|
Exhibit 10.36
EMPLOYMENT AGREEMENT made as of
10/31/01, effective as of November 1, 2001 (the "Effective
Date"), between TIME WARNER CABLE (the "Company"), a
division of Time Warner Entertainment Company, L.P., a Delaware
limited partnership, and TOM BAXTER .
You and the Company desire to set
forth the terms and conditions of your employment by the Company
and agree as follows:
1. Term of Employment
. Your "term of employment" as this phrase is used throughout this
Agreement, shall be for the period beginning on the Effective Date
and ending on October 31, 2006 (the "Term Date"), subject,
however, to earlier termination as set forth in this Agreement.
2. Employment .
During the term of employment, you shall serve as President of the
Company, or in such other position as the Company may determine and
you shall have the authority, functions, duties, powers and
responsibilities normally associated with such position and such
additional authority, functions, duties, powers and
responsibilities as may be assigned to you from time to time by the
Company consistent with your senior position with the Company.
During the term of employment, (i) your services shall be
rendered on a substantially full-time, exclusive basis and you will
apply on a full-time basis all of your skill and experience to the
performance of your duties, (ii) you shall report to the Chief
Operating Officer & Vice Chairman of the Company, and
(iv) you shall have no other employment and, without the prior
written consent of the Chief Operating Officer & Vice Chairman
of the Company, no outside business activities which require the
devotion of substantial amounts of your time, and (iii) the
place for the performance of your services shall be the principal
executive offices of the Company in Stamford, Connecticut, subject
to such reasonable travel as may be required in the performance of
your duties. The foregoing shall be subject to the Company’s
written policies, as in effect from time to time, regarding
vacations, holidays, illness and the like.
3. Compensation .
3.1
Base Salary . The Company shall pay you a base salary at the
rate of not less than $500,000 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 as a
percentage of Base Salary is 150%, pro rated with respect to
partial years. Each year, the Company’s performance and 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.
3.3
Sign-On Bonus . In consideration for your signing this
agreement, you shall receive, within 14 days of your signing,
a bonus of $100,000 ("Sign-on Bonus").
3.4
Stock Options . Subject to your execution of this Agreement,
you will be granted a new hire option to purchase 250,000 shares of
Common Stock of AOL Time Warner Inc. following commencement of your
employment. Thereafter, commencing in 2003, at the Company’s
discretion, you will be eligible to receive annual grants of stock
options, although the Company does not commit to do so. Each such
stock option grant shall be at an exercise price equal to the fair
market value of the Common Stock on the date of grant and shall be
reflected in a separate Stock Option Agreement in accordance with
the Company’s customary practices.
3.5
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 Certificate of Incorporation and By-laws of AOL Time
Warner Inc. and the Partnership Agreement of Time Warner
Entertainment Company, L.P. (whichever is the greater extent of
indemnification) (not including any amendments or additions after
the date hereof that limit or narrow, but including any that add to
or broaden, the protection afforded to you by those
provisions).
2
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 (a) your conviction
(treating a nolo contendere plea as a conviction) of a felony
(whether or not any right to appeal has been or may be exercised),
(b) willful refusal without proper cause to perform your
obligations under this Agreement, (c) fraud, embezzlement or
misappropriation or (d) because of your breach of any of the
covenants provided for in Section 9. 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 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 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 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
3
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, duties
or place of employment, or (ii) the Company failing to cause
any successor to all or substantially all of the business and
assets of the Company expressly to assume the obligations of the
Company under this Agreement.
The
Company shall have the right, exercisable by written notice to you,
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 from the Company was the greatest; provided, however, if the
Company has previously paid you no annual Bonus, then your Average
Annual Bonus shall equal your target Bonus and if the Company has
previously paid you one annual Bonus, then your Average Annual
Bonus shall equal the average of such Bonus and your target
Bonus.
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 twelve 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) Base Salary at an
annual rate equal to your Base Salary in effect immediately prior
to the notice of termination, and (b) an annual Bonus in
respect of each calendar year or portion thereof (in which case a
pro rata portion of such Bonus will be payable) during such period
equal to your Average Annual Bonus. Except as provided in the
second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of
your intention to terminate your status as an employee during such
period, you shall cease to be an employee of the Company effective
upon the commencement of such other employment or the effective
date of such
4
termination as specified by you in such notice, whichever is
applicable, and you shall be entitled to receive, as severance, a
lump sum payment within 30 days after such commencement or such
effective date, discounted as provided in the immediately following
sentence, equal to the balance of the payments you would have
received pursuant to this Section 4.2.2 had you remained on
the Company’s payroll. That lump sum shall be discounted to
present value as of the date of payment from the times at which
such amounts would otherwise have become payable absent such
commencement or termination at an annual discount rate for the
relevant periods equal to 120% of the "applicable Federal rate"
(within the meaning of Section 1274(d) of the Internal Revenue Code
of 1986, as amended (the "Code"), in effect on the date of such
commencement or termination, compounded semi-annually.
Notwithstanding the foregoing, 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 lump sum payment. For purposes of this
Agreement, the term "affiliate" shall mean any entity which,
directly or indirectly, controls, is controlled by, or is under
common control with, the Company.
4.3
After the Term Date . If at the Term Date, the term of
employment shall not have been previously terminated pursuant to
the provisions of this Agreement, no Disability Period is then in
effect and the parties shall not have agreed to an extension or
renewal of this Agreement or on the terms of a new employment
agreement, then the term of employment shall continue on a
month-to-month basis and you shall continue to be employed by the
Company pursuant to the terms of this Agreement. You may terminate
the term of employment under this Agreement on 60 days written
notice delivered to the Company (which notice may be delivered by
you at any time on or after the date which is 60 days prior to
the Term Date). The Company may terminate the term of employment on
or after the Term Date at any time upon written notice to you. The
Company’s written notice of termination will specify the
effective date of such termination. 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.
5
4.4
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 A. If you shall fail to execute
and deliver such release, or if you revoke such release as provided
therein, then in lieu of the payments provided for herein, you
shall receive a severance payment determined in accordance with the
Company’s policies relating to notice and severance.
4.5
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 whatsoever
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.
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.
4.6
Payments . So long as you remain on the payroll of the
Company or any affiliate of the Company, payments of Base Salary
and Bonus required to be made after a termination without cause
shall be made at the same times as similar payments are made to
other senior executives of the Company.
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
6
"Disability Date"). 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.
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 strategic matters as
requested by the Company, but you s
|
