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Exhibit 10.35
EMPLOYMENT AGREEMENT made and
effective as of August 1, 2006 (the "Effective Date"), between
TIME WARNER CABLE INC., a Delaware corporation (the "Company"), and
GLENN BRITT ("You").
You are currently employed by the
Company pursuant to an Employment Agreement between you and Time
Warner Entertainment Company, L.P., dated November 30, 2001,
as amended by the First Amendment to Employment Agreement made as
of March 24, 2003 and by letter dated March 24, 2003 (as
so amended, the "Prior Agreement"). The Company wishes to amend and
restate the terms of your employment with the Company and to secure
your services on a full-time basis for the period to and including
December 31. 2009 (the "Term Date") on the terms and
conditions set forth in this Agreement, and you are willing to
provide 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 the Term Date, subject, however, to earlier
termination as set forth in this Agreement.
2. Employment .
2.1
General . During the term of employment, you shall serve as
Chief Executive Officer of the Company and you shall have the
authority, functions, duties, powers and responsibilities normally
associated with such position at the Company and such additional
authority, functions, duties, powers and responsibilities as may be
assigned to you from time to time by the Company consistent with
your senior position. During the term of employment, your services
shall be rendered on a substantially full-time, exclusive basis and
you will apply on a substantially full-time basis all of your skill
and experience to the performance of your duties. 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.
2.2
Reporting . You shall report to the Board of Directors of
the Company ("Board").
2.3
Other Employment and Activities . You shall have no other
employment and, without the prior written consent of the Board, no
outside business activities which require the devotion of
substantial amounts of your time.
2.4
Place of Performance . The place for the performance of your
services shall be the principal executive offices of the Company in
the greater Stamford, Connecticut area, subject to such reasonable
travel as may be required in the performance of your duties.
3. Compensation .
3.1
Base Salary . The Company shall pay you a base salary at the
rate of not less than $1,000,000 per annum during the term of
employment ("Base Salary"). The Company may increase, but not
decrease, your Base Salary during the term of employment. Base
Salary shall be paid in accordance with the Company’s
customary payroll practices.
3.2
Bonus . In addition to Base Salary, the Company typically
pays its executives an annual cash bonus ("Bonus"). Although your
Bonus is fully discretionary, your target annual Bonus is
$5,000,000, but the parties acknowledge that your actual Bonus will
vary depending on the actual performance of you and the Company,
from a minimum of $0 and up to a maximum Bonus of $6,675,000. Each
year, your personal performance will be considered in the context
of your executive duties and any individual goals set for you, and
your actual Bonus will be determined. Although as a general matter
the Company expects to pay bonuses at the target level in cases of
satisfactory individual performance, it does not commit to do so,
and your Bonus may be negatively affected by the exercise of the
Company’s discretion or by overall Company performance. Your
Bonus amount, if any, will be paid to you between January 1 and
March 15 of the calendar year immediately following the
performance year in respect of which such Bonus is earned.
3.3
Long-Term Incentive Compensation . The Company shall provide
you for each year of your term of employment with long term
incentive compensation with a target value beginning with calendar
year 2007 (the 2006 long term compensation having already been
determined in accordance with the Prior Agreement) of approximately
$6,000,000 (based on the valuation method used by the Company for
its senior executives) through a combination of stock option
grants, restricted stock units or other equity-based awards,
cash-based long-term plans or other components as may be determined
and in such proportions as may be
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determined by the Board from time to time in its sole
discretion.
3.4
Deferred Compensation . Pursuant to the terms of your
previous employment agreements with the Company, 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 Amendment shall in all respects be consistent
with the terms of Annex A), until the full amount which you are
entitled to receive therefrom has been paid in full. The Company
shall pay all fees and expenses of the Trustee and shall enforce
the provisions of the Trust Agreement for your benefit. You shall
be entitled to the amounts in the Trust Account irrespective of the
reason for your termination of employment with the Company.
3.5
Indemnification . You shall be entitled throughout the term
of employment in your capacity as an officer or director of the
Company or any of its subsidiaries or a member of a governing body
of any partnership or joint venture in which Time Warner Inc.
("Time Warner") or the Company has an equity interest (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
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), to the extent not
prohibited by applicable law at the time of the assertion of any
liability against you. In addition, with respect to services you
provided to or on behalf of the predecessor of the Company in your
capacity as an officer or director of the predecessor of the
Company, consistent with the Prior Agreement, you shall be entitled
to the benefit of the applicable indemnification provisions
contained in the Agreement of Limited Partnership, dated
October 29, 1991, as amended, of such predecessor Company (not
including any amendments or additions after the date of execution
of the Prior Agreement that limit or narrow, but including any that
add to or broaden, the protection afforded to you by those
provisions), to the extent not prohibited by applicable law at the
time of the assertion of any liability against you.
4. Termination .
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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)
other than as a result of a moving violation or a Limited Vicarious
Liability (as defined below), (b) willful failure or refusal
without proper cause to perform your material 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) willful misappropriation,
embezzlement or reckless or willful destruction of Company
property, (d) willful and material breach of any statutory or
common law duty of loyalty to the Company having a significant
adverse financial impact on the Company or on the Company’s
reputation; (e) intentional and improper conduct materially
prejudicial to the business of the Company or any of its
affiliates, or (f) willful or material breach of any of the
covenants provided for in Section 9 hereof. Such termination
shall be effected by written notice thereof delivered by the
Company to you and shall be effective as of the date of such
notice; provided, however, that if (i) such termination is
because of your willful failure or refusal without proper cause to
perform any one or more of your obligations under this Agreement,
(ii) such notice is the first such notice of termination for
any reason delivered by the Company to you under this
Section 4.1, and (iii) within 15 days following the
date of such notice you shall cease your refusal and shall use your
best efforts to perform such obligations, the termination shall not
be effective. The term "Limited Vicarious Liability" shall mean any
liability which is based on acts of the Company for which you are
responsible solely as a result of your office(s) with the Company;
provided that (x) you are not directly involved in such acts
and either had no prior knowledge of such intended actions or, upon
obtaining such knowledge, promptly acted reasonably and in good
faith to attempt to prevent the acts causing such liability or
(y) after consulting with the Company’s counsel, you
reasonably believed that no law was being violated by such
acts.
In
the event of termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have
at law or in equity, the Company shall have no further obligation
to you other than (i) to pay Base Salary through the effective
date of termination, (ii) to pay any Bonus for any year prior to
the year in which such termination occurs that has been determined
but not yet paid as of the date of such termination, and
(iii) with respect to any rights you have pursuant to any
insurance or other benefit plans or arrangements of the Company.
You hereby disclaim
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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 15 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 15-day period the
Company shall have cured all such material breaches. A material
breach by the Company shall include, but not be limited to,
(i) the Company violating Section 2 with respect to your
title, reporting lines, authority, functions, powers, 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. In addition, the Company shall be in material
breach of its obligations under this Agreement if, in the event
that the assets of the Company are directly or indirectly combined
(whether by merger, sale, joint venture or otherwise) with the
assets of another entity in the cable business, whether or not Time
Warner Inc. or the Company has control over the combined entity,
you are not offered the position of Chief Executive Officer of such
combined entity.
The
Company shall have the right, exercisable by written notice to you
delivered before the date which is 60 days prior to the Term
Date, to terminate your employment under this Agreement without
cause, which notice shall specify the effective date of such
termination. If such notice is delivered on or after the date which
is 60 days prior to the Term Date, the provision of Section
4.3 shall apply.
4.2.1
After the effective date of a termination pursuant to this
Section 4.2 (a "termination without cause"), you shall receive
Base Salary and a pro rata portion of your Average Annual Bonus (as
defined below) through the effective date of termination. You will
also be entitled to any unpaid Bonus for a year prior to the year
which includes the effective date of termination which has been
determined pursuant to Section 3.2 (which if not determined,
shall be equal to the Average Annual Bonus) and any accrued but
unpaid long-term compensation as provided in Section 3.3. Your
Average Annual Bonus shall be equal to the average of the regular
annual bonus amount (excluding
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the amount of any special or spot bonuses) in respect of the two
calendar years during the most recent five calendar years preceding
the year of termination for which the annual bonus received by you
from the Company was the greatest; provided, however, that if the
Company has previously paid you no full-year annual Bonus under
this Agreement, then your Average Annual Bonus shall equal your
target Bonus and, if the Company has previously paid you one
full-year annual Bonus under this Agreement, then your Average
Annual Bonus shall equal the average of such Bonus and your target
Bonus. Your pro rata Average Annual Bonus pursuant to this
Section 4.2.1 shall be paid to you at the times set forth in
Section 4.7.
4.2.2
After the effective date of a termination without cause, you shall
remain an employee of the Company for a period ending on the date
(the "Severance Term Date") which is the later of (i) the Term Date
and (ii) the date which is 24 months after the effective
date of such termination and during such period you shall be
entitled to receive, whether or not you become disabled during such
period but subject to Section 6, (a) continued payments
of your 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 an employee of
the Company and shall be removed from the payroll of the Company
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, and you shall be entitled to
receive the remaining payments you would have received pursuant to
this Section 4.2.2 had you remained on the Company’s
payroll at the times specified in Section 4.7 of the
Agreement. Notwithstanding the foregoing, if you accept employment
with any not-for-profit entity, then you shall be entitled to
remain an employee of the Company and 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.
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4.3
After the Term Date . If at the Term Date, the term of
employment shall not have been previously terminated pursuant to
the provisions of this Agreement, no Disability Period is then in
effect and the parties shall not have agreed to an extension or
renewal of this Agreement or on the terms of a new employment
agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the
Company pursuant to the terms of this Agreement, subject to
termination by either party hereto on 60 days written notice
delivered to the other party (which notice may be delivered by
either party at any time on or after the date which is 60 days
prior to the Term Date). If the Company shall terminate the term of
employment on or after the Term Date for any reason (other than for
cause as defined in Section 4.1, in which case
Section 4.1 shall apply), which the Company shall have the
right to do so long as no Disability Date (as defined in
Section 5) has occurred prior to the delivery by the Company
of written notice of termination, then such termination shall be
deemed for all purposes of this Agreement to be a "termination
without cause" under Section 4.2 and the provisions of
Sections 4.2.1 and 4.2.2 shall apply.
4.4
Office Facilities . In the event of a termination without
cause or a termination pursuant to Section 4.3, then for the
period beginning on the effective date of such termination and
ending on the earlier of (a) twelve months thereafter or
(b) the date you commence other full-time employment, the
Company shall, without charge to you, make available to you office
space at or near your principal job location immediately prior to
such termination, together with secretarial services, office
facilities, services and furnishings, in each case reasonably
appropriate to an employee of your position and responsibilities
prior to such termination but taking into account your reduced need
for such office space, secretarial services and office facilities,
services and furnishings as a result of you no longer being a
full-time employee.
4.5
Retirement . Notwithstanding the provisions of this
Agreement relating to a termination without cause and Disability,
on the date you first become eligible for normal retirement as
defined in any applicable retirement plan (or, if none, any
applicable qualified employee benefit plan) of the Company or any
subsidiary of the Company (the "Retirement Date"), then this
Agreement shall terminate automatically on such date and your
employment with the Company shall be governed by the policies
generally applicable to employees of the Company, and you shall not
thereafter be entitled to the payments provided in this Agreement
to the extent not received by you on or prior to the Retirement
Date. In addition, no benefits or payments provided in this
Agreement relating to termination without cause and Disability
shall include any period after the Retirement Date and if the
provision of benefits or calculation of payments provided in
this
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Agreement with respect thereto would include any period
subsequent to the Retirement Date, such provision of benefits shall
end on the Retirement Date and the calculation of payments shall
cover only the period ending on the Retirement Date.
4.6
Release . A condition precedent to the Company’s
obligation to make 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.
4.7
Mitigation . In the event of a termination without cause
under this Agreement, you shall not be required to seek other
employment in order to mitigate your damages hereunder, unless
Section 280G of the Code would apply to any payments to you by
the Company and your failure to mitigate would result in the
Company losing tax deductions to which it would otherwise have been
entitled. In such an event, 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 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).
4.8
Payments . Payments of Base Salary and Bonus required to be
made to you after a termination without cause shall be made at the
same times as such payments otherwise would have been paid to you
pursuant to Sections 3.1, 3.2 and 4.2 if you had not been
terminated; provided, however, that any payment or benefit
otherwise required to be made or provided after a termination
without cause or after a Time Warner Cable Transaction that the
Company reasonably determines is subject to
Section 409A(a)(2)(B)(i) of the Code shall not be paid or
payment commenced until the later of (a)
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six months after the date of your "separation from service"
(within the meaning of Section 409A of the Code) and
(b) the payment date or commencement date specified in this
Agreement for such payment(s). On the earliest date on which such
payments can be made or commenced without violating the
requirements of Section 409A(a)(2)(B)(i) of the Code, you
shall be paid, in a single lump sum, an amount equal to the
aggregate amount of all payments delayed pursuant to the preceding
sentence.
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 4.7. 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 4.7.
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
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the Board but you shall not be required to devote more than five
days (up to eight hours per day) each month to such services, which
shall be performed at a time and place mutually convenient to both
parties. Any income from such other employment shall not be applied
to reduce the Company’s obligations under this Agreement.
5.3
Other Disability Provisions . The Company shall be entitled
to deduct from all payments to be made to you during the Disability
Period pursuant to this Section 5 an amount equal to all
disability payments received by you during the Disability Period
from Worker’s Compensation, Social Security and disability
insurance policies maintained by the Company; provided, however,
that for so long as, and to the extent that, proceeds paid to you
from such disability insurance policies are not includible in your
income for federal income tax purposes, the Company’s
deduction with respect to such payments shall be equal to the
product of (i) such payments and (ii) a fraction, the
numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to
individuals at the time of receipt of such payments. All payments
made under this Section 5 after the Disability Date are
intended to be disability payments, regardless of the manner in
which they are computed. Except as otherwise provided in this
Section 5, the term of employment shall continue during the
Disability Period and you shall be entitled to all of the rights
and benefits provided for in this Agreement, except that
Sections 4.2 and 4.3 shall not apply during the Disability
Period and unless the Company has restored you to full-time service
at full compensation prior to the end of the Disability Period, the
term of employment shall end and you shall cease to be an employee
of the Company at the end of the Disability Period and shall not be
entitled to notice and severance or to receive or be paid for any
accrued vacation time or unused sabbatical.
6. Death . If you die
during the term of employment, this Agreement and all obligations
of the Company to make any payments hereunder shall terminate
except that your estate (or a designated beneficiary) shall be
entitled to receive Base Salary to the last day of the month in
which your death occurs, any unpaid Bonus award with respect to a
year prior to your death (if not previously determined, based on
Average Annual Bonus), and Bonus compensation (at the time bonuses
are normally paid) based on the Average Annual Bonus, but prorated
according to the number of whole or partial months you were
employed by the Company in such calendar year. For the purposes of
clarity, it is intended that any vested rights you or your
beneficiaries may have at the time of your death or as a result of
your death pursuant to any insurance or benefit and incentive plans
or arrangements of the Company or Time Warner or any benefit and
incentive plans
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described in Section 8 shall be governed by the terms and
provisions of such insurance or benefit and incentive plans and
arrangements.
7. Insurance . During
your employment with the Company, the Company shall
(i) provide you with $50,000 of group life insurance and
(ii) pay you annually an amount equal to two times the premium
you would have to pay to obtain life insurance under the Group
Universal Life ("GUL") insurance program made available by the
Company in an amount equal to $4,000,000. You shall be under no
obligation to use the payments made by the Company pursuant to the
preceding sentence to purchase GUL insurance or to purchase any
other life insurance. If the Company discontinues its GUL insurance
program, the Company shall nevertheless make the payments required
by this Section 7 as if such program were still in effect. The
payments made to you hereunder shall not be considered as "salary"
or "compensation" or "bonus" in determining the amount of any
payment under any pension, retirement, profit-sharing or other
benefit plan of the Company or any subsidiary of the Company.
8. Other Benefits
.
8.1
General Availability . To the extent that (a) you are
eligible under the general provisions thereof (including without
limitation, any plan provision providing for participation to be
limited to persons who were employees of the Company or certain of
its subsidiaries prior to a specific point in time) and
(b) the Company maintains such plan or program for the benefit
of its executives, during the term of employment and so long as you
are an employee of the Company, you shall be eligible to
participate in any pension, excess plan, profit-sharing, savings,
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 for its senior
corporate executives. For the purpose of clarity, 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, an automobile allowance and
financial services.
8.2
Benefits After a Termination or Disability . During the
period you remain on the payroll of the Company after a termination
without cause or during the Disability Period, you shall continue
to be an employee of the Company and shall continue to be eligible
to participate in the benefit plans and to receive the benefits
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required to be provided to you under this Agreement to the
extent such benefits are maintained in effect by the Company for
its executives; provided, however, you shall not be entitled to any
additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. At the time you leave
the payroll of the Company, your rights to benefits and payments
under any benefit plans or any insurance or other death benefit
plans or arrangements of the Company or under any stock option,
restricted stock, stock appreciation right, bonus unit, management
incentive or other plan of the Company shall be determined in
accordance with the terms and provisions of such plans and any
agreements under which such stock options, restricted stock or
other awards were granted. However, notwithstanding the foregoing
or any more restrictive provisions of any such plan or agreement,
if your employment with the Company is terminated as a result of a
termination pursuant to Section 4.2, then, except if you shall
otherwise qualify for retirement under the terms of the applicable
stock option agreement, consistent with the terms of the Prior
Agreement, (i) all stock options granted to you by Time Warner
shall continue to vest, and any such vested stock options shall
remain exercisable (but not beyond t
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