As filed with the Securities and Exchange Commission on December 18, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TIME WARNER ENTERTAINMENT COMPANY, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3666692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
75 Rockefeller Plaza
New York, New York 10019
(Address of Principal Executive Offices) (Zip Code)
TIME WARNER ENTERTAINMENT
DEFERRED COMPENSATION PLAN
(Full title of the Plan)
Peter R. Haje, Esq.
Executive Vice President and General Counsel
75 Rockefeller Plaza
New York, New York 10019
(Name and address of agent for service)
(212) 484-8000
(Telephone number, including area code, of agent for service)
<TABLE>
--------------------- ------------------- ---------------------- ---------------------- ------------------
Title of Securities Proposed Maximum Proposed Maximum Amount of
to be Registered Amount to be Offering Price Per Aggregate Offering Registration Fee
Registered Obligation (2) Price (2)
--------------------- ------------------- ---------------------- ---------------------- ------------------
--------------------- ------------------- ---------------------- ---------------------- ------------------
<S> <C> <C> <C> <C> <C>
Deferred
Compensation
Obligations (1) $77,000,000 100% $77,000,000 $21,406.00
--------------------- ------------------- ---------------------- ---------------------- ------------------
(1) The Deferred Compensation Obligations are unsecured obligations of Time Warner Entertainment Company,
L.P. to pay deferred compensation in the future in accordance with the terms of the Time Warner
Entertainment Deferred Compensation Plan.
(2) Estimated solely for the purpose of determining the registration fee.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the
Registrant (File No. 001-12878) pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), are hereby incorporated by reference in this
Registration Statement:
1. The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 (the "1997 Form 10-K"); and
2. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
All documents and reports subsequently filed by the Registrant pursuant to
Sections 13(a) and (c), 14 or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities offered hereby
have been sold, or which deregisters all such securities remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing of such documents or reports. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein and to be a part hereof shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Under the Time Warner Entertainment Deferred Compensation Plan (the
"Plan"), Time Warner Entertainment Company, L.P. (the "Company") will provide
eligible employees the opportunity to defer a specified percentage or amount of
their regular annual cash bonus. The obligations of the Company under the Plan
(the "Obligations") will be unsecured general obligations of the Company to pay
the deferred compensation in the future in accordance with the terms of the
Plan, and will rank on a parity with other unsecured and unsubordinated
indebtedness of the Company from time to time outstanding. As of September 30,
1998, the Company's total outstanding indebtedness was approximately $7.4
billion consisting principally of its outstanding senior notes and
debentures, commercial paper and indebtedness under its $7.5 billion revolving
bank Credit Agreement dated as of November 10, 1997 (as amended, the "Credit
Agreement") among the Company, the TWE-A/N Partnership, Time Warner Inc., Time
Warner Companies, Inc., Turner Broadcasting System, Inc., Time Warner Cable,
Inc. and the Chase Manhattan Bank and the other lenders party thereto.
The amount of compensation to be deferred by each participating employee
(each a "Participant") will be determined in accordance with the Plan based on
elections by each Participant. Each Obligation will be payable on the date
selected by each Participant in accordance with the terms of the Plan or, if
earlier, death, disability or other termination of employment pursuant to the
terms of the Plan. The Obligations will be indexed to one or more investment
crediting rate options (the "Crediting Rate Options") individually chosen by
each Participant from a list of investment fund options. Each Participant's
Obligation will be adjusted to reflect the investment experience, whether
positive or negative, of the selected Crediting Rate Options, including any
appreciation or depreciation. The Obligations will be denominated and be payable
in United States dollars.
A Participant's right or the right of any other person to the
Obligations cannot be assigned, alienated, sold, garnished, transferred,
pledged, or encumbered except by a written designation of a beneficiary under
the Plan, by written will, or by the laws of descent and distribution.
The Obligations are not subject to redemption, in whole or in part, prior
to the individual payment dates specified by each Participant, at the option of
the Company or through operation of a mandatory or optional sinking fund or
analogous provision. However, the Company reserves the right to amend or
terminate the Plan at any time, except that no such amendment or termination
shall adversely affect the right of the Participant to the balance of his or her
deferred account as of the date of such amendment or termination.
<PAGE>
The Obligations are not convertible into another security of the Company.
The Obligations will not have the benefit of a negative pledge or any other
affirmative or negative covenant on the part of the Company. No trustee has been
appointed having the authority to take action with respect to the Obligations
and each Participant will be responsible for acting independently with respect
to, among other things, the giving of notices, responding to any requests for
consents, waivers or amendments pertaining to the Obligations, enforcing
covenants and taking action upon default.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Ernst & Young LLP, independent auditors, have audited the
consolidated financial statements and schedules of the Registrant, Warner
Communications Inc. and American Television and Communications Corporation,
included in the Registrant's 1997 Form 10-K, as set forth in their reports,
which are incorporated herein and in the prospectus relating hereto by
reference. Such consolidated financial statements are incorporated by reference
in reliance on their reports, given on their authority as experts in accounting
and auditing.
Legal matters in connection with the Deferred Compensation Obligations
offered hereby have been passed upon for the Registrant by Thomas W. McEnerney,
Esq., 75 Rockefeller Plaza, New York, NY 10019.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is a Delaware limited partnership. Section 17-108 of the
Delaware Revised Uniform Limited Partnership Act provides that subject to such
standards and restrictions, if any, as are set forth in its partnership
agreement, a limited partnership may, and shall have the power to, indemnify and
hold harmless any partner or other person from and against any and all claims
and demands whatsoever.
Section 12.8 of the Registrant's Agreement of Limited Partnership, dated as
of October 29, 1991, as amended (the "TWE Partnership Agreement") provides that
the Registrant shall indemnify, defend and hold harmless each Representative and
officer of the Registrant from any personal liability he or she may incur by
reason of his or her action on behalf of the Registrant to the fullest extent
permitted as if the Registrant were a Delaware corporation. The Registrant's
obligations under Section 12.8 of the TWE Partnership Agreement are expressly
non-recourse to the Registrant's general partners.
Section 145 of the Delaware General Corporation Law (the
"DGCL") provides that a corporation may indemnify directors and officers as well
as other employees and individuals against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement in connection with specified
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation - a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceedings, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
in connection with the defense or settlement of such action, and the statute
requires court approval before there can be any indemnification where the person
seeking indemnification has been found liable to the corporation. The statute
provides that it is not exclusive of other indemnification that may be granted
by a corporation's charter, by-laws, disinterested director vote, stockholder
vote, agreement or otherwise.
Article VI of the By-laws of Time Warner Inc. ("Time Warner"),
the ultimate parent of the Registrant and its general partners, requires
indemnification to the fullest extent permitted under Delaware law of any person
who is or was a director or officer of Time Warner who is or was involved or
threatened to be made so involved in any action, suit or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that
such person is or was serving as a director, officer or employee of Time Warner
or any predecessor of Time Warner or was serving at the request of Time Warner
as a director, officer or employee of any other enterprise, which would include
the Registrant and its general partners.
Time Warner's Directors' and Officers' Liability and Reimbursement
Insurance Policy is designed to reimburse Time Warner for any payments made by
it pursuant to the foregoing indemnification. Such policy has coverage of
$50,000,000.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
<PAGE>
ITEM 8. EXHIBITS.
The exhibits listed on the accompanying Exhibit Index are filed or
incorporated by reference as part of this Registration Statement.
ITEM 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3, Form S-8,
or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission
by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or other-
wise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City and State of New York, on December 18, 1998.
TIME WARNER ENTERTAINMENT COMPANY, L.P.
By: WARNER COMMUNICATIONS INC.,
As General Partner
By: /s/John A. LaBarca
____________________________________
Name: John A. LaBarca
Title: Vice President and Controller
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons on
December 18, 1998 in the capacities indicated.
SIGNATURE TITLE
*
________________________________ Chairman of the Board and
(Gerald M. Levin) Chief Executive Officer of the
Registrant and Warner Communications
Inc. ("WCI") (Principal Executive )
Officer and Director of WCI
*
_________________________________ Executive Vice President and Chief
(Richard J. Bressler) Financial Officer of the Registrant and
Director and Senior Vice President and
Chief Financial Officer of WCI
(Principal Financial Officer)
/s/John A. LaBarca
_________________________________ Senior Vice President and Controller
(John A. LaBarca) of the Registrant and Vice President and
Controller of WCI (Principal Accounting
Officer)
/s/Peter R. Haje
_________________________________ Director of WCI
(Peter R. Haje)
*
_________________________________ Director of WCI
(Richard D. Parsons)
*By: /s/Peter R. Haje
__________________________________
(Attorney-in-Fact)
<PAGE>
EXHIBIT INDEX
Exhibit
NUMBER DESCRIPTION Page
4 Time Warner Entertainment Deferred Compensation Plan.
5 Opinion of Thomas W. McEnerney, Esq. regarding the
legality of the securities being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Thomas W. McEnerney, Esq. included in *
Exhibit 5.
24 Powers of Attorney dated as of December 14, 1998.
__________________________
*Incorporated by reference
Exhibit 4
TIME WARNER ENTERTAINMENT
DEFERRED COMPENSATION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 Establishment of Plan. Time Warner Entertainment Company, L.P. (the
"Company") has established this plan effective as of November 18, 1998, to be
known as the Time Warner Entertainment Deferred Compensation Plan (the "Plan").
1.2 Purpose of Plan. The Plan is intended to be an unfunded,
non-qualified deferred compensation plan maintained to provide deferred
compensation for a select group of management or highly compensated employees
under Section 201(2) of the Employee Retirement Income Security Act of 1974, by
providing Eligible Employees a means of irrevocably deferring to a future Year
the receipt of certain compensation from Employing Companies in excess of the
Compensation Limit. The Plan will also accept transfers of account balances
attributable to compensation previously irrevocably deferred under (i) the Time
Warner Deferred Compensation (pre-1999) Plan (the "Pre-1999 Plan") and (ii) the
employment agreements of certain senior officers and key personnel of the
Company and its Affiliates, subject to the terms and conditions for making such
transfers specified in the Pre-1999 Plan and each of the employment agreements.
1.3 Applicability of Plan. The provisions of the Plan are applicable
only to Employees of Employing Companies employed on or after the effective date
of the Plan.
ARTICLE II
DEFINITIONS
2.1 Definitions. Whenever used in the Plan, the following terms
shall have the respective meanings set forth below unless otherwise expressly
provided, and when the defined meaning is intended, the term is capitalized.
2.2. Affiliate: An Employing Company and any entity affiliated with
the Employing Company within the meaning of Code Section 414(b), with respect to
controlled groups of corporations, Section 414(c) with respect to trades or
businesses under common control with the Employing Company, and Section 414(m)
with respect to affiliated service groups, and any other entity required to be
aggregated with an Employing Company pursuant to regulations under Section
414(o) of the Code.
Except as described below, the term "Affiliate" shall generally mean an
entity in which the Employing Company has an ownership interest directly or
indirectly of at least eighty percent (80%).
(a) The Committee may designate any entity which is related to
the Company by less than eighty percent (80%) as an Affiliate.
(b) If an Employing Company adopts the Plan only for the
benefit of certain of its divisions, locations or operations, all other
divisions, locations or operations of said Employing Company shall be treated as
Affiliates.
(c) Time Warner Inc., each division of Time Warner Inc., any
entity affiliated with Time Warner Inc. within the meaning of Sections
414(b), 414(c) and 414(m) of the Code, and any other entity required
to be aggregated with Time Warner Inc. pursuant to regulations under
Section 414(o) of the Code shall be treated as Affiliates.
(d) TWE-A/N, each division of TWE-A/N, any entity
affiliated with TWE-A/N within the meaning of Sections 414(b), 414(c) and 414(m)
of the Code, and any other entity required to be aggregated with TWE-A/N
pursuant to regulations under Section 414(o) of the Code shall be treated as
Affiliates.
2.3 Adverse Tax Effect: Any reduction in the benefits available to,
or any adverse impact on, the Company from the use of Corporate Owned Life
Insurance ("COLI") as an investment vehicle to fund the obligations of the
Company under the Plan.
<PAGE>
2.4 Beneficiary: The person or persons designated from time to time
by a Participant or Inactive Participant, by notice to the Committee, to receive
any benefits payable under the Plan after his or her death, which designation
has not been revoked by notice to the Committee at the date of the Participant's
or Inactive Participant's death. Such notice shall be in a form as required by
the Committee or acceptable to it which is properly completed and delivered to
the Committee, any member thereof or its designee. Notice to the Committee shall
be deemed to have been given when it is actually received by any such
individual.
2.5 Board: The general partners of the Company.
2.6 Code: The Internal Revenue Code of 1986, as amended.
2.7 Committee: The committee appointed by the Company as provided for
herein.
2.8 Company: Time Warner Entertainment Company, L.P.
2.9 Compensation Limit: The compensation limit of Section 401(a)(17)
of the Code, as adjusted under Section 401(a)(17)(B) of the Code for increases
in the cost of living.
2.10 Deferred Compensation Account: The separate account established
under Article V of the Plan for each Participant and Inactive Participant
representing amounts deferred by a Participant pursuant to Article III.
2.11 Disability: Permanent and total disability as determined by the
Social Security Administration or any disability for which a Participant is
receiving monthly benefits under the provisions of the Time Warner Inc. Long
Term Disability Plan or, in the case of an employee covered by a long term
disability plan of an Affiliate, under the provisions of such plan, whichever
shall occur first.
2.12 Eligible Employee: An individual who meets the eligibility
requirements of Section 3.1.
2.13 Employee: An individual employed by an Employing Company.
2.14 Employing Company: The Company and each Affiliate which has been
authorized by the Committee to participate in the Plan and has adopted the Plan.
2.15 ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
2.16 Inactive Participant: A Participant whose employment has
terminated with the Company and any Affiliate and whose Deferred Compensation
Account has not been fully distributed.
2.17 Investment Committee: The Investment Committee as provided for
herein.
2.18 Investment Direction: A Participant's or Inactive Participant's
direction to the recordkeeper of the Plan, in the form and manner prescribed by
the Committee, in accordance with either written directions or directions made
through the recordkeeper's telephone system directing which Investment Funds
will be credited with his or her deferrals and transfers of all or part of the
deferred amounts and any earnings thereon from other Investment Funds, the
Pre-1999 Plan and certain employment agreements, as provided for herein.
2.19 Investment Funds: The hypothetical investment funds, as determined
from time to time by the Board or the Investment Committee.
2.20 Participant: Each Employee who participates in the Plan in
accordance with the terms and conditions of the Plan.
<PAGE>
2.21 Plan: This plan, the Time Warner Entertainment Deferred Compensation
Plan as set forth herein and as it may be amended from time to time.
2.22 Retirement: The term used to indicate that a Participant, as of
the date his or her employment terminates with the Company and any Affiliate, is
eligible for retirement under the then current qualified defined benefit plan of
the Company or the Affiliate from which he or she is terminating employment. If
such company does not have a qualified defined benefit plan, eligibility for
retirement shall be determined by the applicable provision in the qualified
defined contribution plan of such company for which the Participant is eligible,
and, if more than one, the plan which would result in the earliest distribution
under this Plan.
2.23 Tax Event: The first to occur of any of the following events (as
determined by the Committee):
(a) any amendments to, clarification of, or change in the
laws of the United States or taxing authority thereof that has an Adverse Tax
Effect,
(b) any judicial decision, administrative pronouncement,
published or private ruling, technical advice memorandum, regulatory procedure,
notice or announcement ("Administrative Action") that has an Adverse Tax Effect,
(c) any amendment to, clarification of, or change in the
position or the interpretation of any Administrative Action
that has an Adverse Tax Effect, or
(d) the receipt by the Company or any of its Affiliates or
subsidiaries of a Notice of Proposed Adjustment (or notice similar thereto)
from the Internal Revenue Service proposing an adjustment which would result
in an Adverse Tax Effect.
2.24 TWE-A/N: Time Warner Entertainment-Advance/Newhouse Partnership.
2.25 Valuation Date: With respect to the Investment Funds, each business
day when the New York Stock Exchange is open.
2.26 Year: A calendar year.
ARTICLE III
PARTICIPANT DEFERRALS
3.1 Eligibility. The Employees who shall be eligible to make
deferral elections under the Plan are those salaried officers and other key
employees of an Employing Company who at the time of a deferral election
pursuant to Section 3.3 below:
(i) are on a regular periodic U.S. payroll of the Employing
Company; and
(ii) have a current base salary plus bonus in excess of the
Compensation Limit or are otherwise designated as
eligible by the Committee. For purposes of this
subsection 3.1(ii), "bonus" means any annual bonus
(paid or deferred) pursuant to a regular program (but
excluding long-term cash incentive plan payments other
than those specified in Section 3.5 and commission,
spot and similar bonuses) for the Year preceding the
current Year, except that, in the case of a deferral
election to be made by a newly hired Employee (which
election shall be made available at the sole discretion
of the Employing Company), with respect to a bonus to
be earned in (A) the current Year, "bonus" means the
target or otherwise estimated bonus for that portion of
the current Year after the date of his or her hire, and
(B) the Year following hire, "bonus" means the target
or otherwise estimated bonus for the current Year.
The Committee may from time to time, in its sole and absolute
discretion, modify the above eligibility requirements and make such additional
or other requirements for eligibility as it may determine.
<PAGE>
3.2 Compensation Eligible for Deferral. (a) An Eligible Employee may
elect to defer receipt of all or a specified portion of any bonus, but only to
the extent the receipt thereof would cause the Eligible Employee's compensation
to exceed the Compensation Limit. Each such deferral may be expressed as a
percentage, in 10% increments only, but in no event shall any election result in
a deferral of less than $5,000. The Eligible Employee may elect to have the
designated percentage apply only to that portion of the bonus in excess of a
certain dollar amount that he or she specifies when making the election. In lieu
of designating a percentage, the Eligible Employee may elect to have a specific
dollar amount of the bonus deferred. For purposes of this Section 3.2, "bonus"
means any annual bonus payable pursuant to a regular program (but excluding
long-term cash incentive plan payments other than those specified in Section 3.5
and commission, spot and similar bonuses) and which would otherwise be payable
in cash to an Eligible Employee for services as an Employee.
(b) An Eligible Employee whose compensation is payable under
an employment agreement with the Company or another Employing Company
which provides for deferred compensation may elect to defer such
deferred compensation under the Plan, subject to the terms of
such agreement. Any such deferral so elected shall be made in the same
manner as provided for in subsection (a). Notwithstanding the
foregoing, any compensation previously deferred under an employment
agreement shall be subject to deferral under the Plan only as provided
for in Section 3.6(b).
(c) Whenever any compensation eligible for deferral
under the Plan is also eligible for deferral, in whole or part, under any other
deferred compensation plan (such as an excess 401(k) plan), the amount of such
compensation eligible for deferral under the Plan shall be net of any amount
elected for deferral under the other plan.
3.3 Deferral Elections. An Eligible Employee with the consent of the
Committee may annually make an irrevocable election to defer under the Plan
certain compensation described in Section 3.2 and participate herein by
timely delivering a properly executed election to the Committee on a form
prescribed by the Committee. The election form shall specify with respect
to the compensation to be deferred under the Plan for the Year, pursuant to
the provisions of Section 3.2 and Article V:
(i) the percentage of the bonus or compensation specified in
Section 3.2(b) to be deferred, the certain dollar amount of
such bonus or compensation in excess of which the deferral
has been elected, if applicable or, the specific dollar
amount to be deferred; and
(ii) the time for the commencement of payment of the deferred
compensation, which must be either on account of retirement
or at an in-service Year to be specified by the Eligible
Employee. Compensation which is to be deferred to an
in-service payment date must be deferred for no fewer than
three Years following the Year in which it was earned.
3.4 Effective Date of Election. (a) An election to defer
compensation under the Plan must be received by the Committee prior to the
beginning of the Year in which such compensation is earned. Such an election
shall become irrevocable as of the last day of the Year prior to the Year in
which such compensation is earned. Notwithstanding the foregoing, an election to
defer compensation to be earned in 1999 must be received by the Committee prior
to January 31, 1999, at which time it shall become irrevocable.
(b) Notwithstanding the date specified in subsection (a)
above, the Committee may prescribe an earlier or later date by which
time an Eligible Employee must elect to defer such compensation.
(c) Under no circumstances may an Eligible Employee at any
time defer compensation to which he or she has attained a legally
enforceable right to receive currently.
3.5 Certain Incentive Plans. Notwithstanding anything to the contrary
herein, the term "bonus" wherever used in this Article III shall include any
amounts payable to eligible employees of the following divisions of the Company:
Home Box Office and Home Box Office Communications, who participate in the
1993-1995 Cash Flow Incentive Plan, the 1996-1999 Cash Flow Incentive Plan, and
any successor plan, with respect to amounts they may earn under such incentive
plans, provided, however, that any such elections shall be made irrevocably
either before the beginning of the term of the applicable plan or within 30 days
after the signing of an eligible employee's renegotiated or newly negotiated
employment contract.
<PAGE>
3.6 Transfers. (a) Each "Eligible Participant" in the Pre-1999
Plan may make a one time election no later than January 31, 1999 (which shall
become irrevocable as of such date) by a written notice to the Committee to have
his or her entire account balance in the Pre-1999 Plan transferred to and
deferred under his or her Deferred Compensation Account in the Plan. For
purposes of this Section, an "Eligible Participant" is any Participant in the
Pre-1999 Plan who has not been designated (either individually or by class) by
the Committee, in its sole discretion, as being ineligible to make such
transfers.
(b) Each Eligible Employee, whose compensation is payable
under an employment agreement with the Company or another Employing Company
which provides for deferred compensation, may elect to have transferred to and
deferred under his or her Deferred Compensation Account in the Plan the balance,
in whole or in part, of the compensation previously deferred under such
agreement, subject to the terms thereof. Such an election can be made at any
time, but only once in the Eligible Employee's lifetime.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNT
4.1 Deferred Compensation Account. (a) A Deferred Compensation
Account shall be established for each Participant who makes a deferral election
pursuant to Article III. A Participant's or Inactive Participant's Deferred
Compensation Account shall consist of the Compensation deferred by a Participant
in any Year under the Plan, increased or decreased by any gains or losses
thereon.
(b) The Company shall maintain the Deferred Compensation Accounts
of all Participants and Inactive Participants.
(c) All payments made under the Plan shall be made directly by
the Company from its general assets subject to the claims of any creditors and
no deferred compensation under the Plan shall be segregated or earmarked or
held in trust. The Plan is an unfunded and unsecured contractual obligation of
the Company. Participants, Inactive Participants and Beneficiaries shall be
unsecured creditors of the Comany with respect to all oblitgations owed to them
under the Plan. Participants, Inactive Participants and Beneficiaries shall
not have any interest in any fund or specific asset of the Company by reason of
any amount credited to a Deferred Compensation Account, nor shall any such
person have any right to receive any distribution under the Plan except as
explicitly stated herein. The Company shall not designate any funds or assets
to specifically provide for the distribution of the value of a Deferred
Compensation Account or issue any notes or security for the payment thereof.
Any asset or reserve that the Company may purchase or establish shall not serve
as security to Participants, Inactive Participants and Beneficiaries for the
performance of the Company under the Plan.
4.2 Hypothetical Investment. (a) For crediting rate purposes, amounts
creditedto a Participant's or Inactive Participant's Deferred Compensation
Account shall be deemed to be invested in one or more of the following deemed
Investment Funds, according to his or her Investment Direction: Time Warner Inc.
Stock Fund, International Equity Fund, Aggressive Equity Fund, Income-Managed
Equity Fund, Balanced Investment Fund and Capital Preservation Fund. For any
period, the deemed return on each of these Investment Funds shall be the same as
the return for such period on each similarly named fund offered under the Time
Warner Defined Contribution Plans Master Trust.
(b) The Company, by action of the Investment Committee or the
Board, may add to, decrease or change the Investment Funds offered under the
Plan, at any time and for any reason. Participants, Inactive Participants and
Beneficiaries shall not have the right to continue any particular deferral
option.
(c) The Company shall be under no obligation to invest
amounts corresponding to any deferral options chosen by Participants or Inactive
Participants. Any such allocation to any Deferred Compensation Account shall be
made solely for the purpose of determining the value of such account under the
Plan.
4.3 Investment Direction. Deferrals shall be credited to the
Investment Funds in accordance with a Participant's or Inactive Participant's
Investment Direction. A Participant or Inactive Participant shall direct that
his or her deferrals be applied, in multiples of one percent, to deemed
investments in any or all of the Investment Funds.
4.4 Changes in Investment Direction. A Participant or Inactive
Participant may make one Investment Direction in each calendar quarter,
separately with respect to either or both new deferrals or previous deferrals
and any earnings thereon.
<PAGE>
4.5 Manner of Hypothetical Investment. (a) For purposes of the
hypothetical investment under Section 4.2, deferred compensation shall be
considered to be invested on the date the recordkeeper of the Plan records the
deferral amount.
(b) As of each Valuation Date, the recordkeeper of the
Plan shall determine the value of each Participant's or Inactive
Participant's Deferred Compensation Account.
(c) For purposes of distribution pursuant to Article V,
the balance of each Deferred Compensation Account shall be valued as
of the Valuation Date immediately preceding the date that the
Committee commences the processing of the distribution of the balance
of such account, or the particular installment thereof.
4.6 Participant Assumes Risk of Loss. Each Participant and Inactive
Participant or his or her respective Beneficiary assumes the risk in connection
with any decrease in value of his or her Deferred Compensation Account deemed
invested in the Investment Funds.
4.7 Statement of Account. As soon as reasonably practicable after
the end of each calendar quarter, a statement shall be sent to each Participant
and Inactive Participant with respect to the value of his or her Deferred
Compensation Account as of the end of such quarter.
ARTICLE V
PAYMENT OF DEFERRED COMPENSATION ACCOUNT
5.1 Payment on Account of Retirement. (a) In the event of the
termination of the Participant's employment with the Company or an Affiliate on
account of his or her Retirement, the Participant's Deferred Compensation
Account shall be distributed to him or her in ten annual installment payments.
(b) Notwithstanding any other provision of this Section
5.1, if the value of the Participant's Deferred Compensation Account is less
than $50,000 as of the Valuation Date immediately prior to the date of
Retirement, payment shall be made in a lump sum.
(c) Notwithstanding subsection (a) above, if the value
of a Participant's Deferred Compensation Account is $50,000 or more, such
Participant may, at least 12 months prior to his or her Retirement date, request
a lump sum payment, and the Committee may, in its sole and absolute discretion,
make payment in a lump sum.
(d) The first installment, or lump sum, as the case may
be, shall be distributed as soon as practicable on or after April 1 of the Year
following the date of Retirement. Subsequent annual installment payments shall
be distributed as soon as practicable on or after each following April 1.
(e) All requests by a Participant under this Section
5.1 shall be made only by delivering a written notice to the Committee on a form
prescribed by it.
5.2 Special In-Service Payment. Notwithstanding the payment
provisions in subsections (a) through (d) of Section 5.1, a Participant may
request, by delivering written notice to the Committee on a form prescribed by
it, one special in-service payment in a lump sum of all or any portion of the
Participant's Deferred Compensation Account (but not less than $5,000), to be
distributed as soon as practicable after the expiration of 36 months following
the month in which he or she has made the request, and the Committee may, in its
sole and absolute discretion, make such payment.
(i) The value of any such special in-service payment shall
not include amounts payable under existing in-service
payment elections.
(ii) In the event of the termination of the Participant's
employment with the Company or an Affiliate for any
reason, prior to the payment of any such special
in-service payment, it shall be paid in the same manner
and at the same time or times as any other payments of
the Participant's Deferred Compensation Account due
under this Article. In the event of death, payment
shall be made as provided for in Section 5.6.
(iii) In requesting a special in-service payment, a
Participant must specify that such payment is to be
applicable to the amount or amounts which were deferred
in a specific Year or Years. All or a percentage of the
deferral for such Year or Years may be requested.
<PAGE>
5.3 Payment on Account of Disability. (a) In the event a Participant
meets the definition of Disability, the value of the Participant's Deferred
Compensation Account shall be distributed to him or her in five annual
installment payments.
(b) Notwithstanding subsection (a) above, if the value
of the Participant's Deferred Compensation Account is less than $50,000 as of
the Valuation Date immediately prior to the date the definition of Disability is
met, payment shall be made in a lump sum.
(c) The first installment, or lump sum, as the case may
be, shall be distributed as soon as practicable on or after April 1 of the Year
following the date the Participant has met the definition of Disability.
Subsequent annual installment payments shall be distributed as soon as
practicable on or after each following April 1.
(d) If a Participant or Inactive Participant no longer
meets the definition of Disability and returns to work with the Company or an
Affiliate, no further payments shall be made on account of the prior Disability,
and distribution of his or her remaining Deferred Compensation Account shall be
made as otherwise provided in this Article V.
5.4 In-Service Payments. (a) An in-service payment elected by a
Participant pursuant to Section 3.3(ii) shall be distributed in a lump sum as
soon as practicable on or after April 1 in the Year specified by the
Participant.
(b) Notwithstanding subsection (a) above, a Participant
may request, by delivering written notice to the Committee on a form prescribed
by it prior to January 1 of the Year preceding that in which the in-service
payment is to be made, that the Committee, in its sole and absolute discretion,
defer such payment until such later Year as the Participant requests. Any such
additional deferral (i) must be for full Years, and for no fewer than three
Years following the Year in which payment would have been made but for the
additional deferral, (ii) must be for the current value of the whole amount
originally deferred, (iii) can only be made once with respect to any in-service
payment, and (iv) shall be distributed in a lump sum as soon as practicable on
or after April 1 in the Year specified by the Participant. In lieu of specifying
the Year in which the payment is to be made, the Participant may specify that
payment of the deferral shall be made on account of retirement, in which case
it shall be distributed in accordance with the provisions of Section 5.1 as
soon as practicable on or after April 1 of the Year following the date of
Retirement.
(c) In the event of the termination of a Participant's
employment for any reason prior to the time any in-service payment under this
Section 5.4 would have been made, distribution of such payment shall be made
according to the manner of payment specified in Section 5.1, 5.2, 5.3, 5.5 or
5.6, based on the Participant's actual reason for termination of employment;
provided, however, that the unpaid balance of any in-service payment shall be
paid in full at the time such in-service payment would have been made but for
such termination of employment.
(d) The Committee may, in its sole and absolute discretion,
defer any in-service payment previously elected by any officer of the
Company or Time Warner Inc. who at the time of the designated in-service
payment date is at or above the level of a senior vice president.
In the event of any such deferral by the Committee, payment shall be made
under this Article V as if such officer had made a deferral election for
payment on account of Retirement.
5.5 Payment on Account of Termination of Employment other than on
Account of Death, Disability or Retirement. (a) In the event of the termination
of employment with the Company or an Affiliate for reasons other than death,
Disability or Retirement, the value of the Participant's Deferred Compensation
Account shall be distributed to him or her in five annual installment payments.
A Participant shall not be considered to have terminated employment for purposes
of the Plan if he or she transfers directly to the Company or an Affiliate.
(b) Notwithstanding subsection (a) above, if the value
of the Participant's Deferred Compensation Account is less than $50,000 as of
the applicable Valuation Date pursuant to Section 4.5(b), payment shall be made
in a lump sum.
(c) The first installment, or lump sum, as the case may
be, shall be distributed as soon as practicable on or after April 1 of the Year
following the date the Participant has terminated employment. Subsequent annual
installment payments shall be distributed as soon as practicable on or after
each following April 1.
<PAGE>
5.6 Payment to Beneficiary or Estate in the Event of Death. Notwithstanding
the provisions for payment described in Sections 5.1 through 5.5 above, in the
event of the death of a Participant or Inactive Participant before the
distribution of his or her Deferred Compensation Account has commenced, or
before such account has been fully distributed, the value of such account shall
be determined as of the Valuation Date coincident with or immediately prior to
the date that the Committee commences the processing of the distribution, after
both a written notice of his or her death and a death certificate have been
received by the Committee. Such account shall be distributed in a lump sum as
soon as practicable to the Participant's or Inactive Participant's Beneficiary
(or, if no person has been designated or if no person so designated survives the
Participant or Inactive Participant, to such Participant's or Inactive
Participant's estate or if such Beneficiary survives the Participant or Inactive
Participant, but dies prior to payment, to such Beneficiary's estate). In case
any Participant or Inactive Participant and his or her Beneficiary die in or as
a result of a common accident or disaster and under such circumstances as to
make it impossible to determine which of them was the last to die, the
Participant or Inactive Participant shall be deemed to have survived his or her
Beneficiary. Distributions hereunder shall be subject to such administrative and
procedural requirements and forms as the Committee in its discretion may
require.
5.7 Severe Unforeseeable Financial Emergency Payments. Notwithstanding
any other provisions of the Plan, a Participant or Inactive Participant may make
an application to the Committee that he or she has a severe unforeseeable
financial emergency of such a substantial nature and beyond the individual's
control that a payment of compensation previously deferred under the Plan
or recision of a deferral election is warranted. After consideration of
the application, and a determination that such an emergency exists, the
Committee may, in its sole and absolute discretion, direct that all or a portion
of the balance of such individual's Deferred Compensation Account be paid to him
or her in such manner and at such time as the Committee shall specify, or may
rescind, in whole or in part, a deferral election with respect to a bonus
deferred but not yet payable, but only to the extent reasonably required to
satisfy the emergency need.
5.8 Incapacity. The Committee may direct that any amounts
distributable under the Plan to a person under a legal disability be made to
(and be withheld until the appointment of) a representative qualified pursuant
to law to receive such payment on such person's behalf.
5.9 Method of Paying Installments. Installment payments as provided
for in this Article V shall be paid as follows: (i) in the case of installments
paid over five Years: 1/5 of the value of the Deferred Compensation Account
subject to installment payments shall be paid in the first installment; 1/4 of
the remaining value shall be paid in the second installment; 1/3 of the
remaining value shall be paid in the third installment; 1/2 of the remaining
value shall be paid in the fourth installment; and all of the remaining value in
the account shall be paid in the fifth and final installment, and (ii) in the
case of installments paid over ten Years: 1/10 of the value of the Deferred
Compensation Account subject to installment payments shall be paid in the first
installment; 1/9 of the remaining value shall be paid in the second installment;
1/8 of the remaining value shall be paid in the third installment; 1/7 of the
remaining value shall be paid in the fourth installment; 1/6 of the remaining
value shall be paid in the fifth installment; 1/5 of the remaining value shall
be paid in the sixth installment; 1/4 of the remaining value shall be paid in
the seventh installment; 1/3 of the remaining value shall be paid in the eighth
installment; 1/2 of the remaining value shall be paid in the ninth installment
and all of the remaining value in the account shall be paid in the tenth and
final installment.
5.10 Payments Only in Cash. All payments under the Plan shall be made only
in cash.
5.11 Occurrence of a Tax Event: If a Tax Event shall occur and the
Committee thereafter determines to change the Investment Funds offered as
crediting rates under the Plan for amounts that have been deferred and elected
to be deferred under the Plan prior to the effective date of such change, then
each Participant and Inactive Participant shall have a one-time right to elect
to (a) maintain his or her Deferred Compensation Account under the Plan in the
Investment Funds then offered as crediting rates under the Plan or (b) receive a
lump sum distribution of all (but not less than all) of his or her Deferred
Compensation Account under the Plan and all amounts elected to be deferred under
the Plan but not yet credited to the Plan.
5.12 Rehire of Inactive Participant. If an Inactive Participant
returns to work with the Company or an Affiliate, no further payments shall be
made on account of the prior termination of employment, and distribution of his
or her remaining Deferred Compensation Account shall be made as otherwise
provided in this Article V.
<PAGE>
ARTICLE VI
ADMINISTRATION
6.1 The Committee. The Plan shall be administered by a Committee,
consisting of not less than three members to be appointed from time to time by
the Board. The members of the Committee shall serve at the pleasure of, and may
be removed by the Board at any time. Any member of the Committee may resign at
any time by giving notice to the Board. Any such resignation shall take effect
at the date of receipt of such notice or at any later date specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective. No member of the Committee shall
receive any compensation for his or her services as such. Participants and
Inactive Participants may be members of the Committee but may not participate in
any decision affecting their own account in any case where the Committee may
take discretionary action under Article V.
6.2 Quorum and Actions of Committee. A majority of the members of
the Committee at the time in office shall constitute a quorum for the
transaction of business. All resolutions or other action taken by the Committee
shall be by vote of a majority of its members present at any meeting or, without
a meeting, by instrument in writing signed by all its members. Members of the
Committee may participate in a meeting of such Committee by means of a
conference telephone or similar communications equipment that enables all
persons participating in the meeting to hear each other, and such participation
in a meeting shall constitute presence in person at the meeting.
6.3 Plan Administrator. The Committee shall be the administrator of
the Plan and shall have all powers necessary to administer the Plan, including
discretionary authority to determine eligibility for benefits and to decide
claims under the terms of the Plan, except to the extent that any such powers
are vested in any other fiduciary by the Plan or by the Committee. The Committee
may from time to time establish rules for the administration of the Plan, and it
shall have the exclusive right to interpret the Plan to decide any matters
arising in connection with the administration and operation of the Plan. All its
rules, interpretations and decisions shall be conclusive and binding on the
Employing Companies and on Eligible Employees, Participants, Inactive
Participants and Beneficiaries.
The Committee may delegate any of its powers or duties to others as it
shall determine and may retain counsel, agents and such clerical and accounting
services as it may require in carrying out the provisions of the Plan.
6.4 Reliance on Information. The Committee and Investment Committee
(as described below) may rely conclusively upon all tables, valuations,
certificates, opinions and reports furnished by any actuary, accountant,
controller, counsel, recordkeeper or other person who is employed or engaged for
any purpose in connection with the administration of the Plan.
Neither the Committee or Investment Committee nor any member of the Board
or the board of directors (or governing body) of an Affiliate and no employee of
the Company or any Affiliate shall be liable for any act or action hereunder,
whether of omission or commission, by any other member or employee or by any
agent to whom duties in connection with the administration of the Plan have been
delegated or for anything done or omitted to be done in connection with the
Plan.
6.5 Committee Records. The Committee shall keep a record of all its
proceedings and of all payments directed by it to be made to Participants,
Inactive Participants or Beneficiaries or payments made by it for expenses or
otherwise.
6.6 Investment Committee; Appointment. An Investment Committee, consisting
of three (3) or more persons, shall be appointed from time to time by the Board.
The members of the Investment Committee shall serve at the pleasure of, and may
be removed by the Board at any time. Any member of the Investment Committee may
resign at any time by giving notice to the Board. Any such resignation shall
take effect at the date of receipt of such notice or at any later date specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. Participants may be
members of the Investment Committee. Unless otherwise directed by the Board, and
except as may be required under ERISA, no bond or other security shall be
required of any members of the Investment Committee as such. No member of the
Investment Committee shall receive compensation for his services as such.
<PAGE>
6.7 Quorum and Actions of Investment Committee. A majority of the
members of the Investment Committee at the time in office shall constitute a
quorum for the transaction of business. All resolutions or other action taken by
the Investment Committee shall be by vote of a majority of its members present
at any meeting or, without a meeting, by instrument in writing signed by all its
members. Members of the Investment Committee may participate in a meeting of
such Investment Committee by means of a conference telephone or similar
communications equipment that enables all persons participating in the meeting
to hear each other, and such participation in a meeting shall constitute
presence in person at the meeting.
6.8 Investment Committee Chairman; Delegation by Investment
Committee. The members of the Investment Committee shall elect one of their
number as chairman and may elect a secretary who may, but need not, be one of
their number. The Investment Committee may delegate any of its powers or duties
among its members or to others as it shall determine. It may authorize one or
more of its members to execute or deliver any instrument or to make any payment
in its behalf. It may employ such counsel, agents and clerical, accounting,
actuarial and recordkeeping services as it may require in carrying out the
provisions of the Plan.
6.9 Investment Policy. The Board shall have the authority to
establish the overall investment policy for the Plan and may delegate such
responsibility to the Investment Committee. The Investment Committee shall take
all prudent action necessary or desirable for the purpose of carrying out the
foregoing.
6.10 Indemnification. The Company shall, to the fullest extent
permitted by law, indemnify each director, officer or employee of the Company or
any Affiliate (including the heirs, executors, administrators and other personal
representatives of such person) and each member of the Committee against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by such person in connection with
any threatened, pending or actual suit, action or proceeding (whether civil,
criminal, administrative or investigative in nature or otherwise) in which such
person may be involved by reason of the fact that he or she is or was serving
any employee benefit plans of the Company or any Affiliate in any capacity at
the request of such company.
6.11 Expenses of Administration. Any expense incurred by the Company,
the Committee or the Investment Committee relative to the administration of the
Plan shall be paid by the Employing Companies in such proportions as the Company
may direct.
ARTICLE VII
CLAIMS PROCEDURE
7.1 Participant or Beneficiary Request for Claim. Any request for a
benefit payable under the Plan shall be made in writing by a Participant or
Beneficiary (or an authorized representative of any of them), as the case may
be, and shall be delivered to any member of the Committee. Such written request
shall be deemed filed upon receipt thereof by the Committee. Such request shall
be made within the time prescribed in the Plan for claiming a particular benefit
or, if no time is so prescribed, within a reasonable time before payment of the
benefit is to commence.
7.2 Insufficiency of Information. In the event a request for
benefits contains insufficient information, the Committee shall, within a
reasonable period after receipt of such request, send a written notification to
the claimant setting forth a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why such material is necessary. The claimant's request shall be deemed filed
with the Committee on the date the Committee receives in writing such additional
information.
7.3 Request Notification. The Committee shall make a determination with
respect to a request for benefits within ninety (90) days after such request is
filed (or within such extended period prescribed below). The Committee shall
notify the claimant whether his claim has been granted or whether it has been
denied in whole or in part. Such notification shall be in writing and shall be
delivered, by mail or otherwise, to the claimant within the time period
described above. If the claim is denied in whole or in part, the written
notification shall set forth, in a manner calculated to be understood by the
claimant:
<PAGE>
(i) The specific reason or reasons for the denial;
(ii) Specific reference to pertinent provisions of the Plan
on which the denial is based; and
(iii) An explanation of the Plan's claim review procedure.
Failure by the Committee to give notification pursuant
to this Section within the time prescribed shall be
deemed a denial of the request for the purpose of
proceeding to the review stage.
7.4 Extensions. If special circumstances require an extension of
time for processing the claim, the Committee shall furnish the claimant with
written notice of such extension. Such notice shall be furnished prior to the
termination of the initial ninety (90)-day period and shall set forth the
special circumstances requiring the extension and the date by which the
Committee expects to render its decision. In no event shall such extension
exceed a period of ninety (90) days from the end of such initial ninety (90)-day
period.
7.5 Claim Review. A claimant whose request for benefits has been
denied in whole or in part, or his duly authorized representative, may, within
sixty (60) days after written notification of such denial, file with a reviewer
appointed for such purpose by the Committee (or, if none has been appointed,
with the Committee itself, with a copy to the Committee, a written request for a
review of his claim. Such written request shall be deemed filed upon receipt of
same by the reviewer.
7.6 Time Limitation on Review. A claimant who timely files a request
for review of his claim for benefits, or his duly authorized representative, may
review pertinent documents (upon reasonable notice to the reviewer) and may
submit the issues and his comments to the reviewer in writing. The reviewer
shall, within sixty (60) days after receipt of the written request for review
(or within such extended period prescribed below), communicate its decision in
writing to the claimant and/or his duly authorized representative setting forth,
in a manner calculated to be understood by the claimant, the specific reasons
for its decision and the pertinent provisions of the Plan on which the decision
is based. If the decision is not communicated within the time prescribed, the
claim shall be deemed denied on review.
7.7 Special Circumstances. If special circumstances require an
extension of time beyond the sixty (60)-day period described above for the
reviewer to render his decision, the reviewer shall furnish the claimant with
written notice of the extension required. Such notice shall be furnished prior
to the termination of the initial sixty (60)-day period and shall set forth the
special circumstances requiring the extension period. In no event shall such
extension exceed a period of sixty (60) days from the end of such initial sixty
(60)-day period.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1 Amendments. The Company (by action of the Board) or the
Committee (for the Company and the other Employing Companies) may at any time
amend the Plan.
8.2 Termination or Suspension. The continuance of the Plan and the
ability of an Eligible Employee to make a deferral for any Year are not assumed
as contractual obligations of the Company or any other Employing Company. The
Company reserves the right (for itself and the other Employing Companies) by
action of the Board or the Committee, to terminate or suspend the Plan, or to
terminate or suspend the Plan with respect to itself or an Employing Company.
Any Employing Company may terminate or suspend the Plan with respect to itself
by executing and delivering to the Company or the Committee such documents as
the Company or Committee shall deem necessary or desirable.
8.3 Participants' Rights to Payment. No termination of the Plan or
amendment thereto shall deprive a Participant or Inactive Participant of the
right to payment of deferred compensation credited as of the date of termination
or amendment, in accordance with the terms of the Plan as of the date of such
termination or amendment; provided, however, that in the event of termination of
the Plan, or termination of the Plan with respect to the Company or one or more
other Employing Companies, the Committee may, in its sole and absolute
discretion, accelerate the payment of all such credited deferred compensation on
a uniform basis for all Participants and Inactive Participants or, in the case
of termination of the Plan with respect to one or more other Employing
Companies, for all Participants and Inactive Participants of such other
Employing Companies only.
<PAGE>
ARTICLE IX
PARTICIPATING COMPANIES
9.1 Adoption by Other Entities. Upon the approval of the Company or
the Committee, the Plan may be adopted by any Affiliate by executing and
delivering to the Company or the Committee such documents as the Company or
Committee shall deem necessary or desirable. The provisions of the Plan shall be
fully applicable to such entity except as may otherwise be agreed to by such
adopting company and the Company or Committee.
ARTICLE X
GENERAL PROVISIONS
10.1 Participants' Rights Unsecured. The right of any Participant
or Inactive Participant to receive future payments under the provisions of the
Plan shall be an unsecured claim against the general assets of the Employing
Company employing the Participant at the time that his or her compensation is
deferred. The Company, and any other Employing Company or former Employing
Company shall not guarantee or be liable for payment of benefits to the
employees of any other Employing Company or former Employing Company under the
Plan.
10.2 Non-Assignability. The right of any person to receive any
benefit payable under the Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, lien
or charge, and any such benefit shall not, except to such extent as may be
required by law, in any manner be liable for or subject to the debts, contracts,
liabilities, engagements or torts of the person who shall be entitled to such
benefits, nor shall it be subject to attachment or legal process for or against
such person.
10.3 Affiliate Ceasing to be Such. (a) In the event that a
corporation or unincorporated entity ceases at any time to meet the definition
of an Affiliate, such corporation or entity shall cease as of such time to be an
Employing Company, if it had been such, and those of its Employees who would
have been Eligible Employees under the Plan shall cease to be such.
(b) Payments to Participants employed by any Affiliate which
ceases to be such shall be made pursuant to Article V unless prior to the end of
the Year in which such company ceases to be an Affiliate, it adopts a non-
qualified deferred compensation plan and agrees to the transfer of the Deferred
Compensation Accounts of all such Participants to its plan and to assume all
obligations accrued under the Plan as of the date of such transfer with respect
to such accounts and subsequent distributions thereof.
10.4 No Rights Against the Company. The establishment of the Plan,
any amendment or other modification thereof, or any payments hereunder, shall
not be construed as giving to any Employee, Eligible Employee, Participant or
Inactive Participant any legal or equitable rights against the Company or any
other Employing Company or former Employing Company, its shareholders,
directors, officers or other employees, except as may be contemplated by or
under the Plan including, without limitation, the right of any Participant or
Inactive Participant to be paid as provided under the Plan. Participation in the
Plan does not give rise to any actual or implied contract of employment. A
Participant may be terminated at any time for any reason in accordance with the
procedures of the Employing Company.
10.5 Withholding. Each Employing Company, former Employing Company,
or paying agent shall withhold any federal, state and local income or employment
tax (including F.I.C.A. obligations for both social security and medicare) which
by any present or future law it is, or may be, required to withhold with respect
to any deferral of compensation pursuant to the Plan, any Employing Company
Allocation, any income deemed accrued or any distribution under the Plan, with
respect to any of its former or present Employees. The Committee shall provide
or direct the provision of information necessary or appropriate to enable each
such company to so withhold.
10.6 No Guarantee of Tax Consequences. The Committee, the Company and
any Employing Company or former Employing Company do not make any commitment or
guarantee that any amounts deferred for the benefit of a Participant or Inactive
Participant will be excludible from the gross income of the Participant or
Inactive Participant in the Year of deferral or distribution for federal, state
or local income or employment tax purposes, or that any other federal, state or
local tax treatment will apply to or be available to any Participant or Inactive
<PAGE>
Participant. It shall be the obligation of each Eligible Employee, Participant
or Inactive Participant to determine whether any deferral under the Plan is
excludible from his or her gross income for federal, state and local income or
employment tax purposes, and to take appropriate action if he or she has reason
to believe that any such deferral is not so excludible.
10.7 Severability. If a provision of the Plan shall be held illegal
or invalid, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included in the Plan.
10.8 Governing Law. The provisions of the Plan shall be governed by
and construed in accordance with the laws of the State of New York (other than
its rules of conflicts of laws to the extent that the application of the laws of
another jurisdiction would be required thereby), to the extent not preempted by
the laws of the United States.
Exhibit 5
TIME WARNER ENTERTAINMENT COMPANY, L.P.
75 Rockefeller Plaza
New York, NY 10019
TELEPHONE: 212-484-8000
FACSIMILE: 212-333-3987
December 18, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Dear Sirs:
I am an Associate General Counsel and Vice President of Time Warner
Entertainment Company, L.P., a Delaware limited partnership (the "Company"), and
I am delivering this Opinion in connection with the filing with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, of a
Registration Statement on Form S-8 (the "Registration Statement") for the
purpose of registering $77 million of Deferred Compensation Obligations which
represent unsecured obligations of the Company to pay deferred compensation in
the future in accordance with the terms of the Time Warner Entertainment
Deferred Compensation Plan (the "Plan").
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, records of the Company and other
instruments as I have deemed necessary or appropriate for the purposes of this
opinion, including (a) the Agreement of Limited Partnership, as amended, (b) the
Plan, (c) resolutions adopted by the General Partners of the Company and (d) the
Registration Statement.
Based upon the foregoing, I am of the opinion that, when issued in
accordance with the provisions of the Plan, the Deferred Compensation
Obligations will be valid and binding obligations of the Company, enforceable in
accordance with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws of general applicability relating to or
affecting enforcement of creditors' rights or by general equity principles.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name wherever appearing in the
Registration Statement and any amendment thereto.
Very truly yours,
Thomas W. McEnerney
Associate General Counsel
and Vice President
ens
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the caption "Interests of
Named Experts and Counsel" in the Registration Statement on Form S-8 pertaining
to the registration of $77,000,000 of Deferred Compensation Obligations of Time
Warner Entertainment Company, L.P. ("TWE") and to the incorporation by reference
in the Registration Statement and related prospectus of our reports dated
February 10, 1998, with respect to the consolidated financial statements and
schedules of TWE, Warner Communications Inc. and American Television and
Communications Corporation, included in TWE's Annual Report on Form 10-K for the
year ended December 31, 1997, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
New York, New York
December 11, 1998
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and
directors of Time Warner Entertainment Company, L.P. (the "Company"), American
Television and Communications Corporation ("ATC") and Warner Communications Inc.
("WCI"), hereby constitutes and appoints CHRISTOPHER P. BOGART, RICHARD J.
BRESSLER, PETER R. HAJE, JOHN A. LABARCA, GERALD M. LEVIN, THOMAS W. MCENERNEY
AND RICHARD D. PARSONS and each of them, his true and lawful attorneys-in-fact
and agents, with full power to act without the others, for him and in his name,
place and stead, in any and all capacities, to sign one or more Registration
Statements on Form S-3, Form S-4 or Form S-8 or any other appropriate form and
any and all amendments to any such Registration Statement (including
post-effective amendments), to be filed with the Securities and Exchange
Commission for the registration under the provisions of the Securities Act of
1933, as amended, in connection with (1) deferred compensation obligations of
the Company and (2) a "shelf" registration statement registering securities of
the Company guaranteed by ATC and WCI (Registration No. 33-75144), with power
where appropriate to affix thereto the seal of the Company, ATC and WCI and to
attest said seal, and to file any such Registration Statement, including a form
of prospectus, and any and all amendments and post-effective amendments to any
such Registration Statement, and any subsequent registration statement filed by
the Company, ATC and WCI pursuant to Rule 462(b) of the Securities Act of 1933,
as amended, with all exhibits thereto, and any and all documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform any and all acts and things requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his name as of
the 14th day of December, 1998.
SIGNATURE TITLE
/s/Gerald M. Levin Chairman of the Board and
___________________________ Chief Executive Officer of the Company,
Gerald M. Levin WCI and ATC (Principal Executive Officer)
and Director of WCI and ATC
/s/Richard J. Bressler Executive Vice President and Chief
____________________________ Financial Officer of the Company and
Richard J. Bressler Director and Senior Vice President and
Chief Financial Officer of WCI and ATC
(Principal Financial Officer)
/s/John A. LaBarca Senior Vice President and Controller
____________________________ of the Company and Vice President
John A. LaBarca and Controller of WCI and ATC
(Principal Accounting Officer)
/s/Peter R. Haje Director of WCI and ATC
____________________________
(Peter R. Haje)
/s/Richard D. Parsons Director of WCI and ATC
____________________________
(Richard D. Parsons)
