Document:

exv10w2

Exhibit 10.2

Time Warner Inc. 2010 Stock Incentive Plan

RSU Standard Agreement, Version 1(10RSUV)

For Use from September 2010

Restricted Stock Units Agreement

General Terms and Conditions

                    WHEREAS, the Company has adopted the Plan
(as defined below), the terms of which are
hereby incorporated by reference and made a part of this Agreement; and

                    WHEREAS, the Committee has determined
that it would be in the best interests of the Company
and its stockholders to grant the restricted stock units (the “RSUs”) provided for herein
to the Participant pursuant to the Plan and the terms set forth herein.

                    NOW, THEREFORE, in consideration of the
mutual covenants hereinafter set forth, the parties
agree as follows:

	1.	 	Definitions. Whenever the following terms are used in this Agreement, they shall
have the meanings set forth below. Capitalized terms not otherwise defined herein shall have
the same meanings as in the Plan.

	 	a)	 	“Cause” means, “Cause” as defined in an employment agreement between
the Company or any of its Affiliates and the Participant or, if not defined therein or
if there is no such agreement, “Cause” means (i) Participant’s continued failure
substantially to perform such Participant’s duties (other than as a result of total or
partial incapacity due to physical or mental illness) for a period of ten (10) days
following written notice by the Company or any of its Affiliates to the Participant of
such failure, (ii) dishonesty in the performance of the Participant’s duties, (iii)
Participant’s conviction of, or plea of nolo contendere to, a crime constituting (A) a
felony under the laws of the United States or any state thereof or (B) a misdemeanor
involving moral turpitude, (iv) Participant’s insubordination, willful malfeasance or
willful misconduct in connection with Participant’s duties or any act or omission which
is injurious to the financial condition or business reputation of the Company or any of
its Affiliates, or (v) Participant’s breach of any non-competition, non-solicitation
or confidentiality provisions to which the Participant is subject. The determination
of the Committee as to the existence of “Cause” will be conclusive on the Participant
and the Company.
	 
	 	b)	 	“Disability” means, “Disability” as defined in an employment agreement
between the Company or any of its Affiliates and the Participant or, if not defined
therein or if there shall be no such agreement, “disability” of the Participant shall
have the meaning ascribed to such term in the Company’s long-term disability plan or
policy, as in effect from time to time, to the extent that such definition also
constitutes such Participant being considered “disabled” under Section 409A(a)(2)(C) of
the Code.

September 2010

 

 

	 	c)	 	“Good Reason” means “Good Reason” as defined in an employment agreement
between the Company or any of its Affiliates and the Participant or, if not defined
therein or if there is no such agreement, “Good Reason” means (i) the failure of the
Company to pay or cause to be paid the Participant’s base salary or annual bonus when
due or (ii) any substantial and sustained diminution in the Participant’s authority or
responsibilities materially inconsistent with the Participant’s position;
provided that either of the events described in clauses (i) and (ii) will
constitute Good Reason only if the Company fails to cure such event within 30 days
after receipt from the Participant of written notice of the event which constitutes
Good Reason; provided, further, that “Good Reason” will cease to exist
for an event on the sixtieth (60th) day following the later of its
occurrence or the Participant’s knowledge thereof, unless the Participant has given the
Company written notice of his or her termination of employment for Good Reason prior to
such date.
	 
	 	d)	 	“Notice” means (i) the Notice of Grant of Restricted Stock Units that
accompanies this Agreement, if this Agreement is delivered to the Participant in “hard
copy,” and (ii) the screen of the website for the stock plan administration with the
heading “Vesting Schedule and Details,” which contains the details of the grant
governed by this Agreement, if this Agreement is delivered electronically to the
Participant.
	 
	 	e)	 	“Participant” means an individual to whom RSUs have been awarded
pursuant to the Plan and shall have the same meaning as may be assigned to the terms
“Holder” or “Participant” in the Plan.
	 
	 	f)	 	“Plan” means the equity plan maintained by the Company that is
specified in the Notice, which equity plan has been provided to the Participant
separately and forms a part of this Agreement, as such plan may be amended,
supplemented or modified from time to time.
	 
	 	g)	 	“Retirement” means a voluntary termination of employment by the
Participant (i) following the attainment of age 55 with ten (10) or more years of
service as an employee or a director with the Company or any Affiliate or (ii) pursuant
to the retirement plan or program of the Company or any Affiliate that is applicable to
the Participant.
	 
	 	h)	 	“Severance Period” means the period of time following a termination of
Employment during which a Participant is entitled to receive both salary continuation
payments and continued participation under the health benefit plans of the Company or
any of its Affiliates, whether pursuant to an employment contract with, or a severance
plan or other arrangement maintained by, the
Company or any Affiliate. For the avoidance of doubt, unless otherwise determined
by the Committee, the Severance Period shall not include any time period following
the date on which a Participant commences employment with a subsequent employer that
is not an Affiliate, regardless of whether the Participant

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	 	continues to receive
salary continuation payments from the Company or any Affiliate after such date.

	 	i)	 	“Shares” means shares of Common Stock of the Company.
	 
	 	j)	 	“Vesting Date” means each vesting date set forth in the Notice.

	2.	 	Grant of Restricted Stock Units. The Company hereby grants to the Participant (the
“Award”), on the terms and conditions hereinafter set forth, the number of RSUs set
forth on the Notice. Each RSU represents the unfunded, unsecured right of the Participant to
receive a Share on the date(s) specified herein. RSUs do not constitute issued and
outstanding shares of Common Stock for any corporate purposes and do not confer on the
Participant any right to vote on matters that are submitted to a vote of holders of
Shares.
	 
	3.	 	Dividend Equivalents and Retained Distributions. If on any date while RSUs are
outstanding hereunder the Company shall pay any regular cash dividend on the Shares, the
Participant shall be paid, for each RSU held by the Participant on the record date, an amount
of cash equal to the dividend paid on a Share (the “Dividend Equivalents”) at the time
that such dividends are paid to holders of Shares. If on any date while RSUs are outstanding
hereunder the Company shall pay any dividend other than a regular cash dividend or make any
other distribution on the Shares, the Participant shall be credited with a bookkeeping entry
equivalent to such dividend or distribution for each RSU held by the Participant on the record
date for such dividend or distribution, but the Company shall retain custody of all such
dividends and distributions unless the Board has in its sole discretion determined that an
amount equivalent to such dividend or distribution shall be paid currently to the Participant
(the “Retained Distributions”); provided, however, that if the
Retained Distribution relates to a dividend paid in Shares, the Participant shall receive an
additional amount of RSUs equal to the product of (I) the aggregate number of RSUs held by the
Participant pursuant to this Agreement through the related dividend record date, multiplied by
(II) the number of Shares (including any fraction thereof) payable as a dividend on a Share.
Retained Distributions will not bear interest and will be subject to the same restrictions as
the RSUs to which they relate. Notwithstanding anything else contained in this paragraph 3, no
payment of Dividend Equivalents or Retained Distributions shall occur before the first date on
which a payment could be made without subjecting the Participant to tax under the provisions
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
	 
	4.	 	Vesting and Delivery of Vested Securities.

	 	a)	 	Subject to the terms and provisions of the Plan and this Agreement, no later
than 60 days after each Vesting Date with respect to the Award, the Company shall issue
or transfer to the Participant the number of Shares corresponding to such
Vesting Date and the Retained Distributions, if any, covered by that portion of the
Award. Except as otherwise provided in paragraphs 5, 6 and 7, the vesting of such
RSUs and any Retained Distributions relating thereto shall occur only if the
Participant has continued in Employment of the Company or any of its Affiliates

					
	 	 	 	 	 
	 	 	 	 	 
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	 		 	on the Vesting Date and has continuously been so employed since the Date of Grant (as
defined in the Notice).
	 
	 	b)	 	RSUs Extinguished. Upon each issuance or transfer of Shares in
accordance with this Agreement, a number of RSUs equal to the number of Shares issued
or transferred to the Participant shall be extinguished and such number of RSUs will
not be considered to be held by the Participant for any purpose.
	 
	 	c)	 	Final Issuance. Upon the final issuance or transfer of Shares and
Retained Distributions, if any, to the Participant pursuant to this Agreement, in lieu
of a fractional Share, the Participant shall receive a cash payment equal to the Fair
Market Value of such fractional Share.
	 
	 	d)	 	Section 409A. Notwithstanding anything else contained in this
Agreement, no Shares shall be issued or transferred to a Participant before the first
date on which a payment could be made without subjecting the Participant to tax under
the provisions of Section 409A of the Code.

	5.	 	Termination of Employment.

	 	(a)	 	If the Participant’s Employment with the Company and its Affiliates is
terminated by the Participant for any reason other than those described in clauses
(b) and (c) below prior to the Vesting Date with respect to any portion of the
Award, then the RSUs covered by any such portion of the Award and all Retained
Distributions relating thereto shall be completely forfeited on the date of any such
termination, unless otherwise provided in an employment agreement between the
Participant and the Company or an Affiliate.
	 
	 	(b)	 	If the Participant’s Employment terminates (i) as a result of his or her death or
Disability or (ii) as a result of his or her Retirement or is terminated by the
Company and its Affiliates for any reason other than for Cause on a date when the
Participant satisfies the requirements for Retirement, then the RSUs for which a
Vesting Date has not yet occurred and all Retained Distributions relating thereto
shall, to the extent the RSUs were not extinguished prior to such termination of
Employment, fully vest on the date of any such termination and Shares subject to the
RSUs shall be issued or transferred to the Participant, as soon as practicable, but
no later than 90 days following such termination of Employment.
	 
	 	(c)	 	If the Participant’s Employment is terminated by the Company and its Affiliates
for any reason other than for Cause (unless such termination is due to death or
Disability), then a pro rata portion of the RSUs that were scheduled to vest on the
next Vesting Date, and on any subsequent Vesting Dates that occur during a
Severance Period, and any Retained Distributions relating thereto, shall,
to the extent the RSUs were not extinguished prior to such termination of
Employment, become vested, and Shares subject to such RSUs shall be issued or
transferred to

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	 	the Participant on each such Vesting Date following such termination
of Employment, determined as follows:

	 	(x)	 	the number of RSUs covered by the portion of
the Award that were scheduled to vest on such Vesting Date multiplied
by;
	 
	 	(y)	 	a fraction, the numerator of which shall be the
number of days from the last Vesting Date (or the Date of Grant if
there was no prior Vesting Date) during which the Participant either
remained in Employment or was within a covered Severance Period, and
the denominator of which shall be the number of days from the last
Vesting Date (or the Date of Grant if there was no prior Vesting Date).

	 	 	 	If the product of (x) and (y) results in a fractional share, such fractional
share shall be rounded to the next higher whole share.

	 	 	 	The RSUs and any Retained Distributions related thereto that have not vested shall
be completely forfeited on the date of any such termination.

	 	 	For purposes of this paragraph 5, a temporary leave of absence shall not constitute a
termination of Employment or a failure to be continuously employed by the Company or any
Affiliate regardless of the Participant’s payroll status during such leave of absence if
such leave of absence is approved in writing by the Company or any Affiliate; provided, that
such leave of absence constitutes a bona fide leave of absence and not a Separation From
Service under Treas. Reg. 1.409A-1(h)(1)(i). Notice of any such approved leave of absence
should be sent to the Company at One Time Warner Center, New York, New York 10019,
attention: Director, Global Stock Plans Administration, but such notice shall not be
required for the leave of absence to be considered approved.
	 
	 	 	In the event the Participant’s Employment with the Company or any of its
Affiliates is terminated, the Participant shall have no claim against the Company with
respect to the RSUs and related Retained Distributions, if any, other than as set forth in
this paragraph 5, the provisions of this paragraph 5 being the sole remedy of the
Participant with respect thereto.
	 
	6.	 	Acceleration of Vesting Date. In the event a Change in Control, subject to
paragraph 7, has occurred, to the extent that any such occurrence also constitutes a change in
ownership or effective control of the Company, or in the ownership of a substantial portion of
the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code (a “409A
Change of Control Event”), (A) the Award will vest in full upon the earlier of (i) the
expiration of the one-year period immediately following the Change in Control, provided the
Participant’s Employment with the Company and its Affiliates has
not terminated, (ii) the original Vesting Date with respect to each portion of the Award, or
(iii) the termination of the Participant’s Employment by the Company or any of its
Affiliates (I) by the Company other than for Cause (unless such termination is due to

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	death
or Disability) or (II) by the Participant for Good Reason and (B) Shares subject to the RSUs
shall be issued or transferred to the Participant, as soon as practicable, but in no event
later than 60 days following such Vesting Date, along with the Retained Distributions
related thereto; provided, however, that notwithstanding the foregoing, to the extent that
any such occurrence does not constitute a 409A Change of Control Event, the RSUs shall vest
as described under this paragraph 6, but the issuance of Shares shall be made at the times
otherwise provided hereunder as if no Change of Control had occurred. In the event of any
such vesting as described in clauses (i) and (iii) of the preceding sentence, the date
described in such clauses shall be treated as the Vesting Date.
	 
	7.	 	Limitation on Acceleration. Notwithstanding any provision to the contrary in the
Plan
or this Agreement, if the Payment (as hereinafter defined) due to the Participant hereunder
as a result of the acceleration of vesting of the RSUs pursuant to paragraph 6 of this
Agreement, either alone or together with all other Payments received or to be received by
the Participant from the Company or any of its Affiliates (collectively, the “Aggregate
Payments”), or any portion thereof, would be subject to the excise tax imposed by
Section 4999 of the Code (or any successor thereto), the following provisions shall apply:

	 	a)	 	If the net amount that would be retained by the Participant after all taxes on
the Aggregate Payments are paid would be greater than the net amount that would be
retained by the Participant after all taxes are paid if the Aggregate Payments were
limited to the largest amount that would result in no portion of the Aggregate Payments
being subject to such excise tax, the Participant shall be entitled to receive the
Aggregate Payments.
	 
	 	b)	 	If, however, the net amount that would be retained by the Participant after all
taxes were paid would be greater if the Aggregate Payments were limited to the largest
amount that would result in no portion of the Aggregate Payments being subject to such
excise tax, the Aggregate Payments to which the Participant is entitled shall be
reduced to such largest amount.

	 	 	The term “Payment” shall mean any transfer of property within the meaning of Section
280G of the Code.
	 
	 	 	The determination of whether any reduction of Aggregate Payments is required and the timing
and method of any such required reduction in Payments under this Agreement or in any such
other Payments otherwise payable by the Company or any of its Affiliates consistent with any
such required reduction, shall be made by the Participant, including whether any portion of
such reduction shall be applied against any cash or any shares of stock of the Company or
any other securities or property to which the Participant would otherwise have been entitled
under this Agreement or under any such other Payments,
and whether to waive the right to the acceleration of the Payment due under this Agreement
or any portion thereof or under any such other Payments or portions thereof, and all such
determinations shall be conclusive and binding on the Company and its

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	Affiliates. To the
extent that Payments hereunder or any such other Payments are not paid as a consequence of
the limitation contained in this paragraph 7, then the RSUs and Retained Distributions
related thereto (to the extent not so accelerated) and such other Payments (to the extent
not vested) shall be deemed to remain outstanding and shall be subject to the provisions
hereof and of the Plan as if no acceleration or vesting had occurred. Under such
circumstances, if the Participant terminates Employment for Good Reason or is terminated by
the Company or any of its Affiliates without Cause, the RSUs and Retained Distributions
related thereto (to the extent that they have not already become vested) shall become
immediately vested in their entirety upon such termination and Shares subject to the RSUs
shall be issued or transferred to the Participant, as soon as practicable following such
termination of Employment, subject to the provisions relating to Section 4999 of the Code
set forth herein.
	 
	 	 	The Company shall promptly pay, upon demand by the Participant, all legal fees, court costs,
fees of experts and other costs and expenses which the Participant incurred in any actual,
threatened or contemplated contest of the Participant’s interpretation of, or determination
under, the provisions of this paragraph 7.
	 
	8.	 	Withholding Taxes. The Participant agrees that,

	 	a)	 	Obligation to Pay Withholding Taxes. Upon the payment of any Dividend
Equivalents and the vesting of any portion of the Award of RSUs and the Retained
Distributions relating thereto, the Participant will be required to pay to the Company
any applicable Federal, state, local or foreign withholding tax due as a result of such
payment or vesting. The Company’s obligation to deliver the Shares subject to the RSUs
or to pay any Dividend Equivalents or Retained Distributions shall be subject to such
payment. The Company and its Affiliates shall, to the extent permitted by law, have
the right to deduct from the Dividend Equivalent, Shares issued in connection with the
vesting or Retained Distribution, as applicable, or any payment of any kind otherwise
due to the Participant any Federal, state, local or foreign withholding taxes due with
respect to such vesting or payment.
	 
	 	b)	 	Payment of Taxes with Stock. Subject to the Committee’s right to
disapprove any such election and require the Participant to pay the required
withholding tax in cash, the Participant shall have the right to elect to pay the
required withholding tax associated with a vesting with Shares to be received upon
vesting. Unless the Company shall permit another valuation method to be elected by the
Participant, Shares used to pay any required withholding taxes shall be valued at the
closing price of a Share as reported on the New York Stock Exchange Composite Tape on
the date the withholding tax becomes due (hereinafter called the “Tax Date”).
Notwithstanding anything herein to the contrary, if a Participant who is required to
pay the required withholding tax in cash fails to do so within
the time period established by the Company, then the Participant shall be deemed to
have elected to pay such withholding taxes with Shares to be received upon

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	 	vesting.
Elections must be made in conformity with conditions established by the Committee
from time to time
	 
	 	c)	 	Conditions to Payment of Taxes with Stock. Any election to pay withholding
taxes with stock must be made on or prior to the Tax Date and will be irrevocable
once made.

	9.	 	Changes in Capitalization and Government and Other Regulations. The Award
shall be subject to all of the terms and provisions as provided in this Agreement and in the
Plan, which are incorporated by reference herein and made a part hereof, including, without
limitation, the provisions of Section 10 of the Plan (generally relating to adjustments to
the number of Shares subject to the Award, upon certain changes in capitalization and
certain reorganizations and other transactions).
	 
	10.	 	Forfeiture. A breach of any of the foregoing restrictions or a breach of any of the
other restrictions, terms and conditions of the Plan or this Agreement, with respect to any of
the RSUs or any Dividend Equivalents and Retained Distributions relating thereto, except as
waived by the Board or the Committee, will cause a forfeiture of such RSUs and any Dividend
Equivalents or Retained Distributions relating thereto.
	 
	11.	 	Right of Company to Terminate Employment. Nothing contained in the Plan or this
Agreement shall confer on any Participant any right to continue in the employ of the Company
or any of its Affiliates and the Company and any such Affiliate shall have the right to
terminate the Employment of the Participant at any such time, with or without cause,
notwithstanding the fact that some or all of the RSUs and related Retained Distributions
covered by this Agreement may be forfeited as a result of such termination. The granting of
the RSUs under this Agreement shall not confer on the Participant any right to any future
Awards under the Plan.
	 
	12.	 	Notices. Any notice which either party hereto may be required or permitted to give
the other shall be in writing and may be delivered personally or by mail, postage prepaid,
addressed to Time Warner Inc., at One Time Warner Center, New York, NY 10019, attention
Director, Global Stock Plans Administration, and to the Participant at his or her address, as
it is shown on the records of the Company or its Affiliate, or in either case to such other
address as the Company or the Participant, as the case may be, by notice to the other may
designate in writing from time to time.
	 
	13.	 	Interpretation and Amendments. The Board and the Committee (to the extent delegated
by the Board) have plenary authority to interpret this Agreement and the Plan, to prescribe,
amend and rescind rules relating thereto and to make all other determinations in connection
with the administration of the Plan. The Board or the Committee may from time to time modify
or amend this Agreement in accordance with the provisions of the Plan, provided that no such
amendment shall adversely affect the rights of the Participant under this Agreement without
his or her consent.

					
	 	 	 	 	 
	 	 	 	 	 
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	14.	 	Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and shall be binding upon and inure to
the benefit of the Participant and his or her legatees, distributees and personal
representatives.
	 
	15.	 	Copy of the Plan and Documents. By entering into the Agreement, the Participant
agrees and acknowledges that he or she has received and read a copy of the Plan. The
Participant acknowledges and agrees that the Participant may be entitled from time to time to
receive certain other documents related to the Company, including the Company’s annual report
to stockholders and proxy statement related to its annual meeting of stockholders (which
become available each year approximately three months after the end of the calendar year), and
the Participant consents to receive such documents electronically through the Internet or as
the Company otherwise directs.
	 
	16.	 	Governing Law. The Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to any choice of law rules thereof
which might apply the laws of any other jurisdiction.
	 
	17.	 	Waiver of Jury Trial. To the extent not prohibited by applicable law which cannot
be waived, each party hereto hereby waives, and covenants that it will not assert (whether as
plaintiff, defendant or otherwise), any right to trial by jury in any forum in respect of any
suit, action, or other proceeding arising out of or based upon this Agreement.
	 
	18.	 	Submission to Jurisdiction; Service of Process. Each of the parties hereto hereby
irrevocably submits to the jurisdiction of the state courts of the State of New York and the
jurisdiction of the United States District Court for the Southern District of New York for the
purposes of any suit, action or other proceeding arising out of or based upon this Agreement.
Each of the parties hereto to the extent permitted by applicable law hereby waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or
proceeding brought in such courts, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt or immune from attachment
or execution, that such suit, action or proceeding in the above-referenced courts is brought
in an inconvenient forum, that the venue of such suit, action or proceedings, is improper or
that this Agreement may not be enforced in or by such court. Each of the parties hereto
hereby consents to service of process by mail at its address to which notices are to be given
pursuant to paragraph 12 hereof.
	 
	19.	 	Personal Data. The Company, the Participant’s local employer and the local
employer’s parent company or companies may hold, collect, use, process and transfer, in
electronic or other form, certain personal information about the Participant for the exclusive
purpose of implementing, administering and managing the Participant’s participation in the
Plan. Participant understands that the following personal information is required for the
above named purposes: his/her name, home address and telephone number, office address
(including department and employing entity) and telephone number, e-mail address, date of
birth, citizenship, country of residence at the time of grant, work location
country, system employee ID, employee local ID, employment status (including

					
	 	 	 	 	 
	 	 	 	 	 
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	 	 	international status
code), supervisor (if applicable), job code, title, salary, bonus target and bonuses paid (if
applicable), termination date and reason, tax payer’s identification number, tax equalization code,
US Green Card holder status, contract type (single/dual/multi), any shares of stock or
directorships held in the Company, details of all grants of RSUs (including number of grants, grant
dates, vesting type, vesting dates, and any other information regarding RSUs that have been
granted, canceled, vested, or forfeited) with respect to the Participant, estimated tax withholding
rate, brokerage account number (if applicable), and brokerage fees (the “Data”).
Participant understands that Data may be collected from the Participant directly or, on Company’s
request, from Participant’s local employer. Participant understands that Data may be transferred
to third parties assisting the Company in the implementation, administration and management of the
Plan, including the brokers approved by the Company, the broker selected by the Participant from
among such Company-approved brokers (if applicable), tax consultants and the Company’s software
providers (the “Data Recipients”). Participant understands that some of these Data
Recipients may be located outside the Participant’s country of residence, and that the Data
Recipient’s country may have different data privacy laws and protections than the Participant’s
country of residence. Participant understands that the Data Recipients will receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required for the administration of the Plan and/or the subsequent
holding of Shares on the Participant’s behalf by a broker or other third party with whom the
Participant may elect to deposit any Shares acquired pursuant to the Plan. Participant understands
that Data will be held only as long as necessary to implement, administer and manage the
Participant’s participation in the Plan. Participant understands that Data may also be made
available to public authorities as required by law, e.g., to the U.S. government. Participant
understands that the Participant may, at any time, review Data and may provide updated Data or
corrections to the Data by written notice to the Company. Except to the extent the collection, use,
processing or transfer of Data is required by law, Participant may object to the collection, use,
processing or transfer of Data by contacting the Company in writing. Participant understands that
such objection may affect his/her ability to participate in the Plan. Participant understands that
he/she may contact the Company’s Stock Plan Administration to obtain more information on the
consequences of such objection.

					
	 	 	 	 	 
	 	 	 	 	 
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Exhibit 10.3

Time Warner Inc. 2010 Stock Incentive Plan

Share Retention Version 1 (10SOSRV)

For Use from September 2010

TIME WARNER INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

WHEREAS, the Company has adopted the Plan (as defined below), the terms of which are hereby
incorporated by reference and made a part of this Agreement; and

WHEREAS, the Committee has determined that it would be in the best interests of the Company
and its stockholders to grant the Option provided for herein to the Participant pursuant to the
Plan and the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree as follows:

1.        Definitions. Whenever the following terms are used in this Agreement, they shall
have the meanings set forth below. Capitalized terms not otherwise defined herein shall have the
same meanings as in the Plan.

(a) “Cause” includes (and is not limited to) dishonesty with respect to the Company or
any Affiliate, insubordination, substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, and conduct substantially prejudicial to the business of
the Company or any Affiliate. The determination of the Committee as to the existence of “Cause”
will be conclusive on the Participant and the Company.

(b) “Disability” means, “Disability” as defined in an employment agreement between the
Company or any of its Affiliates and the Participant or, if not defined therein or if there shall
be no such agreement, “disability” of the Participant shall have the meaning ascribed to such term
in the Company’s long-term disability plan or policy, as in effect from time to time.

(c) “Expiration Date” means the date set forth on the Notice (as defined below).

(d) “Good Reason” means (i) a breach by the Company or any Affiliate of any employment
or consulting agreement to which the Participant is a party and (ii) following a Change in Control,
(x) the failure of the Company to pay or cause to be paid the Participant’s base salary or annual
bonus when due or (y) any substantial and sustained diminution in the Participant’s authority or
responsibilities materially inconsistent with the Participant’s position; provided that
either of the events described in clauses (x) and (y) will constitute Good Reason only if the
Company fails to cure such event within 30 days after receipt from the Participant of written
notice of the event which constitutes Good Reason; provided, further, that “Good
Reason” will cease to exist for an event on the sixtieth (60th) day following the later
of its occurrence or the Participant’s knowledge thereof, unless the Participant has given the
Company written notice of his or her termination of employment for Good Reason prior to such date.

 

 

(e) “Notice” means (i) the Notice of Grant of Stock Option that accompanies this
Agreement, if this Agreement is delivered to the Participant in “hard copy,” and (ii) the screen of
the website for the stock plan administration with the heading “Vesting Schedule and Details,”
which contains the details of the grant governed by this Agreement, if this Agreement is delivered
electronically to the Participant.

(f) “Plan” means the equity plan maintained by the Company that is specified in the
Notice, which equity plan has been provided to the Participant separately and forms a part of this
Agreement, as such plan may be amended, supplemented or modified from time to time.

(g) “Retirement” means a termination of employment by the Participant (i) following
the attainment of age 55 with ten (10) or more years of service with the Company or any Affiliate
or (ii) pursuant to a retirement plan or early retirement program of the Company or any Affiliate.

(h) “Vested Portion” means, at any time, the portion of an Option which has become
vested, as described in Section 3 of this Agreement.

2.        Grant of Option. The Company hereby grants to the Participant the right and option
(the “Option”) to purchase, on the terms and conditions hereinafter set forth, the number
of Shares set forth on the Notice, subject to adjustment as set forth in the Plan. The purchase
price of the Shares subject to the Option (the “Option Price”) shall be as set forth on the
Notice. The Option is intended to be a non-qualified stock option, and as such is not intended to
be treated as an option that complies with Section 422 of the Internal Revenue Code of 1986, as
amended.

3.        Vesting of the Option.

(a) In General. Subject to Sections 3(b) and 3(c), the Option shall vest and become
exercisable at such times as are set forth in the Notice.

(b) Change in Control. Notwithstanding the foregoing, in the event of a Change in
Control, the unvested portion of the Option, to the extent not previously cancelled or forfeited,
shall immediately become vested and exercisable upon the earlier of (i) the first anniversary of
the Change in Control or (ii) the termination of the Participant’s Employment (A) by the Company
other than for Cause (unless such termination is due to death or Disability) or (B) by the
Participant for Good Reason.

(c) Termination of Employment. If the Participant’s Employment with the Company and
its Affiliates terminates for any reason (including, unless otherwise determined by the Committee,
a Participant’s change in status from an employee to a non-employee (other than director of the
Company or any Affiliate)), the Option, to the extent not then vested, shall be immediately
canceled by the Company without consideration; provided, however, that if the
Participant’s Employment terminates due to death, Disability or Retirement, the unvested portion of
the Option, to the extent not previously cancelled or forfeited, shall immediately become vested
and exercisable. The Vested Portion of the Option shall remain exercisable for the period set
forth in Section 4(a) of this Agreement. If the Participant is absent from work with the Company
or with an Affiliate because of a temporary disability (any disability other than a

 

 

Disability), or on an approved leave of absence for any purpose, the Participant shall not,
during the period of any such absence, be deemed, by virtue of such absence alone, to have
terminated Employment, except to the extent that the Committee so determines.

4.        Exercise of Option.

(a) Period of Exercise. Subject to the provisions of the Plan and this Agreement, and
the terms of any employment agreement entered into by the Participant and the Company or an
Affiliate that provides for treatment of Options that is more favorable to the Participant than
clauses (i) – (vii) of this Section 4(a), the Participant may exercise all or any part of the
Vested Portion of the Option at any time prior to the closing time of trading on the Expiration
Date (or 5:00 p.m. Eastern time on the Expiration Date, if earlier). Notwithstanding the
foregoing, if the Participant’s Employment terminates prior to the Expiration Date, the Vested
Portion of the Option shall remain exercisable for the period set forth below. If the last day on
which the Option may be exercised, whether the Expiration Date or due to a termination of the
Optionee’s Employment prior to the Expiration Date, is a Saturday, Sunday or other day that is not
a trading day on the New York Stock Exchange (the “NYSE”) or, if the Company’s Shares are not then
listed on the NYSE, such other stock exchange or trading system that is the primary exchange on
which the Company’s Shares are then traded, then the last day on which the Option may be exercised
shall be the preceding trading day on the NYSE or such other stock exchange or trading system.

               (i)       Death or Disability. If the Participant’s Employment with the Company and
its Affiliates terminates due to the Participant’s death or Disability, the Participant (or
his or her representative) may exercise the Vested Portion of the Option for a period ending
on the earlier of (A) three (3) years following the date of such termination and (B) the
Expiration Date;

               (ii)       Retirement. If the Participant’s Employment with the Company and its
Affiliates terminates due to the Participant’s Retirement, the Participant may exercise the
Vested Portion of the Option for a period ending on the earlier of (A) five (5) years
following the date of such termination and (B) the Expiration Date; provided, that
if the Company or any Affiliate has given the Participant notice that the Participant’s
Employment is being terminated for Cause prior to the Participant’s election to terminate
due to the Participant’s Retirement, then the provisions of Section 4(a)(v) shall control;

               (iii)       Unsatisfactory Performance; Voluntary Termination without Good Reason.
If the Participant’s Employment with the Company and its Affiliates is terminated by the
Company or an Affiliate (other than after a Change in Control as set forth in Section
4(a)(vi)) for unsatisfactory performance, but not for Cause (as determined in its sole
discretion by the Company or any Affiliate), or the Participant voluntarily terminates
Employment at any time without Good Reason, the Participant may exercise the Vested Portion
of the Option for a period ending on the earlier of (A) three months following the date of
such termination and (B) the Expiration Date; provided, that if Participant
satisfies the age and service requirements described in the definition of “Retirement,” then
the provisions of Section 4(a)(ii) shall control; provided further, that if the Company or
any Affiliate has given the Participant notice that the

 

 

Participant’s Employment is being terminated for Cause prior to the Participant’s
election to voluntarily terminate Employment without Good Reason, then the provisions of
Section 4(a)(v) shall control;

               (iv)       Termination other than for Cause. Subject to the provision of Section
4(a)(vi), if the Participant’s Employment with the Company and its Affiliates is terminated
by the Company or an Affiliate for any reason other than by the Company or its Affiliates
for Cause, unsatisfactory performance or due to the Participant’s death or Disability, the
Participant may exercise the Vested Portion of the Option for a period ending on the earlier
of (A) one year following the date of such termination and (B) the Expiration Date; provided
that if Participant satisfies the age and service requirements described in the definition
of “Retirement,” then the provisions of Section 4(a)(ii) shall control;

               (v)       Termination by the Company for Cause. If the Participant’s Employment with
the Company and its Affiliates is terminated by the Company or an Affiliate for Cause, the
Participant may exercise the Vested Portion of the Option for a period ending on the earlier
of (A) one month following the date of such termination and (B) the Expiration Date;
provided, however, that if the Participant is terminated by the Company or
an Affiliate for Cause on account of one or more acts of fraud, embezzlement or
misappropriation committed by the Participant, the Vested Portion of the Option shall
immediately terminate in full and cease to be exercisable;

               (vi)       After a Change in Control. If the Participant’s Employment with the
Company and its Affiliates terminates after a Change in Control due to a termination by the
Company other than for Cause or due to the Participant’s resignation for Good Reason, the
Participant may exercise the Vested Portion of the Option for a period ending on the earlier
of (A) one year following the date of such termination and (B) the Expiration Date; provided
that if Participant satisfies the age and service requirements described in the definition
of “Retirement,” then the provisions of Section 4(a)(ii) shall control; and

               (vii)       Transfers of Employment. If (i) the Company or any Affiliate transfers
the Participant’s Employment to a corporation, company or other entity that is not an
Affiliate or (ii) the Affiliate with which the Participant has a service relationship ceases
to be an Affiliate due to a sale or other disposition by the Company or an Affiliate, the
Option, to the extent not then vested, shall be immediately canceled by the Company without
consideration and the Participant may exercise the Vested Portion of the Option for a period
ending on the earlier of (A) one year following the date of such transfer, sale or other
disposition and (B) the Expiration Date; provided that if Participant satisfies the age and
service requirements described in the definition of “Retirement,” then the provisions of
Section 4(a)(ii) shall control.

(b) Method of Exercise.

               (i)       Subject to Section 4(a) of this Agreement, the Vested Portion of an Option may be
exercised by delivering to the Company at its principal office written

 

 

notice of intent to so exercise; provided that the Option may be exercised with
respect to whole Shares only. Such notice shall specify the number of Shares for which the
Option is being exercised, shall be signed (whether or not in electronic form) by the person
exercising the Option and shall make provision for the payment of the Option Price. Payment
of the aggregate Option Price shall be paid to the Company, at the election of the
Committee, pursuant to one or more of the following methods: (A) in cash, or its equivalent;
(B) by transferring Shares having a Fair Market Value equal to the aggregate Option Price
for the Shares being purchased to the Company and satisfying such other requirements as may
be imposed by the Committee; (C) partly in cash and partly in Shares; or (D) if there is a
public market for the Shares at such time, subject to such rules as may be established by
the Committee, through delivery of irrevocable instructions to a broker to sell the Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company
an amount equal to the aggregate Option Price. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to the Shares subject to the Option
until the issuance of the Shares.

               (ii)       Notwithstanding any other provision of the Plan or this Agreement to the contrary,
absent an available exemption to registration or qualification, the Option may not be
exercised prior to the completion of any registration or qualification of the Option or the
Shares under applicable state and federal securities or other laws, or under any ruling or
regulation of any governmental body or national securities exchange that the Committee shall
in its sole reasonable discretion determine to be necessary or advisable.

               (iii)       Upon the Company’s determination that the Option has been validly exercised as to
any of the Shares, the Company shall issue certificates in the Participant’s name for such
Shares or register the Participant’s ownership of such Shares electronically. However, the
Company shall not be liable to the Participant for damages relating to any delays in issuing
the Shares to the Participant, any loss by the Participant of the certificates, or any
mistakes or errors in the issuance of the certificates or in the certificates themselves.

               (iv)       In the event of the Participant’s death, the Vested Portion of an Option shall
remain vested and exercisable by the Participant’s executor or administrator, or the person
or persons to whom the Participant’s rights under this Agreement shall pass by will or by
the laws of descent and distribution as the case may be, to the extent set forth in Section
4(a) of this Agreement. Any heir or legatee of the Participant shall take rights herein
granted subject to the terms and conditions hereof.

               (v)       As a condition to the exercise of any Option evidenced by this Agreement, the
Participant agrees to hold, for a period of twelve (12) months following the date of such
exercise, a number of Shares issued pursuant to such exercise, equal to 75% (rounded down to
the nearest whole Share) of the quotient of (A) and (B), where (A) is the product of (1) the
number of Shares exercised by the Participant multiplied by (2) fifty percent (50%) of the
excess of the Fair Market Value of a Share on the date of exercise over the exercise price
and (B) is the Fair Market Value of a Share on the date of exercise. The holding
requirement related to Shares that is established in this Section

 

 

4(b)(v) shall terminate with respect to the Options evidenced by this Agreement (as
well as any Shares issued pursuant to exercise of such Options) on the first anniversary of
the date of termination of the Participant’s Employment with the Company or its Affiliates.

5.       No Right to Continued Employment or Future Grants of Options. The Participant
understands that nothing contained herein constitutes an employment contract and neither the Plan
nor this Agreement shall be construed as giving the Participant the right to be retained in the
Employment of the Company or any Affiliate. Further, the Company or its Affiliate may at any time
dismiss the Participant or discontinue any other relationship, free from any liability or any claim
under the Plan or this Agreement, except as otherwise expressly provided herein. The Participant
also agrees and acknowledges that grants of Options under the Plan are discretionary and any grant
of Options under the Plan does not imply or create any obligation on the part of the Company to
make any future grants of Options to the Participant.

6.       Legend on Certificates. The certificates representing the Shares purchased by
exercise of an Option shall be subject to such stop transfer orders and other restrictions as the
Committee may deem reasonably advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares
are listed, any applicable federal or state laws and the Company’s Articles of Incorporation and
Bylaws, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

7.       Transferability. Unless otherwise determined by the Committee, an Option may not
be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the
Participant otherwise than by will or by the laws of descent and distribution, and any such
purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void
and unenforceable against the Company or any Affiliate.

8.       Withholding. The Participant may be required to pay to the Company or its
Affiliate and the Company or its Affiliate shall have the right and is hereby authorized to
withhold from any payment due or transfer made under the Option or under the Plan or from any
compensation or other amount owing to a Participant the amount (in cash, Shares, other securities,
other Awards or other property) of any applicable withholding taxes in respect of the Option, its
exercise, or any payment or transfer under the Option or under the Plan and to take such action as
may be necessary in the option of the Company to satisfy all obligations for the payment of such
taxes.

9.       Securities Laws. Upon the acquisition of any Shares pursuant to the exercise of an
Option, the Participant will make or enter into such written representations, warranties and
agreements as the Committee may reasonably request in order to comply with applicable securities
laws or with this Agreement.

10.      Notices. Any notice under this Agreement shall be addressed to the Company in
care of its General Counsel at the principal executive office of the Company, with a copy to the
Director, Global Stock Plans Administration, at the principal executive office of the Company, and
to the Participant at the address appearing in the personnel records of the Company for the
Participant or to either party at such other address as either party hereto may

 

 

hereafter designate in writing to the other. Any such notice shall be deemed effective upon
receipt thereof by the addressee.

11.       Personal Data. The Company, the Participant’s local employer and the local
employer’s parent company or companies may hold, collect, use, process and transfer, in electronic
or other form, certain personal information about the Participant for the exclusive purpose of
implementing, administering and managing the Participant’s participation in the Plan. Participant
understands that the following personal information is required for the above named purposes:
his/her name, home address and telephone number, office address (including department and employing
entity) and telephone number, e-mail address, date of birth, citizenship, country of residence at
the time of grant, work location country, system employee ID, employee local ID, employment status
(including international status code), supervisor (if applicable), job code, title, salary, bonus
target and bonuses paid (if applicable), termination date and reason, tax payer’s identification
number, tax equalization code, US Green Card holder status, contract type (single/dual/multi), any
shares of stock or directorships held in the Company, details of all stock option grants (including
number of grants, grant dates, exercise price, vesting type, vesting dates, expiration dates, and
any other information regarding options that have been granted, canceled, vested, unvested,
exercisable, exercised or outstanding) with respect to the Participant, estimated tax withholding
rate, brokerage account number (if applicable), and brokerage fees (the “Data”).
Participant understands that Data may be collected from the Participant directly or, on Company’s
request, from Participant’s local employer. Participant understands that Data may be transferred
to third parties assisting the Company in the implementation, administration and management of the
Plan, including the brokers approved by the Company, the broker selected by the Participant from
among such Company-approved brokers (if applicable), tax consultants and the Company’s software
providers (the “Data Recipients”). Participant understands that some of these Data
Recipients may be located outside the Participant’s country of residence, and that the Data
Recipient’s country may have different data privacy laws and protections than the Participant’s
country of residence. Participant understands that the Data Recipients will receive, possess, use,
retain and transfer the Data, in electronic or other form, for the purposes of implementing,
administering and managing the Participant’s participation in the Plan, including any requisite
transfer of such Data as may be required for the administration of the Plan and/or the subsequent
holding of shares of common stock on the Participant’s behalf by a broker or other third party with
whom the Participant may elect to deposit any shares of common stock acquired pursuant to the Plan.
Participant understands that Data will be held only as long as necessary to implement, administer
and manage the Participant’s participation in the Plan. Participant understands that Data may also
be made available to public authorities as required by law, e.g., to the U.S. government.
Participant understands that the Participant may, at any time, review Data and may provide updated
Data or corrections to the Data by written notice to the Company. Except to the extent the
collection, use, processing or transfer of Data is required by law, Participant may object to the
collection, use, processing or transfer of Data by contacting the Company in writing. Participant
understands that such objection may affect his/her ability to participate in the Plan. Participant
understands that he/she may contact the Company’s Stock Plan Administration to obtain more
information on the consequences of such objection.

12.       Governing Law; Submission to Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without regard

 

 

to conflicts of laws, and any and all disputes between the Participant and the Company or any
Affiliate relating to the Option shall be brought only in a state or federal court of competent
jurisdiction sitting in Manhattan, New York, and the Participant and the Company and any Affiliate
hereby irrevocably submit to the jurisdiction of any such court and irrevocably agree that venue
for any such action shall be only in any such court.

13.       Entire Agreement. This Agreement, together with the Notice and the Plan, embodies
the entire agreement and understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements and understandings relating to
the subject matter hereof. No statement, representation, warranty, covenant or agreement not
expressly set forth in this Agreement or the Notice shall affect or be used to interpret, change or
restrict, the express terms and provisions of this Agreement or the Notice; provided, that
this Agreement and the Notice shall be subject to and governed by the Plan, and in the event of any
inconsistency between the provisions of this Agreement or the Notice and the provisions of the
Plan, the provisions of the Plan shall govern.

14.       Modifications And Amendments. The terms and provisions of this Agreement and the
Notice may be modified or amended as provided in the Plan.

15.       Waivers And Consents. Except as provided in the Plan, the terms and provisions of
this Agreement and the Notice may be waived, or consent for the departure therefrom granted, only
by a written document executed by the party entitled to the benefits of such terms or provisions.
No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with
respect to any other terms or provisions of this Agreement or the Notice, whether or not similar.
Each such waiver or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.

16.       Reformation; Severability. If any provision of this Agreement or the Notice
(including any provision of the Plan that is incorporated herein by reference) shall hereafter be
held to be invalid, unenforceable or illegal, in whole or in part, in any jurisdiction under any
circumstances for any reason, (i) such provision shall be reformed to the minimum extent necessary
to cause such provision to be valid, enforceable and legal while preserving the intent of the
parties as expressed in, and the benefits of the parties provided by, this Agreement, the Notice
and the Plan or (ii) if such provision cannot be so reformed, such provision shall be severed from
this Agreement or the Notice and an equitable adjustment shall be made to this Agreement or the
Notice (including, without limitation, addition of necessary further provisions) so as to give
effect to the intent as so expressed and the benefits so provided. Such holding shall not affect
or impair the validity, enforceability or legality of such provision in any other jurisdiction or
under any other circumstances. Neither such holding nor such reformation or severance shall affect
the legality, validity or enforceability of any other provision of this Agreement, the Notice or
the Plan.

17.       Entry into Force. By entering into this Agreement, the Participant agrees and
acknowledges that (i) the Participant has received and read a copy of the Plan and (ii) the Option
is granted pursuant to the Plan and is therefore subject to all of the terms of the Plan. The
Participant acknowledges and agrees that the Participant may be entitled from time to time to

 

 

receive certain other documents related to the Company, including the Company’s annual report
to stockholders and proxy statement related to its annual meeting of stockholders (which become
available each year approximately three months after the end of the calendar year), and the
Participant consents to receive such documents electronically through the Internet or as the
Company otherwise directs.

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