Document:

EX-10.14 FORM OF NON-QUALIFIED STOCK OPTION AGRMT.

 

Exhibit 10.14

Share Retention Version 3, Bewkes Upfront Grant
For Use from October 2007

TIME WARNER INC.

2003 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

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

     WHEREAS, the Committee has determined that it would be in the best interests of the Company
and its stockholders to grant the Option provided for herein to the Participant pursuant to the
Plan and the terms set forth herein, and such grant is required under Section 3.5 of the Amended
and Restated Employment Agreement dated December 11, 2007 between the Participant and the Company
(such employment agreement, as it may be amended, superseded or
replaced, the “Employment
Agreement”).

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

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

     (a)
“Cause” shall have the meaning as defined in the Employment Agreement.

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

     (c)
“Plan” means the Time Warner Inc. 2003 Stock Incentive Plan, as the same may be
amended, supplemented or modified from time to time.

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

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

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

 

 

     3. Vesting of the Option.

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

     (b) Change in Control. Notwithstanding the foregoing, in the event of a Change in
Control, the unvested portion of the Option, to the extent not previously cancelled or forfeited,
shall immediately become vested and exercisable upon the earlier of (i) the first anniversary of
the Change in Control or (ii) the termination of the Participant’s Employment pursuant to Section
4.2 of the Employment Agreement.

     (c) Termination of Employment. If the Participant’s Employment with the Company and
its Affiliates terminates for any reason (including, unless otherwise determined by the
Committee, a Participant’s change in status from an employee to a non-employee (other than
director of the Company or any Affiliate)), the Option, to the extent not then vested, shall be
immediately canceled by the Company without consideration; provided, however,
that (i) if the Participant’s Employment terminates due to death or termination by the Company at
the end of the “Disability Period” (as defined in the Employment Agreement), the unvested portion
of the Option, to the extent not previously cancelled or forfeited, shall immediately become
vested and exercisable and (ii) if the Participant’s Employment terminates due to Retirement or
due to termination pursuant to Section 4.2 of the Employment Agreement, then a pro rata portion
of the Options that would vest on the next anniversary of the date of grant shall vest as
follows:

	 	(x)	 	the number of Options that would vest on the next anniversary
of the date of grant multiplied by;
	 
	 	(y)	 	a fraction, the numerator of which shall be the number of days
from the last anniversary of the date of grant (or the date of grant if less
than one year has elapsed) preceding the effective date of the termination of
Employment through the date of such termination of Employment, and the
denominator of which shall be 365.

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

The Vested Portion of the Option shall remain exercisable for the period set forth in Section 4(a)
of this Agreement. If the Participant is absent from work with the Company or with an Affiliate
because of a temporary disability (any disability other than a Disability), or on an approved leave
of absence for any purpose, the Participant shall not, during the period of any such absence, be
deemed, by virtue of such absence alone, to have terminated Employment, except to the extent that
the Committee so determines.

     4. Exercise of Option.

     (a) Period of Exercise. Subject to the provisions of the Plan and this Agreement,
the Participant may exercise all or any part of the Vested Portion of the Option at

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any time prior to the Expiration Date; provided that, if the Participant’s Employment
terminates prior to the Expiration Date, the Vested Portion of the Option shall remain
exercisable for the period set forth below. Notwithstanding the foregoing, if the Employment
Agreement provides for treatment of Options that is more favorable to the Participant than
clauses (i) – (vii) of this Section 4(a), then the terms of the Employment Agreement shall
apply. If the last day on which the Option may be exercised, whether the Expiration Date or due
to a termination of the Optionee’s Employment prior to the Expiration Date, is a Saturday, Sunday
or other day that is not a trading day on the New York Stock Exchange (the “NYSE”) or, if the
Company’s Shares are not then listed on the NYSE, such other stock exchange or trading system
that is the primary exchange on which the Company’s Shares are then traded, then the last day on
which the Option may be exercised shall be the preceding trading day on the NYSE or such other
stock exchange or trading system.

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

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

     (iii) Termination other than for Cause or Due to a Material Breach of the
Employment Agreement by the Participant. If the Participant’s Employment with the
Company and its Affiliates is terminated pursuant to Section 4.2 of the Employment
Agreement, the Participant may exercise the Vested Portion of the Option for a period ending
on the earlier of (A) one year following the date of such termination and (B) the Expiration
Date; provided that if Participant satisfies the age and service requirements described in
the definition of “Retirement,” then the provisions of Section 4(a)(ii) shall be
controlling;

     (iv) Termination by the Company for Cause. If the Participant’s Employment
with the Company and its Affiliates is terminated by the Company pursuant to Section 4.1 of
the Employment Agreement, the Participant may exercise the Vested Portion of the Option for
a period ending on the earlier of (A) one month following the date of such termination and
(B) the Expiration Date; provided, however, that if the Participant is
terminated by the Company or an Affiliate for Cause on account of one or more acts of fraud,
embezzlement or misappropriation committed by the Participant, the Vested Portion of the
Option shall immediately terminate in full and cease to be exercisable.

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     (b) Method of Exercise.

     (i) Subject to Section 4(a) of this Agreement, the Vested Portion of an Option may be
exercised by delivering to the Company at its principal office written notice of intent to
so exercise; provided that the Option may be exercised with respect to whole Shares
only. Such notice shall specify the number of Shares for which the Option is being
exercised, shall be signed (whether or not in electronic form) by the person exercising the
Option and shall make provision for the payment of the Option Price. Payment of the
aggregate Option Price shall be paid to the Company, at the election of the Committee,
pursuant to one or more of the following methods: (A) in cash, or its equivalent; (B) by
transferring Shares having a Fair Market Value equal to the aggregate Option Price for the
Shares being purchased to the Company and satisfying such other requirements as may be
imposed by the Committee; (C) partly in cash and partly in Shares; or (D) if there is a
public market for the Shares at such time, subject to such rules as may be established by
the Committee, through delivery of irrevocable instructions to a broker to sell the Shares
otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company
an amount equal to the aggregate Option Price. No Participant shall have any rights to
dividends or other rights of a stockholder with respect to the Shares subject to the Option
until the issuance of the Shares.

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

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

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

     (v) As a condition to the exercise of any Option evidenced by this Agreement, the
Participant agrees to hold, for a period of twelve (12) months following the date of such
exercise, a number of Shares issued pursuant to such exercise, equal to 75% (rounded down to
the nearest whole Share) of the quotient of (A) and (B), where (A) is the product of (1) the
number of Shares exercised by the Participant multiplied by

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(2) fifty percent (50%) of the excess of the Fair Market Value of a Share on the date of
exercise over the exercise price and (B) is the Fair Market Value of a Share on the date of
exercise. The holding requirement related to Shares that is established in this Section
4(b)(v) shall terminate with respect to the Options evidenced by this Agreement (as well as
any Shares issued pursuant to exercise of such Options) on the first anniversary of the date
of termination of the Participant’s Employment with the Company or its Affiliates.

     5. No Right to Continued Employment. Neither the Plan nor this Agreement shall be
construed as giving the Participant the right to be retained in the Employment of the Company or
any Affiliate. Further, the Company or its Affiliate may at any time dismiss the Participant or
discontinue any other relationship, free from any liability or any claim under the Plan or this
Agreement, except as otherwise expressly provided herein.

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

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

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

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

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

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

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

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

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

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

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

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

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

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     17. Entry into Force. By entering into this Agreement, the Participant agrees and
acknowledges that (i) the Participant has received and read a copy of the Plan and (ii) the Option
is granted pursuant to the Plan and is therefore subject to all of the terms of the Plan, subject
to Section 13 above.

8EX-10.33 AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

Exhibit
10.33

          AMENDED AND RESTATED EMPLOYMENT AGREEMENT made December 18, 2007 effective as
of 12/18, 2007 (the “Effective Date”), between TIME WARNER INC., a Delaware
corporation (the “Company”), and RICHARD D. PARSONS (“You”).

          You are currently employed by the Company pursuant to an Employment Agreement made December
18, 2003, effective as of December 17, 2003 (the “Prior Agreement”). The Company wishes to amend
and restate the terms of your employment with the Company and to secure your services for the
period to and including December 31, 2008 on and subject to the terms and conditions set forth in
this Agreement, and you are willing to provides such services on and subject to the terms and
conditions set forth in this Agreement. You and the Company therefore agree as follows:

          1. Term of Employment. Your “term of employment” as this phrase is used throughout
this Agreement shall be for the period beginning on the Effective Date and ending on December 31,
2008 (the “Term Date”), subject, however, to earlier termination as set forth in this Agreement.

          2. Employment. During the term of employment through December 31, 2007, you shall
serve as Chairman and Chief Executive Officer of the Company of the Company. Beginning January 1,
2008, you shall serve as Chairman of the Board. In these positions you shall have the authority,
functions, duties, powers and responsibilities normally associated with such positions and such
additional authority, functions, duties, powers and responsibilities as the Board of Directors may
from time to time delegate to you in addition thereto. You shall, subject to your election as such
from time to time and without additional compensation, serve during the term of employment 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 using all of your skill and experience to the performance of your
duties, (ii) you shall report only to the Board of Directors of the Company, (iii) you shall have
no other employment and, without the prior written consent of a majority of the Company’s Board of
Directors, no outside business activities which require the devotion of substantial amounts of your
time, and (iv) the place for the performance of your services shall be the principal executive
offices of the Company in the New York City metropolitan area, subject to such reasonable travel as
may be required in the performance of your duties. The foregoing shall be subject to the Company’s
written policies, as in effect from time to time, regarding vacations, holidays, illness and the
like and shall not prevent you from devoting such time to your personal affairs as shall not
interfere with the performance

 

 

of your duties hereunder, provided that you comply with the provisions of the Confidentiality
Agreement 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 (“Entity”).

          3. Compensation.

               3.1 Base Salary. The Company shall pay you a base salary at the rate of not less
than $ 1,500,000 per annum during the term of employment (“Base Salary”). Base Salary shall be
paid in accordance with the Company’s then current 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 $5,500,000 through 2007; in 2008, your target annual Bonus is
$2,900,000 but the parties acknowledge that your actual Bonus for 2008 will vary depending on the
actual performance of you and the Company from a minimum of $0 and up to a maximum Bonus of
$4,350,000 as determined by the Compensation and Human Development Committee of the Board of
Directors of the Company (the “Compensation Committee”). Payments of any bonus compensation under
this Section 3.2 will be paid to you between January 1 and March 15 of the calendar year
immediately following the performance year in respect of which such Bonus is earned. 

               3.3 Deferred Compensation Account. Pursuant to the terms of employment agreements
with the Company that preceded the Prior Agreement, you 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. The Trust Account shall be
maintained by the trustee (the “Trustee”) thereof in accordance with the terms of Annex A attached
hereto and the trust agreement (the Trust Agreement”) establishing the Rabbi Trust (which Trust
Agreement shall in all respects be consistent with the terms of Annex A), until the full amount
which you are

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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 in
to 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, you will be eligible to receive long term incentive compensation in 2008 with a target
value of $3,200,000 (based on the valuation method used by the Company with respect to awards made
to of its senior executives) through a combination of stock option grants and restricted stock
units, as determined by the Compensation Committee in its sole discretion.

          3.5 Intentionally Deleted.

               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 (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 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

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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 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 with respect of amounts credited to the Trust Account through the effective date of
termination or 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.

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               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.

                    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 Chief Executive Officer and
Chairman or during your employment as Chairman was the greatest. Your pro rata Average Annual Bonus
pursuant to this Section 4.2.1 shall be paid to you at the times set forth in Section 4.7.

                    4.2.2 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 Term Date (the “Severance Term
Date”) and during such period you shall be entitled to receive, whether or not you become disabled
during such period but subject to Section 6, (a) Base Salary (on the Company’s normal payroll
payment dates as in effect immediately prior to the effective 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 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 4.7 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 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 Office Facilities. The parties agree that from January 1, 2009 through December
31, 2009, 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.

               4.4 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 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 of, such release.

               4.5 Retirement. Notwithstanding the provisions of Sections 4.2 or 5, if the term of
employment is in effect and you are still employed by the Company pursuant to this Agreement on the
date you first become eligible for normal retirement as defined in any applicable retirement plan
of the Company or any subsidiary of the Company (the “Retirement Date”), then this Agreement shall
terminate automatically on such date and your employment with the Company shall thereafter be
governed by the policies generally applicable to employees of the Company, and you shall not
thereafter be entitled to the payments provided in such Sections to the extent not received by you
on or prior to the Retirement Date. In addition, no benefits or payments provided in Sections 4.2

6

 

or 5 shall include any period after the Retirement Date and if the provision of benefits or
calculation of payments provided in any such Section would include any period subsequent to the
Retirement Date, such provision of benefits shall end on the Retirement date and the calculation of
payments shall cover only the period ending on the Retirement Date. Notwithstanding the foregoing,
the provisions of Annex A and the Trust Agreement shall apply to the investment and payment of
deferred compensation after such termination, the provisions of Section 7 of this Agreement shall
survive any such termination and the provisions of Sections 5 and 6 of the Confidentiality
Agreement shall apply to any dispute with respect to this Agreement that arises after any such
termination.

               4.6 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 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 4.6 shall not be a defense or offset to the
Company’s obligation to pay you in full the amounts provided in this Agreement upon the occurrence
of a termination without cause, at the time provided herein, or the timely and full performance of
any of the Company’s other obligations under this Agreement.

               4.7 Payments. Payments of Base Salary and Bonus required to be made to you after
any termination shall be made at the same times as such payments

7

 

otherwise would have been paid to you pursuant to Sections 3.1 and 3.2 if you had not been
terminated, subject to Section 12.17.

     5. Disability.

          5.1 Disability Payments. If during the term of employment and prior to the
delivery of any notice of termination without cause, you become physically or mentally disabled,
whether totally or partially, so that you are prevented from performing your usual duties for a
period of six consecutive months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay your full compensation through the last
day of the sixth consecutive month of disability or the date on which the shorter periods of
disability shall have equaled a total of six months in any twelve-month period (such last day or
date being referred to herein as the “Disability Date”), subject to Section 12.17. If you have not
resumed your usual duties on or prior to the Disability Date, the Company shall pay you a pro rata
Bonus (based on your Average Annual Bonus) for the year in which the Disability Date occurs and
thereafter shall pay you disability benefits for the period ending on the later of (i) the Term
Date or (ii) the date which is 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 12.17.

          5.2 Recovery from Disability. If during the Disability Period you shall fully
recover from your disability, the Company shall have the right (exercisable within 60 days after
notice from you of such recovery), but not the obligation, to restore you to full-time service at
full compensation. If the Company elects to restore you to full-time service, then this Agreement
shall continue in full force and effect in all respects and the Term Date shall not be extended by
virtue of the occurrence of the Disability Period. If the Company elects not to restore you to
full-time service, you shall be entitled to obtain other employment, subject, however, to the
following: (i) you shall perform advisory services during any balance of the Disability Period;
and (ii) you shall comply with the provisions of Sections 9 and 10 during the Disability Period.
The advisory services referred to in clause (i) of the immediately preceding sentence shall consist
of rendering advice concerning the business, affairs and management of the Company as requested by
the 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

8

 

performed at a time and place mutually convenient to both parties. Any income from such
other employment shall not be applied to reduce the Company’s obligations under this
Agreement.

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

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

     7. Life Insurance. The parties confirm that pursuant to the terms of the Prior
Agreement and your previous employment agreements with the Company, the Company maintained
$5,000,000 face amount of split ownership life insurance on your

9

 

life. The Company shall continue
to maintain such life insurance, which will be structured
to comply with Section 409A of the Code, 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 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. The Company shall pay you such amount no later than March 15 of the calendar
year following any calendar year in which you are entitled to this amount. You shall be under no
obligation to use the payments made by the Company pursuant to the preceding sentence to purchase
GUL insurance or to purchase any other life insurance.

     If the Company discontinues its GUL insurance program, the Company shall nevertheless make the
payments required by this Section 7 as if such program were

10

 

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 employment and so long as you are an
employee of the Company, you shall be eligible to participate in any savings plan, 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 existing or
established hereafter. In addition, you shall be entitled during the term of employment and so
long as you are an employee of the Company, 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, and financial services.

          Pursuant to the terms of your previous employment agreements with the Company, in addition to
any retirement benefits to which you are entitled under the Time Warner Employees’ Pension Plan,
any supplemental retirement or excess benefit plan maintained by the Company or any of its
affiliates or any successor plans thereto (hereinafter collectively referred to as the “Pension
Plan”), the Company will, following your termination of employment for any reason, except by the
Company for cause pursuant to Section 4.1 and except for a termination by you in breach of this
Agreement, pay or cause to be paid to you or your beneficiary as the case may be, in accordance
with the following provisions, an amount which is equivalent to the excess of (the “Excess Amount”)
(i) the amount you or your beneficiary would be entitled to receive under the Pension Plan assuming
you had five additional years of service (as such term is defined in the Pension Plan) taking into
account all the provisions of the Pension Plan as are from time to time in effect and applicable to
you or your beneficiary over (ii) the amount you or

11

 

your beneficiary would be entitled to receive
under the Pension Plan based on actual years
of service taking into account all the provisions of the Pension Plan as are from time to time
in effect and applicable to you or your beneficiary.

     If you or your beneficiary is entitled to an Excess Amount as described in the preceding
paragraph, the Company shall pay the Excess Amount to you or your beneficiary either in (i) a
single lump sum or (ii) 10 equal annual installments, as designated by you in a written election
made to the Company on or prior to December 31, 2008; provided, however, that if you have a
separation from service with the company within the meaning of section 409A of the Code (a
“separation from service”) on or prior to July 1, 2008, then the excess amount shall be payable in
a single lump sum and you shall not be entitled to elect to receive payment in installments . In
either case, the amount or amounts will be actuarially equivalent to the amounts payable as the
Excess Amount as determined under the preceding paragraph, based on such actuarial tables and
interest rates as may be adopted from time to time under the Pension Plan for the purpose of
computing such equivalencies. In the event no designation as to the method of payment is made or in
the event of your separation from service on or prior to July 1, 2008, payment shall be made in a
single lump sum.  The payment(s) described herein shall be made or commence six months following
the date of your Separation from Service  (or within 30 days thereafter), and any subsequent annual
installments shall be paid on the anniversaries of the date of such first payment (or within 30
days thereafter). If you die prior to receiving full payment of the Excess Amount, payments shall
be made to your beneficiary(ies), which shall be your beneficiary(ies) under the Time Warner Excess
Benefit Pension Plan. If you or your beneficiary(ies) dies before any payments described herein
have been made, the payments shall be made at the same time and in the same manner as they would
have been paid if the payments were to be made under the Time Warner Excess Benefit Pension Plan

          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. After the effective date of a termination of employment pursuant to Section 4
or during a Disability Period,

12

 

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 management
incentive or other non-equity-based plan of the Company shall be determined in accordance with the
terms and provisions of such plans. At the later of (i) the date you cease to serve as a director
of the Company and (ii) the Severance Term Date or the Benefit Cessation Date, if earlier, your
rights to benefits and payments under any stock option, restricted stock unit, performance stock
unit or other equity-based award shall be determined in accordance with the terms and provisions of
the plans and any agreements under which such stock options, restricted stock units, performance
stock units or other awards were granted. However, consistent with the terms of the Prior
Employment Agreement, notwithstanding the foregoing or any more restrictive provisions of any such
plan or agreement, (i) if your employment with the Company is terminated as a result of a
termination pursuant to Section 4.2, then, 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 later of (a) the date you cease to serve as a
director of the Company and (b) the Severance Term Date or the Benefit Cessation Date, if earlier;
(ii) because you have attained age 55 and ten years of service with the Company, if your employment
is terminated pursuant to Section 4.2 or is terminated voluntarily by you, then all stock options
granted to you by the Company shall vest and become immediately exercisable, and shall remain
exercisable for five years (but not beyond the term of such options) following the later of (a) the
date you cease to serve as a director fo the Company and (b) the Severance Term Date or the Benefit
Cessation Date, if earlier; and (iii) the Company shall not be permitted to determine that your
employment was terminated for “unsatisfactory performance” within the meaning of any stock option
agreement between you and the Company. With respect to awards of restricted stock units (“RSUs”)
held at the time of a termination of employment pursuant to Section 4.2, subject to potential
further delay in payment pursuant to Section 12.17, (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 does not contain special treatment for
retirement, then the treatment of the RSUs will be determined

13

 

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.

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

     9. Protection of Confidential Information; Non-Compete.

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

               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)

14

 

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 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
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

15

 

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.

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

     11. Notices. All notices, requests, consents and other communications required or
permitted to be given under this Agreement shall be effective only if given in

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writing and shall be deemed to have been duly given if delivered personally or sent by a
nationally recognized overnight delivery service, or mailed first-class, postage prepaid, by
registered or certified mail, as follows (or to such other or additional address as either party
shall designate by notice in writing to the other in accordance herewith):

          11.1 If to the Company:

Time Warner Inc.

One Time Warner Center

New York, New York 10019

Attention: Senior Vice President — Global

Compensation and Benefits

(with a copy, similarly addressed

but Attention: General Counsel)

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

     12. General.

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

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

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

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

17

 

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

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

          12.7 Specific Remedy. In addition to such other rights and remedies as the Company
may have at equity or in law with respect to any breach of this Agreement, if you commit a material
breach of any of the provisions of Sections 9.1, 9.2, or 10, the Company shall have the right and
remedy to have such provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will cause irreparable
injury to the Company.

          12.8 Resolution of Disputes. Except as provided in the preceding Section 12.7, any
dispute or controversy arising with respect to this Agreement and your employment hereunder
(whether based on contract or tort or upon any federal, state or local statute, including but not
limited to claims asserted under the Age Discrimination in

18

 

Employment Act, Title VII of the Civil
Rights Act of 1964, as amended, any state Fair
Employment Practices Act and/or the Americans with Disability Act) shall, at the election of
either you or the Company, be submitted to JAMS/ENDISPUTE for resolution in arbitration in
accordance with the rules and procedures of JAMS/ENDISPUTE. Either party shall make such election
by delivering written notice thereof to the other party at any time (but not later than 45 days
after such party receives notice of the commencement of any administrative or regulatory proceeding
or the filing of any lawsuit relating to any such dispute or controversy) and thereupon any such
dispute or controversy shall be resolved only in accordance with the provisions of this Section
12.8. Any such proceedings shall take place in New York City before a single arbitrator (rather
than a panel of arbitrators), pursuant to any streamlined or expedited (rather than a
comprehensive) arbitration process, before a non-judicial (rather than a judicial) arbitrator, and
in accordance with an arbitration process which, in the judgment of such arbitrator, shall have the
effect of reasonably limiting or reducing the cost of such arbitration. The resolution of any such
dispute or controversy by the arbitrator appointed in accordance with the procedures of
JAMS/ENDISPUTE shall be final and binding. Judgment upon the award rendered by such arbitrator may
be entered in any court having jurisdiction thereof, and the parties consent to the jurisdiction of
the New York courts for this purpose. The prevailing party shall be entitled to recover the costs
of arbitration (including reasonable attorneys fees and the fees of experts) from the losing party.
If at the time any dispute or controversy arises with respect to this Agreement, JAMS/ENDISPUTE is
not in business or is no longer providing arbitration services, then the American Arbitration
Association shall be substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions of
this Section 12.8. If you shall be the prevailing party in such arbitration, the Company shall
promptly pay, upon your demand, all legal fees, court costs and other costs and expenses incurred
by you in any legal action seeking to enforce the award in any court.

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

          12.10 No Conflict. You represent and warrant to the Company that this Agreement is
legal, valid and binding upon you and the execution of this Agreement and the performance of your
obligations hereunder does not and will not

19

 

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

          12.11 Conflict of Interest. Attached as Annex 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.

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

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

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

          12.15 Survival. Sections 3.4, 3.5, 8.3 and 9 through 12 shall survive any
termination of the term of employment by the Company for cause pursuant to

20

 

Section 4.1. Sections 3.4, 3.5, 4.4, 4.5, 4.7 and 8 through 12 shall survive any termination
of the term of employment pursuant to Sections 4.2, 5 or 6.

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

affiliate — Section 4.2.2

Average Annual Bonus – Section 4.2.1

Base 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 9.1

Competitive Entity – Section 9.2

Disability Date — Section 5

Disability Period — Section 5

Effective Date — the first 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

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

21

 

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 12.17; provided
that neither the Company nor any of its employees or representatives shall have any liability to
you with respect to thereto.

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

	 	 	 	 	 	 	 
	 	 	TIME WARNER INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Mark A. Wainger
 

	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Richard D. Parsons	 	 
	 	 	 	 	 
	 	 	Richard D. Parsons	 	 

22

 

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 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 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 often years (the “Pay-Out Period”)
commencing on the first Company payroll date in the month following the later of (i) May 15, 2008
and (ii) the date the Executive ceases to be an employee of the Company and leaves the payroll of
the Company for any reason, provided, however, that if the Executive was named in the compensation
table in the Company’s then most recent proxy statement, such payments shall commence on the first
Company payroll date in January of the year following the year in which the latest of such events
occurs. 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 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 this Agreement is terminated by the Company pursuant to Section 4.1 or if the Executive
terminates this Agreement or the term of employment in breach of this

 

 

Agreement, the Trust Account shall be valued as of the later of (i) May 15, 2008 or (ii)
twelve months after termination of the Executive’s employment with the Company, and the balance of
the Trust Account, after the securities held therein have been sold and all related indebtedness
liquidated, shall be paid to the Executive as soon as practicable and in any event within 75 days
following the later of such dates 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.

          If the Executive becomes disabled within the meaning of Section 5 of the Agreement and is not
thereafter returned to full-time employment with the Company as provided in said Section 5, then
deferred compensation shall be paid bi-weekly during the Pay-Out Period commencing on the first
Company payroll date in the month following the end of the Disability Period in accordance with the
provisions of the first paragraph of this Section A.7.

          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 shall be paid to the Executive’s estate or beneficiary within 75 days of such death in
accordance with the provisions of the second preceding paragraph.

          Notwithstanding the foregoing provisions of this Section A.7, if the Rabbi Trust shall
terminate in accordance with the provisions of the Trust Agreement, the Trust Account shall be
valued as of the date of such termination and the balance of the Trust Account shall be paid to the
Executive within 15 days of such termination in accordance with the provisions of the third
preceding paragraph.

          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, (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.

 

 

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, RICHARD D. PARSONS, 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                                   
    
  ,                    .

	 	 	 	 	 
	 

	 	 

Richard D. Parsons

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