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Publishing Group Stock Incentive Plan

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As Amended through
November 18, 1999


TIME WARNER
PUBLISHING GROUP
STOCK INCENTIVE PLAN


1. PURPOSE OF THE PLAN


The purpose of the Time Warner Publishing Group Stock Incentive Plan (hereinafter the "Plan") is to provide for the granting of stock options, stock appreciation rights and restricted shares to certain employees of The Time Inc. Magazine Company, The Time Inc. Book Company, Warner Publishing, Inc. and their respective Subsidiaries in recognition of the valuable services provided, and contemplated to be provided, by such employees. The general purpose of the Plan is to promote the interests of Time Warner and its stockholders and to reward dedicated employees of these companies by providing such employees additional incentives to continue and increase their efforts with respect to, and to remain in the employ of, Time Warner or its Subsidiaries. This plan is being adopted in connection with the development of an overall long-term compensation program for these companies and it is expected that certain Options granted hereunder will become exercisable only if certain performance criteria are met.


2. CERTAIN DEFINITIONS


The following terms (whether used in the singular or plural) have the meanings indicated when used in the Plan:


(a) "Agreement" means the stock option agreement, stock
appreciation rights agreement and the restricted shares agreement
specified in Section 12, both individually and collectively, as the
context so requires.


(b) "Approved Transaction" means any transaction in which
the Board (or, if approval of the Board is not required as a matter of
law, the stockholders of Time Warner) shall approve (i) any
consolidation or merger of


Time Warner in which Time Warner is not the continuing or surviving
corporation or pursuant to which shares of Common Stock would be
converted into cash, securities or other property, other than a merger
of Time Warner (x) as contemplated in the Amended and Restated
Agreement and Plan of Merger dated as of September 22, 1995 among Time
Warner Inc., TW Inc., Time Warner Acquisition Corp., TW Acquisition
Corp. and Turner Broadcasting System, Inc., as the same may be amended
from time to time, or (y) in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership
of common stock of the surviving corporation immediately after the
merger, or (ii) any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of Time Warner, or (iii) the adoption
of any plan or proposal for the liquidation or dissolution of Time
Warner.


(c) "Award" means grants of Options, SARs and/or
Restricted Shares under this Plan.


(d) "Board" means the Board of Directors of Time Warner.


(e) "Board Change" means, during any period of two
consecutive years, individuals who at the beginning of such period
constituted the entire Board ceased for any reason to constitute a
majority thereof unless the election, or the nomination for election by
Time Warner's stockholders, of each new director was approved by a vote
of at least two-thirds of the directors then still in office who were
directors at the beginning of the period.


(f) "Cash Award" means the amount of cash, if any, to be
paid to an employee pursuant to Section 7.5.


(g) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute or statutes
thereto. Reference to any specific Code section shall include any
successor section.


(h) "Committee" means the Committee comprised of


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members of the Board appointed pursuant to Section 4.


(i) "Common Stock" means the common stock, par value $.01
per share, of Time Warner.


(j) "Composite Tape" means the New York Stock Exchange
Composite Tape.


(k) "Control Purchase" means any transaction in which any
person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act), corporation or other entity (other than Time Warner
or any employee benefit plan sponsored by Time Warner or any if its
Subsidiaries) (i) shall purchase any Common Stock (or securities
convertible into Common Stock) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, without the
prior consent of the Board, or (ii) shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of Time Warner representing 20%
or more of the combined voting power of the then outstanding securities
of Time Warner ordinarily (and apart from the rights accruing under
special circumstances) having the right to vote in the election of
directors (calculated as provided in Rule 13d-3(d) in the case of
rights to acquire Time Warner's securities).


(l) "Dividend Equivalents" means, with respect to
Restricted Shares to be issued at the end of the Restriction Period, to
the extent specified by the Board only, an amount equal to the regular
cash dividends and all other distributions (or the economic equivalent
thereof) which are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.


(m) "Effective Date" means the date the Plan becomes
effective pursuant to Section 16.


(n) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor statute or
statutes thereto. Reference to any specific


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Exchange Act section shall include any successor section.


(o) "Fair Market Value" of a share of Common Stock means
the average of the high and low sales prices of a share of Common Stock
on the Composite Tape on the date in question, except as otherwise
provided in Section 6.5.


(p) "General SARs" means stock appreciation rights
subject to the terms of Section 6.5(b).


(q) "Holder" means an employee of Time Warner or any of
its Subsidiaries who has received an Award under this Plan.


(r) "ISO" means an incentive stock option within the
meaning of section 422A(b) of the Code.


(s) "Limited SARs" means stock appreciation rights
subject to the terms of Section 6.5(c).


(t) "Minimum Price Per Share" means the highest gross
price (before brokerage commissions, soliciting dealers' fees and
similar charges) paid or to be paid for any share of Common Stock
(whether by way of exchange, conversion, distribution, liquidation or
otherwise) in, or in connection with, any Approved Transaction or
Control Purchase which occurs at any time during the period beginning
on the sixtieth day prior to the date on which Limited SARs are
exercised and ending on the date on which Limited SARs are exercised.
If the consideration paid or to be paid in any such Approved
Transaction or Control Purchase shall consist, in whole or in part, of
consideration other than cash, the Board shall take such action, as in
its judgment it deems appropriate, to establish the cash value of such
consideration, but such valuation shall not be less than the value, if
any, attributed to such consideration by any other party to such
Approved Transaction or Control Purchase.


(u) "Nonqualified Stock Option" means a stock option that
is designated as a nonqualified stock option.


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(v) "Option" means any ISO or Nonqualified Stock Option.


(w) "Plan" has the meaning ascribed thereto in Section 1.


(x) "Restricted Shares" means shares of Common Stock or
the right to receive shares of Common Stock, as the case may be,
awarded pursuant to Section 7.


(y) "Restriction Period" means a period of time beginning
on the date of each award of Restricted Shares and ending on the
Valuation Date with respect to such award.


(z) "Retained Distributions" has the meaning ascribed
thereto in Section 7.3.


(aa) "SARs" means General SARs and Limited SARs.


(bb) "SEC" means the Securities and Exchange Commission.


(cc) "Subsidiary" of a person means any present or future
subsidiary of such person as such term is defined in section 425 of the
Code and any present or future trade or business, whether or not
incorporated, controlled by or under common control with such person.
An entity shall be deemed a Subsidiary of a person only for such
periods as the requisite ownership or control relationship is
maintained.


(dd) "Time Warner" means Time Warner Inc., a Delaware
corporation, and any successor thereto.


(ee) "Total Disability" means a permanent and total
disability as defined in section 22(e)(3) of the Code.


(ff) "Valuation Date" with respect to any Restricted
Shares awarded hereunder means the date designated as such in the
Agreement with respect to such award of Restricted Shares pursuant to
Section 7.


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3. STOCK SUBJECT TO THE PLAN


3.1. Number of Shares. Subject to the provisions of Section 13 and this Section 3, the maximum number of shares of Common Stock in respect of which Awards may be granted is 650,000. If and to the extent that an Option shall expire, terminate or be canceled for any reason without having been exercised (or without having been considered to have been exercised as provided in Section 6.5(a)), the shares of Common Stock subject to such expired, terminated or canceled portion of the Option shall again become available for purposes of the Plan. In addition, any Restricted Shares which are forfeited under the terms of the Plan or any Agreement shall again become available for purposes of the Plan.


3.2. Character of Shares. Shares of Common Stock deliverable under the terms of the Plan may be, in whole or in part, authorized and unissued shares of Common Stock or issued shares of Common Stock held in Time Warner's treasury, or both.


3.3. Reservation of Shares. Time Warner shall at all times reserve a number of shares of Common Stock (authorized and unissued Common Stock, issued Common Stock held in Time Warner's treasury, or both) equal to the maximum number of shares that may be subject to outstanding Awards and future Awards under the Plan.


4. ADMINISTRATION


4.1. Powers. The Plan shall be administered by the Board. Subject to the express provisions of the Plan, the Board shall have plenary authority, in its discretion, to grant Awards under the Plan and to determine the terms and conditions (which need not be identical) of all Awards so granted, including without limitation, (a) the purchase price, if any, of each Restricted Share, (b) the individuals to whom, and the time or times at which, Awards shall be granted or awarded, (c) the number of shares to be subject to each Award, (d) whether an Option shall be an ISO or a Nonqualified Stock Option, (e) when an Option or SAR can be exercised and whether in whole or


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in installments, (f) the time or times and the conditions subject to which Restricted Shares shall become vested and any Cash Awards shall become payable, and (g) the form, terms and provisions of any Agreement (which terms may be amended, subject to Section 15).


4.2. Factors to Consider. In making determinations hereunder, the Board may take into account the nature of the services rendered by the respective employees, their dedication and past contributions to Time Warner and its Subsidiaries, their present and potential contributions to the success of Time Warner and its Subsidiaries and such other factors as the Board in its discretion shall deem relevant.


4.3. Interpretation. Subject to the express provisions of the Plan, the Board shall have plenary authority to interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Plan. The determinations of the Board on the matters referred to in this Section 4 shall be conclusive.


4.4. Delegation to Committee. Notwithstanding anything to the contrary contained herein, the Board may at any time, or from time to time, appoint a Committee and delegate to such Committee the authority of the Board to administer the Plan, including to the extent provided by the Board, the power to further delegate such authority. Upon such appointment and delegation, any such Committee shall have all the powers, privileges and duties of the Board in the administration of the Plan to the extent provided in such delegation, except for the power to appoint members of the Committee and to terminate, modify or amend the Plan. The Board may from time to time appoint members of any such Committee in substitution for or in addition to members previously appointed, may fill vacancies in such Committee and may discharge such Committee.


Any such Committee shall select one of its members as its chairman and shall hold its meeting at such times and places as it shall deem advisable. A majority of members shall constitute a quorum and all determinations shall be made by a majority of such quorum. Any determination reduced to writing and signed by all of the members shall be fully as effective as


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if it had been made by a majority vote at a meeting duly called and held.


5. ELIGIBILITY


5.1. General. Awards may be made only to (a) employees of Time Warner or any of its Subsidiaries (including officers and directors of any of Time Warner's Subsidiaries), other than officers or directors of Time Warner who are subject to Section 16 of the Exchange Act, and (b) prospective employees of Time Warner or any of its Subsidiaries. The exercise of Options and SARs and the vesting of Restricted Shares granted to a prospective employee shall be conditioned upon such person becoming an employee of Time Warner or any of its Subsidiaries. For purposes of the Plan, the term "prospective employee" shall mean any person who holds an outstanding offer
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