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as it may be amended, superseded or replaced, the “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:
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(x) |
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the number of Options that would vest on the next anniversary
of the date of grant multiplied by; |
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(y) |
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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
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