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                                                              As Amended through
                                                                   July 18, 1996

                                   TIME WARNER
                                 CORPORATE GROUP
                              STOCK INCENTIVE PLAN

1.      PURPOSE OF THE PLAN

        The purpose of the Time Warner Corporate 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 Time Warner
Inc., Warner Communications Inc., Time Warner Enterprises, 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

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        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 members of the
        Board appointed pursuant to Section 4.

               (i) "Common Stock" means the common stock, par value $1.00 per
        share, of Time Warner.

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

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               (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 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).

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               (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.

               (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

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        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.

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 325,000. 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.

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        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 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

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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 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 of employment on specific terms
from Time Warner or any of its Subsidiaries. Awards may be made to employees who
hold or have held Awards under this Plan or any similar or other awards under
any other plan of Time Warner or its Subsidiaries.

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        5.2. Special ISO Rule. No ISO shall be granted to an employee who, at
the time the ISO is granted, owns (or is considered as owning within the meaning
of section 425(d) of the Code) stock possessing more than 10% of the total
combined voting power of all classes of stock of Time Warner or any of its
Subsidiaries, unless at the time the ISO is granted the option price is at least
110% of the Fair Market Value of the Common Stock subject to the ISO and the ISO
by its terms is not exercisable after the expiration of five years from the date
it is granted.

6.      OPTIONS AND SARS

        6.1. Option Prices. Subject to Section 5.2, the purchase price of the
Common Stock under each Option shall be determined by the Board and set forth in
the applicable Agreement, but shall not be less than 100% of the Fair Market
Value of the Common Stock on the date of grant.

        6.2. Term of Options. The term of each Option shall be for such period
as the Board shall determine, as set forth in the applicable Agreement, but not
more than 10 years from the date of grant in the case of an ISO (except as
provided in Section 5.2).

        6.3. Exercise of Options. An Option granted under the Plan shall become
(and remain) exercisable during the term of the Option to the extent provided in
the applicable Agreement and this Plan and, unless the Agreement otherwise
provides, may be exercised to the extent exercisable, in whole or in part, at
any time and from time to time during such term; provided, however, that
subsequent to the grant of an Option, the Board, at any time before complete
termination of such Option, may accelerate the time or times at which such
Option may be exercised in whole or in part (without reducing the term of such
Option). The Agreement may contain conditions precedent to the exercisability of
Options, including without limitation, the achievement of minimum performance
criteria.

        6.4. Manner of Exercise. Payment of the Option purchase price shall be
made in cash or in whole shares of Common Stock already owned by the person
exercising an Option or, partly in cash and partly in such Common Stock;
provided, however, that such payment may be made in whole or in part in shares
of Common Stock only if and to the extent permitted by the

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applicable Agreement. An Option shall be exercised by written notice to Time
Warner upon such terms and conditions as provided in the Agreement. Time Warner
shall effect the transfer of the shares of Common Stock purchased under the
Option as soon as practicable, and within a reasonable time thereafter such
transfer shall be evidenced on the books of Time Warner. No Holder or other
person exercising an Option shall have any of the rights of a stockholder of
Time Warner with respect to shares of Common Stock subject to an Option granted
under the Plan until due exercise and full payment has been made. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date of such due exercise and full payment.

        6.5. SARS. (a) General Conditions. The Board may (but shall not be
obligated to) grant General SARs and/or Limited SARs pursuant to the provisions
of this Section 6.5 to a Holder of any Option (hereinafter called a "related
Option"), with respect to all or a portion of the shares of Common Stock subject
to the related Option.

        A SAR may be granted either concurrently with the grant of the related
Option or at any time thereafter prior to the complete exercise, termination,
expiration or cancellation of such related Option. Subject to the terms and
provisions of this Section 6.5, each SAR shall be exercisable to the extent the
related Option is then exercisable (and may be subject to such additional
limitations on exercisability as the Agreement may provide), and in no event
after the complete termination or full exercise of the related Option. SARs
shall be exercisable in whole or in part upon notice to Time Warner upon such
terms and conditions as provided in the Agreement.

        Upon the exercise of SARs, the related Option shall be considered to
have been exercised to the extent of the number of shares of Common Stock with
respect to which such SARs are exercised and shall be considered to have been
exercised to that extent for purposes of determining the number of shares of
Common Stock in respect of which other Awards may be granted. Upon the exercise
or termination of the related Option, the SARs with respect thereto shall be
considered to have been exercised or terminated to the extent of the number of
shares of Common Stock with respect to which the related Option was so exercised
or terminated.

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        The provisions of Sections 4, 6 and 8 through 22 (to the extent that
such provisions are applicable to Options) shall also be applicable to SARs
unless the context otherwise requires.

        (b) General SARs. General SARs shall be exercisable only at the time the
related Option is exercisable and subject to the terms and provisions of this
Section 6.5, upon the exercise of General SARs, the person exercising the
General SAR shall be entitled to receive consideration (in the form hereinafter
provided) equal in value to the excess of the Fair Market Value on the date of
exercise of the shares of Common Stock with respect to which such General SARs
have been exercised over the aggregate related Option purchase price for such
shares; provided, however, that the Board may, in any Agreement granting General
SARs provide that the appreciation realizable upon exercise thereof shall be
measured from a base higher than the related Option purchase price.

        Upon the exercise of a General SAR, the person exercising the General
SAR may specify the form of consideration to be received by such person
exercising the General SAR, which shall be in shares of Common Stock (valued at
Fair Market Value on the date of exercise of such General SAR), or in cash, or
partly in cash and partly in shares of Common Stock. Any election by the person
exercising the General SAR to receive cash in full or partial settlement of such
General SAR shall comply with all applicable laws. Unless otherwise specified in
the applicable Agreement, the number of General SARs which may be exercised for
cash, or partly for cash and partly for shares of Common Stock, during any
calendar quarter, may not exceed 20% of the aggregate number of shares of Common
Stock originally subject to the related Option (as such original number, without
giving effect to the exercise of any portion of the related Option, shall have
been retroactively adjusted in accordance with Section 13 or any corresponding
provisions of an applicable Agreement).

        For purposes of this Section 6.5, the date of exercise of a General SAR
shall mean the date on which Time Warner shall have received notice from the
person exercising the General SAR of the exercise of such General SAR.

        (c) Limited SARs. Limited SARs may be exercised only during the period
(a) beginning on the first day following either (i) the date of an Approved
Transaction, (ii) the date

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of a Control Purchase, or (iii) the date of a Board Change, and (b) ending on
the ninetieth day (or such other date specified in the Agreement) following such
date. The effective date of exercise of a Limited SAR shall be deemed to be the
date on which Time Warner shall have received notice from the person exercising
the Limited SAR of the exercise thereof.

        Upon the exercise of Limited SARs granted in connection with an ISO,
except as otherwise provided in the Agreement, the person exercising the Limited
SAR shall receive in cash an amount equal to the excess of the Fair Market Value
on the date of exercise of such Limited SARs of the shares of Common Stock with
respect to which such Limited SARs shall have been exercised over the aggregate
related Option purchase price for such shares.

        Upon the exercise of Limited SARs granted in connection with a
Nonqualified Stock Option, except as otherwise provided in the Agreement, the
person exercising the Limited SAR shall receive in cash an amount equal to the
product computed by multiplying (a) the excess of (i) the higher of (A) the
Minimum Price Per Share, or (B) the highest reported closing sales price of a
share of Common Stock as reported on the Composite Tape at any time during the
period beginning on the sixtieth day prior to the date on which such Limited
SARs are exercised and ending on the date on which such Limited SARs are
exercised over (ii) the per share Option price of the related Nonqualified Stock
Option, by (b) the number of shares of Common Stock with respect to which such
Limited SARs are being exercised.

        6.6. Nontransferability of Options and SARs. Except as set forth in this
Section 6.6, Options and SARs shall not be transferable other than by will or
the laws of descent and distribution, and Options and SARs may be exercised
during the lifetime of the Holder thereof only by such Holder (or his or her
court appointed legal representative). The Agreement may provide that
Nonqualified Stock Options and SARs are transferable by gift to such persons or
entities and upon such terms and conditions specified in the Agreement.

7.      RESTRICTED SHARES

        7.1. Valuation Date, Issuance and Price. The Board shall determine
whether shares of Common Stock covered by awards of

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Restricted Shares will be issued at the beginning or the end of the Restriction
Period, whether Dividend Equivalents will be paid during the Restriction Period
in the event shares of the Common Stock are to be issued at the end of the
Restriction Period and shall designate a Valuation Date with respect to each
award of Restricted Shares and may prescribe other restrictions, terms and
conditions applicable to the vesting of such Restricted Shares in addition to
those provided in the Plan. The Board shall determine the price, if any, to be
paid by the Holder for the Restricted Shares; provided, however, that the
issuance of Restricted Shares shall be made for at least the minimum
consideration necessary to permit such Restricted Shares to be deemed fully paid
and nonassessable. All determinations made by the Board pursuant to this Section
7.1 shall be specified in the Agreement.

        7.2. Issuance of Restricted Shares at Beginning of the Restriction
Period. If shares of Common Stock are issued at the beginning of the Restriction
Period, the stock certificate or certificates representing such Restricted
Shares shall be registered in the name of the Holder to whom such Restricted
Shares shall have been awarded. During the Restriction Period, certificates
representing the Restricted Shares and any securities constituting Retained
Distributions shall bear a restrictive legend to the effect that ownership of
the Restricted Shares (and such Retained Distributions), and the enjoyment of
all rights appurtenant thereto, are subject to the restrictions, terms and
conditions provided in the Plan and the applicable Agreement. Such certificates
shall remain in the custody of Time Warner and the Holder shall deposit with
Time Warner stock powers or other instruments of assignment, each endorsed in
blank, so as to permit retransfer to Time Warner of all or any portion of the
Restricted Shares and any securities constituting Retained Distributions that
shall be forfeited or otherwise not become vested in accordance with the Plan
and the applicable Agreement.

        7.3. Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding shares of Common
Stock for all corporate purposes. The Holder will have the right to vote such
Restricted Shares, to receive and retain all regular cash dividends and such
other distributions, as the Board may in its sole discretion designate, paid or
distributed 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; except,

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that, (a) the Holder will 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 or waived; (b) Time Warner will retain custody
of the stock certificate or certificates representing the Restricted Shares
during the Restriction Period as provided in Section 7.2; (c) other than regular
cash dividends and such other distributions as the Board may in its sole
discretion designate, Time Warner 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 vesting and other 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 a separate account; (d) the Holder may not
sell, assign, transfer, pledge, exchange, encumber or dispose of the Restricted
Shares or any Retained Distributions or his interest in any of them during the
Restriction Period; and (e) 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.

        7.4. Issuance of Stock at End of the Restriction Period. Restricted
Shares issued at the end of the Restriction Period shall not constitute issued
and outstanding shares of Common Stock and the Holder shall not have any of the
rights of a stockholder with respect to the shares of Common Stock covered by
such an award of Restricted Shares, in each case, until such shares shall have
been transferred to the Holder at the end of the Restriction Period. If and to
the extent that shares of Common Stock are to be issued at the end of the
Restriction Period, the Holder shall be entitled to receive Dividend Equivalents
with respect to the shares of Common Stock covered thereby either (a) during the
Restriction Period or (b) in accordance with the rules applicable to Retained
Distributions, as the Board may specify in the Agreement.

        7.5. Cash Awards. In connection with any award of Restricted Shares, an
Agreement may provide for the payment of a cash amount to the Holder of such
Restricted Shares at any

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time after such Restricted Shares shall have become vested. Such Cash Awards
shall be payable in accordance with such additional restrictions, terms and
conditions as shall be prescribed by the Board in the Agreement and shall be in
addition to any other salary, incentive, bonus or other compensation payments
which such Holder shall be otherwise entitled or eligible to receive from Time
Warner or any of its Subsidiaries.

        7.6. Completion of Restriction Period. On the Valuation Date with
respect to each award of Restricted Shares, and the satisfaction of any other
applicable restrictions, terms and conditions (a) all or part of such Restricted
Shares shall become vested, (b) any Retained Distributions and any unpaid
Dividend Equivalents with respect to such Restricted Shares shall become vested
to the extent that the Restricted Shares related thereto shall have become
vested and (c) any Cash Award to be received by the Holder with respect to such
Restricted Shares shall become payable, all in accordance with the terms of the
applicable Agreement. Any such Restricted Shares, Retained Distributions and any
unpaid Dividend Equivalents that shall not become vested shall be forfeited to
Time Warner and the Holder shall not thereafter have any rights (including
dividend and voting rights) with respect to such Restricted Shares, Retained
Distributions and any unpaid Dividend Equivalents that shall have been so
forfeited.

8.      ACCELERATION OF OPTIONS, SARS AND RESTRICTED SHARES

        If a Holder's employment shall terminate by reason of death or Total
Disability, notwithstanding any contrary waiting period or installment period or
Restriction Period in any Agreement or in the Plan or in the event of any
Approved Transaction, Board Change or Control Purchase, unless the applicable
Agreement provides otherwise: (a) in the case of an Option or SAR, each such
outstanding Option or SAR granted under the Plan shall immediately become
exercisable in full in respect of the aggregate number of shares covered
thereby; and (b) in the case of Restricted Shares, the Restriction Period
applicable to each such award of Restricted Shares shall be deemed to have
expired and all such Restricted Shares, any related Retained Distributions and
any unpaid Dividend Equivalents shall become vested and any Cash Award payable
pursuant to the applicable Agreement shall be adjusted in such manner as
provided in the Agreement.

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9.      TERMINATION OF EMPLOYMENT

        9.1. General. If a Holder's employment shall terminate prior to the
complete exercise of an Option (or deemed exercise thereof, as provided in
Section 6.5(a)), then such Option shall thereafter be exercisable solely to the
extent provided in the applicable Agreement; provided, however, that (a) no
Option may be exercised after the scheduled expiration date of such Option; (b)
if the Holder's employment terminates by reason of death or Total Disability,
the Option shall remain exercisable for a period of at least one year following
such termination (but not later than the scheduled expiration of such Option);
and (c) any termination by the employing company for cause will be treated in
accordance with the provisions of Section 9.2.

        9.2. Termination for Cause. If a Holder's employment with Time Warner or
any of its Subsidiaries shall be terminated by Time Warner or such Subsidiary
during the Restriction Period with respect to any Restricted Shares or prior to
the exercise of any Option for cause (for these purposes, cause shall have the
meaning ascribed thereto in any employment agreement to which such Holder is a
party or, in the absence thereof, shall include but not be limited to,
insubordination, dishonesty, incompetence, moral turpitude, other misconduct of
any kind and the refusal to perform his duties and responsibilities for any
reason other than illness or incapacity; provided, however, that if such
termination occurs within 12 months after an Approved Transaction, Control
Purchase or Board Change, termination for cause shall mean only a felony
conviction for fraud, misappropriation or embezzlement), then (a) all Options
held by such Holder and any permitted transferee pursuant to Section 6.6 shall
immediately terminate and (b) such Holder's rights to all Restricted Shares,
Retained Distributions, any unpaid Dividend Equivalents and any Cash Awards
shall be forfeited immediately.

        9.3. Special Rule. Notwithstanding any other provision of the Plan, the
Board may provide in the applicable Agreement that the Award shall become and/or
remain exercisable at rates and times at variance with the rules otherwise
herein set forth; provided, however, that any such Agreement provisions at
variance with the exercisability rules otherwise set forth herein shall be
effective only if reflected in the terms of an employment agreement approved or
ratified by the Board.

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        9.4. Miscellaneous. The Board may determine whether any given leave of
absence constitutes a termination of employment. Awards made under the Plan
shall not be affected by any change of employment so long as the Holder
continues to be an employee of Time Warner or any of its Subsidiaries.

10.     RIGHT OF COMPANY TO TERMINATE EMPLOYMENT

        Nothing contained in the Plan or in any Award shall confer on any Holder
any right to continue in the employ of Time Warner or any of its Subsidiaries or
interfere in any way with the right of Time Warner or a Subsidiary to terminate
the employment of the Holder at any time, with or without cause; subject,
however, to the provisions of any employment agreement between the Holder and
Time Warner or any of its Subsidiaries.

11.     NONALIENATION OF BENEFITS

        Except as provided in Section 6.6, no right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits.

12.     WRITTEN AGREEMENT

        Each award of Restricted Shares and any right to a Cash Award hereunder
shall be evidenced by a restricted shares agreement; each grant of an Option
shall be evidenced by a stock option agreement which shall designate the Options
granted thereunder as ISOs or Nonqualified Stock Options; and each SAR shall be
evidenced by a stock appreciation rights agreement, each in such form and
containing such terms and provisions not inconsistent with the provisions of the
Plan as the Board from time to time shall approve; provided, however, that such
Awards may be evidenced by a single agreement. The effective date of the
granting of an Award shall be the date on which the Board approves such grant.
Each grantee of an Option, SAR or Restricted Shares shall be notified promptly
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such grant and a written Agreement shall be promptly executed and delivered by
Time Warner and the grantee, provided that such grant of Options, SARs or
Restricted Shares shall terminate if such written Agreement is not signed by
such grantee (or his attorney) and delivered to Time Warner within 60 days after
the date the Board approved such grant or if the effectiveness of such grant is
conditioned upon the grantee becoming an employee of Time Warner or one of its
Subsidiaries, the execution by the grantee of an employment agreement with Time
Warner or one of its subsidiaries or any other similar condition, within 60 days
after the occurrence of such condition, if later. Any such written Agreement may
contain (but shall not be required to contain) such provisions as the Board
deems appropriate to ensure that the penalty provisions of section 4999 of the
Code will not apply to any stock or cash received by the Holder or such Holder's
permitted transferee pursuant to Section 6.6 from Time Warner or any of its
Subsidiaries.

13.     ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

        In the event of any stock split, dividend, distribution, combination,
reclassification or recapitalization that changes the character or amount of the
Common Stock while any portion of any Award theretofore granted under the Plan
is outstanding but unexercised or unvested, the Board shall make such
adjustments in the character and number of shares subject to such Award, in the
option price, in the relevant appreciation base and in the Cash Awards, as shall
be applicable, equitable and appropriate in order to make such Award,
immediately after any such change, as nearly as may be practicable, equivalent
to such Award, immediately prior to any such change. If any merger,
consolidation or similar transaction affects the Common Stock subject to any
unexercised or unvested Award theretofore granted under the Plan, the Board or
any surviving or acquiring corporation shall take such action as is equitable
and appropriate to substitute a new award for such Award or to assume such Award
in order to make such new or assumed Award, as nearly as may be practicable,
equivalent to the old Award. If any such change or transaction shall occur, the
number and kind of shares for which Awards may thereafter be granted under the
Plan shall be adjusted to give effect thereto.

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14.     RIGHT OF FIRST REFUSAL

        The Agreements may contain such provisions as the Board shall determine
to the effect that if a Holder, or other person exercising an Option, elects to
sell all or any shares of Common Stock that such Holder or other person acquired
upon the exercise of an Option or upon the vesting of Restricted Shares awarded
under the Plan, then such Holder or other person shall not sell such shares
unless such Holder or other person shall have first offered in writing to sell
such shares to Time Warner at Fair Market Value on a date specified in such
offer (which date shall be at least three business days and not more than 10
business days following the date of such offer). In any such event, certificates
representing shares issued upon exercise of Options and the vesting of
Restricted Shares shall bear a restrictive legend to the effect that
transferability of such shares are subject to the restrictions contained in the
Plan and the applicable Agreement and Time Warner may cause the registrar of its
Common Stock to place a stop transfer order with respect to such shares.

15.     TERMINATION AND AMENDMENT

        15.1. General. Unless the Plan shall theretofore have been terminated as
hereinafter provided, no Awards may be made under the Plan on or after the tenth
anniversary of the Effective Date. The Board may at any time prior to the tenth
anniversary of the Effective Date terminate the Plan, and the Board may at any
time modify or amend the Plan in such respects as it shall deem advisable;
provided, however, that any such modification or amendment shall comply with all
applicable laws and stock exchange listing requirements.

        15.2. Modification. No termination, modification or amendment of the
Plan may, without the consent of the person (or a transferee of such person if
the Award, or any part thereof, has been transferred pursuant to Section 6.6) to
whom any Award shall theretofore have been granted, adversely affect the rights
of such person with respect to such Award. No modification, extension, renewal
or other change in any Award granted under the Plan shall be made after the
grant of such Award, unless the same is consistent with the provisions of the
Plan. With the consent of the Holder (or a transferee of such Holder if the
Award, or any part thereof, has been transferred pursuant to Section 6.6) and
subject to the terms and

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conditions of the Plan (including Section 15.1), the Board may amend outstanding
Agreements with any Holder (or any such transferee), including, without
limitation, any amendment which would (a) accelerate the time or times at which
the Award may be exercised and/or (b) extend the scheduled expiration date of
the Award. Without limiting the generality of the foregoing, the Board may but
solely with the Holder's consent, agree to cancel any Award under the Plan held
by such Holder and issue a new Award in substitution therefor, provided that the
Award so substituted shall satisfy all of the requirements of the Plan as of the
date such new Award is made.

16.     EFFECTIVENESS OF THE PLAN

        The Plan shall become effective upon approval by the Board of Directors
of Time Warner.

17.     GOVERNMENT AND OTHER REGULATIONS

        The obligation of Time Warner with respect to Awards shall be subject to
all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, and the rules and regulations of any securities exchange on which the
Common Stock may be listed. For so long as the Common Stock is registered under
the Exchange Act, Time Warner shall use its reasonable efforts to comply with
any legal requirements (a) to maintain a registration statement in effect under
the Securities Act of 1933 with respect to all shares of Common Stock that may
be issued to Holders under the Plan, and (b) to file in a timely manner all
reports required to be filed by it under the Exchange Act.

18.     WITHHOLDING

        Time Warner's obligation to deliver shares of Common Stock or pay cash
in respect of any Award or Cash Award under the Plan shall be subject to
applicable federal, state and local tax withholding requirements. Federal, state
and local withholding taxes paid upon the exercise of any Option and upon the
vesting of Restricted Shares may be paid in shares of Common Stock upon such
terms and conditions as the Board shall

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determine; provided, however, that the Board in its sole discretion may
disapprove such payment and require that such taxes be paid in cash.

19.     SEPARABILITY

        If any of the terms or provisions of this Plan conflict with the
requirements of section 422A of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of
section 422A of the Code. If this Plan does not contain any provision required
to be included herein under section 422A of the Code, such provision shall be
deemed to be incorporated herein with the same force and effect as if such
provision had been set out at length herein; provided, however, that to the
extent any Option which is intended to qualify as an ISO cannot so qualify, such
Option, to that extent, shall be deemed to be a Nonqualified Stock Option for
all purposes of the Plan.

20.     NON-EXCLUSIVITY OF THE PLAN

        The adoption of the Plan by the Board shall not be construed as creating
any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

21.     EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

        By acceptance of an Award or Cash Award, as applicable, each Holder
shall be deemed to have agreed that such Award or Cash Award, as applicable, is
special incentive compensation that will not be taken into account, in any
manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan of Time
Warner or any of its Subsidiaries. In addition, each beneficiary of a deceased
Holder shall be deemed to have agreed that such Award or Cash Award, as
applicable, will not affect the amount of any life insurance coverage, if any,
provided by Time Warner or any of its Subsidiaries on the life of the Holder
which is payable to such beneficiary under any life

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insurance plan covering employees of Time Warner or any of its
Subsidiaries.

22.     GOVERNING LAW

        The Plan shall be governed by, and construed in accordance with, the
laws of the State of New York.






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