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                                                              As Amended Through
                                                                  March 16, 2000

                                   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








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         other property, other than a merger of Time Warner (x) as contemplated
         in the Amended and Restated Agreement and Plan of Merger dated as of
         September 22, 1995 among Time Warner Inc., TW Inc., Time Warner
         Acquisition Corp., TW Acquisition Corp. and Turner Broadcasting System,
         Inc., as the same may be amended from time to time, or (y) in which the
         holders of Common Stock immediately prior to the merger have the same
         proportionate ownership of common stock of the surviving corporation
         immediately after the merger, or (ii) any sale, lease, exchange, or
         other transfer (in one transaction or a series of related transactions)
         of all, or substantially all, of the assets of Time Warner, or (iii)
         the adoption of any plan or proposal for the liquidation or dissolution
         of Time Warner.

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

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

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

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

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

                  (h) "Committee" means the Committee comprised of members of
         the Board appointed pursuant to Section 4.

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

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

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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 award.

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                  (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 the matters referred to in this Section 4
shall be conclusive.

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         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.

         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

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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 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

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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.

         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.

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         (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 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.

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         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. Limited Transferability of Options and SARs. Except as set forth
in this Section 6.6 and Section 23, 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 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 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

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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, 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

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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 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.

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         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.

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

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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 for cause by Time Warner or such
Subsidiary during the Restriction Period with respect to any Restricted Shares
or prior to the exercise of any Option, then (a) unless the applicable Agreement
provides otherwise, all Options held by such Holder and any permitted transferee
pursuant to Section 6.6 terminate one month after the date of a termination
for cause (provided that if such termination for cause is for fraud,
misappropriation or embezzlement, all options shall terminate immediately)
and (b) such Holder's rights to all Restricted Shares, Retained Distributions,
any unpaid Dividend Equivalents and any Cash Awards shall be forfeited
immediately. For the purposes hereof, cause (a) shall have the meaning
provided for in any employment, advisory or consulting agreement to
which such Holder and Time Warner or any such Subsidiary are parties or
(b) in the absence thereof, shall mean insubordination, dishonesty,
incompetence, moral turpitude, other misconduct of any kind and the refusal
to perform such Holder's duties and responsibilities for any reason other
than illness or incapacity, except that if the termination occurs within
12 months after an Approved Transaction, Control Purchase or Board Change,
cause under this clause (b) shall mean only a felony conviction for fraud,
misappropriation or embezzlement.

         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.

         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.

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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
of 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

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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.

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

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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 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

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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 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

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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 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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23.      BENEFICIARIES

         Each Holder may designate any person(s) or legal entity(ies), including
his or her estate, as his or her beneficiary under the Plan. Such designation
shall be made in writing on a form filed with the Secretary of Time Warner or
his or her designee and may be revoked or changed by such Holder at any time by
filing written notice of such revocation or change with the Secretary of Time
Warner or his or her designee. If no person shall be designated by a Holder as
his or her beneficiary or if no person designated as a beneficiary survives such
Holder, the Holder's beneficiary shall be his or her estate.

24.      DEFERRAL OF OPTION GAINS

         The Agreement may contain terms, conditions and procedures permitting
Holders to elect to defer the receipt of shares of Common Stock upon the
exercise of Options for a specific period or until a specified event.

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