplying (x)
such target Annual Bonus by (y) a fraction, the numerator of which is the
number of days in the Fiscal Year that the Executive was employed by the
Company and the denominator of which is 365; and


 


(ii)                                  provide those death
or disability benefits to which the Executive is entitled at the date of the
Executive’s death or Disability under any benefit plans, policies or
arrangements of the Company.


 


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(b)                                 Cause
or Without Good Reason. If the Executive’s employment shall be terminated
(i) by the Company with Cause, or (ii) by the Executive without Good Reason,
the Company shall pay to the Executive a lump sum cash payment within ten (10)
days after such termination equal to, to the extent not previously paid, the
Accrued Amounts.


 


(c)                                  Without
Cause or With Good Reason. If the Executive’s employment shall be
terminated (i) by the Company without Cause or (ii) by the Executive with Good
Reason, the Executive shall be entitled to receive the following payments and
benefits:


 


(i)                                     to the extent not
previously paid, the Accrued Amounts;


 


(ii)                                  an amount equal to
the sum of: (i) the Executive’s Base Salary and (ii) the target Annual Bonus
for the Fiscal Year of such termination, payable in substantially equal monthly
installments on the first day of each of the first 12 calendar months following
termination (subject to the Executive’s continued compliance with the covenants
contained in Section 6 during such payment period);


 


(iii)                               a pro-rated Annual Bonus
for the Fiscal Year of termination determined by multiplying (x) the actual
Annual Bonus which the Executive would have earned in respect of such Fiscal
Year had he remained employed for the entire such Fiscal Year by (y) a
fraction, the numerator of which is the number of days in such Fiscal Year that
the Executive was employed by the Company and the denominator of which is 365,
payable at the time bonuses are generally payable to the Company’s senior
executives in respect of such Fiscal Year; and


 


(iv)                              The Executive and the
Executive’s spouse and dependents, as applicable, shall continue to participate
in the Company’s group health and life insurance plans (or be provided
comparable medical and life insurance coverage), at Company expense, until the
earlier of the first anniversary of such termination or the date the Executive
becomes eligible for coverage under the group health or life insurance plan, as
applicable, of another employer.


 


(d)                                 In
General. The Executive shall have no rights upon his termination of
employment with the Company, other than those set forth in each of Section 5(a),
(b) or (c), as applicable, to any compensation or any other benefits from the
Company under this Agreement, provided that amounts which the Executive is otherwise
entitled to receive under any plan, program or arrangement of the Company or
any of its affiliates available to employees generally (other than any
severance plan or program), shall be payable in accordance with such plan,
program or arrangement.


 


6





















 


6.                                       Restrictive
Covenants. Without in any way limiting or waiving any right or remedy
accorded to the Company or any limitation placed upon the Executive by law, the
Executive hereby agrees as follows:


 


(a)                                  Non-Solicitation.
The Executive agrees that during the Employment Period and for six months after
the expiration or termination thereof (the “Non-Solicitation Period”),
the Executive shall not, directly or indirectly:


 


(i)                                     hire or make an
offer of employment to, or supervise, any employee at the level of Vice
President or above (each, a “Restricted Executive”) of the Company or
other direct or indirect subsidiary or controlled affiliate of the Company (the
Company and all such other subsidiaries or controlled affiliates being referred
to hereinafter as the “Restricted Operations”) on the Executive’s own
behalf, or on behalf or any person, firm or entity (other than a Restricted
Operation);


 


(ii)                                  attempt to persuade
any Restricted Executive to (1) terminate his employment with a Restricted
Operation, (2) refrain from extending his employment with a Restricted
Operation, (3) refrain from entering into a new employment arrangement with a
Restricted Operation or (4) enter into any employment arrangement with any
competitor of a Restricted Operation;


 


(iii)                               hire,
or make an offer of employment to, or enter into, or solicit or offer to enter
into, any “Contract” (as hereinafter defined) with, any “Artist”
(as hereinafter defined) on the Executive’s own behalf or on behalf of any person,
firm or entity, if the activities which are the subject of such hiring,
employment or Contract are in any way competitive with a Restricted Operation;
or


 


(iv)                              attempt to persuade any
Artist to (1) terminate his or her relationship or Contract with a Restricted
Operation, (2) refrain from extending his or her relationship or Contract with
a Restricted Operation, (3) refrain from entering into a new Contract with a
Restricted Operation or (4) enter into any relationship or Contract with any
competitor of a Restricted Operation.


 


(b)                                 Confidentiality.
The Executive shall not at any time disclose or reveal to any person, firm or
entity, or make use of (otherwise than for the benefit of the Company or its
affiliates), any trade secrets or information of a secret or confidential
nature, including without limitation, matters of a business nature, such as
information about costs, profits, markets, leases, details of recording
agreements, distribution agreements, customer Contracts, manufacturing
processes, financial information, technical and production know-how,
developments, inventions, processes or administrative procedures, concerning
the business or affairs of a Restricted Operation, which the Executive may have
acquired in the course of or incident to the Executive’s employment with the
Company, and the Executive confirms that all such information


 


7





















 


(“Confidential
Information”) is the exclusive property of the Company and/or such
Restricted Operation. This paragraph shall not apply to disclosures by the
Executive (i) in the proper performance of his obligations under this Agreement
during the Employment Period or to officers, employees, lawyers and accountants
of a Restricted Operation, (ii) to the Executive’s legal counsel in connection
with seeking legal advice related hereto, (iii) to the Executive’s accountants
in connection with seeking financial or tax advice related hereto, or (iv) as
required by law, a court of competent jurisdiction or regulatory agency or
other governmental authority. Nothing herein shall prevent the Executive,
subsequent to the termination or expiration of his employment hereunder, from
using or availing himself of general technical skills, knowledge and
experience, including that pertaining to or derived from the non-confidential
aspects of a Restricted Operation. The term “Confidential Information” shall
not include information generally available and known to the public other than
as a result of a breach of this Section 6(b) by the Executive. The
Executive agrees to hold as Company property all Confidential Information and
all books, papers and other data, and all copies thereof and therefrom, in any
way relating to the businesses of a Restricted Operation, whether made or
received by the Executive, and, on termination of employment, or upon demand by
the Company, to deliver the same to the Company.


 


(c)                                  Intellectual
Property. Any copyrights, “Musical Compositions” (as hereinafter
defined), trademarks, patents, patent applications, inventions, developments
and processes which the Executive during the Employment Period may develop
which may reasonably be expected to be usable by a Restricted Operation in the
ordinary course of its business shall belong to Company and/or the relevant Restricted
Operation. Furthermore, the Executive agrees to execute any copyright
assignment or other instruments as any Restricted Operation may deem reasonably
necessary (at such Restricted Operation’s expense) to evidence, establish,
maintain, protect, enforce, and/or defend any and all of such Restricted
Operation’s interests under this Section 6(c).  All such interests shall vest in the relevant
Restricted Operation whether or not such instrument is requested, executed or
delivered. If the Executive shall not so execute and deliver any such
instrument after reasonable notice and opportunity to do so, the Company shall
have the right to do so in the Executive’s name and the Company is hereby
irrevocably appointed the Executive’s attorney-in-fact for such purposes, which
power is coupled with an interest.


 


(d)                                 Definitions.
For the purposes of Section 6 of this Agreement, the following definitions
shall apply:


 


(i)                                     “Artists”
means (A) any singer or musician, or other person furnishing the services or
works of an artist to a Restricted Operation pursuant to a Contract with a
Restricted Operation pursuant to which such singer, musician or other person is
required to provide exclusive services for the making or delivering of master “Recordings”
(as hereinafter defined) to such Restricted Operation or (B) any writer,
producer or other talent who has entered into a Contract with a Restricted Operation
or who has otherwise provided services to a Restricted Operation excepting, in
the case of both clauses (A) and (B) above, any


 


8





















 


such person who is required to provide services to any person or party
other than a Restricted Operation on an exclusive basis pursuant to a Contract
that was not entered into in connection with any violation by the Executive of
this Agreement.


 


(ii)                                  “Contract”
means any contract, other agreement, commitment, binding arrangement, binding
understanding or binding relationship (whether written or oral and whether
express or implied).


 


(iii)                               “Musical Compositions”
means a musical composition or medley consisting of words and/or music, or any
dramatic material and bridging passages whether in form of instrumental and/or
vocal music, prose or otherwise, irrespective of length.


 


(iv)                              “Recordings” means
any recording of sound, whether or not coupled with a visual image, by any
method or format and on any substance or material, whether now or hereafter
known, which is used or useful in the recording, production and/or manufacture
of Records or for any other exploitation of sound, excluding television and
movies (other than music videos or the promotion thereof), consumer electronics
and electronic games.


 


(v)                                 “Records” means
gramophone discs, magnetic tapes, compact discs, other storage media and any
other device or appliance used for emitting sounds (whether or not accompanied
by visual images) incorporating the Recordings.


 


(e)                                  Severability;
Blue-Pencilling. Each section, subsection or part thereof under this Section 6
constitutes an entirely separate and independent restriction. If any of such
covenants or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction (i)
the remaining terms and provisions hereof shall be unimpaired and (ii) the
invalid or unenforceable term or provision shall be deemed replaced by a term
or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.


 


(f)                                    Necessity;
Enforcement. The parties hereto have considered carefully the necessity for
protection of each Restricted Operation against the Executive’s disclosures of
Confidential Information and other actions referred to in this Section 6,
and the nature and scope of such protection. The parties agree and acknowledge
that the duration and scope applicable to the covenants set forth in this Section 6
are fair, reasonable and necessary, and that the Executive has received
adequate consideration for such obligations. Accordingly, the Executive agrees
that, in addition to any other relief to which the Company may be entitled, the
Company shall be entitled to seek injunctive relief (without the requirement of
posting any bond or other security) from a court of competent jurisdiction for
the purpose of restraining the Executive from any actual or threatened breach
of the covenants contained in this Section 6.


 


9





















 


7.                                       Indemnity.
To the fullest extent permitted by applicable law, the Company shall indemnify,
defend and hold the Executive harmless from and against any and all claims,
demands, actions, causes of action, liabilities, losses, judgments, fines,
costs and expenses (including, without limitation, the reimbursement of reasonable
attorneys’ fees, settlement expenses, punitive damages and the advancement of
legal fees and expenses, as such fees and expenses are incurred by the
Executive) arising from or relating to (a) claims relating to the Company or
any or direct or indirect parents or subsidiaries or (b) the Executive’s
service with or status as an officer, director, employee, agent or
representative of the Company or any of its direct or indirect parents or
subsidiaries or in any other capacity in which the Executive serves or have
served at the request of the Board or the CEO for the benefit of any such
entity. Without limiting the foregoing, in connection with any such claim,
demand, action, cause of action, liability, loss, judgment or fine, the
Executive shall have the right (i) to be represented by separate counsel
reasonably acceptable to the Company, at the Company’s sole cost and expense,
and (ii) to have the Company pay the cost and expense of any bond that the
Executive may be required to post in order to appeal an adverse decision. The
Company’s obligations under this Section 7 shall be in addition to, and
not in derogation of, any other rights the Executive may have against the
Company to indemnification or advancement of expenses, whether by statute,
contract or otherwise (including, without limitation, the Executive’s
entitlement to indemnification and the payment or reimbursement of expenses
(including attorneys’ fees and expenses) to the extent provided in and/or permitted
by the Certificate of Incorporation and By-Laws of the Company. The Company
shall maintain directors and officers liability insurance in commercially
reasonably amounts (as reasonably determined by the Board), and the Executive
shall be covered under such insurance to the same extent as any other senior
executive of the Company. The Executive hereby undertakes to repay any advances
paid to him pursuant to this Section 7 if a final judgment adverse to the
Executive establishes that he is not entitled to be indemnified under this
Agreement or otherwise. The Company hereby acknowledges that the undertaking
set forth in the previous sentence satisfies all requirements for any similar
undertakings in the by-laws or other corporate documents of the Company. The
Company shall not take any action that would impair the Executive’s right to
indemnification, other than in connection with a claim by the Company that the
Executive is not entitled to indemnification in accordance with the standards
set forth in this Section 7.


 


8.              Successors.


 


(a)                                  This
Agreement is personal to the Executive and without the prior written consent of
the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive’s legal representatives.


 


(b)                                 This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and, other than as set forth in Section 8(c), shall not be assignable
by the Company without the prior written consent of the Executive (which shall
not be unreasonable withheld).


 


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(c)                                  The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner to the same extent that the Company would be
required to perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees
to perform this Agreement by operation of law, or otherwise.


 


9.                                       Miscellaneous.


 


(a)                                  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware applicable to contracts made and performed entirely therein.
The parties hereto agree that exclusive jurisdiction of any dispute regarding
this Agreement shall be the state or federal courts located in New York, New
York.


 


(b)                                 In
the event of any termination of the Executive’s employment hereunder, the
Executive shall be under no obligation to seek other employment or otherwise
mitigate the obligations of the Company under this Agreement, and there shall
be no offset against amounts due the Executive under this Agreement on account
of future earnings by the Executive. Any amounts due to the Executive under
this Agreement upon termination of employment are considered to be reasonable
by the Company and are not in the nature of a penalty.


 


(c)                                  The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect.


 


(d)                                 This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.


 


(e)                                  All
notices required or permitted by this Agreement to be given to any party shall
be in writing and shall be delivered personally, or sent by certified mail,
return receipt requested, or by Federal Express or similar overnight service,
prepaid recorded delivery, addressed as follows:


 


	
   

  	
  If to the
  Executive:

  	
   

  
	
   

  	
  Michael
  Fleisher

  	
   

  
	
   

  	
  181 Hudson
  st, Apt 8D

  	
   

  
	
   

  	
  New York, NY
  10013

  	
   

  



 


11





















 


	
   

  	
  If to the
  Company:

  
	
   

  	
   

  
	
   

  	
  Warner Music
  Group Inc.

  
	
   

  	
  75
  Rockefeller Plaza

  
	
   

  	
  New York,
  New York 10019

  
	
   

  	
  Attention:
  Chief Executive Officer and General Counsel

  



 


and shall be
deemed to have been duly given when so delivered personally or, if mailed or
sent by overnight courier, upon delivery; provided, that, a
refusal by a party to accept delivery shall be deemed to constitute receipt.


 


(f)                                    The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.


 


(g)                                 The
Company may withhold from any amounts payable under this Agreement such
Federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.


 


(h)                                 This
Agreement is the joint product of the Company and the Executive and each
provision hereof has been subject to the mutual consultation, negotiation and
agreement of the Company and the Executive and shall not be construed for or
against either party hereto.


 


(i)                                     Subject
to any other documents which may be entered into by the Executive and the
Company on or after the Effective Date (including without limitation the
Restricted Stock Award Agreement), this Agreement contains the entire agreement
and understanding of the parties hereto with respect to the subject matter
contained herein and, upon this Agreement becoming effective, supersedes all
prior communications, representations and negotiations in respect thereto,
whether or not in writing.


 


IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


 


	
   

  	
  /s/ Michael
  D. Fleisher

  	
   

  
	
   

  	
  Michael D.
  Fleisher

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARNER MUSIC
  GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
    CEO

  	
   

  
						



 


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