EX-10.50 AMENDED AND RESTATED EMPLOYMENT AGREEMENT






Exhibit 10.50




     AMENDED and RESTATED EMPLOYMENT AGREEMENT made December 16, 2008 effective as of July 1, 2008
(the “Effective Date”), between TIME WARNER INC., a Delaware corporation (the “Company”), and PAUL
T. CAPPUCCIO (“You”).



     You are currently employed by the Company pursuant to an Employment Agreement made March 20,
2001, effective as of March 1, 2001 (the “Prior Agreement”). The Company wishes to amend and
restate the terms of your employment with the Company and to continue to secure your services on a
full-time basis, on and subject to the terms and conditions set forth in this Agreement, and you
are willing to provides such services on and subject to the terms and conditions set forth in this
Agreement. You and the Company therefore 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 March 1, 2001 and ending on June 30, 2005 (the
“Term Date”), and, thereafter pursuant to Section 4.3.



     2. Employment. During the term of employment, you shall serve as Executive Vice
President and General Counsel of the Company 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 report to the Chief Executive Officer of the Company, (iii) 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, 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. Effective February 2, 2004, the Company shall pay you a base salary
at the rate of not less than $1,000,000 per annum during the remainder of 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.




          3.2 Bonus. In addition to Base Salary, the Company typically pays its executives an
annual cash bonus (“Bonus”). Although your Bonus is fully discretionary, beginning in 2001 your
target annual Bonus is 200% of your Base Salary. 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 Company’s discretion or by overall
Company performance. Your Bonus amount, if any, will 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
target value of at least $1,800,000 (based on the valuation method used by the Company for 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 Effective Date that limit or narrow, but including any that add to or broaden,
the protection afforded to you by those provisions).




 









 








     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 by
action of the Company because of (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 refusal
without proper cause to perform your obligations under this Agreement, (c) fraud, embezzlement or
misappropriation or (d) because of your breach of any of the covenants provided for in Section 9
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 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 the termination
of employment (the “Effective Termination Date”), (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 Effective
Termination Date, 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 under this Agreement with an Effective
Termination Date 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 Termination Date. 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 In the event of a termination of employment 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 Termination Date. 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. 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 4.7.



               4.2.2 In the event of a termination covered by Sections 4.2 or 4.3, after the Effective
Termination Date, you shall continue to be treated as an employee of the Company for a period
ending on the date which is twenty-four months after the Effective Termination Date (the “Severance
Term Date”) 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 Termination Date) 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 next 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 8.2 effective upon the commencement of such other employment or the effective date
specified by you in such notice, whichever is applicable (the “Equity Cessation Date”), and you
shall receive the remaining payments of Base Salary and Bonus pursuant to this Section 4.2.2 for
the balance of the twenty-four months after the Effective Termination Date at the times specified
in Section 4.7 of the Agreement. Notwithstanding the foregoing, if you accept employment with any
not-for-profit entity or governmental entity, then you may continue to be treated as an employee of
the Company for purposes of your rights to receive certain post-termination benefits pursuant to
Section 8.2 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, as such form may be updated in the discretion of
the Company. 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 Retirement. Notwithstanding the provisions of this Agreement relating to a
termination without cause and Disability, on the date you first become eligible for normal
retirement as defined in any applicable retirement plan (or, if none, any applicable qualified
employee benefit plan) of the Company or any subsidiary of the Company (the “Retirement Date”),
then this Agreement shall terminate automatically on such date and your employment with the Company
shall thereafter be governed by the policies generally applicable to employees of the Company, and
you shall not thereafter be entitled to the payments provided in this Agreement to the extent not
received by you on or prior to the Retirement Date. In addition, no benefits or payments provided
in this Agreement relating to termination without cause and Disability shall include any period
after the Retirement Date and if the provision of benefits or calculation of payments provided in
this Agreement with respect thereto would include any period subsequent to the Retirement Date,
such provision of benefits shall end on the Retirement Date and the calculation of payments shall
cover only the period ending on the Retirement Date.




          4.6 Mitigation. In the event of a termination without cause under this Agreement,
you shall not be required to take actions in order to mitigate your damages hereunder, unless
Section 280G of the Internal Revenue Code of 1986, as amended (the “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, Section 4.8.1 shall
govern. 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.
Any obligation to mitigate your damages pursuant to this Section 4.6 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.




          4.7 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 12.17.




          4.8 Limitation on Certain Payments. Notwithstanding any other provision of this
Agreement:




 









 








               4.8.1. In the event that part or all of the consideration, compensation or benefits to be paid
to you under this Agreement would constitute “parachute payments” under Section 280G(b)(2) of the
Code, then, if the aggregate present value of such parachute payments, singularly or together with
the aggregate present value of any consideration, compensation or benefits to be paid to you under
any other plan, arrangement or agreement which constitute “parachute payments” (collectively, the
“Parachute Amount”) exceeds 2.99 times your “base amount”, as defined in Section 280G(b)(3) of the
Code (the “Base Amount”), the amounts constituting “parachute payments” which would otherwise be
payable to you or for your benefit shall be reduced to the extent necessary so that the Parachute
Amount is equal to 2.99 times the Base Amount (the “Reduced Amount”); provided that such amounts
shall not be so reduced if, without such reduction, you would be entitled to receive and retain, on
a net after tax basis (including, without limitation, any excise taxes payable under Section 4999
of the Code), an amount which is greater than the amount, on a net after tax basis, that you would
be entitled to retain upon receipt of the Reduced Amount.



               4.8.2. If the determination made pursuant to Section 4.8.1 results in a reduction of the
payments that would otherwise be paid to you except for the application of Section 4.8.1, such
reduction in payments shall be first applied to reduce any cash severance payments that you would
otherwise be entitled to receive hereunder and shall thereafter be applied to reduce other payments
and benefits in a manner that would not result in subjecting you to additional taxation under
Section 409A of the Code, unless you elect to have the reduction in payments applied in a different
order. Within ten days following such determination, the Company shall pay or distribute to you or
for your benefit such amounts as are then due to you under this Agreement and shall promptly pay or
distribute to you or for your benefit in the future such amounts as become due to you under this
Agreement.



               4.8.3. As a result of the uncertainty in the application of Sections 280G and 4999 of the Code
at the time of a determination hereunder, it is possible that payments will be made by the Company
that should not have been made under Section 4.8.1 (an “Overpayment”). In the event that there is a
final determination by the Internal Revenue Service, or a final determination by a court of
competent jurisdiction, that an Overpayment has been made, the Company shall have no further
liability or obligation to you for any excise taxes, interest or penalty that you are required to
pay as a result of such final determination.



 









 





          4.9 Office Facilities. In the event of a termination without cause, then for the
period beginning on the effective date of such termination and ending on the earlier of (a) six
months thereafter or (b) the date you commence other full-time employment, the Company shall,
without charge to you, make available to you office space at or near your principal job location
immediately prior to such termination, together with secretarial services, office facilities,
services and furnishings, in each case reasonably appropriate to an employee of your position and
responsibilities prior to such termination but taking into account your reduced need for such
office space, secretarial services and office facilities, services and furnishings as a result of
you no longer being a full-time employee.




     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 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 12.17. 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 two years 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 12.17.




          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 9 and 10 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 Chairman, the Chief Executive Officer or
a Chief Operating Officer 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 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. 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 two
times the premium you would have to pay to obtain life insurance under the Group Universal Life
(“GUL”) insurance program made available by the Company in an amount equal to $3 million. The
Company shall pay you such amount no later than March 15 of the calendar year following any
calendar year in which you are entitled to this amount. 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. Other Benefits.



          8.1 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, accident, disability or similar plan or program of
the Company now existing or established hereafter.




          8.2 Benefits After a Termination or Disability. After the Effective Termination
Date of a termination of employment pursuant to Section 4.2 and prior to the Severance Term 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 Termination 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 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 shall be determined in
accordance with the terms and provisions of such plans. At the Severance Term Date or, if earlier,
the Equity Cessation Date, your rights to benefits and payments under any stock option, restricted
stock, stock appreciation right, bonus unit, management incentive or other long-term incentive 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, 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 Equity 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 by the Company
or America Online, Inc. (which options are collectively referred to as your “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 this Agreement) shall vest and become immediately
exercisable upon the earlier of the Severance Term Date or the Equity 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 Equity 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 (“RSUs”) held at
the Effective Termination Date of a termination of employment pursuant to Section 4.2, subject to
potential further delay in payment pursuant to Section 12.17, (i) if you are eligible for
retirement treatment at the Effective Termination Date, 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, (ii) if you are not eligible for retirement treatment at the Effective
Termination Date, then the treatment of


 









 






the RSUs (other than the RSUs granted to you on October 25, 2006) will be determined at the
earlier of the Severance Term Date or the Equity 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, and (iii) the treatment of the RSUs granted to you on October 25, 2006 will be
determined at the Effective Termination Date in accordance with the terms of the applicable award
agreement.




          8.3 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.




     9. Protection of Confidential Information; Non-Compete.



          9.1 Confidentiality Covenant. You acknowledge that your employment by the Company
(which, for purposes of this Section 9 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:




               9.1.1 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 circumstances,
disclose such matters to the extent required by applicable laws or governmental regulations or
judicial or regulatory process;



               9.1.2 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



               9.1.3 If the term of employment is terminated pursuant to Section 4, for a period of one
year after the Effective Termination Date, 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.



          9.2 Non-Compete. During the term of employment and for a period of twelve months
after (i) the effective date of your retirement or other voluntary termination of employment or
(ii) the Effective Termination Date of a termination of employment pursuant to Section 4, you shall
not, directly or indirectly, without the prior written consent of the Chairman, the Chief Executive
Officer or any Chief Operating 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, during the Disability
Period, or prior to the Effective Termination Date in the event your employment is terminated
pursuant to Section 4, any person or entity that engages in any line of 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) after the Disability Period, the Effective Termination Date in the event of a termination of
your term of employment pursuant to Section 4 or the effective date of your retirement or other
voluntary termination of employment, any of the following: AT&T Corporation, Bertelsmann A.G., CBS
Corporation, Comcast Corporation, The Walt Disney Company, 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.




     10. 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.



 









 





     11. 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 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):



          11.1 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)




          11.2 If to you, to your residence address set forth on the records of the Company.




     12. General.



          12.1 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.




          12.2 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.




          12.3 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.




          12.4 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.




 









 








          12.5 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.




          12.6 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.




          12.7 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 9.1, 9.2, or 10, 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.




          12.8 Resolution of Disputes. Except as provided in the preceding Section 12.7, 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 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
12.8. 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 12.8. 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.




          12.9 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.




          12.10 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 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.




          12.11 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.




          12.12 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.




          12.13 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.




          12.14 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.




          12.15 Survival. Sections 3.4, 8.3 and 9 through 12 shall survive any termination
of the term of employment by the Company for cause pursuant to Section 4.1. Sections 3.4, 4.4,
4.4, 4.6, 4.8 and 8 through 12 shall survive any termination of the term of employment pursuant to
Sections 4.2, 5 or 6.




          12.16 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 Amount — Section 4.8.1


Base Salary — Section 3.1


Bonus — Section 3.2


cause — Section 4.1


Code — Section 4.6


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


Effective Termination Date — Section 4.1


Equity Cessation Date — Section 4.2.2


Overpayment — Section 4.8.3


Parachute Amount — Section 4.8.1


Reduced Amount — Section 4.8.1


Retirement Date Section 4.5


Severance Term Date — Section 4.2.2


Term Date — Section 1


Term Options Section 8.2


term of employment — Section 1


termination without cause — Section 4.2.1


Work Product — Section 10




          12.17 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 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 and does not reduce the value of
such payments to you. 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 12.17; 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
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Senior Vice President, Global Compensation and Benefits	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Paul T. Cappuccio
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Paul T. Cappuccio	 	 






 









 






ANNEX A




RELEASE




This Release is made by and among                      (“You” or “Your”) and TIME WARNER INC. (the “Company”), One Time
Warner Center, New York, New York 10019 as of the date set forth below in connection with the
Employment Agreement dated                     , and effective as of                     , and the letter agreement (the “Letter Agreement”
between You and the Company dated as of                      (as so amended, the “Employment Agreement”), and in
association with the termination of your employment with the Company.


In consideration of payments made to You and other benefits to be received by You by the Company
and other benefits to be received by You pursuant to the Employment Agreement, as further reflected
in the Letter Agreement, You, being of lawful age, do hereby release and forever discharge the
Company, its successors, related companies,




 Affiliates, officers, directors, shareholders,
subsidiaries, agents, employees, heirs,
executors, administrators, assigns, benefit plans (including but not limited to the AOL Time Warner
Inc. Severance Pay Plan For Regular Employees), benefit plan sponsors and benefit plan
administrators of and 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”), whether known or unknown, which in any way relate to or arise out of your
employment with the Company or the termination of Your employment, which You may now have under any
federal, state or local law, regulation or order, including without limitation, Claims related to
any stock options held by You or granted to You by the Company that are scheduled to vest
subsequent to Your termination of employment and Claims under the Age Discrimination in Employment
Act (with the exception of Claims that may arise after the date You sign this Release, Title VII of
the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, as amended, the Family
and Medical Leave Act and the Employee Retirement Income Security Act of 1974, as amended, through
and including the date of this Release; provided, however, that the execution of this Release
shall not prevent You from bringing a lawsuit against the Company to enforce its obligations under
the Employment Agreement and this Release.



Notwithstanding anything to the contrary, nothing in this Release shall prohibit or restrict You
from (i) making any disclosure of information required by law; (ii) filing a charge with,
providing information to, or testifying or otherwise assisting in any investigation or proceeding
brought by, any federal regulatory or law enforcement agency or legislative body, any
self-regulatory organization, or the Company’s legal, compliance or human resources officers; (iii)
filing, testifying or participating in or otherwise assisting in a proceeding relating to an
alleged violation of any federal, state or municipal law relating to fraud or any rule or
regulation of the Securities and Exchange Commission or any self-regulatory organization; or (iv)
challenging the validity of my release of claims under the Age Discrimination in Employment Act.
Provided, however, You acknowledge that You cannot recover any monetary damages or equitable relief
in connection with a charge brought by You or through any action brought by a third party with
respect to the Claims released and waived in the Agreement. Further, notwithstanding the above,
You am not waiving or releasing: (i) any claims arising after the Effective Date of this Agreement;
(iii) any claims for enforcement of this Agreement; (iii) any rights or claims You may have to
workers compensation or unemployment benefits; (iv) claims for accrued, vested benefits under any
employee benefit plan of the Company in accordance with the terms of such plans and applicable law;
and/or (v) any claims or rights which cannot be waived by law.



You further state that You have reviewed this Release, that You know and understand its contents,
and that You have executed it voluntarily.



You acknowledge that You have been given                      days from the date You received a copy of the Release to
sign it. You also acknowledge that by signing this Release You may be giving up valuable legal
rights and that You have been advised to consult with an attorney. You understand that You have the
right to revoke my consent to the Release for seven days following my signing of the Release. You
further understand that You will not receive any payments or benefits
under this Agreement if You
do not sign this Release or




 









 







if You revoke Your consent to the Release within seven days after
signing the Release.
The Release shall not become effective or enforceable with respect to claims under the Age
Discrimination Act until the expiration of the seven-day period following Your signing of this
Release. You shall not receive any payments or benefits pursuant to this Agreement until the
Release becomes effective. To revoke, You send a written statement of revocation by certified
mail, return receipt requested, or by hand delivery. If You do not revoke, the Release shall
become effective on the eighth day after You sign it.




	 	 	 	 	 
	Accepted and Agreed to:
	 
	 	 	 
	 
	 	 	 	 
	Dated: