Document:

EX-10.34 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

Exhibit
10.34

          AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) made December 11 2007,
between TIME WARNER INC., a Delaware corporation (the “Company”), and Jeffrey Bewkes (“You”).

          You are currently employed by Time Warner Inc. (the “Company”) pursuant to an Employment
Agreement between you and the Company dated December 22, 2003, which includes a separate
Confidentiality Non Competition and Ownership Agreement (the “Prior Agreement”). The Prior
Agreement shall continue to govern the terms of your employment through December 31, 2007 and this
Agreement shall become effective January 1, 2008 (the “Effective Date”) for all purposes other than
Section 3.5, which shall be and become effective upon the execution of this Agreement. In all other
respects, this Agreement shall amend and supersede the terms of the Prior Agreement (including the
Confidentiality Non Competition and Ownership Agreement) effective with the Effective Date. 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 the Effective Date and ending on December 31,
2012 (the “Term Date”), subject, however, to earlier termination as set forth in this Agreement.

     2. Employment. During the term of employment, you shall serve as Chief Executive
Officer, Time Warner Inc. and shall report only to the Board of Directors of the Company. 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 the
Board of Directors of the Company may from time to time delegate to you in addition thereto
consistent with your position with the Company. You shall, subject to your election as such from
time to time and without additional compensation, serve during the term of employment in such
additional offices of comparable or greater stature and responsibility in the Company and its
subsidiaries and as a director and as a member of any committee of the Board of Directors of the
Company and its subsidiaries to which you may be elected from time to time. During your
employment, (i) your services shall be rendered on a substantially full-time, exclusive basis and
you will apply on a substantially full-time basis all of your skill and experience to the
performance of your duties, (ii) you shall have no other employment and, without the prior written
consent of the Board of Directors of the Company, no outside business activities which require the
devotion of substantial amounts of your time, and (iii) unless you consent otherwise, 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 and shall not
prevent you from devoting such time to your personal affairs (including service as a director of
another entity) as shall not interfere with the performance of your duties hereunder, provided that
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comply with Section 9 and any generally applicable written policies of the Company on
conflicts of interest and service as a director of another corporation, partnership, trust or other
entity.

     3. Compensation.

          3.1 Base Salary. The Company shall pay you a base salary at the rate of not less
than $1,750,000 per annum during the term of employment (“Base Salary”). If you are elected to
serve as Chairman of the Board during the term of employment, your Base Salary will be increased to
not less than $2,000,000 per annum for the remainder of the term of employment. The Company may
increase, but not decrease, your Base Salary during the term of employment and upon any such
increase the term “Base Salary” shall mean such increased amount (subject to Section 5). Base
Salary shall be paid in accordance with the Company’s then current payroll practices and policies
with respect to senior executives. For the purposes of this Agreement “senior executives” shall
mean the executive officers of the Company.

          3.2 Bonus. In addition to Base Salary, you may be entitled to receive during the
term of employment an annual cash bonus (“Bonus”) subject to and pursuant to the Company’s Annual
Bonus Plan for Executive Officers (such plan, together with any successor plan of Company intended
to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), being
hereinafter referred to as the “Annual Bonus Plan”). Although your Bonus is fully discretionary,
your target annual Bonus is $8,500,000, but the parties acknowledge that your actual Bonus will
vary depending on the actual performance of you and the Company from a minimum of $0 and up to a
maximum Bonus of $12,750,000 as determined by the Compensation and Human Development Committee of
the Board of Directors of the Company (the “Compensation Committee”). Each year, your personal
performance will be considered in the context of your executive duties and any individual goals set
for you, and your actual Bonus will be determined at that time. Although as a general matter the
Company expects to pay bonuses at the target level in cases of satisfactory individual performance,
it does not commit to do so, and your Bonus may be negatively affected by the exercise of the
Compensation Committee’s discretion based on overall Company performance. Payments of any bonus
compensation under this Section 3.2 shall be paid to you between January 1 and March 15 of the
calendar year immediately following the performance year in respect of which such Bonus is earned.

          3.3 Deferred Compensation Account. Pursuant to the terms of employment agreements
with the Company that preceded the Prior Agreement, you previously have been paid deferred
compensation which has been deposited in a special account (the “Trust Account”) maintained on the
books of a Time Warner Inc. grantor trust (the “Rabbi Trust”) for your benefit. Consistent with
the terms of the Prior Agreement, the Trust Account shall be maintained by the trustee (“Trustee”)
thereof in accordance with the terms of Annex A attached hereto and the

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trust agreement (the “Trust Agreement”) establishing the Rabbi Trust (which Trust Agreement
shall in all respects remain consistent with the terms of Annex A), until the full amount which you
are entitled to receive therefrom has been paid in full. The Company shall pay all fees and
expenses of the Trustee and shall enforce the provisions of the Trust Agreement for your benefit.
The Company and you acknowledge that no amounts have been paid by the Company or deferred by you
into the Trust Account and the terms and conditions governing the Trust Account have not been
modified subsequent to October 1, 2004.

          3.4 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 $8,500,000 (based on the valuation method and process used by the Company with
respect to awards made to its senior executives). In 2008, the long term incentive compensation
will be in the form of options to purchase no more than 1,500,000 shares of Time Warner Common
Stock and, for the remainder of the term of employment, the long term incentive compensation will
be paid 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. The long term incentive compensation paid pursuant to this section will be paid at the
same times as paid to other senior executives of the Company.

          3.5 Upfront Equity Grants. Following execution of the Agreement by both parties, you
will be awarded a signing grant of 950,000 options to purchase shares of Time Warner Common Stock
(the “Upfront Options”) on the next regular grant date (the 1st and 15th of
each month (or the next business day if the 1st or 15th is not a business
day)). The Upfront Options will be reflected in a separate stock option agreement that will set
forth the terms and conditions of the Upfront Options. In the event your employment with the
Company is terminated as a result of a termination of employment pursuant to Section 4.2 or due to
your retirement, then (i) there shall be no additional vesting of the Upfront Options other than a
pro-rata portion (based on the number of days from the previous vesting date through the date of
termination) of the next installment of the Upfront Options shall vest on the effective date of
termination of your employment, and (ii) the vested portion of the Upfront Options shall remain
exercisable for a period of five years (but not beyond the term of such Upfront Options) from the
earlier of the Severance Term Date and the Benefit Cessation Date or the effective date of your
retirement, as applicable.

     In addition, in January 2008, you will be awarded 250,000 target performance stock units (the
“Upfront PSU Grant”). The Upfront PSU Grant shall be reflected in a separate Performance Stock
Units Agreement that will set forth the terms and conditions of the Upfront PSU Grant, including a
provision that the performance period for the Upfront Performance Stock Units

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Grant will be the five-year period beginning on January 1, 2008 and ending on December 31,
2012 and that the number of performance stock units that will vest will be determined by the
Compensation Committee following the end of the performance period based on the highest total
stockholder return (“TSR”) of Time Warner Common Stock for the three periods beginning January 1,
2008 and ending December 31, 2010, December 31, 2011 and December 31, 2012, respectively, relative
to the TSR of the S&P 500 Index for the same periods, with a payout of 200% of the Upfront PSU
Grant if the Company’s TSR is at the 100th percentile and a payout of 100% if the
Company’s TSR is at the 50th percentile and a payout of 0 if the Company’s TSR is below
the 25th percentile. In the event your employment with the Company is terminated as a
result of a termination pursuant to Section 4.2 or due to your retirement, then (a) the performance
period for the Upfront PSU Grant will end at December 31, 2008 if you retire pursuant to the second
sentence of Section 4.6 or, otherwise, at December 31 of the year in which the effective date of
termination of employment or retirement occurs, (b) the Company’s relative TSR will be measured
based on the highest TSR achieved for the period(s) beginning January 1, 2008 and ending on each
December 31 occurring thereafter during the shortened performance period, and, subject to the
certification by the Compensation Committee of the performance level achieved by the Company, the
number of shares to be paid to you will be (i) determined based on the highest TSR for such
period(s) and (ii) pro-rated at 20% if your termination occurs because you retire pursuant to the
second sentence of Section 4.6 or, otherwise, pro-rated based on a fraction, the numerator of which
is the number of days from January 1, 2008 through the effective date of termination of employment,
and the denominator of which is 1827, and (c) the shares of Time Warner Common Stock to be paid
with respect to the Upfront PSU Grant will be paid to you as soon as practicable following but not
later than March 15 of the year following the effective date of termination of employment.

     3.6 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 and in any other agreements or
arrangements intended to provide you with indemnification rights (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add to or broaden, the
protection afforded to you by those provisions).

     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 Sections 4.1 and in Section 3.6, for “cause”. Termination by the Company for “cause” shall
mean termination because of your (a) conviction (treating a nolo contendere plea as a conviction)
of a felony (whether or not any right to appeal has been or may be exercised) other

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than as a result of a moving violation or a Limited Vicarious Liability, (b) willful failure
or refusal without proper cause to perform your material duties with the Company, including your
material obligations under this Agreement (other than any such failure resulting from your
incapacity due to physical or mental impairment), (c) willful misappropriation, embezzlement or
reckless or willful destruction of Company property having a significant adverse financial effect
on the Company or a significant adverse effect on the Company’s reputation, (d) willful and
material breach of any statutory or common law duty of loyalty to the Company having a significant
adverse financial effect on the Company or a significant adverse effect on the Company’s
reputation; or (e) material and willful breach of any of the covenants provided for in Sections 9
and 10. 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 your
material duties with the Company including any one or more of your material obligations under this
Agreement or for intentional and improper conduct, and (ii) within 30 days following the date of
such notice you shall cease your refusal and shall use your best efforts to perform such
obligations or cease such intentional and improper conduct, the termination shall not be effective.
For purposes of this definition of Cause, no act, or failure to act, on your part shall be
considered “willful” or “intentional” unless done, or omitted to be done, by you not in good faith
and without reasonable belief that such action or omission was opposed to the best interest of the
Company. The term “Limited Vicarious Liability” shall mean any liability which is based on acts of
the Company for which you are responsible solely as a result of your office(s) with the Company;
provided that (x) you are not directly involved in such acts and either had no prior knowledge of
such intended actions or, upon obtaining such knowledge, promptly acted reasonably and in good
faith to attempt to prevent the acts causing such liability or (y) after consulting with the
Company’s counsel, you reasonably believed that no law was being violated by such acts.

          In the event of termination by the Company for cause, without prejudice to any other rights or
remedies that the Company may have at law or in equity, the Company shall have no further
obligation to you other than (i) to pay Base Salary through the effective date of termination,
(ii) to pay any Bonus for any year prior to the year in which such termination occurs that has been
determined but not yet paid as of the date of such termination, and (iii) with respect to any
rights you have with respect of amounts credited to the Trust Account or the Deferred Compensation
Plan established by the Company on November 18,1998, as amended, (the “Deferred Plan”), through the
effective date of termination or pursuant to any insurance or other benefit plans or arrangements
of the Company (including rights under Section 8.2 hereof). You hereby disclaim any right to
receive a pro rata portion of any Bonus with respect to the year in which such termination occurs.

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          4.2 Termination by You for Material Breach by the Company and Termination by the Company
Without Cause. Unless previously terminated pursuant to any other provision of this Agreement
and unless a Disability Period shall be in effect, you shall have the right, exercisable by written
notice to the Company, to terminate the term of employment effective 30 days after the giving of
such notice, if, at the time of the giving of such notice, the Company is in material breach of its
obligations under this Agreement; provided, however, that, with the exception of clause (i) below,
this Agreement shall not so terminate if such notice is the first such notice of termination
delivered by you pursuant to this Section 4.2 and within such 30-day period the Company shall have
cured all such material breaches and provided further, that such notice is provided to the Company
within 90 days after your knowledge of the occurrence of such material breach. A material breach
by the Company shall include, but not be limited to, (ii) the Company violating Section 2 with
respect to your title, your reporting solely to the Board of Directors of the Company, authorities,
functions, duties, place of employment, powers or responsibilities (whether or not accompanied by a
change in title); and (iii) 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 date of such termination. If such notice
is delivered on or after the date which is 60 days prior to the Term Date, and the effective date
of such termination is no earlier than the Term Date, the provisions of Section 4.3 shall apply.

               4.2.1 After the effective date of a termination pursuant to this Section 4.2 (a “termination
without cause”), you shall receive Base Salary and a pro rata portion of your Average Annual Bonus
(as defined below) through the effective date of termination. Your Average Annual Bonus shall be
equal to the average of the regular annual bonus amounts (excluding the amount of any special or
spot bonuses) in respect of the two calendar years during the most recent five calendar years for
which the annual bonus received by you during your employment as CEO was the greatest; provided,
however, if the Company has previously paid you less than two annual bonuses for years during which
you served as CEO, then your Average Annual Bonus shall equal your target Bonus. Your pro-rata
Average Annual Bonus pursuant to this Section 4.2.1 shall be paid to you at the time set forth in
Section 4.8.

               4.2.2 After the effective date of a termination without cause, you shall continue to be
treated as an employee of the Company for a period ending on the date (the “Severance Term Date”)
which is two years after the effective date of such termination, and during such period you shall
be entitled to receive, whether or not you become disabled during such period

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but subject to Section 6, (a) Base Salary (on the Company’s normal payroll payment dates as in
effect for senior executives immediately prior to the effective date of your termination without
cause) at an annual rate equal to your Base Salary in effect immediately prior to the notice of
termination, and (b) an annual Bonus in respect of each calendar year or portion thereof (in which
case a pro rata portion of such Bonus will be payable) during such period equal to your Average
Annual Bonus. Except as provided in the second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of your intention to terminate your
status as an employee during such period, you shall cease to be treated as an employee of the
Company for purposes of your rights to receive certain post-termination benefits under Section 8.2
effective upon the commencement of such other employment or the effective date of such termination
as specified by you in such notice, whichever is applicable (the “Benefit Cessation Date”), and you
shall receive the remaining payments of Base Salary and Bonus pursuant to this Section 4.2.2 at the
times specified in Section 4.8 of the Agreement. Notwithstanding the foregoing, if you accept
employment with any not-for-profit entity or governmental entity, then you shall 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 90 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 90 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), then you shall receive any unpaid Annual Bonus or
award under Section 3.4 with respect to a year prior to the year of termination which has been
determined but not yet paid, Base Salary and a pro rata portion of your Average Annual Bonus
through the effective date of termination. At the end of the 90-day notice period provided for in
the first sentence of this Section 4.3, the term of employment shall end and you shall cease to be
an employee of the Company and you shall have no further obligations or liabilities to the Company
whatsoever, except that Sections 3.6, 7, 9.1, 9.2, 10, 11 and 13, and Annex A, shall survive such
termination.

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     4.4 Office Facilities. In the event of a termination of your employment pursuant to
Section 4.2 or 4.3, then for the period beginning on the effective date of such termination and
ending one year thereafter, the Company shall, without charge to you, make available to you office
space at your principal job location immediately prior to your termination of employment, or other
location reasonably close to such location, 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 of employment but taking into account your reduced need
for such office space, secretarial services and office facilities, services and furnishings as a
result of your no longer being a full-time employee.

     4.5 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 B. 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 or, such release.

     4.6 Retirement. Because you have attained age 55 and ten years of service with the
Company or an Affiliate of the Company, if your employment is voluntarily terminated by you at any
time (other than pursuant to Section 4.2) you will be considered to have “retired” for purposes of
this Agreement. Moreover, if you are not elected to serve as Chairman of the Board of the Company
by January 1, 2009, and you give notice of your retirement between January 1, 2009 and March 31,
2009, then the retirement will become effective 30 days after the giving of such notice and your
obligations under Section 9.2 will not apply. In addition, if you retire pursuant to the preceding
sentence, you will receive an Annual Bonus with respect to 2008, as well as Base Salary and a pro
rata portion of your Average Annual Bonus through the effective date of retirement. A retirement
pursuant to this Section 4.6 shall not be deemed a “termination without cause” under this
Agreement.

     4.7 No Mitigation/No Offset. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense, or other claim, right or action that the Company
may have against you or others. In no event shall you be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to you under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or not you obtain other
employment.

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     4.8 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 would otherwise have been paid to you
pursuant to Sections 3.1 and 3.2 if you had not been terminated, subject to Section 13.17.

     5. Disability.

          5.1 Disability Payments. If during the term of employment and prior to the
delivery of any notice of termination without cause, you become physically or mentally disabled,
whether totally or partially, so that you are prevented from performing your usual duties for a
period of six consecutive months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay 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 13.17. If you have not
resumed your usual duties on or prior to the Disability Date, the Company shall pay you a pro rata
Bonus (based on your Average Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending on the later of (i) the Term
Date or (ii) the date which is twelve months after the Disability Date (in the case of either (i)
or (ii), the “Disability Period”), in an annual amount equal to 75% of (a) your Base Salary at the
time you become disabled and (b) the Average Annual Bonus, in each case, subject to Section 13.17.

          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 continue to receive disability benefits and 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 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 Board of Directors of the Company but you shall
not be required to devote more than five days (up to eight hours per day) each month to such
services, which shall be performed at a time and place mutually convenient to both parties. Any
income from such other employment shall not be applied to reduce the Company’s obligations under
this Agreement.

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          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 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 any unpaid Annual Bonus award with
respect to the year prior to your death, 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. For purposes of clarity, it is intended that your death shall
not affect any vested rights you or your beneficiaries may have at the time of your death pursuant
to any insurance or other death benefit plans or arrangements of the Company or any subsidiary or
benefit and incentive plans described in Sections 3.3, 8.1 and 8.2, which vested rights shall
continue to be governed by the provisions of such plans and this Agreement.

     7. Life Insurance. The parties confirm that pursuant to the terms of the Prior
Agreement and employment agreements with the Company or Affiliates that preceded the Prior
Agreement, the Company has maintained $4,000,000 face amount of split ownership life insurance on
your life. The Company shall continue to maintain such life insurance, which will be structured to
comply with Section 409A of the Cod, and IRS Notice 2007-34, and shall maintain such policy
(without reduction in the face amount of the coverage) until your death and irrespective of any
termination of this Agreement, except pursuant to Section 4.1. You shall be entitled to designate
the beneficiary or beneficiaries of such policy, which may include a trust. At your death, or on the

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earlier surrender of such policy by the owner, your estate (or the owner of the policy) shall
promptly pay to the Company an amount equal to the premiums on such policy paid by the Company and
its subsidiaries (net of (i) tax benefits, if any, to the Company and its subsidiaries in respect
of payments of such premiums, (ii) any amounts payable by the Company which have been paid by you
or on your behalf with respect to such insurance, (iii) dividends received by the Company and its
subsidiaries in respect of such premiums, but only to the extent such dividends are not used to
purchase additional insurance on your life, and (iv) any unpaid borrowings by the Company and its
subsidiaries under the policy). If other than the Company, the owner of the policy from time to
time shall execute, deliver and maintain a customary split dollar insurance agreement and
collateral assignment form, assigning to the Company the proceeds of the policy but only to the
extent necessary to secure the reimbursement of the obligation contained in the preceding sentence.
The Company agrees that it will not borrow against the policy an amount in excess of the premiums
on such policy paid by the Company and its subsidiaries (net of the amounts referred to in clauses
(i), (ii) and (iii) above). The life insurance provided for in this Section 7 shall be in addition
to any other insurance hereafter provided by the Company or any of its subsidiaries on your life
under any group or individual policy. In addition to the foregoing, during your employment with
the Company, the Company shall (x) provide you with $50,000 of group life insurance and (y) pay you
annually an amount equal to 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
(i) twice your Base Salary minus (ii) $50,000. You shall be under no obligation to use the
payments made by the Company pursuant to the preceding sentence to purchase GUL insurance or to
purchase any other life insurance. If the Company discontinues its GUL insurance program, the
Company shall nevertheless make the payments required by this Section 7 as if such program were
still in effect. The payments made to you hereunder shall not be considered as “salary” or
“compensation” or “bonus” in determining the amount of any payment under any pension, retirement,
profit-sharing or other benefit plan of the Company or any subsidiary of the Company. The parties
intend that any life insurance provided under this Section 7 shall be provided in a manner
consistent with applicable laws.

     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
senior executives, during the term of your employment with the Company, you shall be eligible to
participate in any savings plan, pension, profit-sharing, stock option or similar plan or program
and in any group life insurance (to the extent set forth in Section 7), hospitalization, medical,
dental, accident, disability or similar plan or program of the Company now

11

 

existing or established hereafter. In addition, you shall be entitled during the term of
employment, to receive other benefits generally available to all senior executives of the Company
to the extent you are eligible under the general provisions thereof, including, without limitation,
to the extent maintained in effect by the Company for its senior executives, an automobile
allowance and financial services.

          8.2. Benefits After a Termination or Disability. After the effective date of a
termination of employment pursuant to Section 4.2 and prior to the Severance Term Date or, if
earlier, the Benefit Cessation Date or during the Disability Period, you shall continue to be
treated as an employee of the Company for purposes of eligibility to participate in the Company’s
health and welfare benefit plans other than disability programs and to receive the health and
welfare benefits (other than disability programs) required to be provided to you under this
Agreement to the extent such health and welfare benefits are maintained in effect by the Company
for its executives. During the same period, you will also continue to receive all other benefits
maintained in effect by the Company for its senior executives, such as financial services
reimbursement or an automobile allowance. After the effective date of a termination of employment
pursuant to Section 4 or during a Disability Period, you shall not be entitled to any additional
awards or grants under any stock option, restricted stock or other stock-based incentive plan and
you shall not be entitled to continue elective deferrals in or accrue additional benefits under any
qualified or nonqualified retirement programs maintained by the Company. As applicable, at (i) the
Severance Term Date or, if earlier, the Benefit Cessation Date in connection with a termination of
employment pursuant to Section 4.2, (ii) the effective date of your retirement, or (iii) the end of
the term of employment pursuant to Section 4.3, your rights to benefits and payments under any
health and welfare benefit plans or any insurance or other death benefit plans or arrangements of
the Company or under any stock option, restricted stock, stock appreciation right, bonus unit,
management incentive or other plan of the Company shall be determined in accordance with the terms
and provisions of such plans and any agreements under which such stock options, restricted stock or
other awards were granted. However, notwithstanding the foregoing or any more restrictive
provisions of any such plan or agreement, (a) consistent with the terms of the Prior Agreement and
your previous employment agreement, (x) stock options to purchase shares of Time Warner Common
Stock granted to you after May 1, 1996 and prior to January 1, 2000 shall remain exercisable for
the full term thereof in the event of your termination of employment pursuant to Section 4.2 or 4.3
or due to your death or disability and (y) stock options to purchase shares of Time Warner Common
Stock granted to you after December 31, 1999 and prior to November 1, 2003 shall remain exercisable
for a period of five years (but not beyond the term of such stock options) following the Severance
Term Date or, if earlier, the Benefit Cessation Date if your employment is terminated pursuant to
Section 4.2 and for five years (but not beyond the term of such stock options) following the
effective date of termination if your employment is terminated pursuant to Section 4.3; (b) if your
employment with the Company is terminated as a result of a termination pursuant to Section 4.2,
then (i) all stock

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options, restricted stock, and performance stock units granted to you by the Company on or
after November 1, 2003 (other than the Upfront PSU Grant and the Upfront Options awarded under
Section 3.5) shall continue to vest through the earlier of the Severance Term Date or the Benefit
Cessation Date, (ii) all stock options granted to you by the Company on or after November 1, 2003
(other than the Upfront Options awarded under Section 3.5) shall vest on, and remain exercisable
for a period of five years after, the earlier of the Severance Term Date or the Benefit Cessation
Date (but not beyond the term of such options), (iii) any performance stock units granted to you by
the Company after the Effective Date (other than the Upfront PSU Grant awarded under Section 3.5)
will not be pro-rated in determining the number of shares of Time Warner Common Stock to be paid
out at the end of the applicable performance period; and (iv) 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; and (c) because you have attained age 55
and ten years of service with the Company or an Affiliate of the Company, if your employment is
voluntarily terminated by you at any time or is terminated by the Company pursuant to Section 4.3,
then all options granted to you by the Company (other than the Upfront Options awarded under
Section 3.5) shall vest and become immediately exercisable, and shall remain exercisable for five
years (and for the full term for stock options granted after May 1, 1996 and prior to January 1,
2000 if the termination of employment is pursuant to Section 4.3) following your date of
termination (but not beyond the term of such options); provided, however, that if the Company has
given notice of termination under Section 4.1 prior to your election to terminate pursuant to this
subsection, then the terms of the applicable stock option plan or agreement shall be controlling.
With respect to awards of restricted stock units (“RSUs”) held at the time of a termination of
employment pursuant to Section 4.2, subject to potential further delay in payment pursuant to
Section 13.17, (i) for all awards of RSUs that contain special accelerated vesting upon retirement,
the vesting of the RSUs will accelerate upon, and the shares of Time Warner Common Stock will be
paid to you promptly following, the effective date of termination of employment, and (ii) if the
award agreement for any RSU award does not contain special treatment for retirement, then the
treatment of the RSUs will be determined at the earlier of the Severance Term Date or the Benefit
Cessation Date in accordance with the terms of the applicable award agreement(s) and based on a
termination of employment at the applicable date, 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.

     The treatment of the Upfront Options and the Upfront PSU Grant in the event of your
termination of employment pursuant to Section 4.2 or your retirement will be as described in
Section 3.5.

          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

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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 such termination, without the prior written consent of the Company, you shall not
employ, and shall not cause any entity of which you are an affiliate to employ, any

14

 

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 through the later of (i) the
Severance Term Date if no Benefit Cessation Date applies or the Benefit Cessation Date, if it does
apply, and, (ii) twelve months after the effective date of any termination of the term of
employment pursuant to Section 4, you shall not, directly or indirectly, without the prior written
consent of the Board of Directors of the Company, render any services to, or act in any capacity
for, any Competitive Entity, or acquire any interest of any type in any Competitive Entity;
provided, however, that the foregoing shall not be deemed to prohibit you from acquiring, (a)
solely as an investment and through market purchases, securities of any Competitive Entity which
are registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which are
publicly traded, so long as you are not part of any control group of such Competitive Entity and
such securities, including converted securities, do not constitute more than one percent (1%) of
the outstanding voting power of that entity and (b) securities of any Competitive Entity that are
not publicly traded, so long as you are not part of any control group of such Competitive Entity
and such securities, including converted securities, do not constitute more than three percent (3%)
of the outstanding voting power of that entity. For purposes of the foregoing, the following shall
be deemed to be a Competitive Entity: (x) during the period that you are actively employed with the
Company, any person or entity that engages in any line of business that is substantially the same
as either (i) any line of business which the Company engages in, conducts or, to your knowledge,
has definitive plans to engage in or conduct or (ii) any operating business that is engaged in or
conducted by the Company as to which, to your knowledge, the Company covenants, in writing, not to
compete with in connection with the disposition of such business, and (y) during the period
following a termination of your term of employment pursuant to Section 4, any of the following:
AT&T Corporation, Bertelsmann A.G., CBS Corporation, Comcast Corporation, The Walt Disney Company,
EarthLink, Inc., General Electric Corporation, Google Inc., Microsoft Corporation, The News
Corporation Ltd., Sony Corporation, Viacom Inc. and Yahoo! Inc., and their respective subsidiaries
and affiliates and any successor to the internet service provider, media or entertainment
businesses thereof. Notwithstanding the above, this Section 9.2 shall not apply in the event of
your retirement pursuant to the second sentence of Section 4.6.

     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

15

 

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. Certain Additional Payments by the Company.

          11.1 Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any Payment would be subject to the Excise Tax, then you
shall be entitled to receive an additional payment (the “Gross-Up Payment”) in an amount such that,
after payment by you of all taxes (and any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, you retain an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding the foregoing
provisions of this Section 11.1, if it shall be determined that you are entitled to the Gross-Up
Payment, but that the Parachute Value of all Payments does not exceed 110% of the Safe Harbor
Amount, then no Gross-Up Payment shall be made to you and the amounts payable under this Agreement
shall be reduced so that the Parachute Value of all Payments, in the aggregate, equals the Safe
Harbor Amount. The reduction of the amounts payable hereunder, if applicable, shall be made by
reducing the payments and benefits under the following sections in the following order: (i) Section
4.2.2, and (ii) the pro-rata bonus under Section 4.2.1. For purposes of reducing the Payments to
the Safe Harbor Amount, only amounts payable under this Agreement (and no other Payments) shall be
reduced. If the reduction of the amount payable under this Agreement would not result in a
reduction of the Parachute Value of all Payments to the Safe Harbor Amount, no amounts payable
under the Agreement shall be reduced pursuant to this Section 11. The Company’s obligation to make
Gross-Up Payments under this Section 11 shall not be conditioned upon your termination of
employment.

          11.2 Subject to the provisions of Section 11.3, all determinations required to be made under
this Section 11, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such

16

 

determination, shall be
made by a nationally recognized certified public accounting firm as may be
designated by the Company subject to your consent (the “Accounting Firm”). The Accounting
Firm shall provide detailed supporting calculations both to the Company and you within 15 business
days of the receipt of notice from you that there has been a Payment or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting a change of control transaction involving the
Company, you may appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any determination by the Accounting Firm shall be binding upon the Company and you. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments that will not
have been made by the Company should have been made (the “Underpayment”), consistent with the
calculations required to be made hereunder. In the event the Company exhausts its remedies
pursuant to Section 11.3 and you thereafter are required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of you.

     11.3 You shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable, but no later than 10 business days after you
are informed in writing of such claim. You shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. You shall not pay such claim prior to
the expiration of the 30-day period following the date on which you give such notice to the Company
(or such shorter period ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies you in writing prior to the expiration of such period that the
Company desires to contest such claim, you shall:

     (1) give the Company any information reasonably requested by the Company
relating to such claim,

     (2) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company,

     (3) cooperate with the Company in good faith in order effectively to contest
such claim; and

17

 

     (4) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest, and shall indemnify
and hold you harmless, on an after-tax basis, for any Excise Tax or income tax (including interest
and penalties) imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 11.3, the Company shall control all
proceedings taken in connection with such contest, and, at its sole discretion, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with the applicable
taxing authority in respect of such claim and may, at its sole discretion, either pay the tax
claimed to the appropriate taxing authority on behalf of you and direct you to sue for a refund or
contest the claim in any permissible manner, and you agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that, if the Company pays
such claim and directs you to sue for a refund, the Company shall indemnify and hold you harmless,
on an after-tax basis, from any Excise Tax, or income tax (including interest or penalties) imposed
with respect to such payment or with respect to any imputed income in connection with such payment;
and provided, further, that any extension of the statute of limitations relating to payment of
taxes for your taxable year with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of the contest shall
be limited to issues with respect to which the Gross-Up Payment would be payable hereunder, and you
shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

     11.4 If, after the receipt by you of a Gross-Up Payment or payment by the Company of an amount
on your behalf pursuant to Section 11.3, you become entitled to receive any refund with respect to
the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, you shall
(subject to the Company’s complying with the requirements of Section 11.3, if applicable) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after payment by the Company of an amount on your behalf
pursuant to Section 11.3, a determination is made that you shall not be entitled to any refund with
respect to such claim and the Company does not notify you in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination, then the amount of
such payment shall offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid.

18

 

     11.5 Any Gross-Up Payment, as determined pursuant to this Section 11, shall be paid by the
Company to you within five days of the receipt of the Accounting Firm’s determination;
provided that, the Gross-Up Payment shall in all events be paid no later than the end of your
taxable year next following your taxable year in which the Excise Tax (and any income or other
related taxes or interest or penalties thereon) on a Payment are remitted to the Internal Revenue
Service or any other applicable taxing authority or, in the case of amounts relating to a claim
described in Section 11.3 that does not result in the remittance of any federal, state, local and
foreign income, excise, social security and other taxes, the calendar year in which the claim is
finally settled or otherwise resolved. Notwithstanding any other provision of this Section 11, the
Company may, in its sole discretion, withhold and pay over to the Internal Revenue Service or any
other applicable taxing authority, for the benefit of you, all or any portion of any Gross-Up
Payment, and you hereby consent to such withholding.

     11.6 Definitions. The following terms shall have the following meanings for purposes
of this Section 11.

     (1) “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, together with
any interest or penalties imposed with respect to such excise tax.

 

     (2) “Parachute Value” of a Payment shall mean the present value as of the date
of the change of control for purposes of Section 280G of the Code of the portion of
such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining whether and to what
extent the Excise Tax will apply to such Payment.

     (3) A “Payment” shall mean any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) to or for your
benefit, whether paid or payable pursuant to this Agreement or otherwise.

     (4) The “Safe Harbor Amount” means 2.99 times your “base amount,” within the
meaning of Section 280G(b)(3) of the Code.

     12. 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):

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12.1 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)

          12.2 If to you, to your residence address set forth on the records of the Company with a
copy to:

Wachtell, Lipton, Rosen & Katz

51 W. 52nd Street

New York, New York 10019

Attention: Michael J. Segal, Esq.

     13. General.

          13.1 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.

          13.2 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.

          13.3 Entire Agreement. This Agreement, including Annexes A, B, C and the
agreements specifically referred to herein, represent the entire agreement and understanding of the
parties relating to the subject matter of this Agreement and, except as otherwise specifically
provided in this Agreement, supersedes all prior agreements, arrangements and understandings,
written or oral, between the parties.

          13.4 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.

          13.5 Assignability. This Agreement and your rights and obligations hereunder may
not be assigned by you and except as specifically contemplated in this Agreement, or under the life
insurance policies and benefit plans referred to in Sections 7 and 8.2, 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

20

 

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.

     13.6 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.

     13.7 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.

     13.8 Resolution of Disputes. Except as provided in the preceding Section 13.7, 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 13.8. 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

21

 

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 (from the losing party; provided that each
party shall bear the costs of its own attorneys and other experts and advisors irrespective of
which party prevails). 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 13.8. 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.

     13.9 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.

     13.10 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.

     13.11 Conflict of Interest. Attached as Annex C 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.

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          13.12 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.

          13.13 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.

          13.14 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.

          13.15 Survival. Sections 3.3, 3.6, 8.3 and 9 through 13 shall survive any
termination of the term of employment by the Company for cause pursuant to Section 4.1. Sections
3.3, 3.4, 3.6, 4.4, 4.5, 4.7 and 7 through 13 shall survive any termination of the term of
employment pursuant to Sections 4.2, 4.3, 4.6, 5 or 6.

          13.16 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

Average Closing Price — Section 3.5

Base Salary — Section 3.1

Benefit Cessation Date — Section 4.2.2

Bonus — Section 3.2

cause — Section 4.1

Code — Section 3.2

Company — the first paragraph on page 1 and Section 9.1

Competitive Entity — Section 9.2

Disability Date — Section 5

Disability Period — Section 5

Effective Date — the second paragraph on page 1

Severance Term Date — Section 4.2.2

Term Date — Section 1

term of employment — Section 1

termination without cause — Section 4.2.1

Work Product — Section 10

23

 

     13.17 Compliance with IRC Section 409A. This Agreement is intended to comply with
Section 409A of 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. 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 13.17; 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 on the dates set forth below
with effect as of the Effective Date.

	 	 	 	 	 	 	 	 	 
	 	 	TIME WARNER INC.	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By
	 	/s/ Mark A. Wainger
	 	Date:
	 	12/11/07
	 

	 	 	 	 
	 	 	 	 
	 

	 	 	 	Name: Mark A. Wainger	 	 	 	 
	 

	 	 	 	Title: Senior Vice President	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	/s/ Jeffrey Bewkes
	 	Date:
	 	Dec. 11, 2007
	 	 	 	 	 	 	 
	 	 	Jeffrey Bewkes	 	 	 	 

24

 

ANNEX A

Deferred Compensation Account

     A.1 Investments. Funds credited to the Trust Account shall be actually invested and
reinvested in an account in securities selected from time to time by an investment advisor
designated from time to time by the Company (the “Investment Advisor”), substantially all of which
securities shall be “eligible securities”. The designation from time to time by the Company of an
Investment Advisor shall be subject to the approval of the Executive, which approval shall not be
withheld unreasonably. “Eligible securities” are common and preferred stocks, warrants to purchase
common or preferred stocks, put and call options, and corporate or governmental bonds, notes and
debentures, either listed on a national securities exchange or for which price quotations are
published in newspapers of general circulation, including The Wall Street Journal, and
certificates of deposit. Eligible securities shall not include the common or preferred stock, any
warrants, options or rights to purchase common or preferred stock or the notes or debentures of the
Company or any corporation or other entity of which the Company owns directly or indirectly 5% or
more of any class of outstanding equity securities. The Investment Advisor shall have the right,
from time to time, to designate eligible securities which shall be actually purchased and sold for
the Trust Account on the date of reference. Such purchases may be made on margin; provided that the
Company may, from time to time, by written notice to the Executive, the Trustee and the Investment
Advisor, limit or prohibit margin purchases in any manner it deems prudent and, upon three business
days written notice to the Executive, the Trustee and the Investment Advisor, cause all eligible
securities theretofore purchased on margin to be sold. The Investment Advisor shall send
notification to the Executive and the Trustee in writing of each transaction within five business
days thereafter and shall render to the Executive and the Trustee written quarterly reports as to
the current status of his or her Trust Account. In the case of any purchase, the Trust Account
shall be charged with a dollar amount equal to the quantity and kind of securities purchased
multiplied by the fair market value of such securities on the date of reference and shall be
credited with the quantity and kind of securities so purchased. In the case of any sale, the Trust
Account shall be charged with the quantity and kind of securities sold, and shall be credited with
a dollar amount equal to the quantity and kind of securities sold multiplied by the fair market
value of such securities on the date of reference. Such charges and credits to the Trust Account
shall take place immediately upon the consummation of the transactions to which they relate. As
used herein “fair market value” means either (i) if the security is actually purchased or sold by
the Rabbi Trust on the date of reference, the actual purchase or sale price per security to the
Rabbi Trust or (ii) if the security is not purchased or sold on the date of reference, in the case
of a listed security, the closing price per security on the date of reference, or if there were no
sales on such date, then the closing price per security on the nearest preceding day on which there
were such sales, and, in the case of an unlisted security, the mean between the bid and asked
prices per security on the date of reference, or if no such prices are available for such date,
then the mean between the bid and asked prices per security on the nearest preceding day for which
such prices are available. If no bid or asked price information is available with respect to a
particular security, the price quoted to the Trustee as the value of such security on the date of
reference (or the nearest preceding date for which such information is available) shall be used for
purposes of administering the Trust Account, including determining the fair market value of such
security. The Trust Account shall be charged

25

 

currently with all interest paid by the Trust Account with respect to any credit extended to
the Trust Account. Such interest shall be charged to the Trust Account, for margin purchases
actually made, at the rates and times actually paid by the Trust Account. The Company may, in the
Company’s sole discretion, from time to time serve as the lender with respect to any margin
transactions by notice to the then Investment Advisor and the Trustee and in such case interest
shall be charged at the rate and times then charged by an investment banking firm designated by the
Company with which the Company does significant business. Brokerage fees shall be charged to the
Trust Account at the rates and times actually paid.

     A.2 Dividends and Interest. The Trust Account shall be credited with dollar amounts
equal to cash dividends paid from time to time upon the stocks held therein. Dividends shall be
credited as of the payment date. The Trust Account shall similarly be credited with interest
payable on interest-bearing securities held therein. Interest shall be credited as of the payment
date, except that in the case of purchases of interest-bearing securities the Trust Account shall
be charged with the dollar amount of interest accrued to the date of purchase, and in the case of
sales of such interest-bearing securities the Trust Account shall be credited with the dollar
amount of interest accrued to the date of sale. All dollar amounts of dividends or interest
credited to the Trust Account pursuant to this Section A.2 shall be charged with all taxes thereon
deemed payable by the Company (as and when determined pursuant to Section A.5). The Investment
Advisor shall have the same right with respect to the investment and reinvestment of net dividends
and net interest as he has with respect to the balance of the Trust Account.

     A.3 Adjustments. The Trust Account shall be equitably adjusted to reflect stock
dividends, stock splits, recapitalizations, mergers, consolidations, reorganizations and other
changes affecting the securities held therein.

     A.4 Obligation of the Company. Without in any way limiting the obligations of the
Company otherwise set forth in the Agreement or this Annex A, the Company shall have the obligation
to establish, maintain and enforce the Rabbi Trust and to make payments to the Trustee for credit
to the Trust Account in accordance with the provisions of Section 3.3 of the Agreement, to use due
care in selecting the Trustee or any successor trustee and to in all respects work cooperatively
with the Trustee to fulfill the obligations of the Company and the Trustee to the Executive. The
Trust Account shall be charged with all taxes (including stock transfer taxes), interest, brokerage
fees and investment advisory fees, if any, payable by the Company and attributable to the purchase
or disposition of securities designated by the Investment Advisor (in all cases net after any tax
benefits that the Company would be deemed to derive from the payment thereof, as and when
determined pursuant to Section A.5) and only in the event of a default by the Company of its
obligation to pay such fees and expenses, the fees and expenses of the Trustee in accordance with
the terms of the Trust Agreement, but no other costs of the Company. Subject to the terms of the
Trust Agreement, the securities purchased for the Trust Account as designated by the Investment
Advisor shall remain the sole property of the Company, subject to the claims of its general
creditors, as provided in the Trust Agreement. Neither the Executive nor his legal representative
nor any beneficiary designated by the Executive shall have any right, other than the right of an
unsecured general creditor, against the Company or the Trust in respect of any portion of the Trust
Account.

     A.5 Taxes. The Trust Account shall be charged with all federal, state and local taxes
deemed payable by the Company with respect to income recognized upon the dividends and interest
received by the Trust Account pursuant to Section A.2 and gains recognized upon sales of

26

 

any of the securities which are sold pursuant to Section A. 1, or A.7. The Trust Account
shall be credited with the amount of the tax benefit received by the Company as a result of any
payment of interest actually made pursuant to Section A. 1 or A.2 and as a result of any payment of
brokerage fees and investment advisory fees made pursuant to Section A.1. If any of the sales of
the securities which are sold pursuant to Section A.1 or A.7 results in a loss to the Trust
Account, such net loss shall be deemed to offset the income and gains referred to in the second
preceding sentence (and thus reduce the charge for taxes referred to therein) to the extent then
permitted under the Internal Revenue Code of 1986, as amended from time to time, and under
applicable state and local income and franchise tax laws (collectively referred to as “Applicable
Tax Law”); provided, however, that for the purposes of this Section A.5 the Trust Account shall,
except as provided in the third following sentence, be deemed to be a separate corporate taxpayer
and the losses referred to above shall be deemed to offset only the income and gains referred to in
the second preceding sentence. Such losses shall be carried back and carried forward within the
Trust Account to the extent permitted by Applicable Tax Law in order to minimize the taxes deemed
payable on such income and gains within the Trust Account. For the purposes of this Section A.5,
all charges and credits to the Trust Account for taxes shall be deemed to be made as of the end of
the Company’s taxable year during which the transactions, from which the liabilities for such taxes
are deemed to have arisen, are deemed to have occurred. Notwithstanding the foregoing, if and to
the extent that in any year there is a net loss in the Trust Account that cannot be offset against
income and gains in any prior year, then an amount equal to the tax benefit to the Company of such
net loss (after such net loss is reduced by the amount of any net capital loss of the Trust Account
for such year) shall be credited to the Trust Account on the last day of such year. If and to the
extent that any such net loss of the Trust Account shall be utilized to determine a credit to the
Trust Account pursuant to the preceding sentence, it shall not thereafter be carried forward under
this Section A.5. For purposes of determining taxes payable by the Company under any provision of
this Annex A it shall be assumed that the Company is a taxpayer and pays all taxes at the maximum
marginal rate of federal income taxes and state and local income and franchise taxes (net of
assumed federal income tax benefits) applicable to business corporations and that all of such
dividends, interest, gains and losses are allocable to its corporate headquarters, which are
currently located in New York City.

     A.6 Intentionally Deleted.

     A.7 Payments. Payments of deferred compensation shall be made as provided in this
Section A.7. Unless the Executive makes the election referred to in the next succeeding sentence,
deferred compensation shall be paid bi-weekly for a period of ten years (the “Pay-Out Period”)
commencing on the first Company payroll following the later of (i) the Term Date and (ii) the
February following the year when the Executive separates from service (within the meaning of
Section 409A of the Internal Revenue Code). Until December 31, 2008, the Executive may elect a
shorter Pay-Out Period by delivering written notice to the Company or the Trustee at least one-year
prior to the commencement of the Pay-Out Period, which notice shall specify the shorter Pay-Out
Period. On each payment date, the Trust Account shall be charged with the dollar amount of such
payment. On each payment date, the amount of cash held in the Trust Account shall be not less than
the payment then due and the Company or the Trustee may select the securities to be sold to provide
such cash if the Investment Advisor shall fail to do so on a timely basis. The amount of any taxes
payable with respect to any such sales shall be computed, as provided in Section A.5 above, and
deducted from the Trust Account, as of the end of the taxable year of the Company during which such
sales are deemed to have occurred. Solely for the purpose of determining the amount of payments
during the Pay-Out Period, the Trust Account shall be valued on the fifth trading day prior to the
end of the month preceding the first payment of each year of the Pay-Out

27

 

Period, or more frequently at the Company’s or the Trustee’s election (the “Valuation Date”),
by adjusting all of the securities held in the Trust Account to their fair market value (net of the
tax adjustment that would be made thereon if sold, as estimated by the Company or the Trustee) and
by deducting from the Trust Account the amount of all outstanding indebtedness. The extent, if
any, by which the Trust Account, valued as provided in the immediately preceding sentence exceeds
the aggregate amount of credits to the Trust Account pursuant to Sections 3.3, and 3.5 of the
Agreement as of each Valuation Date is herein called “Account Retained Income”. The amount of each
payment for the year, or such shorter period as may be determined by the Company or the Trustee, of
the Pay-Out Period immediately succeeding such Valuation Date, including the payment then due,
shall be determined by dividing the aggregate value of the Trust Account, as valued and adjusted
pursuant to the second preceding sentence, by the number of payments remaining to be paid in the
Pay-Out Period, including the payment then due; provided that each payment made shall be deemed
made first out of Account Retained Income (to the extent remaining after all prior distributions
thereof since the last Valuation Date). The balance of the Trust Account, after all the securities
held therein have been sold and all indebtedness liquidated, shall be paid to the Executive in the
final payment, which shall be decreased by deducting therefrom the amount of all taxes attributable
to the sale of any securities held in the Trust Account since the end of the preceding taxable year
of the Company, which taxes shall be computed as of the date of such payment.

     If the Executive shall die at any time whether during or after the term of employment, the
Trust Account shall be valued as of the date of the Executive’s death and the balance of the Trust
Account after all the securities held therein have been sold and all indebtedness liquidated shall
be paid to the Executive’s estate or beneficiary within 75 days of such death in a final lump sum
payment, which shall be decreased by deducting therefrom the amount of all taxes attributable to
the sale of any securities held in the Trust Account since the end of the preceding taxable year of
the Company, which taxes shall be computed as of the date of such payment. Payments made pursuant
to this paragraph shall be deemed made first out of Account Retained Income.

Within 90 days after the end of each taxable year of the Company in which payments are made,
directly or indirectly, to the Executive from the Trust Account and at the time of the final
payment from the Trust Account, the Company or the Trustee shall compute and the Company shall pay
to the Trustee for credit to the Trust Account, the amount of the tax benefit assumed to be
received by the Company from the payment to the Executive of amounts of Account Retained Income
during such taxable year or since the end of the last taxable year, as the case may be. No
additional credits shall be made to the Trust Account pursuant to the preceding sentence in respect
of the amounts credited to the Trust Account pursuant to the preceding sentence. Notwithstanding
any provision of this Section A.7, the Executive shall not be entitled to receive pursuant to this
Annex A an aggregate amount that shall exceed the sum of (i) all credits made to the Trust Account
pursuant to Sections 3.3 and 3.5 of the Agreement to which this Annex is attached, (ii) the net
cumulative amount (positive or negative) of all income, gains, losses, interest and expenses
charged or credited to the Trust Account pursuant to this Annex A (excluding credits made pursuant
to the second preceding sentence), after all credits and charges to the Trust Account with respect
to the tax benefits or burdens thereof, and (iii) an amount equal to the tax benefit to the Company
from the payment of the amount (if positive) determined under clause (ii) above; and the final
payment(s) otherwise due may be adjusted or eliminated accordingly. In determining the tax benefit
to the Company under clause (iii) above, the Company shall be deemed to have made the payments
under clause (ii) above with respect to the same taxable years and in the same proportions as
payments of Account Retained Income were actually made from the Trust Account. Except as otherwise
provided in this paragraph, the computation of all taxes and tax benefits referred to in this
Section A.7 shall be determined in accordance with Section A.5 above.

28

 

ANNEX B

RELEASE

     Pursuant to the terms of the Employment Agreement made as of                      , between TIME
WARNER INC., a Delaware corporation (the “Company”), One Time Warner Center, New York, New York
10019 and the undersigned (the “Agreement”), and in consideration of the payments made to me and
other benefits to be received by me pursuant thereto, I, [Name], being of lawful age, do hereby
release and forever discharge the Company and any successors, subsidiaries, affiliates, related
entities, predecessors, merged entities and parent entities and their respective officers,
directors, shareholders, employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns from any and all actions, causes of
action, claims, or demands for general, special or punitive damages, attorney’s fees, expenses, or
other compensation or damages (collectively, “Claims”), which in any way relate to or arise out of
my employment with the Company or any of its subsidiaries or the termination of such employment,
which I may now or hereafter have under any federal, state or local law, regulation or order,
including without limitation, Claims related to any stock options held by me or granted to me by
the Company that after taking into account the provisions of Section 9 of the Agreement are
scheduled to vest subsequent to my termination of employment and Claims under the Age
Discrimination in Employment Act (with the exception of Claims that may arise after the date I sign
this Release), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the
Fair Labor Standards Act, the Family and Medical Leave Act and the Employee Retirement Income
Security Act, each as amended through and including the date of this Release; provided,
however, that the execution of this Release shall not prevent the undersigned from bringing
a lawsuit against the Company to enforce my rights and the Company’s continuing obligations under
the Agreement.

     I acknowledge that I have been given at least 21 days from the day I received a copy of this
Release to sign it and that I have been advised to consult an attorney. I understand that I have
the right to revoke my consent to this Release for seven days following my signing. This Release
shall not become effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.

     I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP VALAUBLE LEGAL RIGHTS AND
THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE SIGNING. I further state that I have read this
document and the Agreement referred to herein, that I know the contents of both and that I have
executed the same as my own free act.

     WITNESS my hand this                      day of                      ,                      .

	 	 	 	 	 
	 

	 	 

	 	 

29EX-10.39 EMPLOYMENT AGREEMENT

 

Exhibit
10.39

     EMPLOYMENT AGREEMENT made  12/20, 2007 effective as of January 1,
2008 (the “Effective Date”), between TIME WARNER INC., a Delaware corporation (the “Company”), and
JOHN MARTIN (“You”).

     You and the Company desire to set forth the terms and conditions of your employment by the
Company and agree as follows:

     1. Term of Employment. Your “term of employment” as this phrase is used throughout
this Agreement shall be for the period beginning on the Effective Date and ending on December 31,
2010 (the “Term Date”), subject, however, to earlier termination as set forth in this Agreement.

     2. Employment. During the term of employment, you shall serve as Executive Vice
President and Chief Financial Officer of the Company or in such other senior position as the
Company may determine and you shall have the authority, functions, duties, powers and
responsibilities normally associated with such position and such additional authority, functions,
duties, powers and responsibilities as may be assigned to you from time to time by the Company
consistent with your senior position with the Company. During the term of employment, (i) your
services shall be rendered on a substantially full-time, exclusive basis and you will apply on a
full-time basis all of your skill and experience to the performance of your duties, (ii) you shall
have no other employment and, without the prior written consent of your manager or other more
senior officer of the Company in your reporting line, no outside business activities which require
the devotion of substantial amounts of your time, (iii) you shall report to the Chief Executive
Officer of the Company, and (iv) the place for the performance of your services shall be the
principal executive offices of the Company in the New York City metropolitan area, subject to such
reasonable travel as may be required in the performance of your duties. The foregoing shall be
subject to the Company’s written policies, as in effect from time to time, regarding vacations,
holidays, illness and the like.

     3. Compensation.

          3.1 Base Salary. The Company shall pay you a base salary at the rate of not less
than $1,000,000 per annum during the term of employment (“Base Salary”). The Company may increase,
but not decrease, your Base Salary during the term of employment. Base Salary shall be paid in
accordance with the Company’s customary payroll practices.

 

 

     3.2 Bonus. In addition to Base Salary, you may be entitled to receive during the
term of employment an annual cash bonus (“Bonus”) subject to and pursuant to the Company’s Annual
Bonus Plan for Executive Officers (such plan, together with any successor plan of Company intended
to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), being
hereinafter referred to as the “Annual Bonus Plan”). Although your Bonus is fully discretionary,
your target annual Bonus is $2,000,000, but the parties acknowledge that your actual Bonus will
vary depending on the actual performance of you and the Company from a minimum of $0 and up to a
maximum Bonus of $3,000,000 as determined by the Compensation and Human Development Committee of
the Board of Directors of the Company (the “Compensation Committee”). Each year, your personal
performance will be considered in the context of your executive duties and any individual goals set
for you, and your actual Bonus will be determined. Although as a general matter the Company
expects to pay bonuses at the target level in cases of satisfactory individual performance, it does
not commit to do so, and your Bonus may be negatively affected by the exercise of the Compensation
Committee’s discretion or by overall Company performance. Payments of any bonus compensation under
this Section 3.2 shall be paid to you between January 1 and March 15 of the calendar year
immediately following the performance year in respect of which such Bonus is earned.

     3.3 Long Term Incentive Compensation. So long as the term of employment has not
terminated the Company annually shall provide you with long term incentive compensation with a
value of $3,000,000 (based on the valuation method used by the Company of its senior executives)
through a combination of stock option grants, restricted stock units, performance shares or other
equity-based awards, cash-based long-term plans or other components as may be determined by the
Compensation Committee of the Company’s Board of Directors from time to time in its sole
discretion.

     3.4 Indemnification. You shall be entitled throughout the term of employment (and
after the end of the term of employment, to the extent relating to service during the term of
employment) to the benefit of the indemnification provisions contained on the date hereof in the
Restated Certificate of Incorporation and By-laws of the Company (not including any amendments or
additions after the date hereof that limit or narrow, but including any that add to or broaden, the
protection afforded to you by those provisions).

2

 

     3.5 Signing Equity Grant. You will be awarded options to purchase 81,300 shares of
Time Warner common stock and 65,810 restricted stock units (the “Make-Whole RSUs” and, together
with the stock options, the “Make-Whole Awards”). The “Make-Whole Awards will be granted on
January 2, 2008 if this Agreement has been fully executed prior to such date or will be granted on
the next regular granting date (1st and 15th of each month) following the
execution of this Agreement if it has not been fully executed prior to January 2, 2008. The
Make-Whole Awards are intended to have a combined valuation of approximately $1,550,000 based on
calculations as of October 31, 2007, and are being granted to replace equity awards granted by Time
Warner Cable Inc. and amounts you expected to receive pursuant to a cash long-term incentive plan
maintained by Time Warner Cable Inc. You agree that you will irrevocably agree to cancel all
outstanding stock options, restricted stock units or other awards based on any class of common
stock of Time Warner Cable Inc. granted to you by Time Warner Cable Inc. effective January 1, 2008.
The Make-Whole Awards will be reflected in award agreements entered into between you and the
Company, with the standard form of restricted stock units agreement modified to provide that the
Make-Whole RSUs will have accelerated vesting on a pro-rated based on the Severance Term Date in
the event of a termination of employment pursuant to Section 4.2.

     4. Termination.

          4.1 Termination for Cause. The Company may terminate the term of employment and
all of the Company’s obligations under this Agreement, other than its obligations set forth below
in this Section 4.1, for “cause”. Termination by the Company for “cause” shall mean termination
because of your (a) conviction (treating a nolo contendere plea as a conviction) of a felony
(whether or not any right to appeal has been or may be exercised), (b) willful failure or refusal
without proper cause to perform your duties with the Company, including your obligations under this
Agreement (other than any such failure resulting from your incapacity due to physical or mental
impairment), (c) misappropriation, embezzlement or reckless or willful destruction of Company
property, (d) breach of any statutory or common law duty of loyalty to the Company; (e) intentional
and improper conduct materially prejudicial to the business of the Company or any of its
affiliates, or (f) breach of any of the covenants provided for in Section 8 hereof. Such
termination shall be effected by written notice thereof delivered by the Company to you and shall
be effective as of the date of such notice; provided, however, that if (i) such termination is
because of your willful failure or refusal without proper cause to perform

3

 

any one or more of your obligations under this Agreement, (ii) such notice is the first such
notice of termination for any reason delivered by the Company to you under this Section 4.1, and
(iii) within 15 days following the date of such notice you shall cease your refusal and shall use
your best efforts to perform such obligations, the termination shall not be effective.

     In the event of termination by the Company for cause, without prejudice to any other rights or
remedies that the Company may have at law or in equity, the Company shall have no further
obligation to you other than (i) to pay Base Salary through the effective date of termination, (ii)
to pay any Bonus for any year prior to the year in which such termination occurs that has been
determined but not yet paid as of the date of such termination, and (iii) with respect to any
rights you have pursuant to any insurance or other benefit plans or arrangements of the Company.
You hereby disclaim any right to receive a pro rata portion of any Bonus with respect to the year
in which such termination occurs.

     4.2 Termination by You for Material Breach by the Company and Termination by the Company
Without Cause. Unless previously terminated pursuant to any other provision of this Agreement
and unless a Disability Period shall be in effect, you shall have the right, exercisable by written
notice to the Company, to terminate the term of employment effective 30 days after the giving of
such notice, if, at the time of the giving of such notice, the Company is in material breach of its
obligations under this Agreement; provided, however, that, with the exception of clause (i) below,
this Agreement shall not so terminate if such notice is the first such notice of termination
delivered by you pursuant to this Section 4.2 and within such 30-day period the Company shall have
cured all such material breaches; and provided further, that such notice is provided to the Company
within 90 days after the occurrence of such material breach. A material breach by the Company
shall include, but not be limited to, (i) the Company violating Section 2 with respect to
authority, reporting lines, duties, or place of employment or (ii) the Company failing to cause any
successor to all or substantially all of the business and assets of the Company expressly to assume
the obligations of the Company under this Agreement.

     The Company shall have the right, exercisable by written notice to you delivered before the
date which is 60 days prior to the Term Date, to terminate your employment under this Agreement
without cause, which notice shall specify the effective

4

 

date of such termination. If such notice is delivered on or after the date which is 60 days
prior to the Term Date, the provisions of Section 4.3 shall apply.

     4.2.1 After the effective date of a termination pursuant to this Section 4.2 (a “termination
without cause”), you shall receive Base Salary and a pro rata portion of your Average Annual Bonus
(as defined below) through the effective date of termination. Your Average Annual Bonus shall be
equal to the average of the regular annual bonus amounts (excluding the amount of any special or
spot bonuses) in respect of the two calendar years during the most recent five calendar years for
which the annual bonus received by you from the Company was the greatest; provided, however, if the
Company has previously paid you no annual Bonus, then your Average Annual Bonus shall equal your
target Bonus and if the Company has previously paid you one annual Bonus, then your Average Annual
Bonus shall equal the average of such Bonus and your target Bonus. Your pro rata Average Annual
Bonus pursuant to this Section 4.2.1 shall be paid to you at the times set forth in Section 4.6.

     4.2.2 After the effective date of a termination without cause, you shall remain an employee
of the Company for a period ending on the date (the “Severance Term Date”) which is the later of
(i) the Term Date and (ii) the date which is two years after the effective date of such termination
and during such period you shall be entitled to receive, whether or not you become disabled during
such period but subject to Section 6, (a) Base Salary (on the Company’s normal payroll payment
dates as in effect immediately prior to the effective date of your termination without cause) at an
annual rate equal to your Base Salary in effect immediately prior to the notice of termination, and
(b) an annual Bonus in respect of each calendar year or portion thereof (in which case a pro rata
portion of such Bonus will be payable) during such period equal to your Average Annual Bonus.
Except as provided in the succeeding sentence, if you accept other full-time employment during such
period or notify the Company in writing of your intention to terminate your status as an employee
during such period, you shall cease to be treated as an employee of the Company for purposes of
your rights to receive certain post-termination benefits under Section 7.2 effective upon the
commencement of such other employment or the effective date of such termination as specified by you
in such notice, whichever is applicable (the “Benefit Cessation Date”), and you shall receive the
remaining payments of Base Salary and Bonus pursuant to this Section 4.2.2 at the times specified
in Section 4.6 of the Agreement. Notwithstanding the foregoing, if you accept employment with any
not-for-profit entity or governmental entity, then you continue to be treated as an employee of

5

 

the Company for purposes of your rights to receive certain post-termination benefits pursuant
to Section 7.2 and you will continue to receive the payments as provided in the first sentence of
this Section 4.2.2; and if you accept full-time employment with any affiliate of the Company, then
the payments provided for in this Section 4.2.2 shall immediately cease and you shall not be
entitled to any further payments. For purposes of this Agreement, the term “affiliate” shall mean
any entity which, directly or indirectly, controls, is controlled by, or is under common control
with, the Company.

     4.3 After the Term Date. If at the Term Date, the term of employment shall not
have been previously terminated pursuant to the provisions of this Agreement, no Disability Period
is then in effect and the parties shall not have agreed to an extension or renewal of this
Agreement or on the terms of a new employment agreement, then the term of employment shall continue
on a month-to-month basis and you shall continue to be employed by the Company pursuant to the
terms of this Agreement, subject to termination by either party hereto on 60 days written notice
delivered to the other party (which notice may be delivered by either party at any time on or after
the date which is 60 days prior to the Term Date). If the Company shall terminate the term of
employment on or after the Term Date for any reason (other than for cause as defined in Section
4.1, in which case Section 4.1 shall apply), which the Company shall have the right to do so long
as no Disability Date (as defined in Section 5) has occurred prior to the delivery by the Company
of written notice of termination, then such termination shall be deemed for all purposes of this
Agreement to be a “termination without cause” under Section 4.2 and the provisions of Sections
4.2.1 and 4.2.2 shall apply.

     4.4 Release. A condition precedent to the Company’s obligation to make or continue
the payments associated with a termination without cause shall be your execution and delivery of a
release in the form attached hereto as Annex A. If you shall fail to execute and deliver such
release, or if you revoke such release as provided therein, then in lieu of the payments provided
for herein, you shall receive a severance payment determined in accordance with the Company’s
policies relating to notice and severance reduced by the aggregate amount of severance payments
paid pursuant to this Agreement, if any, prior to the date of your refusal to deliver, or
revocation of, such release.

     4.5 Mitigation. In the event of a termination without cause under this Agreement,
you shall not be required to seek other employment or take other actions

6

 

in order to mitigate your damages hereunder, unless Section 280G of the Internal Revenue Code would
apply to any payments to you by the Company and your failure to mitigate would result in the
Company losing tax deductions to which it would otherwise have been entitled. In such an event,
you will engage in whatever mitigation is necessary to preserve the Company’s tax deductions. With
respect to the preceding sentences, any payments or rights to which you are entitled by reason of
the termination of employment without cause shall be considered as damages hereunder. In addition,
whether or not you are required to mitigate your damages hereunder, if following a termination
without cause you obtain other employment with any entity, other than a not-for-profit entity or
government institution, then you shall pay over to the Company the total cash salary and bonus (of
any kind) payable to you in connection with such other employment for services during the period
prior to the Severance Term Date (whether paid or deferred), at the time received by you, to the
extent of the amounts previously paid to you by the Company following your termination with respect
to such period, as damages or severance, in excess of the Company’s standard policy. (The
provisions of the foregoing sentence shall not apply to any equity interest, stock option, phantom
or restricted stock or similar benefit received in connection with such other employment.) Any
obligation to mitigate your damages pursuant to this Section 4.5 shall not be a defense or offset
to the Company’s obligation to pay you in full the amounts provided in this Agreement upon the
occurrence of a termination without cause, at the time provided herein, or the timely and full
performance of any of the Company’s other obligations under this Agreement.

          4.6 Payments. Payments of Base Salary and Bonus required to be made to you after
any termination shall be made at the same times as such payments otherwise would have been paid to
you pursuant to Sections 3.1 and 3.2 if you had not been terminated, subject to Section 11.17.

     5. Disability.

          5.1 Disability Payments. If during the term of employment and prior to the
delivery of any notice of termination without cause, you become physically or mentally disabled,
whether totally or partially, so that you are prevented from performing your usual duties for a
period of six consecutive months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay

7

 

your full compensation through the last day of the sixth consecutive month of disability or
the date on which the shorter periods of disability shall have equaled a total of six months in any
twelve-month period (such last day or date being referred to herein as the “Disability Date”),
subject to Section 11.17. If you have not resumed your usual duties on or prior to the Disability
Date, the Company shall pay you a pro rata Bonus (based on your Average Annual Bonus) for the year
in which the Disability Date occurs and thereafter shall pay you disability benefits for the period
ending on the later of (i) the Term Date or (ii) the date which is twelve months after the
Disability Date (in the case of either (i) or (ii), the “Disability Period”), in an annual amount
equal to 75% of (a) your Base Salary at the time you become disabled and (b) the Average Annual
Bonus, in each case, subject to Section 11.17.

     5.2 Recovery from Disability. If during the Disability Period you shall fully
recover from your disability, the Company shall have the right (exercisable within 60 days after
notice from you of such recovery), but not the obligation, to restore you to full-time service at
full compensation. If the Company elects to restore you to full-time service, then this Agreement
shall continue in full force and effect in all respects and the Term Date shall not be extended by
virtue of the occurrence of the Disability Period. If the Company elects not to restore you to
full-time service, you shall be entitled to obtain other employment, subject, however, to the
following: (i) you shall perform advisory services during any balance of the Disability Period;
and (ii) you shall comply with the provisions of Sections 8 and 9 during the Disability Period.
The advisory services referred to in clause (i) of the immediately preceding sentence shall consist
of rendering advice concerning the business, affairs and management of the Company as requested by
the Chief Executive Officer or other more senior officer of the Company but you shall not be
required to devote more than five days (up to eight hours per day) each month to such services,
which shall be performed at a time and place mutually convenient to both parties. Any income from
such other employment shall not be applied to reduce the Company’s obligations under this
Agreement.

     5.3 Other Disability Provisions. The Company shall be entitled to deduct from all
payments to be made to you during the Disability Period pursuant to this Section 5 an amount equal
to all disability payments received by you during the Disability Period from Worker’s Compensation,
Social Security and disability insurance policies maintained by the Company; provided, however,
that for so long as, and to the extent that, proceeds paid to you from such disability insurance
policies are not includible in your

8

 

income for federal income tax purposes, the Company’s deduction with respect to such payments
shall be equal to the product of (i) such payments and (ii) a fraction, the numerator of which is
one and the denominator of which is one less the maximum marginal rate of federal income taxes
applicable to individuals at the time of receipt of such payments. All payments made under this
Section 5 after the Disability Date are intended to be disability payments, regardless of the
manner in which they are computed. Except as otherwise provided in this Section 5, the term of
employment shall continue during the Disability Period and you shall be entitled to all of the
rights and benefits provided for in this Agreement, except that Sections 4.2 and 4.3 shall not
apply during the Disability Period, and unless the Company has restored you to full-time service at
full compensation prior to the end of the Disability Period, the term of employment shall end and
you shall cease to be an employee of the Company at the end of the Disability Period and shall not
be entitled to notice and severance or to receive or be paid for any accrued vacation time or
unused sabbatical.

     6. Death. If you die during the term of employment, this Agreement and all
obligations of the Company to make any payments hereunder shall terminate except that your estate
(or a designated beneficiary) shall be entitled to receive Base Salary to the last day of the month
in which your death occurs and Bonus compensation (at the time bonuses are normally paid) based on
the Average Annual Bonus, but prorated according to the number of whole or partial months you were
employed by the Company in such calendar year. 

     7. Other Benefits.

          7.1 General Availability. To the extent that (a) you are eligible under the
general provisions thereof (including without limitation, any plan provision providing for
participation to be limited to persons who were employees of the Company or certain of its
subsidiaries prior to a specific point in time) and (b) the Company maintains such plan or program
for the benefit of its executives, during the term of your employment with the Company, you shall
be eligible to participate in any savings plan, or similar plan or program and in any group life
insurance, hospitalization, medical, dental,

9

 

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

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

10

 

this Agreement) shall vest and become immediately exercisable upon the earlier of the Severance
Term Date or the Benefit Cessation Date, and (y) all your vested Term Options shall remain
exercisable for a period of three years after the earlier of the Severance Term Date or the Benefit
Cessation Date (but not beyond the term of such stock options); and (iii) the Company shall not be
permitted to determine that your employment was terminated for “unsatisfactory performance” within
the meaning of any stock option agreement between you and the Company. .With respect to awards of
restricted stock units for Time Warner Common Stock (“RSUs”) held at the time of a termination of
employment pursuant to Section 4.2, subject to potential further delay in payment pursuant to
Section 11.17, (i) if you are eligible for retirement treatment at the effective date of the
termination, then for all awards of RSUs that contain special accelerated vesting upon retirement,
the vesting of the RSUs will accelerate upon, and the shares of Time Warner Common Stock will be
paid to you promptly following, the effective date of termination of employment, and (ii) if you
are not eligible for retirement treatment at the effective date of the termination of employment,
then the treatment of the RSUs (other than the Make-Whole RSU grant made pursuant to Section 3.5)
will be determined at the earlier of the Severance Term Date or the Benefit Cessation Date in
accordance with the terms of the applicable award agreement(s), but the shares of Time Warner
Common Stock underlying any vested RSUs will not be paid to you until promptly following the next
regular vesting date(s) for such award(s) of RSUs. With respect to the Make-Whole RSUs, if there is
a termination of employment pursuant to Section 4.2 at a time when you are not eligible for
retirement treatment, then, subject to potential further delay in payment pursuant to Section
11.17, a pro-rated portion of the Make-Whole RSU, representing the number of RSUs that would vest
through the Severance Term Date, shall vest and be paid to you promptly following the effective
date of termination of employment.

     7.3 Payments in Lieu of Other Benefits. In the event the term of employment and
your employment with the Company is terminated pursuant to any section of this Agreement, you shall
not be entitled to notice and severance under the Company’s general employee policies or to be paid
for any accrued vacation time or unused sabbatical, the payments provided for in such sections
being in lieu thereof.

     7. 4 Life Insurance. During your employment with the Company, the Company shall (i)
provide you with $50,000 of group life insurance and (ii) pay you annually an amount equal to 2x
the premium you would have to pay to obtain life insurance under the Group Universal Life (“GUL”)
insurance program made available by

11

 

the Company in an amount equal to $3,000,000. You shall be under no obligation to use the
payments made by the Company pursuant to the preceding sentence to purchase GUL insurance or to
purchase any other life insurance. If the Company discontinues its GUL insurance program, the
Company shall nevertheless make the payments required by this Section 7 as if such program were
still in effect. The payments made to you hereunder shall not be considered as “salary” or
“compensation” or “bonus” in determining the amount of any payment under any pension, retirement,
profit-sharing or other benefit plan of the Company or any subsidiary of the Company.

     8. Protection of Confidential Information; Non-Compete.

          8.1 Confidentiality Covenant. You acknowledge that your employment by the Company
(which, for purposes of this Section 8 shall mean Time Warner Inc. and its affiliates) will,
throughout the term of employment, bring you into close contact with many confidential affairs of
the Company, including information about costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, technical processes and other business affairs and methods
and other information not readily available to the public, and plans for future development. You
further acknowledge that the services to be performed under this Agreement are of a special,
unique, unusual, extraordinary and intellectual character. You further acknowledge that the
business of the Company is international in scope, that its products and services are marketed
throughout the world, that the Company competes in nearly all of its business activities with other
entities that are or could be located in nearly any part of the world and that the nature of your
services, position and expertise are such that you are capable of competing with the Company from
nearly any location in the world. In recognition of the foregoing, you covenant and agree:

               8.1.1 You shall keep secret all confidential matters of the Company and shall not disclose
such matters to anyone outside of the Company, or to anyone inside the Company who does not have a
need to know or use such information, and shall not use such information for personal benefit or
the benefit of a third party, either during or after the term of employment, except with the
Company’s written consent, provided that (i) you shall have no such obligation to the extent such
matters are or become publicly known other than as a result of your breach of your obligations
hereunder and (ii) you may, after giving prior notice to the Company to the extent practicable
under the

12

 

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

          8.1.2 You shall deliver promptly to the Company on termination of your employment, or at any
other time the Company may so request, all memoranda, notes, records, reports and other documents
(and all copies thereof) relating to the Company’s business, which you obtained while employed by,
or otherwise serving or acting on behalf of, the Company and which you may then possess or have
under your control; and

          8.1.3 If the term of employment is terminated pursuant to Section 4, for a period of one
year after such termination, without the prior written consent of the Company, you shall not
employ, and shall not cause any entity of which you are an affiliate to employ, any person who was
a full-time employee of the Company at the date of such termination or within six months prior
thereto but such prohibition shall not apply to your secretary or executive assistant or to any
other employee eligible to receive overtime pay.

     8.2 Non-Compete. During the term of employment and through the later of (i) the
Term Date, (ii) the Severance Term Date, (iii) the Benefit Cessation Date, if applicable, and, (iv)
and twelve months after the effective date of any termination of the term of employment pursuant to
Section 4, you shall not, directly or indirectly, without the prior written consent of the Chief
Executive Officer of the Company, render any services to, or act in any capacity for, any
Competitive Entity, or acquire any interest of any type in any Competitive Entity; provided,
however, that the foregoing shall not be deemed to prohibit you from acquiring, (a) solely as an
investment and through market purchases, securities of any Competitive Entity which are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which are publicly traded,
so long as you are not part of any control group of such Competitive Entity and such securities,
including converted securities, do not constitute more than one percent (1%) of the outstanding
voting power of that entity and (b) securities of any Competitive Entity that are not publicly
traded, so long as you are not part of any control group of such Competitive Entity and such
securities, including converted securities, do not constitute more than three percent (3%) of the
outstanding voting power of that entity. For purposes of the foregoing, the following shall be
deemed to be a Competitive Entity: (x) during the period that you are actively employed with the
Company, any person or entity that engages in any line of

13

 

business that is substantially the same as either (i) any line of business which the Company
engages in, conducts or, to your knowledge, has definitive plans to engage in or conduct or (ii)
any operating business that is engaged in or conducted by the Company as to which, to your
knowledge, the Company covenants, in writing, not to compete with in connection with the
disposition of such business, and (y) during the period following a termination of your term of
employment pursuant to Section 4, any of the following: AT&T Corporation, Bertelsmann A.G., CBS
Corporation, Comcast Corporation, The Walt Disney Company, EarthLink, Inc., General Electric
Corporation, Google Inc., Microsoft Corporation, The News Corporation Ltd., Sony Corporation,
Viacom Inc. and Yahoo! Inc., and their respective subsidiaries and affiliates and any successor to
the internet service provider, media or entertainment businesses thereof.

     9. Ownership of Work Product. You acknowledge that during the term of employment,
you may conceive of, discover, invent or create inventions, improvements, new contributions,
literary property, material, ideas and discoveries, whether patentable or copyrightable or not (all
of the foregoing being collectively referred to herein as “Work Product”), and that various
business opportunities shall be presented to you by reason of your employment by the Company. You
acknowledge that all of the foregoing shall be owned by and belong exclusively to the Company and
that you shall have no personal interest therein, provided that they are either related in any
manner to the business (commercial or experimental) of the Company, or are, in the case of Work
Product, conceived or made on the Company’s time or with the use of the Company’s facilities or
materials, or, in the case of business opportunities, are presented to you for the possible
interest or participation of the Company. You shall (i) promptly disclose any such Work Product
and business opportunities to the Company; (ii) assign to the Company, upon request and without
additional compensation, the entire rights to such Work Product and business opportunities; (iii)
sign all papers necessary to carry out the foregoing; and (iv) give testimony in support of your
inventorship or creation in any appropriate case. You agree that you will not assert any rights to
any Work Product or business opportunity as having been made or acquired by you prior to the date
of this Agreement except for Work Product or business opportunities, if any, disclosed to and
acknowledged by the Company in writing prior to the date hereof.

     10. Notices. All notices, requests, consents and other communications required or
permitted to be given under this Agreement shall be effective only if given in writing and shall be
deemed to have been duly given if delivered personally or sent by a

14

 

nationally recognized overnight delivery service, or mailed first-class, postage prepaid, by
registered or certified mail, as follows (or to such other or additional address as either party
shall designate by notice in writing to the other in accordance herewith):

          10.1 If to the Company:

Time Warner Inc.

One Time Warner Center

New York, New York 10019

Attention: Senior Vice President — Global

Compensation and Benefits

(with a copy, similarly addressed

but Attention: General Counsel)

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

     11. General.

          11.1 Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the substantive laws of the State of New York applicable to agreements made and
to be performed entirely in New York.

          11.2 Captions. The section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this Agreement.

          11.3 Entire Agreement. This Agreement, including Annexes A and B, set forth the
entire agreement and understanding of the parties relating to the subject matter of this Agreement
and supersedes all prior agreements, arrangements and understandings, written or oral, between the
parties.

          11.4 No Other Representations. No representation, promise or inducement has been
made by either party that is not embodied in this Agreement, and neither party shall be bound by or
be liable for any alleged representation, promise or inducement not so set forth.

15

 

          11.5 Assignability. This Agreement and your rights and obligations hereunder may
not be assigned by you and except as specifically contemplated in this Agreement, neither you, your
legal representative nor any beneficiary designated by you shall have any right, without the prior
written consent of the Company, to assign, transfer, pledge, hypothecate, anticipate or commute to
any person or entity any payment due in the future pursuant to any provision of this Agreement, and
any attempt to do so shall be void and shall not be recognized by the Company. The Company shall
assign its rights together with its obligations hereunder in connection with any sale, transfer or
other disposition of all or substantially all of the Company’s business and assets, whether by
merger, purchase of stock or assets or otherwise, as the case may be. Upon any such assignment, the
Company shall cause any such successor expressly to assume such obligations, and such rights and
obligations shall inure to and be binding upon any such successor.

          11.6 Amendments; Waivers. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended and the terms or covenants hereof may be waived only by written
instrument executed by both of the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect such party’s right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of
any such breach, or a waiver of the breach of any other term or covenant contained in this
Agreement.

          11.7 Specific Remedy. In addition to such other rights and remedies as the Company
may have at equity or in law with respect to any breach of this Agreement, if you commit a material
breach of any of the provisions of Sections 8.1, 8.2, or 9, the Company shall have the right and
remedy to have such provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will cause irreparable
injury to the Company.

          11.8 Resolution of Disputes. Except as provided in the preceding Section 11.7, any
dispute or controversy arising with respect to this Agreement and your employment hereunder
(whether based on contract or tort or upon any federal, state or local statute, including but not
limited to claims asserted under the Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, any state Fair

16

 

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

          11.9 Beneficiaries. Whenever this Agreement provides for any payment to your
estate, such payment may be made instead to such beneficiary or beneficiaries as you may designate
by written notice to the Company. You shall have the right to revoke any such designation and to
redesignate a beneficiary or beneficiaries by written notice to the Company (and to any applicable
insurance company) to such effect.

          11.10 No Conflict. You represent and warrant to the Company that this Agreement is
legal, valid and binding upon you and the execution of this Agreement and the performance of your
obligations hereunder does not and will not constitute a breach of, or conflict with the terms or
provisions of, any agreement or

17

 

understanding to which you are a party (including, without limitation, any other employment
agreement). The Company represents and warrants to you that this Agreement is legal, valid and
binding upon the Company and the execution of this Agreement and the performance of the Company’s
obligations hereunder does not and will not constitute a breach of, or conflict with the terms or
provisions of, any agreement or understanding to which the Company is a party.

          11.11 Conflict of Interest. Attached as Annex B and made part of this Agreement is
the Time Warner Corporate Standards of Business Conduct. You confirm that you have read,
understand and will comply with the terms thereof and any reasonable amendments thereto. In
addition, as a condition of your employment under this Agreement, you understand that you may be
required periodically to confirm that you have read, understand and will comply with the Standards
of Business Conduct as the same may be revised from time to time.

          11.12 Withholding Taxes. Payments made to you pursuant to this Agreement shall be
subject to withholding and social security taxes and other ordinary and customary payroll
deductions.

          11.13 No Offset. Neither you nor the Company shall have any right to offset any
amounts owed by one party hereunder against amounts owed or claimed to be owed to such party,
whether pursuant to this Agreement or otherwise, and you and the Company shall make all the
payments provided for in this Agreement in a timely manner.

          11.14 Severability. If any provision of this Agreement shall be held invalid, the
remainder of this Agreement shall not be affected thereby; provided, however, that the parties
shall negotiate in good faith with respect to equitable modification of the provision or
application thereof held to be invalid. To the extent that it may effectively do so under
applicable law, each party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.

          11.15 Survival. Sections 3.4, 7.3 and 8 through 11 shall survive any termination
of the term of employment by the Company for cause pursuant to Section

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4.1. Sections 3.4, 4.4, 4.5, 4.6 and 7 through 11 shall survive any termination of the term
of employment pursuant to Sections 4.2, 5 or 6.

          11.16 Definitions. The following terms are defined in this Agreement in the places
indicated:

affiliate — Section 4.2.2

Average Annual Bonus – Section 4.2.1

Base Salary — Section 3.1

Benefit Cessation Date – Section 4.2.2

Bonus – Section 3.2

cause — Section 4.1

Code — Section 4.2.2

Company — the first paragraph on page 1 and Section 8.1

Competitive Entity – Section 8.2

Disability Date — Section 5

Disability Period — Section 5

Effective Date — the first paragraph on page 1

Make-Whole Awards – Section 3.5

Make-Whole RSUs – Section 3.5

Severance Term Date – Section 4.2.2

Term Date – Section 1

term of employment — Section 1

termination without cause – Section 4.2.1

Work Product — Section 9

     11.17 Compliance with IRC Section 409A. This Agreement is intended to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code” and will be
interpreted in a manner intended to comply with Section 409A of the Code. Notwithstanding anything
herein to the contrary, (i) if at the time of your termination of employment with the Company you
are a “specified employee” as defined in Section 409A of the Code (and any related regulations or
other pronouncements thereunder) and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of employment is necessary in order to
prevent any accelerated or additional tax under Section 409A of the Code, then the Company will
defer the commencement of the payment of any such payments or benefits hereunder (without any
reduction in such payments or benefits ultimately paid or provided to you) until the date that is
six months following your termination of employment with the Company (or the earliest date as is
permitted under Section 409A of the Code) and (ii) if any other payments

19

 

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

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

	 	 	 	 	 
	 	TIME WARNER INC.

 	 
	 	By  	/s/ Mark A. Wainger
 	 
	 	 	 	 
	 	 	 	 
	 

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

20

 

ANNEX A

RELEASE

          Pursuant to the terms of the Employment Agreement made as of ___, between TIME
WARNER INC., a Delaware corporation (the “Company”), One Time Warner Center, New York, New York
10019 and the undersigned (the “Agreement”), and in consideration of the payments made to me and
other benefits to be received by me pursuant thereto, I, John Martin, being of lawful age, do
hereby release and forever discharge the Company and any successors, subsidiaries, affiliates,
related entities, predecessors, merged entities and parent entities and their respective officers,
directors, shareholders, employees, benefit plan administrators and trustees, agents, attorneys,
insurers, representatives, affiliates, successors and assigns from any and all actions, causes of
action, claims, or demands for general, special or punitive damages, attorney’s fees, expenses, or
other compensation or damages (collectively, “Claims”), which in any way relate to or arise out of
my employment with the Company or any of its subsidiaries or the termination of such employment,
which I may now or hereafter have under any federal, state or local law, regulation or order,
including without limitation, Claims related to any stock options held by me or granted to me by
the Company that are scheduled to vest subsequent to my termination of employment and Claims under
the Age Discrimination in Employment Act (with the exception of Claims that may arise after the
date I sign this Release), Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act and the Employee
Retirement Income Security Act, each as amended through and including the date of this Release;
provided, however, that the execution of this Release shall not prevent the
undersigned from bringing a lawsuit against the Company to enforce its obligations under the
Agreement.

          I acknowledge that I have been given at least 21 days from the day I received a copy of this
Release to sign it and that I have been advised to consult an attorney. I understand that I have
the right to revoke my consent to this Release for seven days following my signing. This Release
shall not become effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.

          I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP VALAUBLE LEGAL RIGHTS AND
THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE SIGNING. I further state that I have read this
document and the Agreement referred to herein, that I know the contents of both and that I have
executed the same as my own free act.

          WITNESS
my hand this         day of
           ,
       .

	 	 	 	 	 
	 	 	 
	 	 	 
	 	John Martin 	 
	 	 	 
	 

21

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