exv10w1






EXHIBIT 10.1




TIME WARNER INC.

2010 STOCK INCENTIVE PLAN




1. Purpose of the Plan




     The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining
employees, directors and advisors and to motivate such employees, directors and advisors to exert
their best efforts on behalf of the Company and its Affiliates by providing incentives through the
granting of Awards. The Company expects that it will benefit from the added interest which such
employees, directors and advisors will have in the welfare of the Company as a result of their
proprietary interest in the Company’s success.



2. Definitions




     The following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



     (a) “Act” means The Securities Exchange Act of 1934, as amended, or any successor thereto.



     (b) “Affiliate” means any entity that is consolidated with the Company for financial reporting
purposes or any other entity designated by the Board in which the Company or an Affiliate has a
direct or indirect equity interest of at least 20%, measured by reference to vote or value.



     (c) “Award” means an Option, SAR, award of Restricted Stock, or Other Stock-Based Award
granted pursuant to the Plan.



     (d) “Board” means the Board of Directors of the Company.



     (e) “Change in Control” means the occurrence of any of the following events:




     (i) any “Person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Act (other
than the Company or any company owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the Company)
becomes the “Beneficial Owner” within the meaning of Rule 13d-3 promulgated under the Act of
30% or more of the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors; excluding, however, any circumstance
in which such beneficial ownership resulted from any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Company or by any corporation controlling,
controlled by, or under common control with, the Company;




     (ii) a change in the composition of the Board since the Effective Date, such that the
individuals who, as of such date, constituted the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of such Board; provided that any individual who
becomes a director of the Company subsequent to the Effective Date whose election, or
nomination for election by the Company’s stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened election contest, as such terms
are used in Rule 14a-12 of Regulation 14A promulgated under the Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person or entity other
than the Board shall not be deemed a member of the Incumbent Board;




     (iii) a reorganization, recapitalization, merger, consolidation or similar form of
corporate transaction, or the sale, transfer, or other disposition of all or substantially all
of the assets of the Company to an entity that is not an Affiliate (each of the foregoing
events, a “Corporate Transaction”) involving the Company, unless securities representing 60%
or more of the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the Company or the corporation resulting from such Corporate Transaction,
including a



 









 






corporation that, as a result of such transaction owns all or substantially all of
the Company’s assets (or the direct or indirect parent of such corporation), are held
immediately subsequent to such transaction by the person or persons who were the beneficial
holders of the outstanding voting securities entitled to vote generally in the election of
directors of the Company immediately prior to such Corporate Transaction, in substantially the
same proportions as their ownership immediately prior to such Corporate Transaction; or




     (iv) the liquidation or dissolution of the Company, unless such liquidation or
dissolution is part of a transaction or series of transactions described in clause (iii) above
that does not otherwise constitute a Change in Control.



     (f) “Code” means the Internal Revenue Code of 1986, as amended, or any successor thereto.



     (g) “Committee” means the Compensation and Human Development Committee of the Board or its
successor, or such other committee of the Board to which the Board has delegated power to act under
or pursuant to the provisions of the Plan or a subcommittee of the Compensation and Human
Development Committee (or such other committee) established by the Compensation and Human
Development Committee (or such other committee).



     (h) “Company” means Time Warner Inc., a Delaware corporation.



     (i) “Effective Date” means the date the Board approves the Plan.



     (j) “Employment” means (i) a Participant’s employment if the Participant is an employee of the
Company or any of its Affiliates or (ii) a Participant’s services as a non-employee director, if
the Participant is a non-employee member of the Board or the board of directors of an Affiliate;
provided, however that unless otherwise determined by the Committee, a change in a Participant’s
status from employee to non-employee (other than a director of the Company or an Affiliate) shall
constitute a termination of employment hereunder.



     (k) “Fair Market Value” means, on a given date, (i) if there should be a public market for the
Shares on such date, the closing sale price of the Shares on the New York Stock Exchange (“NYSE”)
Composite Tape, or, if the Shares are not listed or admitted on any national securities exchange,
the average of the per Share closing bid price and per Share closing asked price on such date as
quoted on the National Association of Securities Dealers Automated Quotation System (or such market
in which such prices are regularly quoted) (the “NASDAQ”), or, if no sale of Shares shall have been
reported on the NYSE Composite Tape or quoted on the NASDAQ on such date, then the immediately
preceding date on which sales of the Shares have been so reported or quoted shall be used, and (ii)
if there should not be a public market for the Shares on such date, the Fair Market Value shall be
the value established by the Committee in good faith.



     (l) “ISO” means an Option that is also an incentive stock option granted pursuant to Section
6(d).



     (m) “Option” means a stock option granted pursuant to Section 6.



     (n) “Option Price” means the price for which a Share can be purchased upon exercise of an
Option, as determined pursuant to Section 6(a).



     (o) “Other Stock-Based Awards” means awards granted pursuant to Section 9.



     (p) “Participant” means an employee, prospective employee, director or advisor of the Company
or an Affiliate who is selected by the Committee to participate in the Plan.



     (q) “Performance-Based Awards” means certain Other Stock-Based Awards granted pursuant to
Section 9(b).



     (r) “Plan” means the Time Warner Inc. 2010 Stock Incentive Plan, as amended from time to time.



     (s) “Plan Share Limit” has the meaning set forth in Section 3.



 









 





     (t) “Restricted Stock” means any Share granted under Section 8.



     (u) “Section 162(m)” means Section 162(m) of the Code and the Department of Treasury
regulations and other interpretative guidance issued thereunder, including without limitation any
such regulations or other guidance that may be issued after the Effective Date.



     (v) “Section 409A” means Section 409A of the Code and the Department of Treasury regulations
and other interpretative guidance issued thereunder, including without limitation any such
regulations or other guidance that may be issued after the Effective Date.



     (w) “Shares” means shares of common stock of the Company, $.01 par value per share.



     (x) “SAR” means a stock appreciation right granted pursuant to Section 7.



     (y) “Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of the Code (or
any successor section thereto), of the Company.



     (z) “Substitute Awards” has the meaning set forth in Section 4(c).



3. Shares Subject to the Plan




     Subject to adjustment as provided in Section 10, the total number of Shares available for
issuance under the Plan (the “Plan Share Limit”) shall be equal to 70,000,000, of which, no more
than 40% may be issued in the form of Restricted Stock or Other Stock-Based Awards payable in
Shares and no more than 70,000,000 may be issued with respect to ISOs. The maximum aggregate number
of Shares with respect to which Awards may be granted during a calendar year, net of any Shares
which are subject to Awards (or portions thereof) which, during such year, terminate or lapse
without payment of consideration, shall be equal to 1.5% of the number of Shares outstanding on
December 31 of the preceding calendar year. The maximum number of Shares with respect to which
Awards may be granted during a calendar year to any Participant shall be 1,200,000; provided that
the maximum number of Shares that may be awarded in the form of Restricted Stock or Other
Stock-Based Awards payable in Shares during any calendar year to any Participant shall be 500,000.
In the case of Awards that are settled in cash based on the Fair Market Value of a Share, the
maximum aggregate amount of cash that may be paid pursuant to Awards granted in a calendar year to
any Participant shall be equal to the Fair Market Value of a Share as of the relevant vesting,
payment or settlement date multiplied by 500,000.



     The number of Shares available for issuance under the Plan shall be reduced by the full
number of Shares covered by Awards granted under the Plan (including, without limitation, the full
number of Shares covered by any SAR, regardless of whether any such SAR or other Award covering
Shares under the Plan is ultimately settled in cash or by delivery of Shares); provided, however,
that the number of Shares covered by Awards (or portions thereof) that are forfeited or that
otherwise terminate or lapse without the payment of consideration in respect thereof shall again
become available for issuance under the Plan; and provided further that any Shares that are
forfeited after the actual issuance of such Shares to a Participant under the Plan shall not become
available for re-issuance under the Plan.



4. Administration




     (a) The Plan shall be administered by the Committee, which may delegate its duties and powers
in whole or in part to any subcommittee thereof consisting solely of at least two individuals who
are intended to qualify as “independent directors” within the meaning of the NYSE listed company
rules, “non-employee directors” within the meaning of Rule 16b-3 under the Act and, to the extent
required by Section 162(m), “outside directors” within the meaning thereof. In addition, to the
extent permitted or not prohibited by the Delaware General Corporation Law, the Committee may
delegate the authority to grant Awards under the Plan to any employee or group of employees of the
Company or an Affiliate; provided that such delegated authority shall not include the authority to
grant Awards to any individual who is subject to Section 16 of the Act and any grants made pursuant to such delegated authority are
consistent with guidelines established by the Committee from time to time.



 









 





     (b) The Committee shall have the full power and authority to make, and establish the terms and
conditions of, any Award to any person eligible to be a Participant, consistent with the provisions
of the Plan, and to waive any such terms and conditions at any time (including, without limitation,
accelerating or waiving any vesting conditions, subject to Sections 8(a) and 9(a)).



     (c) Subject to the restrictions on “repricing” of Options and SARs as set forth in Section
5(b), Awards may, in the discretion of the Committee, be granted under the Plan in assumption of,
or in substitution for, outstanding awards previously granted by the Company or any of its
Affiliates or a company acquired by the Company or any of its Affiliates or with which the Company
or any of its Affiliates combines (“Substitute Awards”). The number of Shares underlying any
Substitute Awards shall be counted against the Plan Share Limit; provided, however,
that Substitute Awards issued in connection with the assumption of, or in substitution for,
outstanding awards previously granted by an entity that is acquired by the Company or any of its
Affiliates or with which the Company or any of its Affiliates combines shall not be counted against
the Plan Share Limit; provided further, however, that Substitute Awards issued in
connection with the assumption of, or in substitution for, outstanding stock options intended to
qualify for special tax treatment under Sections 421 and 422 of the Code that were previously
granted by an entity that is acquired by the Company or any of its Affiliates or with which the
Company or any of its Affiliates combines shall be counted against the maximum aggregate number of
Shares available for ISOs under the Plan.



     (d) The Committee is authorized to interpret the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, and to make any other determinations that it deems
necessary or desirable for the administration of the Plan, and may delegate such authority, as it
deems appropriate. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems necessary or
desirable. Any decision of the Committee in the interpretation and administration of the Plan, as
described herein, shall lie within its sole and absolute discretion and shall be final, conclusive
and binding on all parties concerned (including, but not limited to, Participants and their
successors).



     (e) The Committee shall require payment of any amount it may determine to be necessary to
withhold for federal, state, local or other taxes as a result of the exercise, grant, vesting or
payout of an Award. Unless the Committee specifies otherwise, the Participant may elect to pay a
portion or all of such withholding taxes by (a) delivery of Shares or (b) having Shares withheld by
the Company with a Fair Market Value equal to the minimum statutory withholding rate from any
Shares that would have otherwise been received by the Participant.



5. Limitations




     (a) No Award may be granted under the Plan after August 15, 2014, but Awards granted prior to
such date may extend beyond that date.



     (b) Notwithstanding any provision herein to the contrary, the repricing of an Option or SAR,
once granted hereunder, is prohibited without the prior approval of the Company’s stockholders. For
this purpose, a “repricing” means any of the following (or any other action that has the same
effect as any of the following): (i) changing the terms of an Option or SAR to lower its exercise
price other than a decrease in exercise price that occurs as a result of an adjustment made in
connection with a change in capitalization or similar change in the outstanding Shares pursuant to
Section 10(a) below; (ii) any other action that is treated as a “repricing” under U.S. generally
accepted accounting principles; and (iii) repurchasing for cash or canceling an Option or SAR at a
time when its exercise price is greater than the Fair Market Value of the underlying Shares in
exchange for another Award, unless the cancellation and exchange occurs in connection with a change
in capitalization or similar change in the outstanding Shares permitted under Section 10(a) below.
Any such cancellation and exchange described in clause (iii) (other than in connection with a
change permitted under Sections 10(a) and 10(b) below) will be considered a “repricing” regardless
of whether it is treated as a “repricing” under U.S. generally accepted accounting principles
and regardless of whether it is voluntary on the part of the Participant.



 









 





     (c) With respect to any Awards granted to a Participant who is a non-employee member of the
Board at the time of grant, such Awards shall be made pursuant to formulas established by the Board
in advance of such grant. Any such Awards shall be made at the time such a Participant first
becomes a member of the Board and, thereafter, on an annual basis at or following the annual
meeting of stockholders. Such formulas may include any one or more of the following: (i) a fixed
number of Options or SARs or a number of Options determined by reference to a fixed dollar amount
(calculated based on the Fair Market Value of a Share on the date of grant and the Black-Scholes
methodology for valuing Options and SARs), (ii) a fixed number of Shares of Restricted Stock or a
number of Shares of Restricted Stock determined by reference to a fixed dollar amount (calculated
based on the Fair Market Value of a Share on the date of grant), and (iii) Other Stock-Based Awards
determined either by reference to a fixed number of Shares or to a fixed dollar amount (calculated
based on the Fair Market Value of a Share on the date of grant).



6. Terms and Conditions of Options




     Options granted under the Plan shall be, as determined by the Committee, nonqualified or
incentive stock options for federal income tax purposes, as evidenced by the related Award
agreements, and shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee shall determine, and
as evidenced by the related Award agreement:



     (a) Option Price. The Option Price per Share shall be determined by the Committee, but shall
not be less than 100% of the Fair Market Value of a Share on the date an Option is granted.



     (b) Exercisability. Options granted under the Plan shall be exercisable at such time and upon
such terms and conditions as may be determined by the Committee, but in no event shall an Option be
exercisable more than ten years after the date it is granted, except as may be provided pursuant to
Section 15.



     (c) Exercise of Options. Except as otherwise provided in the Plan or in an Award agreement, an
Option may be exercised for all, or from time to time any part, of the Shares for which it is then
exercisable. For purposes of this Section 6, the exercise date of an Option shall be the date a
notice of exercise is received by the Company, together with provision for payment of the full
purchase price in accordance with this Section 6(c). The purchase price for the Shares as to which
an Option is exercised shall be paid to the Company, as designated by the Committee, pursuant to
one or more of the following methods: (i) in cash or its equivalent (e.g., by check); (ii) in
Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being
purchased and satisfying such other requirements as may be imposed by the Committee; (iii) partly
in cash and partly in such Shares or (iv) if there is a public market for the Shares at such time,
through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the
exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such
sale equal to the aggregate Option Price for the Shares being purchased. No Participant shall have
any rights to dividends or other rights of a stockholder with respect to Shares subject to an
Option until the Shares are issued to the Participant.



     (d) ISOs. The Committee may grant Options under the Plan that are intended to be ISOs. Such
ISOs shall comply with the requirements of Section 422 of the Code (or any successor section
thereto). No ISO may be granted to any Participant who, at the time of such grant, owns more than
10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary,
unless (i) the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on
the date the ISO is granted and (ii) the date on which such ISO terminates is a date not later than
the day preceding the fifth anniversary of the date on which the ISO is granted. Any Participant
who disposes of Shares acquired upon the exercise of an ISO either (i) within two years after the
date of grant of such ISO or (ii) within one year after the transfer of such Shares to the
Participant, shall notify the Company of such disposition and of the amount realized upon such
disposition. All Options granted under the Plan are intended to be nonqualified stock options,
unless the applicable Award agreement expressly states that the Option is intended to be an ISO. If
an Option is intended to be an ISO, and if for any reason such Option (or portion thereof)
shall not qualify as an ISO, then, to the extent of such nonqualification, such Option (or portion
thereof) shall be regarded as a nonqualified stock option granted under the Plan; provided that
such Option (or portion thereof) otherwise complies with the Plan’s requirements relating to
nonqualified stock options. In no event shall



 









 





any member of the Committee, the Company or any of its Affiliates (or their respective employees, officers or directors) have any liability to any
Participant (or any other person) due to the failure of an Option to qualify for any reason as an
ISO.




     (e) Attestation. Wherever in the Plan or any agreement evidencing an Award a Participant
is permitted to pay the exercise price of an Option or taxes relating to the exercise of an Option
by delivering Shares, the Participant may, subject to procedures satisfactory to the Committee,
satisfy such delivery requirement by presenting proof of beneficial ownership of such Shares, in
which case the Company shall treat the Option as exercised without further payment and/or shall
withhold such number of Shares from the Shares acquired by the exercise of the Option, as
appropriate.



7. Terms and Conditions of SARs




     (a) Grants. The Committee may grant (i) a SAR independent of an Option or (ii) a SAR in
connection with an Option, or a portion thereof. A SAR granted pursuant to clause (ii) of the
preceding sentence (A) may be granted at the time the related Option is granted or at any time
prior to the exercise or cancellation of the related Option, (B) shall cover the same number of
Shares covered by the Option (or such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such Option except for such additional
limitations as are contemplated by this Section 7 (or such additional limitations as may be
included in an Award agreement).



     (b) Terms. The exercise price per Share of a SAR shall be an amount determined by the
Committee but in no event shall such amount be less than 100% of the Fair Market Value of a Share
on the date the SAR is granted; provided, however, that notwithstanding the foregoing in the case
of a SAR granted in conjunction with an Option, or a portion thereof, the exercise price may not be
less than the Option Price of the related Option. Each SAR granted independent of an Option shall
entitle a Participant upon exercise to an amount equal to (i) the excess of (A) the Fair Market
Value on the exercise date of one Share over (B) the exercise price per Share, times (ii) the
number of Shares covered by the SAR. Each SAR granted in conjunction with an Option, or a portion
thereof, shall entitle a Participant to surrender to the Company the unexercised Option, or any
portion thereof, and to receive from the Company in exchange therefor an amount equal to (i) the
excess of (A) the Fair Market Value on the exercise date of one Share over (B) the Option Price per
Share, times (ii) the number of Shares covered by the Option, or portion thereof, which is
surrendered. Payment shall be made in Shares or in cash, or partly in Shares and partly in cash
(any such Shares valued at such Fair Market Value), all as shall be determined by the Committee.
SARs may be exercised from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the SAR is being exercised. The date a
notice of exercise is received by the Company shall be the exercise date. No fractional Shares will
be issued in payment for SARs, but instead cash will be paid for a fraction or, if the Committee
should so determine, the number of Shares will be rounded downward to the next whole Share. No
Participant shall have any rights to dividends or other rights of a stockholder with respect to
Shares covered by SARs until the Shares are issued to the Participant.



     (c) Limitations. The Committee may impose, in its discretion, such conditions upon the
exercisability of SARs as it may deem fit, but in no event shall a SAR be exercisable more than ten
years after the date it is granted, except as may be provided pursuant to Section 15.



8. Restricted Stock




(a) Grant. Subject to the provisions of the Plan, the Committee shall determine the number of
Shares of Restricted Stock to be granted to each Participant, the duration of the period during
which, and the conditions, if any, under which, the Restricted Stock may be forfeited to the
Company, and the other terms and conditions of such Awards. Notwithstanding any other provision,
with respect to




(i) Shares of Restricted Stock that are subject to time-based vesting, but not
performance-based vesting, not less than 95% of such Shares of Restricted Stock shall remain
subject to forfeiture for at least three years after the date of grant, subject to earlier
termination of such potential for forfeiture in whole or in part in the event of a Change in
Control or the death, disability or other termination of the Participant’s



 









 




Employment, and (ii) Shares of Restricted Stock that are subject to vesting upon the attainment of performance
objectives, the minimum performance period shall be one year.




     (b) Transfer Restrictions. Shares of Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, except as provided in the Plan or the applicable Award agreement.
Shares of Restricted Stock may be evidenced in such manner as the Committee shall determine in its
sole discretion. If certificates representing Shares of Restricted Stock are registered in the name
of the applicable Participant, the Company may, at its discretion, retain physical possession of
such certificates until such time as all applicable restrictions have lapsed. After the lapse of
the restrictions applicable to such Shares of Restricted Stock, the Company shall deliver a
certificate or other evidence of ownership of the Shares to the Participant.



     (c) Dividends. Dividends paid on any Shares of Restricted Stock may be paid directly to the
Participant, withheld by the Company subject to vesting of the Restricted Shares pursuant to the
terms of the applicable Award agreement, or may be reinvested in additional Shares of Restricted
Stock, as determined by the Committee in its sole discretion; provided that, for Shares of
Restricted Stock that are subject to vesting upon the attainment of a performance goal, dividends
may be withheld and paid only with respect to those Restricted Shares for which the restrictions
ultimately lapse and the Restricted Shares vest.



     (d) Performance-Based Grants. Notwithstanding anything to the contrary herein, certain Shares
of Restricted Stock granted under this Section 8 may, at the discretion of the Committee, be
granted in a manner that is intended to be deductible by the Company under Section 162(m). The
restrictions applicable to such Restricted Stock shall lapse based wholly or partially on the
attainment of written performance goals approved by the Committee for a performance period of not
less than one year established by the Committee (i) while the outcome for that performance period
is substantially uncertain and (ii) no more than 90 days after the commencement of the performance
period to which the performance goal relates. The performance goals, which must be objective, shall
be based on one or more of the criteria set forth in Section 9(b) below. The criteria may relate to
the Company, one or more of its Affiliates or one or more of its or their divisions or units, or
any combination of the foregoing, and may be applied on an absolute basis and/or be relative to one
or more peer group companies or indices, or any combination thereof, all as the Committee shall
determine. In addition, to the extent consistent with Section 162(m), the performance goals may be
calculated without regard to extraordinary items. The Committee shall determine whether, with
respect to a performance period, the applicable performance goals have been met with respect to a
given Participant and, if they have, shall so certify prior to the release of the restrictions on
the Shares. No such restrictions shall lapse for such performance period until such certification
is made by the Committee.



9. Other Stock-Based Awards




     (a) Generally. The Committee, in its sole discretion, may grant or sell Awards of Shares and
Awards that are valued in whole or in part by reference to, or are otherwise based on the Fair
Market Value of, Shares (“Other Stock-Based Awards”), including, but not limited to, Shares awarded
as a bonus and not subject to any restrictions or conditions, Shares in payment of the amounts due
under an incentive or performance plan sponsored or maintained by the Company or an Affiliate,
restricted stock units, performance stock units, dividend equivalent units, stock equivalent units,
and deferred stock units. Such Other Stock-Based Awards shall be in such form, and dependent on
such conditions, as the Committee shall determine, including, without limitation, the right to
receive, or vest with respect to, one or more Shares (or the equivalent cash value of such Shares)
upon the completion of a specified period of service, the occurrence of an event and/or the
attainment of performance objectives. Other Stock-Based Awards may be granted alone or in addition
to any other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine the number of Shares to be awarded to a Participant under (or otherwise related to)
such Other Stock-Based Awards; whether such Other Stock-Based Awards shall be
settled in cash, Shares or a combination of cash and Shares; and all other terms and
conditions of such Awards (including, without limitation, the vesting provisions thereof and
provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable).
Notwithstanding any other provision, with respect to (i) Other Stock-Based Awards settled in Shares
that are subject to time-based vesting, but not performance-based vesting, not less than 95% of
such Other Stock-Based Awards payable in Shares



 









 




shall vest and become payable at least three years after the date of grant, subject to earlier vesting in whole or in part in the event of a Change in
Control or the death, disability or other termination of the Participant’s Employment, and (ii)
Other Stock-Based Awards settled in Shares that are subject to vesting upon the attainment of
performance objectives, the minimum performance period shall be one year and dividend equivalents
may be accrued and paid only with respect to the shares for which the Other Stock-Based Award
ultimately vests.




     (b) Performance-Based Awards. Notwithstanding anything to the contrary herein, certain Other
Stock-Based Awards granted under this Section 9 may be granted in a manner which is intended to be
deductible by the Company under Section 162(m) (“Performance-Based Awards”). A Participant’s
Performance-Based Award shall be determined based on the attainment of written performance goals
approved by the Committee for a performance period of not less than one year established by the
Committee (i) while the outcome for that performance period is substantially uncertain and (ii) no
more than 90 days after the commencement of the performance period to which the performance goal
relates. The performance goals, which must be objective, shall be based on one or more of the
following criteria: (i) operating income before depreciation and amortization (“OIBDA”), including
adjusted OIBDA; (ii) operating income, including adjusted operating income; (iii) net income,
including adjusted net income; (iv) earnings per share, including adjusted earnings per share; (v)
return on stockholders’ equity; (vi) revenues or sales; (vii) free cash flow; (viii) return on
invested capital, including adjusted return on invested capital; (ix) total stockholder return; and
(x) cash flow from operations. The foregoing criteria may relate to the Company, one or more of its
Affiliates or one or more of its or their divisions or units, or any combination of the foregoing,
and may be applied on an absolute basis and/or be relative to one or more peer group companies or
indices, or any combination thereof, all as the Committee shall determine. In addition, to the
extent consistent with Section 162(m), the performance goals may be calculated without regard to
extraordinary items. The Committee shall determine whether, with respect to a performance period,
the applicable performance goals have been met with respect to a given Participant and, if they
have, shall so certify and ascertain the amount of the applicable Performance-Based Award. No
Performance-Based Awards will be paid for such performance period until such certification is made
by the Committee. The amount of the Performance-Based Award actually paid to a given Participant
may be less than the amount determined by the applicable performance goal formula, at the
discretion of the Committee. The amount of the Performance-Based Award determined by the Committee
for a performance period shall be paid to the Participant at such time as determined by the
Committee in its sole discretion after the end of such performance period.



10. Adjustments Upon Certain Events




     Notwithstanding any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:



     (a) Generally. In the event of any change in the outstanding Shares (including, without
limitation, the value thereof) after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, combination, spin-off, combination or
exchange of Shares or other corporate exchange, or any distribution to holders of Shares other than
regular cash dividends, or any transaction similar to the foregoing, the Committee in its sole
discretion and without liability to any person shall make such substitution or adjustment, if any,
as it deems to be equitable (subject to Section 19), as to (i) the number or kind of Shares or
other securities issued or reserved for issuance pursuant to the Plan or pursuant to outstanding
Awards, (ii) the maximum number of Shares for which Awards (including limits established for
Restricted Stock or Other Stock-Based Awards) may be granted during a calendar year to any
Participant, (iii) the Option Price of any Option or exercise price of any SAR and/or (iv) any
other affected terms of such Awards.



     (b) Change in Control. In the event of a Change in Control after the Effective Date, the
Committee may (subject to Section 19), but shall not be obligated to, (A) accelerate, vest or cause
the restrictions to lapse with respect to, all or any portion of an Award, (B) cancel Awards for
fair value (as determined in the sole discretion of the Committee) which, in the case of Options
and SARs, may equal the excess, if any, of the value of the consideration to be paid in the Change
in Control transaction to holders of the same number of Shares subject to such Options or SARs (or,
if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to
such Options or SARs) over the aggregate Option Price of such



 









 




Options or exercise price of such SARs, (C) provide for the issuance of substitute Awards that will substantially preserve the
otherwise applicable terms of any affected Awards previously granted hereunder as determined by the
Committee in its sole discretion or (D) provide that for a period of at least 30 days prior to the
Change in Control, Options shall be exercisable as to all Shares subject thereto and that upon the
occurrence of the Change in Control, such Options shall terminate and be of no further force and
effect.




11. No Right to Employment or Awards




     The granting of an Award under the Plan shall impose no obligation on the Company or any
Affiliate to continue the Employment of a Participant and shall not lessen or affect the Company’s
or any Affiliate’s right to terminate the Employment of such Participant. No Participant or other
person shall have any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders of Awards. The terms and conditions of Awards and the
Committee’s determinations and interpretations with respect thereto need not be the same with
respect to each Participant (whether or not such Participants are similarly situated).



12. Successors and Assigns




     The Plan shall be binding on all successors and assigns of the Company and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.



13. Nontransferability of Awards




     Unless otherwise determined by the Committee (and subject to the limitation that in no
circumstances may an Award may be transferred by the Participant for consideration or value), an
Award shall not be transferable or assignable by the Participant otherwise than by will or by the
laws of descent and distribution. An Award exercisable after the death of a Participant may be
exercised by the legatees, personal representatives or distributees of the Participant.



14. Amendments or Termination




     The Board or the Committee may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made, (a) without the approval of the stockholders of the
Company, if (i) such action would (except as is provided in Section 10(a) of the Plan) increase the
total number of Shares reserved for the purposes of the Plan or increase the maximum number of
Shares of Restricted Stock or Other Stock-Based Awards that may be awarded hereunder, or the
maximum number of Shares for which Awards may be granted to any Participant, or (ii) stockholder
approval for such action is otherwise required by (A) any applicable law or regulation, (B) the
rules of the NYSE or any successor exchange or quotation system on which the Shares may be then
listed or quoted or (C) Section 162(m) (taking into consideration the exception provided by Treas.
Reg. § 1.162-27(f)(iii)(4)), (b) without the consent of a Participant, if such action would
diminish any of the rights of the Participant under any Award theretofore granted to such
Participant under the Plan or (c) to Section 5(b) of the Plan, relating to repricing of Options or
SARs, to permit such repricing, without the prior approval of the Company’s stockholders; provided,
however, that the Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable laws.



15. International Participants




     With respect to Participants who reside or work outside the United States of America and who
are not (and who are not expected to be) “covered employees” within the meaning of Section 162(m)
of the Code, the Committee may, in its sole discretion, amend the terms of the Plan or Awards with
respect to such Participants in order to conform such terms with the requirements of local law or
to obtain more favorable tax or other treatment for a Participant, the Company or an Affiliate.





 









 






16. Other Benefit Plans





     All Awards shall constitute a special incentive payment to the Participant and shall not be
taken into account in computing the amount of salary or compensation of the Participant for the
purpose of determining any benefits under any pension, retirement, profit sharing, bonus, life
insurance or other benefit plan of the Company or under any agreement between the Company and the
Participant, unless such plan or agreement specifically provides otherwise.



17. Choice of Law




     The Plan shall be governed by and construed in accordance with the laws of the State of New
York without regard to conflicts of laws and, except as otherwise provided in the pertinent Award
agreement, any and all disputes between a Participant and the Company or any Affiliate relating to
an Award shall be brought only in a state or federal court of competent jurisdiction sitting in
Manhattan, New York.



18. Effectiveness of the Plan




     The Plan shall be effective as of the Effective Date, subject to the approval of the
stockholders of the Company.



19. Section 409A




     It is intended that the provisions of the Plan comply with Section 409A, and all provisions of
the Plan shall be construed and interpreted in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A.



     No Participant or the creditors of a Participant shall have the right to subject any deferred
compensation (within the meaning of Section 409A) payable under the Plan to any anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as
permitted under Section 409A, any deferred compensation (within the meaning of Section 409A)
payable to any Participant or for the benefit of any Participant under the Plan may not be reduced
by, or offset against, any amount owing by any such Participant to the Company or any of its
Affiliates.



     Notwithstanding any other provisions in the Plan or any Award agreement to the contrary, in
the event that it is reasonably determined by the Company that, as a result of Section 409A,
payments in respect of any Award under the Plan may not be made at the time contemplated by the
terms of the Plan or the relevant Award agreement, as the case may be, without causing the
Participant holding such Award to be subject to taxation under Section 409A, the Company will make
such payment on the first day that would not result in the Participant incurring any tax liability
under Section 409A. If, at the time of a Participant’s separation from service (within the meaning
of Section 409A), (A) such Participant shall be a specified employee (within the meaning of Section
409A and using the identification methodology selected by the Company from time to time) and (B)
the Company shall make a good faith determination that an amount payable pursuant to an Award
constitutes deferred compensation (within the meaning of Section 409A), the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to
avoid taxes or penalties under Section 409A, then the Company shall not pay such amount on the
otherwise scheduled payment date but shall instead pay it on the first business day after such
six-month period. Such amount shall be paid without interest, unless otherwise determined by the
Committee, in its sole discretion, or as otherwise provided in any applicable employment agreement
between the Company and the relevant Participant. To the extent any amount made under the Plan to
which Section 409A applies is payable in two or more installments, each installment payment shall be
treated as a separate and distinct payment for purposes of Section 409A.



     Notwithstanding any provision of the Plan to the contrary, in light of the uncertainty with
respect to the proper application of Section 409A, the Company reserves the right to make
amendments to any Award as the Company deems necessary or desirable to avoid the imposition of
taxes or penalties under Section 409A. In any case, a Participant shall be solely responsible and
liable for the satisfaction of all taxes and penalties that may be imposed on such Participant or
for such Participant’s account in connection with an Award (including any taxes and penalties under Section 409A), and neither the Company nor any of its Affiliates shall have any obligation to
indemnify or otherwise hold such Participant harmless from any or all of such taxes or penalties.