Exhibit 10.5
As
Amended through
October 25, 2007
TIME
WARNER INC.
1988 Restricted Stock and Restricted Stock Unit Plan For
Non-Employee Directors
1.
PURPOSE . The purpose of the Plan is to supplement the
compensation paid to Outside Directors and to increase their
proprietary interest in the Company and their identification with
the interests of the Company’s stockholders, by grants of
annual awards with respect to Common Stock.
2.
CERTAIN DEFINITIONS .
(a)
“Time Warner” shall mean Time Warner Inc. (formerly
named AOL Time Warner Inc.), a Delaware corporation, and any
successor thereto.
(b)
“Average Market Price” shall mean the average (rounded
to the nearest cent) of the means between the high and low sales
prices of a share of Common Stock as reported on the New York Stock
Exchange Composite Tape for the ten consecutive trading days ending
on the date of the annual meeting of stockholders of the Company
for the year with respect to which an annual grant of Restricted
Shares or Restricted Stock Units is made pursuant to paragraph 5 of
the Plan.
(c)
“Board” shall mean the Board of Directors of the
Company.
(d)
“Commission” shall mean the Securities and Exchange
Commission.
(e)
“Common Stock” shall mean the Common Stock, par value
$.01 per share, of the Company.
(f)
“Company” shall mean (i) with respect to periods
prior to January 11, 2001, Historic TW Inc. (formerly named
Time Warner Inc.) and (ii) with respect to periods on and
after January 11, 2001, Time Warner.
(g)
“Grant Date” shall have the meaning set forth in
paragraph 5 of the Plan.
(h)
“Outside Director” shall mean a member of the Board of
Directors of the Company who, as of the close of business on the
date of the annual meeting of stockholders of the Company, is not
an employee of the Company or any subsidiary of the Company. For
the purposes hereof, a “subsidiary” of the Company
shall mean any corporation, partnership or other entity in which
the Company owns, directly or indirectly, an equity interest of 50%
or more.
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(i)
“Plan” shall mean this 1988 Restricted Stock and
Restricted Stock Unit Plan for Non-Employee Directors of the
Company.
(j)
“Retained Distributions” shall mean distributions which
are retained by the Company pursuant to paragraph 6(b) and
(c) of the Plan.
(k)
“Restricted Shares” shall mean shares of Common Stock
granted to an Outside Director pursuant to paragraph 5 of the
Plan.
(l)
“Restricted Stock Units” means a contingent obligation
of the Company to deliver shares of Common Stock granted to an
Outside Director pursuant to paragraph 5 of the Plan.
(m)
“Restriction Period” shall mean the period of time
specified in paragraph 6(a) hereof applicable to all awards granted
under the Plan.
3.
SHARES SUBJECT TO THE PLAN . Subject to the provisions of
paragraph 9 hereof, the maximum aggregate number of Restricted
Shares and Restricted Stock Units which may be issued under the
Plan in any calendar year, commencing with calendar year 1999,
shall be equal to .003% of the shares of Common Stock outstanding
on December 31 st of the
preceding calendar year. Any Restricted Shares and Restricted Stock
Units available for grant in any calendar year which are not
granted in that calendar year shall not be available for grant in
any subsequent calendar year and any Restricted Shares and
Restricted Stock Units awarded in any calendar year that are
forfeited by the terms of the Plan in any subsequent calendar year
shall not again be available for awards. No fractional shares of
Common Stock shall be granted or issued under the Plan.
Shares
utilized in respect of Restricted Shares or Restricted Stock Units
may be, in whole or in part, authorized but unissued shares of
Common Stock or shares of Common Stock previously issued and
outstanding and reacquired by the Company.
4.
ELIGIBILITY . Subject to the last sentence of paragraph 5
hereof, the only persons eligible to participate in the Plan shall
be Outside Directors.
5.
ANNUAL GRANTS . Subject to
the provisions of paragraph 3 hereof, each Outside Director shall
automatically be granted under the Plan, as of the conclusion of
each annual meeting of stockholders of the Company (the
“Grant Date”), (a) for Grant Dates occurring
during calendar years 1990 through 1998, that number of Restricted
Shares equal to $30,000 divided by the Average Market Price of the
Common Stock on the Grant Date and (b) for Grant Dates
occurring during calendar year 1999 and thereafter, that number of
Restricted Shares or Restricted Stock Units, as determined by the
Board prior to the Grant Date, as is equal to a dollar amount
determined by the Board of Directors on or before the Grant Date
divided by the Average Market Price of the Common Stock on the
Grant Date, and except as hereinafter provided, the Company shall
promptly thereafter issue such Restricted Shares or Restricted
Stock Units, in each case without any further action required to be
taken by the Board or any
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committee thereof. The Company shall not be required to issue
fractions of Restricted Shares or Restricted Stock Units and in
lieu thereof any fractional Restricted Share or Restricted Stock
Unit shall be rounded up to the next whole number. Notwithstanding
the foregoing, in the case of an Outside Director who, as of any
Grant Date, has not continuously served as a member of the Board
for a period of at least six consecutive months (a “new
Outside Director”), the Restricted Shares or Restricted Stock
Units granted to such new Outside Director on such Grant Date shall
not be issued in such new Outside Director’s name until six
months after such new Outside Director shall have first become a
new Outside Director. An individual who shall become an Outside
Director subsequent to the date of the annual meeting of
stockholders of the Company for any year shall first become
eligible to participate in the Plan commencing on the date of the
next annual meeting of stockholders of the Company.
6.
RESTRICTION PERIOD; RESTRICTIONS APPLICABLE TO RESTRICTED SHARES
AND RESTRICTED STOCK UNITS; CERTIFICATES REPRESENTING RESTRICTED
SHARES; DIVIDEND EQUIVALENTS APPLICABLE TO RESTRICTED STOCK
UNITS .
(a) Restricted
Shares and Restricted Stock Units granted to an Outside Director
pursuant to the Plan shall be subject to the possibility of
forfeiture for a period (the “Restriction Period”)
commencing on the date such Restricted Shares or Restricted Stock
Units shall have been granted to such Outside Director pursuant to
paragraph 5 of the Plan and ending on the earliest of the following
events:
(i)
(A) the date such Outside Director ceases to be a director of
the Company by reason of mandatory retirement pursuant to any
policy or plan of the Company applicable to Outside Directors, or
(B) with respect to Restricted Stock Units only, the date such
Outside Director ceases to be a director of the Company, provided
the Outside Director has either (x) completed at least five
years of service as a director, in the aggregate or (y) served
as a director of the Company for at least five consecutive annual
meetings of stockholders of the Company;
(ii)
the date such Outside Director, having been nominated for
reelection, is not re-elected by the stockholders of the Company to
serve as a member of the Board or, having been re-elected by fewer
than a majority “for” votes of the votes cast by the
stockholders at a stockholders’ meeting in an uncontested
election of directors, the date such Outside Director’s offer
to resign from the Board is accepted by the Board;
(iii)
the date of death of such Outside Director;
(iv)
the date such Outside Director terminates service on the Board on
account of medical or health reasons which render such Outside
Director unable to continue to serve as a member of the
Board;
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(v)
the occurrence of a Change in Control of the Company (as defined in
paragraph 6(c) below); or
(vi)
in each of the four years following
the date of grant, on the first day of the month in which a grant
of Restricted Shares or Restricted Stock Units was made to an
Outside Director pursuant to paragraph 5 of the Plan with respect
to 25% of the number of Restricted Shares or Restricted Stock Units
in such grant, beginning with grants made in 2003;
provided , however , that, in the discretion of the
Board on a case by case basis, the Restriction Period applicable to
all Restricted Shares and Restricted Stock Units granted to an
Outside Director shall end and be deemed completed for all purposes
of the Plan in the event an Outside Director (a “withdrawing
Outside Director”) terminates his or her service as a member
of the Board (A) for reasons of personal or financial
hardship; (B) to serve in any governmental, diplomatic or any
other public service position or capacity; (C) to avoid or
protect against a conflict of interest of any kind; (D) on the
advice of legal counsel; or (E) for any other extraordinary
circumstance that the Board determines to be comparable to the
foregoing; provided that in the case of a Restricted Stock Unit,
the payment of the shares shall not occur before the first date on
which a payment could be made without subjecting the Outside
Director to tax under the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”).
The withdrawing Outside Director shall abstain from participating
in any determination made by the Board with respect to any matter
relating to the foregoing.
(b)
Restricted Shares, when issued, will be represented by a stock
certificate or certificates registered in the name of the Outside
Director to whom such Restricted Shares shall have been granted.
Each such certificate shall bear a legend in substantially the
following form:
“The
shares represented by this certificate are subject to the terms and
conditions (including forfeiture and restrictions against transfer)
contained in the Time Warner Inc. 1988 Restricted Stock and
Restricted Stock Unit Plan for Non-Employee Directors. A copy of
such Plan is on file in the Office of the Secretary of Time Warner
Inc.”
Such
certificates shall be deposited by such Outside Director with the
Company, together with stock powers or other instruments of
assignment, each endorsed in blank, which will permit transfer to
the Company of all or any portion of the Restricted Shares and any
securities constituting Retained Distributions that shall be
forfeited or that shall not become vested in accordance with the
Plan. Restricted Shares shall constitute issued and outstanding
shares of Common Stock for all corporate purposes. The Outside
Director will have the right to vote such Restricted Shares, to
receive and retain all regular cash dividends paid on such
Restricted Shares and to exercise all other rights, powers and
privileges of a holder of Common Stock with respect to such
Restricted Shares, with the exception that (i) the Outside
Director will
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not be
entitled to delivery of the stock certificate or certificates
representing such Restricted Shares until the Restriction Period
shall have expired and unless all other vesting requirements with
respect thereto shall have been fulfilled; (ii) the Company
will retain custody of the stock certificate or certificates
representing the Restricted Shares during the Restriction Period;
(iii) other than regular cash dividends, the Company will
retain custody of all distributions (“Retained
Distributions”) made or declared with respect to the
Restricted Shares (and such Retained Distributions will be subject
to the same restrictions, terms and conditions as are applicable to
the Restricted Shares) until such time, if ever, as the Restricted
Shares with respect to which such Retained Distributions shall have
been made, paid or declared shall have become vested, and such
Retained Distributions shall not bear interest or be segregated in
separate accounts; (iv) an Outside Director may not sell,
assign, transfer, pledge, exchange, encumber or dispose of any
Restricted Shares or any Retained Distributions during the
Restriction Period; and (v) a breach of any restrictions,
terms or conditions provided in the Plan or established by the
Board with respect to any Restricted Shares or Retained
Distributions will cause a forfeiture of such Restricted Shares and
any Retained Distributions with respect thereto.
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