AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of March 25, 1998
and effective as of January 1, 1998, (the "Effective Date"), between TIME WARNER
INC., a Delaware corporation (the "Company"), and R.E. Turner III (the
"Executive").
            The Executive is currently employed by the Company pursuant to an
Employment Agreement dated as of October 10, 1996 (the "Prior Agreement"). The
Company wishes to amend and restate the Prior Agreement and to secure the
services of the Executive for the period to and including December 31, 2001 (the
"Term Date") on and subject to the terms and conditions set forth in this
Agreement, and the Executive is willing for the Prior Agreement to be so amended
and restated and to provide such services on and subject to the terms and
conditions set forth in this Agreement. The parties therefore agree as follows:

              1. Term of Employment. The Executive's "term of employment", as
this phrase is used throughout this Agreement, shall be for the period beginning
on the Effective Date and ending on the Term Date, subject, however, to the
terms and conditions set forth in this Agreement.
              2. Employment. During the term of employment, the Company shall
employ the Executive, and the Executive shall serve, as Vice Chairman of the
Company and Chief Executive Officer of the Company's Video Division (the "Video
Division"). The Video Division shall consist of (i) Turner Broadcasting System,
Inc. ("TBS"), including all of the businesses conducted by TBS and its
subsidiaries on October 10, 1996, and any business thereafter conducted by TBS
and its subsidiaries, (ii) the businesses conducted from time to time by the
Home Box Office division of Time Warner Entertainment Company, L.P., including
all such businesses so conducted on October 10, 1996, (iii) the Company's
interest in Court TV, and (iv) subject only to contractual obligations of the
Company and its subsidiaries existing at September 22, 1995, substantially all
other nationally distributed cable networks and nationally distributed cable
programming services operated from time to time by the Company or its
subsidiaries or controlled affiliates. The Executive shall have responsibility
for the direction and supervision of the Video Division with all of the
authority, duties, functions and powers appropriate and customary to discharge
such responsibility. The Chief Operating Officer of the Video Division shall be
selected by the Company's Chairman of the Board subject to the consent of the
Executive, which consent shall not be unreasonably


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                                                                              2

withheld. In addition, the Executive shall be invited to participate in all
meetings of the chief executive officers of the divisions of the Company held
during the term of employment and shall have such other authority, functions,
duties, powers and responsibilities as the Board of Directors or the Chief
Executive Officer of the Company may from time to time delegate to the Executive
in addition thereto, consistent with the terms hereof and his status as Vice
Chairman of the Company and Chief Executive Officer of the Video Division. The
Executive shall, subject to his election as such from time to time and without
additional compensation, serve during the term of employment in such additional
offices of comparable or greater stature and responsibility in the Company and
its subsidiaries and as a director and as a member of any committee of the Board
of Directors of the Company and its subsidiaries, to which he may be elected
from time to time. So long as the Executive is employed by the Company pursuant
to the terms of this Agreement and subject to the Company's obligations under
the provisions of the Investors Agreement No. 1 dated as of October 10, 1996
between the Company, the Executive and Turner Outdoor, Inc., the Company shall
include the Executive in the management slate for election as a director at
every stockholders' meeting at which his term as a director would otherwise
expire and shall use its best efforts to cause the Executive to be elected a
member of its Board of Directors at each such meeting.

              During the term of employment, (i) the Executive shall report only
to the Company's Board of Directors and its Chief Executive Officer, (ii) the
Executive shall have no other employment and, without the prior written consent
of the Chief Executive Officer of the Company, no outside business activities
which require the devotion of substantial amounts of the Executive's time;
provided, however, that the Executive's engaging in bison raising, the ownership
and operation of ranch properties and other real estate, the management of the
Executive's investments, including without limitation, the operation of venture
capital or investment funds or partnerships that are owned primarily by the
Executive and/or members of his family and activities on behalf of
not-for-profit and charitable organizations or foundations shall not be deemed a
breach of this Section 2, and (iii) the place for the performance of the
Executive's services shall be the principal executive offices of TBS in the
Atlanta, Georgia metropolitan area, subject to such reasonable travel as may be
appropriate or required in the performance of the Executive's duties in the
business of the Company, including without limitation, regular trips to the
Company's headquarters in New York City. The foregoing shall be subject to the
Company's written policies, as in effect from time to time, regarding vacations,
holidays, illness and the like and shall not prevent the Executive from devoting
such time to his personal affairs as he devoted to such affairs while serving as
Chairman, Chief Executive Officer and President of TBS prior to October 10,
1996; provided,



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                                                                      3

however, that the Executive shall in any event comply with the provisions of
Sections 9 and 10 and any Company written policies in effect from time to time
on conflicts of interest.

                  3.  Compensation.

              3.1 Base Salary. The Company shall pay or cause to be paid to the
Executive a base salary of not less than $700,000 per annum during the term of
employment (the "Base Salary"). The Company may increase, but not decrease, the
Base Salary at any time and from time to time during the term of employment and
upon each such increase the term "Base Salary" shall mean such increased amount.
The Company shall consider an increase in the Executive's Base Salary each time
it increases the Base Salary of its Chief Executive Officer. Base Salary shall
be payable in monthly or more frequent installments in accordance with the
Company's then current practices and policies with respect to senior executives.
For the purposes of this Agreement "senior executives" shall mean the executive
officers of the Company.
              3.2 Bonus. In addition to Base Salary, the Executive shall be
entitled to receive during the term of employment an annual cash bonus based on
the performance of the Company and of the Executive. The Executive's annual
bonus will be targeted at 90% of the annual bonus received by the Company's
Chief Executive Officer, however, the actual amount of the Executive's bonus for
all periods commencing on or after January 1, 1997, shall be determined by the
Compensation Committee of the Company's Board of Directors in accordance with
the provisions of the Company's Annual Bonus Plan for Executive Officers. Such
determination with respect to the amount, if any, of annual bonuses to be paid
to the Executive under this Agreement shall be final and conclusive except as
specifically provided otherwise in this Agreement. If the Executive is not
employed hereunder for a full fiscal year, the bonus provided for herein shall
be prorated based upon the number of full or partial months of actual employment
during such year. Payments of any bonus compensation under this Section 3.2
shall be made in accordance with the Company's then current practices and
policies with respect to senior executives, but in no event later than 90 days
after the end of the period for which the bonus is payable.
              3.3 Deferred Compensation. In addition to Base Salary and bonus as
set forth in Sections 3.1 and 3.2, the Executive shall be credited with a
defined contribution which shall be determined and paid out on a deferred basis
("deferred compensation") as provided in this Agreement, including Annex A
hereto. During the term of employment, the Company shall pay to the trustee (the
"Trustee") of a Company grantor trust (the "Rabbi



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                                                                            4

Trust") for credit to a special account maintained on the books of the Rabbi
Trust for the Executive (the "Trust Account"), monthly, an amount equal to 50%
of one-twelfth of the Executive's then current Base Salary. If a lump sum
payment is made pursuant to Section 4.2.2 or 4.2.3, the Company shall pay to the
Trustee for credit to the Trust Account at the time of such payment an amount
equal to 50% of the Base Salary portion of such lump sum payment. The Trust
Account shall be maintained by the Trustee in accordance with the terms of this
Agreement, including Annex A, and the trust agreement (the "Trust Agreement")
establishing the Rabbi Trust (which Trust Agreement shall in all respects be in
furtherance of, and not inconsistent with, the terms of this Agreement,
including Annex A), until the full amount which the Executive is entitled to
receive therefrom has been paid in full; provided, that in case of any conflict
between the provisions of this Agreement and the Trust Agreement, the provisions
of this Agreement shall control. Effective April 1, 1998, the Company shall
establish and maintain the Rabbi Trust as a grantor trust within the meaning of
subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended, and shall pay all fees and expenses of the Trustee and
shall enforce the provisions of the Trust Agreement for the benefit of the
Executive. Prior to April 1, 1998, the Company shall credit the Executive with
deferred compensation in accordance with the provisions of Section 3.3 of the
Prior Agreement.

              3.4 Deferred Bonus. In addition to any other deferred bonus plan
in which the Executive may be entitled to participate, the Executive may elect
by written notice delivered to the Company at least 15 days prior to the
commencement of any calendar year during the term of employment during which an
annual cash bonus would otherwise accrue or to which it would relate, to defer
payment of and to have the Company credit to the Trust Account all or any
portion of the Executive's bonus for such year. Any such election shall only
apply to the calendar year during the term of employment with respect to which
such election is made and a new election shall be required with respect to each
successive calendar year during the term of employment.

              3.5 Prior Account. The parties confirm that the Company has
maintained a deferred compensation account (the "Prior Account") for the
Executive in accordance with the Prior Agreement. On or promptly after April 1,
1998, the entire balance of the Prior Account shall be transferred to, and
thereafter shall for all purposes be made and deemed part of, the Trust Account
and shall be maintained by the Trustee in accordance with this Agreement and the
Trust Agreement. All prior credits to the Prior Account shall be deemed to be
credits made under this Agreement, all "Account Retained Income" thereunder
shall be deemed to be Account Retained Income under this Agreement and all
increases or



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                                                                       5

decreases to the Prior Account as a result of income, gains, losses and other
charges shall be deemed to have been made under this Agreement.

              3.6 Reimbursement. The Company shall reasonably promptly pay or
reimburse the Executive for all reasonable travel (including use of the
Executive's personal means of transportation), entertainment and other business
expenses actually incurred or paid by the Executive during the term of
employment in the performance of his services under this Agreement provided such
expenses are incurred or paid in accordance with the Company's then current
written practices and policies with respect to senior executives of the Company
and upon presentation of expense statements or vouchers or such other supporting
information as the Company may customarily require of its senior executives.

              3.7 No Anticipatory Assignments. Except as specifically
contemplated in Section 12.8 or under the life insurance policies and benefit
plans referred to in Sections 7 and 8, respectively, neither the Executive, his
legal representative nor any beneficiary designated by him shall have any right,
without the prior written consent of the Company, to assign, transfer, pledge,
hypothecate, anticipate or commute to any person or any corporation,
partnership, trust or other entity ("Entity") any payment due in the future
pursuant to any provision of this Agreement, and any attempt to do so shall be
void and shall not be recognized by the Company.

              3.8 Indemnification. The Executive shall be entitled throughout
the term of employment in his capacity as an officer or director of the Company
or any of its subsidiaries or an officer or member of the Board of
Representatives or other governing body of any partnership or joint venture in
which the Company has an equity interest (and after the term of employment, to
the extent relating to his service as such officer, director or member) to the
benefit of the indemnification provisions contained on the date hereof in the
Certificate of Incorporation and By-Laws of the Company (not including any
amendments or additions after the date of execution hereof that limit or narrow,
but including any that add to or broaden, the protection afforded to the
Executive by those provisions), to the extent not prohibited by applicable law
at the time of the assertion of any liability against the Executive. In
addition, if at any time during the term of employment the Company generally
provides indemnification agreements to its other directors or executive
officers, the Company shall provide a substantially similar agreement to the
Executive.



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                                                                          6

                  4.  Termination.

              4.1 Termination for Cause. The Company may terminate the term of
employment and all of the Company's obligations hereunder, other than its
obligations set forth below in this Section 4.1, for "cause" but only if the
term of employment has not previously been terminated pursuant to any other
provision of this Agreement. Termination by the Company for "cause" shall mean
termination by action of the Company's Board of Directors, or a committee
thereof, because of the Executive's conviction (treating a nolo contendere plea
as a conviction) of a felony (whether or not any right to appeal has been or may
be exercised) or willful refusal without proper cause to perform his obligations
under this Agreement or because of the Executive's material breach of any of the
covenants provided for in Section 9. Such termination shall be effected by
written notice thereof delivered by the Company to the Executive and shall be
effective as of the date of such notice; provided, however, that if (i) such
termination is because of (x) the Executive's willful refusal without proper
cause to perform any one or more of his obligations under this Agreement or (y)
the Executive's breach of any of the covenants in Sections 9.1.2 or 9.1.3 or the
Executive's inadvertent breach of any limitation contained in Section 9.2
relating to the acquisition or ownership of an interest in any Entity, (ii) such
notice is the first such notice of termination for any reason delivered by the
Company to the Executive under this Section 4.1, and (iii) within 15 days
following the date of such notice the Executive shall (x) cease his refusal and
shall use his best efforts to perform such obligations or (y) cure such breach,
as applicable, the termination shall not be effective.

              In the event of such termination by the Company for cause in
accordance with the foregoing procedures, without prejudice to any other rights
or remedies that the Company may have at law or in equity, except as set forth
in the last sentence of this Section 4.1, the Executive shall have no further
obligation to the Company under this Agreement and the Company shall have no
further obligations to the Executive under this Agreement other than (i) to pay
Base Salary and make credits of deferred compensation to the Trust Account
accrued through the effective date of termination (including but not limited to
pursuant to Section 3.4),(ii) to pay any annual bonus pursuant to Section 3.2 to
the Executive in respect of the calendar year prior to the calendar year in
which such termination is effective, in the event such annual bonus has not yet
been paid as of the date of such termination, such bonus payable as determined
in the ordinary course and (iii) with respect to any rights the Executive has in
respect of amounts credited to the Trust Account or pursuant to any insurance or
other benefit plans or arrangements of the Company maintained for the benefit of
the Executive or the Company's senior executives. The Executive hereby disclaims



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                                                                         7

any right to receive a pro rata portion of the Executive's annual bonus with
respect to the year in which such termination occurs. The fourth sentence of
Section 3.3, the provisions of Section 3.6 with respect to expenses incurred
prior to such termination and the provisions of Sections 3.8, 8.2, 8.3 and 9
through 12 and Annex A shall survive any termination pursuant to this Section
4.1.

              4.2 Termination by Executive for Material Breach by the Company
and Termination by the Company Without Cause. Unless previously terminated
pursuant to any other provision of this Agreement and unless a Disability Period
shall be in effect, the Executive shall have the right, exercisable by written
notice to the Company, to terminate the term of employment effective 15 days
after the giving of such notice, if, at the time of the giving of such notice,
the Company shall be in material breach of its obligations under this Agreement;
provided, however, that, with the exception of clause (i) below, the term of
employment shall not so terminate if such notice is the first such notice of
termination delivered by the Executive pursuant to this Section 4.2 and within
such 15-day period the Company shall have cured all such material breaches of
its obligations under this Agreement. A material breach by the Company shall
include, but not be limited to, the occurrence of any of the following: (i) the
Company failing to cause the Executive to retain any titles specified in the
first two sentences of Section 2; (ii) the Executive being required to report to
persons other than those specified in Section 2; (iii) the Company violating the
provisions of Section 2 with respect to the Executive's authority, functions,
duties, powers or responsibilities (whether or not accompanied by a change in
title); (iv) the Company requiring the Executive's primary services to be
rendered at a place other than at the principal executive offices of TBS in the
Atlanta, Georgia metropolitan area; or (v) the Company failing to cause any
successor to all or substantially all of the business and assets of the Company
expressly to assume the obligations of the Company under this Agreement.

              The Company shall have the right, exercisable by written notice to
the Executive, to terminate the Executive's employment under this Agreement
without cause, effective no less than 30 days after the giving of such notice,
which notice shall specify the effective date of such termination.

              In the event of a termination pursuant to this Section 4.2,(A) the
Executive shall cease being an employee of the Company and shall be entitled to
receive a lump sum payment as provided in Section 4.2.2; provided, however, that
(B) the Executive may elect by delivery of written notice to the Company prior
to the date written notice of such termination is given by the Executive
pursuant to this Section 4.2 or any time prior to 10 days


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                                                                           8

after written notice of such termination is given by the Company pursuant to
this Section 4.2, to remain an employee of the Company as provided in Section
4.2.3.

              4.2.1 Regardless of whether the election set forth in clause (B)
of Section 4.2 is made by the Executive, (i) after the effective date of such
termination, the Executive shall have no further obligations or liabilities to
the Company whatsoever, except that Section 4.4 and Sections 6 through 12 shall
survive such termination, and (ii) the Executive shall be entitled to receive
(A) any earned and unpaid Base Salary and deferred compensation accrued through
the date of such termination, (B) any annual bonus pursuant to Section 3.2 in
respect of the calendar year prior to the calendar year in which such
termination is effective, in the event such annual bonus has not yet been paid
as of the date of such termination, such bonus payable as determined in the
ordinary course and (C) a pro rata portion of the Executive's annual bonus for
the year in which such termination occurs through the date of such termination
based on the average annual bonus received by the Executive from the Company for
the two fiscal years immediately preceding the year of termination (it being
understood that for purposes of determining such average bonus, the bonus paid
by the Company to the Executive with respect to the period from October 10, 1996
through December 31, 1996, shall be deemed to be "grossed up" on an annualized
basis), all or a portion of which pro rata bonus will be credited to the Trust
Account if the Executive previously elected to defer all or any portion of the
Executive's bonus for such year pursuant to Section 3.4 and (iii) Executive
shall retain all rights with respect to amounts credited to the Trust Account.
In addition, the fourth sentence of Section 3.3, the provisions of Section 3.6
with respect to expenses incurred prior to such termination and the provisions
of Section 3.8 and Annex A shall survive any termination pursuant to this
Section 4.2.

              4.2.2 In the event the Executive shall not have made the election
provided in clause (B) of Section 4.2 above, the Company shall pay to the
Executive as damages in a lump sum within 30 days thereafter an amount
(discounted as provided in the immediately following sentence) equal to all
amounts otherwise payable pursuant to Sections 3.1, 3.2 and 3.3 for the year or
part thereof in which such termination occurs and for each subsequent year
through and including the Term Date (assuming that annual bonuses are required
to be paid for each such year (or portion thereof, in which case a pro rata
portion of such bonus shall be payable), with each such annual bonus being equal
to the average annual bonus received by the Executive from the Company for the
two fiscal years immediately preceding the year of termination (it being
understood that for purposes of determining such average bonus, the bonus paid
by the Company to the Executive with respect to the period from October 10, 1996
through December 31, 1996, shall be deemed to be "grossed up" on an


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                                                                              9

annualized basis), assuming that no portion of such bonus is deferred pursuant
to Section 3.4). Any payments required to be made to the Executive pursuant to
this Section 4.2.2 upon such termination in respect of Sections 3.1 and 3.2 and
the credit to the Trust Account provided for in the third sentence of Section
3.3 shall be discounted to present value as of the date of payment from the
times at which such amounts would have become payable absent any such
termination at an annual discount rate for the relevant periods equal to 120% of
the "applicable Federal rate" (within the meaning of Section 1274(d) of the
Internal Revenue Code of 1986 (the "Code")), in effect on the date of such
termination, compounded semi-annually, the use of which rate is hereby elected
by the parties hereto pursuant to Treas. Reg. 'SS'.1.280G-1 Q/A 32 (provided
that, in the event such election is not permitted under Section 280G of the Code
and the regulations thereunder, such other rate determined as of such other date
as is applicable for determining present value under Section 280G of the Code
shall be used).

              4.2.3 In the event the Executive shall have made the election
provided in clause (B) of Section 4.2 above, the term of employment shall
continue and the Executive shall remain an employee of the Company until the
Term Date and during such period the Executive shall be entitled to receive,
whether or not he becomes disabled during such period but subject to Section 6,
(a) Base Salary at an annual rate equal to his Base Salary in effect immediately
prior to the date of the notice of termination, (b) an annual bonus (all or a
portion of which may be deferred by the Executive pursuant to Section 3.4) in
respect of each calendar year or portion thereof (in which case a pro rata
portion of such annual bonus will be payable) during such period equal to the
average annual bonus received by the Executive from the Company for the two
years immediately preceding the year in which the notice of termination is given
(it being understood that for purposes of determining such average bonus, the
bonus paid by the Company to the Executive with respect to the period from
October 10, 1996 through December 31, 1996, shall be deemed to be "grossed up"
on an annualized basis), and (c) deferred compensation as provided in Section
3.3. Except as provided in the next sentence, if the Executive accepts full-time
employment with any other Entity during such period or notifies the Company in
writing of his intention to terminate his status as an employee during such
period, then the term of employment shall end and the Executive shall cease to
be an employee of the Company effective upon the commencement of such employment
or the effective date of such termination as specified by the Executive in such
notice, whichever is applicable, and the Executive shall be entitled to receive
as damages in a lump sum within 30 days after such commencement or such
effective date an amount (discounted as provided in the second sentence of
Section 4.2.2, except that the "applicable Federal rate" shall be determined as
of the date the Executive shall cease to be an employee of


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                                                                          10

the Company) for the balance of the Base Salary, deferred compensation (which
shall be credited to the Trust Account as provided in the third sentence of
Section 3.3) and regular annual bonuses (assuming no deferral pursuant to
Section 3.4) the Executive would have been entitled to receive pursuant to this
Section 4.2.3 had the Executive remained on the Company's payroll until the Term
Date. Notwithstanding the preceding sentence, if the Executive accepts
employment with any not-for-profit or charitable organization or foundation,
then the Executive shall be entitled to remain an employee of the Company and
receive the payments as provided in the first sentence of this Section 4.2.3;
and if the Executive accepts full-time employment with any affiliate of the
Company, then the payments provided for in this Section 4.2.3 and the term of
employment shall cease and the Executive shall not be entitled to any such lump
sum payment. For purposes of this Agreement, the term "affiliate" shall mean any
Entity which, directly or indirectly, controls, is controlled by, or is under
common control with, the Company.

              4.3 Office Facilities. In the event the Executive shall make the
election provided in clause (B) of Section 4.2, then for the period beginning on
the day the Executive makes such election and ending one year thereafter, the
Company shall, without charge to the Executive, make available to the Executive
office space at the Executive's principal job location immediately prior to his
termination of employment, or other location reasonably close to such location,
together with secretarial services, office facilities, services and furnishings,
in each case reasonably appropriate to an employee of the Executive's position
and responsibilities prior to such termination of employment

              4.4 Mitigation. In the event of termination of the term of
employment pursuant to Section 4.2, the Executive shall not be required to seek
other employment in order to mitigate his damages hereunder; provided, however,
that, notwithstanding the foregoing, if there are any damages hereunder by
reason of the events of termination described above which are "contingent on a
change" (within the meaning of Section 280G(b)(2)(A)(i) of the Code), the
Executive shall be required to mitigate such damages hereunder, including any
such damages theretofore paid, but not in excess of the extent, if any,
necessary to prevent the Company from losing any tax deductions to which it
otherwise would be entitled in connection with such damages if they were not so
"contingent on a change". With respect to the preceding sentence, any payments
or rights to which the Executive is entitled by reason of the termination of the
term of employment pursuant to Section 4.2 shall be considered as damages
hereunder. Any obligation of the Executive to mitigate his damages pursuant to
this Section 4.4 shall not be a defense or offset to the Company's obligation to
pay the Executive



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                                                                     11

in full the amounts provided in Section 4.2.2 or 4.2.3, at the time provided
therein or the timely and full performance of any of the Company's other
obligations under this Agreement.

              4.5 Payments. So long as the Executive remains on the payroll of
the Company or any subsidiary of the Company, payments of salary, deferred
compensation and bonus required to be made pursuant to Section 4.2 shall be made
at the same times as such payments are made to senior executives of the Company
or such subsidiary.

              4.6 Termination by the Executive Without Cause. If the term of
employment has not previously been terminated pursuant to any other provision of
this Agreement, the Executive may terminate the term of employment and all of
his obligations hereunder on 90 days prior written notice to the Company. In the
event of such termination, the Company shall have no further obligations to the
Executive other than (i) to pay Base Salary and make credits of deferred
compensation to the Trust Account accrued through the effective date of
termination, (ii) to pay any annual bonus pursuant to Section 3.2 to the
Executive in respect of the calendar year prior to the calendar year in which
such termination is effective, in the event such annual bonus has not yet been
paid as of the date of such termination, such bonus payable as determined in the
ordinary course, (iii) to pay the Executive a pro rata annual bonus for the
portion of the year in which such termination occurs based on the average annual
bonus received by the Executive from the Company for the two fiscal years
immediately preceding the year of termination (it being understood that for
purposes of determining such average bonus, the bonus paid by the Company to the
Executive with respect to the period from October 10, 1996 through December 31,
1996, shall be deemed to be "grossed up" on an annualized basis), all or a
portion of which pro rata bonus will be credited to the Trust Account if the
Executive previously elected to defer all or any portion of the Executive's
bonus for such year pursuant to Section 3.4 and (iv) with respect to any rights
the Executive has in respect of amounts credited to the Trust Account or
pursuant to any insurance or other benefit plans or arrangements of the Company
maintained for the benefit of the Executive or the Company's senior executives.
The fourth sentence of Section 3.3, the provisions of Section 3.6 with respect
to expenses incurred prior to such termination and the provisions of Sections
3.8, 8.2, 8.3 and 9 through 12 and Annex A shall survive any termination
pursuant to this Section 4.6.

              5. Disability. If during the term of employment and prior to any
termination of the term of employment or of this Agreement under Section 4.2,
the Executive shall become physically or mentally disabled, whether totally or
partially, so that he is prevented from performing his usual duties for a period
of six consecutive months, or for shorter periods



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                                                                            12

aggregating six months in any twelve-month period, the Company shall,
nevertheless, contin ue to pay the Executive his full compensation and continue
to credit the Trust Account, when otherwise due, as provided in Section 3 and
Annex A, through the last day of the sixth consecutive month of disability or
the date on which the shorter periods of disability shall have equaled a total
of six months in any twelve-month period (such last day or date being referred
to herein as the "Disability Date"). If the Executive has not resumed his usual
duties on or prior to the Disability Date, the Company shall pay the Executive a
pro rata bonus through the Disability Date for the year in which the Disability
Date occurs in an amount equal to the average annual bonus received by the
Executive from the Company for the two years immediately preceding the year in
which the notice of termination is given (it being understood that for purposes
of determining such average bonus, the bonus paid by the Company to the
Executive with respect to the period from October 10, 1996 through December 31,
1996, shall be deemed to be "grossed up" on an annualized basis), and shall pay
the Executive disability benefits until the Term Date (the "Disability Period"),
in an annual amount equal to 75% of (a) the Executive's Base Salary at the time
the Executive becomes disabled (and this reduced amount shall also be deemed to
be the Base Salary for purposes of determining the amounts to be credited to his
Trust Account pursuant to Section 3.3 and Annex A as further disability
benefits) and (b) the average of the annual bonuses in respect of the two
calendar years for which the annual bonus received by the Executive from the
Company was the greatest (it being understood that for purposes of determining
such average bonus, the bonus paid by the Company to the Executive with respect
to the period from October 10, 1996 through December 31, 1996, shall be deemed
to be "grossed up" on an annualized basis), all or a portion of which may be
deferred by the Executive pursuant to Section 3.4. If during the Disability
Period the Executive shall fully recover from his disability, the Company shall
have the right (exercisable within 60 days after notice from the Executive of
such recovery), but not the obligation, to restore the Executive to full-time
service at full compensation. If the Company elects to restore the Executive to
full-time service, then this Agreement shall continue in full force and effect
in all respects and the Term Date shall not be extended by virtue of the
occurrence of the Disability Period. If the Company elects not to restore the
Executive to full-time service, the Executive shall be entitled to obtain other
employment, subject, however, to the following: (i) the Executive shall be
obligated to perform advisory services during any balance of the Disability
Period, unless he is rendering the services described in clause (iii) below;
(ii) the provisions of Sec tions 9.1, 9.3 and 10 shall continue to apply to the
Executive during the Disability Period; and (iii) if the Executive renders any
services to any persons that are in competition with the Company or any of its
subsidiaries or affiliates (which, notwithstanding Section 9.2, the parties
agree the Executive shall be permitted to do if the Company elects not to
restore the




<PAGE>

<PAGE>


                                                                            13

Executive to full-time service, as described above), the total cash salary and
bonus received in connection therewith, whether paid to the Executive or
deferred for his benefit, prior to the last day of the Disability Period, shall
reduce, pro tanto, any amount that the Company would otherwise be required to
pay to him hereunder. The advisory services referred to in clause (i) of the
immediately preceding sentence shall consist of rendering advice concerning the
business, affairs and management of the Company as requested by the Chief
Executive Officer of the Company but the Executive shall not be required to
devote more than five days (up to eight hours per day) each month to such
services, which shall be performed at a time and place mutually convenient to
both parties. Subject to clause (iii) of the second preceding sentence, any
income from such other employment shall not be applied to reduce the Company's
obligations under this Agreement. The Company shall be entitled to deduct from
all payments to be made to the Executive during the Disability Period pursuant
to this Section 5 an amount equal to all disability payments received by the
Executive during the Disability Period from Workmen's Compensation, Social
Security and disability insurance policies maintained by the Company; provided,
however, that for so long as, and to the extent that, proceeds paid to the
Executive from such disability insurance policies are not includible in his
income for federal income tax purposes, the Company's deduction with respect to
such payments shall be equal to the product of (i) such payments and (ii) a
fraction, the numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to individuals at
the time of receipt of such payments. All payments made under this Section 5
after the Disability Date are intended to be disability payments, regardless of
the manner in which they are computed. Except as otherwise provided in this
Section 5, the term of employment shall continue during the Disability Period
and the Executive shall be entitled to all of the rights and benefits provided
for in this Agreement except that, Section 4.2 shall not apply during the
Disability Period and the term of employment shall end and the Executive shall
cease to be an employee of the Company at the end of the Disability Period and
shall not be entitled to notice and severance or to receive or be paid for any
accrued vacation time or unused sabbatical.

              6. Death. Upon the death of the Executive during the term of
employment, this Agreement and all obligations of the Company to make any
payments under Sections 3, 4 and 5 shall terminate except that (i) the
Executive's estate (or a designated beneficiary) shall be entitled to receive,
to the extent being received by the Executive immediately prior to his death,
Base Salary and deferred compensation to the last day of the month in which his
death occurs and bonus compensation (at the time bonuses are normally paid)
based on the average of the annual bonuses in respect of the three years for
which the annual bonus received by the Executive from the Company was the
greatest (it being understood that for purposes of



<PAGE>

<PAGE>


                                                                         14

determining such average bonus, the bonus paid by the Company to the Executive
with respect to the period from October 10, 1996 through December 31, 1996,
shall be deemed to be "grossed up" on an annualized basis), but prorated
according to the number of whole or partial months the Executive was employed by
the Company in such calendar year, and (ii) the Trust Account shall be
liquidated and revalued as provided in Annex A as of the date of the Executive's
death (except that all taxes shall be computed and charged to the Trust Account
as of such date of death to the extent not theretofore so computed and charged)
and the entire balance thereof (plus any amount due under the last paragraph of
Section A.6 of Annex A) shall be paid to the Executive's estate (or a designated
beneficiary) in a single payment not later than 75 days following such date of
death.

                  7.  Life Insurance.

              7.1 Split Ownership Insurance. Subject to the Executive's
satisfactory completion of any applications and other documentation and any
physical examination that may be required by the insurer, the Company shall
obtain $6,000,000 face amount of split ownership, whole or universal life
insurance on the life of the Executive, to be owned by the Executive or the
trustees of a trust for the benefit of the Executive's spouse and/or
descendants. The Executive shall use reasonable efforts to fulfill all
requirements necessary to obtain such insurance. Until the death of the
Executive, and irrespective of any termination of this Agreement except pursuant
to Section 4.1, the Company shall pay all premiums on such policy and shall
maintain such policy (without reduction of the face amount of the coverage). The
Company shall not borrow from the cash value of such policy. At the death of the
Executive, or on the earlier surrender of such policy by the owner, the
Executive agrees that the owner of the policy shall promptly pay to the Company
an amount equal to the premiums on such policy paid by the Company (net of (i)
tax benefits, if any, to the Company in respect of payments of such premiums,
(ii) any amounts payable by the Company which had been paid by or on behalf of
the Executive with respect to such insurance, (iii) dividends received by the
Company in respect of such premiums, but only to the extent such dividends are
not used to purchase additional insurance on the life of the Executive, and (iv)
any unpaid borrowings by the Company on the policy), whether before, during or
after the term of this Agreement. The owner of the policy from time to time
shall execute, deliver and maintain a customary split dollar insurance and
collateral assignment form, assigning to the Company the proceeds of such policy
but only to the extent necessary to secure the reimbursement obligation
contained in the preceding sentence.



<PAGE>

<PAGE>


                                                                             15

              7.2 Group Life Insurance. In addition to the foregoing, during the
term of employment, the Company shall (x) provide the Executive with $50,000 of
group life insurance and (y) pay to the Executive annually an amount equal to
the premium that the Executive would have to pay to obtain life insurance under
the Group Universal Life ("GUL") insurance program made available by the Company
in an amount equal to (i) twice the Executive's Base Salary minus (ii) $50,000.
The Executive shall be under no obligation to use the payments made by the
Company pursuant to the preceding sentence to purchase GUL insurance or to
purchase any other life insurance. If the Company discontinues its GUL insurance
program, the Company shall nevertheless make the payments required by this
Section 7 as if such program were still in effect. The payments made to the
Executive pursuant to this Section 7 shall not be considered as "salary" or
"compensation" or "bonus" in determining the amount of any payment under any
pension, retirement, profit-sharing or other benefit plan of the Company or any
subsidiary of the Company.
                  8.  Other Benefits.

              8.1 General Availability. To the extent that (a) the Executive is
eligible under the general provisions thereof and (b) the Company maintains such
plan or program for the benefit of its senior executives, during the term of
employment and so long as the Executive is an employee of the Company, the
Executive shall be eligible to participate in any pension, profit-sharing, stock
option or similar plan or program and in any group life insurance (to the extent
set forth in Section 7), hospitalization, medical, dental, accident, disability
or similar plan or program of the Company now existing or established hereafter.
In addition, the Executive shall be entitled during the term of employment and
so long as the Executive is an employee of the Company, to receive other
benefits generally available to all senior executives of the Company to the
extent the Executive is eligible under the general provisions thereof,
including, without limitation, to the extent maintained in effect by the Company
for its senior executives, an automobile allowance and financial services.

              8.2 Stock Options. The Compensation Committee of the Board of
Directors (the "Committee") has approved the Company's commitment to grant to
the Executive options to purchase shares of the Company's Common Stock in the
amounts and at the times and in accordance with the other provisions set forth
in Annex B attached hereto (the "Contract Options"), subject to the execution of
this Agreement by the Executive. All Contract Options granted to the Executive
shall be subject to substantially the same terms and conditions as options
granted to other senior executives of the Company, except as otherwise



<PAGE>

<PAGE>


                                                                            16

provided herein or in Annex B. The Executive shall be eligible to receive grants
of stock options in addition to the Contract Options in the discretion of the
Committee.

              8.3 Benefits After a Termination or Disability. During the period
the Executive remains on the payroll of the Company after a termination pursuant
to Section 4.2 and during the Disability Period the Executive shall continue to
be eligible to participate in the benefit plans and to receive the benefits
required to be provided to the Executive under Sections 7.2 and 8.1 to the
extent such benefits are maintained in effect by the Company for its senior
executives (and under Section 7.1 without regard to whether such benefits are
maintained in effect for other senior executives of the Company); provided,
however, that except with respect to the Contract Options, the Executive shall
not be entitled to any additional awards or grants under any stock option,
restricted stock or other stock based incentive plan. The Executive shall
continue to be an employee of the Company for purposes of any stock option and
restricted shares agreements and any other incentive plan awards during the term
of employment and until such time as the Executive shall leave the payroll of
the Company. At the time the Executive's term of employment with the Company
terminates and he leaves the payroll of the Company pursuant to the provisions
of Section 4.1, 4.2, 4.6, 5 or 6, the Executive's rights to benefits and
payments under any benefit plans or any insurance or other death benefit plans
or arrangements of the Company or under any stock option, restricted stock,
stock appreciation right, bonus unit, management incentive or other plan of the
Company shall be determined, subject to the other terms and provisions of this
Agreement, in accordance with the terms and provisions of such plans and any
agreements under which such stock options, restricted stock or other awards were
granted; provided, however, that notwithstanding the foregoing or the provisions
of any plan or agreement, if the Executive leaves the payroll of the Company as
a result of a termination pursuant to Section 4.2, then (i) all stock options
granted to the Executive by the Company shall become immediately exercisable at
the time the Executive shall leave the payroll of the Company pursuant to
Section 4.2, (ii) all stock options granted to the Executive by the Company
shall remain exercisable (but not beyond the expiration of the option term)
during the remainder of the term of employment and for a period of three months
thereafter or such longer period as shall be specified in any applicable stock
option agreement and (iii) the Company shall not be permitted to determine that
the Executive's employment was terminated for "unsatisfactory performance"
within the meaning of any stock option agreement between the Company and the
Executive.

              8.4 Payments in Lieu of Other Benefits. In the event the term of
employment and the Executive's employment with the Company is terminated
pursuant to


<PAGE>

<PAGE>


                                                                       17

Sections 4.1, 4.2, 5 or 6 (and regardless of whether the Executive elects (B) as
provided in Section 4.2), the Executive shall not be entitled to notice and
severance or to be paid for any accrued vacation time or unused sabbatical, the
payments provided for in such Sections being in lieu thereof.

              9. Protection of Confidential Information; Non-Compete. Except as
provided in Section 5, the provisions of Section 9.2 shall apply from the
Effective Date through the date the Executive ceases to be an employee of the
Company and leaves the payroll of the Company for any reason. Except as
otherwise provided therein, the provisions of Sections 9.1 and 9.3 shall apply
from the Effective Date to the date that is three years after the event
described in the preceding sentence.


              9.1 Confidentiality Covenant. The Executive acknowledges that his
employment by the Company (which, for purposes of this Section 9 shall mean Time
Warner Inc. and its affiliates) will, throughout the term of employment, bring
him into close contact with many confidential affairs of the Company, including
information about costs, profits, markets, sales, products, key personnel,
pricing policies, operational methods, technical pro cesses and other business
affairs and methods and other information not readily available to the public,
and plans for future development. The Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character. The Executive further acknowledges
that the business of the Company is international in scope, that its products
are marketed throughout the world, that the Company competes in nearly all of
its business activities with other Entities that are or could be located in
nearly any part of the world and that the nature of the Executive's services,
position and expertise are such that he is capable of competing with the Company
from nearly any location in the world. In recognition of the foregoing, the
Executive covenants and agrees:

                9.1.1 The Executive shall keep secret all material confidential
matters of the Company and shall not intentionally disclose such matters to
anyone outside of the Company, either during or after the term of employment,
except with the Company's written consent, provided that (i) the Executive shall
have no such obligation to the extent such matters are or become publicly known
other than as a result of the Executive's breach of his obligations hereunder
and (ii) the Executive may, after giving prior notice to the Company to the
extent practicable under the circumstances, disclose such matters to the extent
required by applicable laws or governmental regulations or judicial or
regulatory process;


<PAGE>

<PAGE>


                                                                             18

              9.1.2 At the Company's request and expense, the Executive shall
deliver promptly to the Company, all memoranda, notes, records, reports and
other documents (and all copies thereof) relating to the Company's business,
which he obtained while employed by, or otherwise serving or acting on behalf
of, the Company and which he may then possess or have under his control; and


              9.1.3 If the term of employment is terminated pursuant to Section
4.1 or 4.2, or ends as scheduled on the Term Date, for a period of one year
after such termination, without the prior written consent of the Company, the
Executive shall not solicit the employment of, and shall not cause any Entity of
which he is an affiliate to solicit the employment of, any person who was a
full-time executive employee of the Company at the date of such termination or
within six months prior thereto. The parties agree that the restrictions set
forth in the immediately preceding sentence shall not apply to any solicitation
directed by the Executive at the public in general in publications available to
the public in general or any contact which Executive can demonstrate was
initiated by such employee.


              9.2 Non-Compete. The Executive shall not, directly or indirectly,
without the prior written consent of the Chief Executive Officer of the Company,
render any services to any person or Entity or acquire any interest of any type
in any Entity, that is in competition with the Company; provided, however, that
the foregoing shall not be deemed to prohibit the Executive from (a) acquiring,
solely as an investment and through market pur chases, securities of any Entity
which are registered under Section 12(b) or 12(g) of the Securities Exchange Act
of 1934 and which are publicly traded, so long as he is not part of any control
group of such Entity and such securities, if converted, do not constitute more
than three percent (3%) of the outstanding voting power of that Entity, (b)
acquiring, solely as an investment, any securities of an Entity (other than an
Entity that has outstanding securities covered by the preceding clause (a)) so
long as he remains a passive investor in such Entity and does not become part of
any control group thereof and so long as such Entity is not, directly or through
subsidiaries, in competition with the Company, or (c) serving as a director of
any Entity that is not in competition with the Company. For purposes of the
foregoing, a person or Entity shall be deemed to be in competition with the
Company if such person or Entity engages in any line of business that is
substantially the same as any line of operating business which the Company
engages in, conducts or, to the knowledge of the Executive, has definitive plans
to engage in or conduct.


              9.3 Specific Remedy. In addition to such other rights and remedies
as the Company may have at equity or in law with respect to any breach of this
Agreement, if the


<PAGE>

<PAGE>


                                                                             19

Executive commits a material breach of any of the provisions of Section 9.1 or
9.2, the Company shall have the right and remedy to have such provisions
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company.

              10. Ownership of Work Product. The Executive acknowledges that
during the term of employment, he may conceive of, discover, invent or create
inventions, improve ments, new contributions, literary property, material, ideas
and discoveries, whether patentable or copyrightable or not (all of the
foregoing being collectively referred to herein as "Work Product"), and that
various business opportunities shall be presented to him by reason of his
employment by the Company. The Executive acknowledges that all of the foregoing
shall be owned by and belong exclusively to the Company and that he shall have
no personal interest therein, provided that they are either related in any
manner to the business (commercial or experimental) of the Company, or are, in
the case of Work Product, conceived or made on the Company's time or with the
use of the Company's facilities or materials, or, in the case of business
opportunities, are presented to him for the possible interest or participa tion
of the Company. The Executive shall (i) promptly disclose any such Work Product
and business opportunities to the Company; (ii) assign to the Company, upon
request and without additional compensation, the entire rights to such Work
Product and business opportunities; (iii) sign all papers necessary to carry out
the foregoing; and (iv) give testimony in support of his inventorship or
creation in any appropriate case. The Executive agrees that he will not assert
any rights to any Work Product or business opportunity as having been made or
acquired by him prior to the date of this Agreement except for Work Product or
business opportunities, if any, disclosed to and acknowledged by the Company in
writing prior to the date hereof. The Company hereby agrees that the Executive
shall have all rights and interest in any biographical or autobiographical
materials concerning the Executive's life, which materials shall be owned by and
belong exclusively to the Executive and with respect to which the Company shall
have no interest or rights therein.

              11. Notices. All notices, requests, consents and other
communications required or permitted to be given under this Agreement shall be
effective only if given in writing and shall be deemed to have been duly given
if delivered personally or sent by overnight courier, or mailed first-class,
postage prepaid, by registered or certified mail, as follows (or to such other
or additional address as either party shall designate by notice in writing to
the other in accordance herewith):



<PAGE>

<PAGE>


                                                                             20

                           11.1  If to the Company:

                                    Time Warner Inc.

                                    75 Rockefeller Plaza

                            New York, New York 10019

                                    Attention:  Chief Executive Officer

                        (with a copy, similarly addressed

                         but Attention: General Counsel)

              11.2 If to the Executive, to his residence address set forth on
the records of the Company.
                  12.  General.

              12.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the substantive laws of the State of
New York applicable to agreements made and to be performed entirely in New York.


              12.2 Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.


              12.3 Entire Agreement. This Agreement, including Annexes A and B,
sets forth the entire agreement and understanding of the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties, including
without limitation, the Prior Agreement.

              12.4 No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or be liable for any alleged representation,
promise or inducement not so set forth.

              12.5 Assignability. This Agreement and the Executive's rights and
obligations hereunder may not be assigned by the Executive. The Company may
assign its rights together with its obligations hereunder, in connection with
any sale, transfer or other disposition of all or substantially all of its
business and assets; and such rights and obligations


<PAGE>

<PAGE>


                                                                             21

shall inure to, and be binding upon, any successor to all or substantially all
of the business and assets of the Company, whether by merger, purchase of stock
or assets or otherwise. The Company shall cause such successor expressly to
assume such obligations.

              12.6 Amendments; Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by both of the parties hereto, or
in the case of a waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any provision hereof shall
in no manner affect such party's right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.

              12.7 Legal Fees. In addition to any obligations the Company may
have under Section 3.8, the Company shall promptly pay, upon demand by the
Executive, all legal fees, court costs, fees of experts, and other costs and
expenses when incurred by the Executive arising in connection with any actual,
threatened or contemplated litigation or legal, administrative or other
proceeding relating to this Agreement to which the Executive is or expects to
become a party. Subject to any rights of the Executive under Section 3.8, if the
Company or, if the Company is not a party to such litigation or proceeding, the
party opposing the Executive, shall substantially prevail on the material issues
involved in any such litigation or proceeding (but in no other case), then,
after all rights of appeal have been exercised or lapsed, the Executive shall
promptly repay to the Company all amounts previously paid to the Executive under
this Section in respect of such litigation or proceeding, but without interest
thereon.
              12.8 Beneficiaries. Whenever this Agreement provides for any
payment to the Executive's estate, such payment may be made instead to such
beneficiary or beneficiaries as the Executive may designate by written notice to
the Company. The Executive shall have the right to revoke any such designation
and to redesignate a beneficiary or beneficiaries by written notice to the
Company (and to any applicable insurance company) to such effect.

              12.9 No Conflict. The Executive represents and warrants to the
Company that this Agreement is legal, valid and binding upon the Executive and
the execution of this Agreement and the performance of the Executive's
obligations hereunder



<PAGE>

<PAGE>


                                                                         22

does not and will not constitute a breach of, or conflict with the terms or
provisions of, any agreement or understanding to which the Executive is a party
(including, without limitation, any other employment agreement). The Company
represents and warrants to the Executive that this Agreement is legal, valid and
binding upon the Company and the execution of this Agreement and the performance
of the Company's obligations hereunder does not and will not constitute a breach
of, or conflict with the terms or provisions of, any agreement or understanding
to which the Company is a party.

              12.10 Withholding Taxes. Payments made to the Executive pursuant
to this Agreement shall be subject to withholding and social security taxes and
other ordinary and customary payroll deductions.

              12.11 No Offset. Neither the Company nor the Executive shall have
any right to offset any amounts owed by one party hereunder against amounts owed
or claimed to be owed to such party, whether pursuant to this Agreement or
otherwise, and the Company and the Executive shall make all the payments
provided for in this Agreement in a timely manner.

              12.12 Severability. If any provision of this Agreement shall be
held invalid, the remainder of this Agreement shall not be affected thereby;
provided, however, that the parties shall negotiate in good faith with respect
to equitable modification of the provision or application thereof held to be
invalid. To the extent that it may effectively do so under applicable law, each
party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.

              12.13 Definitions. The following terms are defined in this
Agreement in the places indicated:

                  Account Retained Income - Section A.6 of Annex A
                  affiliate - Section 4.2.3
                  Applicable Tax Law - Section A.5 of Annex A
                  Base Salary - Section 3.1
                  cause - Section 4.1
                  Code - Section 4.2.2
                  Company - the first paragraph on page 1 and Section 9.1
                  deferred compensation - Section 3.3
                  Contract Options - Section 8.2




<PAGE>

<PAGE>


                                                                            23

                  Disability Date - Section 5
                  Disability Period - Section 5
                  Effective Date - the first paragraph on page 1
                  eligible securities - Section A.1 of Annex A
                  Entity - Section 3.6
                  Executive - the first paragraph in page 1
                  fair market value - Section A.1 of Annex A
                  Investment Advisor - Section A.1 of Annex A
                  Pay-Out Period - Section A.6 of Annex A
                  Prior Account - Section 3.5
                  Prior Agreement - the second paragraph on page 1
                  Rabbi Trust - Section 3.3 senior executives - Section 3.1
                  TBS - Section 2
                  Term Date - the second paragraph on page 1 term of
                  employment - Section 1
                  Trust Account - Section 3.3
                  Trust Agreement - Section 3.3
                  Trustee - Section 3.3
                  Valuation Date - Section A.6 of Annex A
                  Video Division - Section 2
                  Work Product - Section 10

              IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
                                           TIME WARNER INC.

                                           By       /s/ Gerald M. Levin
                                           _____________________________
                                           Gerald M. Levin
                                           Chairman and Chief Executive
                                           Officer
                                            /s/ R.E. Turner
                                           _____________________________
                                            R.E. Turner III




<PAGE>

<PAGE>


                                                                          A-1

                                                                     ANNEX A

                          DEFERRED COMPENSATION ACCOUNT

                  A.1 Investments. Funds credited to the Trust Account shall be
actually invested and reinvested in an account in securities selected from time
to time by an investment advisor designated from time to time by the Company
(the "Investment Advisor"), substantially all of which securities shall be
"eligible securities". The designation from time to time by the Company of an
Investment Advisor shall be subject to the approval of the Executive, which
approval shall not be withheld unreasonably. "Eligible securities" are common
and preferred stocks, warrants to purchase common or preferred stocks, put and
call options, and corporate or governmental bonds, notes and debentures, either
listed on a national securities exchange or for which price quotations are
published in newspapers of general circulation, including The Wall Street
Journal, and certificates of deposit. Eligible securities shall not include the
common or preferred stock, any warrants, options or rights to purchase common or
preferred stock or the notes or debentures of the Company or any corporation or
other entity of which the Company owns directly or indirectly 5% or more of any
class of outstanding equity securities. The Investment Advisor shall have the
right, from time to time, to designate eligible securities which shall be
actually purchased and sold for the Trust Account on the date of reference. Such
purchases may be made on margin; provided that the Company may, from time to
time, by written notice to the Executive, the Trustee and the Investment
Advisor, limit or prohibit margin purchases in any manner it deems prudent and,
upon three business days written notice to the Executive, the Trustee and the
Investment Advisor, cause all eligible securities theretofore purchased on
margin to be sold. The Investment Advisor shall send notification to the
Executive and the Trustee in writing of each transaction within five business
days thereafter and shall render to the Executive and the Trustee written
quarterly reports as to the current status of the Executive's Trust Account. In
the case of any purchase, the Trust Account shall be charged with a dollar
amount equal to the quantity and kind of securities purchased multiplied by the
fair market value of such securities on the date of reference and shall be
credited with the quantity and kind of securities so purchased. In the case of
any sale, the Trust Account shall be charged with the quantity and kind of
securities sold, and shall be credited with a dollar amount equal to the
quantity and kind of securities sold multiplied by the fair market value of such
securities on the date of reference. Such charges and credits to the Trust
Account shall take place immediately upon the consummation of the transactions
to which they relate. As used herein "fair market value" means either (i) if the
security is actually purchased or sold by the Rabbi Trust on the date of
reference, the actual purchase or sale price per security to the Rabbi Trust or
(ii) if the security is not purchased or sold on the date of reference, in the
case of a listed security, the closing price per security on the date of
reference, or if there were no sales on such date, then the closing price per
security on the nearest preceding day on which there were such sales, and, in




<PAGE>

<PAGE>


                                                                            A-2

the case of an unlisted security, the mean between the bid and asked prices per
security on the date of reference, or if no such prices are available for such
date, then the mean between the bid and asked prices per security on the nearest
preceding day for which such prices are available. If no bid or asked price
information is available with respect to a particular security, the price quoted
to the Trustee as the value of such security on the date of reference (or the
nearest preceding date for which such information is available) shall be used
for purposes of administering the Trust Account, including determining the fair
market value of such security. The Trust Account shall be charged currently with
all interest paid by the Trust Account with respect to any credit extended to
the Trust Account. Such interest shall be charged to the Trust Account, for
margin purchases actually made, at the rates and times actually paid by the
Trust Account. The Company may, in the Company's sole discretion, from time to
time serve as the lender with respect to any margin transactions by notice to
the then Investment Advisor and the Trustee and in such case interest shall be
charged at the rate and times then charged by an investment banking firm
designated by the Company with which the Company does significant business.
Brokerage fees shall be charged to the Trust Account at the rates and times
actually paid.

                  A.2 Dividends and Interest. The Trust Account shall be
credited with dollar amounts equal to cash dividends paid from time to time upon
the stocks held therein. Dividends shall be credited as of the payment date. The
Trust Account shall similarly be credited with interest payable on interest
bearing securities held therein. Interest shall be credited as of the payment
date, except that in the case of purchases of interest-bearing securities the
Trust Account shall be charged with the dollar amount of interest accrued to the
date of purchase, and in the case of sales of such interest-bearing securities
the Trust Account shall be credited with the dollar amount of interest accrued
to the date of sale. All dollar amounts of dividends or interest credited to the
Trust Account pursuant to this Section A.2 shall be charged with all taxes
thereon deemed payable by the Company (as and when determined pursuant to
Section A.5). The Investment Advisor shall have the same right with respect to
the investment and reinvestment of net dividends and net interest as he has with
respect to the balance of the Trust Account.

                  A.3 Adjustments. The Trust Account shall be equitably adjusted
to reflect stock dividends, stock splits, recapitalizations, mergers,
consolidations, reorganizations and other changes affecting the securities held
therein.

                  A.4 Obligation of the Company. Without in any way limiting the
obligations of the Company otherwise set forth in the Agreement or this Annex A,
the Company shall have the obligation to establish, maintain and enforce the
Rabbi Trust and to make payments to the Trustee for credit to the Trust Account
in accordance with the provisions of Section 3.3 of the Agreement, to use due
care in selecting the Trustee or any successor trustee and to in all




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                                                                         A-3

respects work cooperatively with the Trustee to fulfill the obligations of the
Company and the Trustee to the Executive. The Trust Account shall be charged
with all taxes (including stock transfer taxes), interest, brokerage fees and
investment advisory fees, if any, payable by the Company and attributable to the
purchase or disposition of securities designated by the Investment Advisor (in
all cases net after any tax benefits that the Company would be deemed to derive
from the payment thereof, as and when determined pursuant to Section A.5) and
only in the event of a default by the Company of its obligation to pay such fees
and expenses, the fees and expenses of the Trustee in accordance with the terms
of the Trust Agreement, but no other costs of the Company. Subject to the terms
of the Trust Agreement, the securities purchased for the Trust Account as
designated by the Investment Advisor shall remain the sole property of the
Company, subject to the claims of its general creditors, as provided in the
Trust Agreement. Neither the Executive nor his legal representative nor any
beneficiary designated by the Executive shall have any right, other than the
right of an unsecured general creditor, against the Company or the Trust in
respect of any portion of the Trust Account.

                  A.5 Taxes. The Trust Account shall be charged with all
federal, state and local taxes deemed payable by the Company with respect to
income recognized upon the dividends and interest received by the Trust Account
pursuant to Section A.2 and gains recognized upon sales of any of the securities
which are sold pursuant to Section A.1 or A.6. The Trust Account shall be
credited with the amount of the tax benefit received by the Company as a result
of any payment of interest actually made pursuant to Section A.1 or A.2 and as a
result of any payment of brokerage fees and investment advisory fees made
pursuant to Section A.1. If any of the sales of the securities which are sold
pursuant to Section A.1 or A.6 results in a loss to the Trust Account, such net
loss shall be deemed to offset the income and gains referred to in the second
preceding sentence (and thus reduce the charge for taxes referred to therein) to
the extent then permitted under the Internal Revenue Code of 1986, as amended
from time to time, and under applicable state and local income and franchise tax
laws (collectively referred to as "Applicable Tax Law"); provided, however, that
for the purposes of this Section A.5 the Trust Account shall, except as provided
in the third following sentence, be deemed to be a separate corporate taxpayer
and the losses referred to above shall be deemed to offset only the income and
gains referred to in the second preceding sentence. Such losses shall be carried
back and carried forward within the Trust Account to the extent permitted by
Applicable Tax Law in order to minimize the taxes deemed payable on such income
and gains within the Trust Account. For the purposes of this Section A.5, all
charges and credits to the Trust Account for taxes shall be deemed to be made as
of the end of the Company's taxable year during which the transactions, from
which the liabilities for such taxes are deemed to have arisen, are deemed to
have occurred. Notwithstanding the foregoing, if and to the extent that in any
year there is a net loss in the Trust Account that cannot be offset against
income and gains in any prior year, then an amount equal to the tax benefit to
the Company of such net loss (after such net loss is reduced by the amount of
any




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<PAGE>


                                                                            A-4

net capital loss of the Trust Account for such year) shall be credited to the
Trust Account on the last day of such year. If and to the extent that any such
net loss of the Trust Account shall be utilized to determine a credit to the
Trust Account pursuant to the preceding sentence, it shall not thereafter be
carried forward under this Section A.5. For purposes of determining taxes
payable by the Company under any provision of this Annex A it shall be assumed
that the Company is a taxpayer and pays all taxes at the maximum marginal rate
of federal income taxes and state and local income and franchise taxes (net of
assumed federal income tax benefits) applicable to business corporations and
that all of such dividends, interest, gains and losses are allocable to its
corporate headquarters, which are currently located in New York City.

                  A.6 Payments. Payments of deferred compensation shall be made
as provided in this Section A.6. Unless the Executive makes the election
referred to in the next succeeding sentence, deferred compensation shall be paid
bi-weekly for a period of ten years (the "Pay-Out Period") commencing on the
first Company payroll date in the month following the later of (i) the Term Date
and (ii) the date the Executive ceases to be an employee of the Company and
leaves the payroll of the Company for any reason. The Executive may elect a
shorter Pay-Out Period by delivering written notice to the Company or the
Trustee at least one-year prior to the commencement of the Pay-Out Period, which
notice shall specify the shorter Pay-Out Period. On each payment date, the Trust
Account shall be charged with the dollar amount of such payment. On each payment
date, the amount of cash held in the Trust Account shall be not less than the
payment then due and the Company or the Trustee may select the securities to be
sold to provide such cash if the Investment Advisor shall fail to do so on a
timely basis. The amount of any taxes payable with respect to any such sales
shall be computed, as provided in Section A.5 above, and deducted from the Trust
Account, as of the end of the taxable year of the Company during which such
sales are deemed to have occurred. Solely for the purpose of determining the
amount of payments during the Pay-Out Period, the Trust Account shall be valued
on the fifth trading day prior to the end of the month preceding the first
payment of each year of the Pay-Out Period, or more frequently at the Company's
or the Trustee's election (the "Valuation Date"), by adjusting all of the
securities held in the Trust Account to their fair market value (net of the tax
adjustment that would be made thereon if sold, as estimated by the Company or
the Trustee) and by deducting from the Trust Account the amount of all
outstanding indebtedness. The extent, if any, by which the Trust Account, valued
as provided in the immediately preceding sentence, exceeds the aggregate amount
of credits to the Trust Account pursuant to Sections 3.3, 3.4 and 3.5 of the
Agreement as of each Valuation Date and not theretofore distributed or deemed
distributed pursuant to this Section A.6 is herein called "Account Retained
Income". The amount of each payment for the year, or such shorter period as may
be determined by the Company or the Trustee, of the Pay-Out Period immediately
succeeding such Valuation Date, including the payment then due, shall be
determined by dividing the aggregate value of the Trust Account, as valued and
adjusted




<PAGE>

<PAGE>


                                                                            A-5

pursuant to the second preceding sentence, by the number of payments remaining
to be paid in the Pay-Out Period, including the payment then due; provided that
each payment made shall be deemed made first out of Account Retained Income (to
the extent remaining after all prior distributions thereof since the last
Valuation Date). The balance of the Trust Account, after all the securities held
therein have been sold and all indebtedness liquidated, shall be paid to the
Executive in the final payment, which shall be decreased by deducting therefrom
the amount of all taxes attributable to the sale of any securities held in the
Trust Account since the end of the preceding taxable year of the Company, which
taxes shall be computed as of the date of such payment.

                  If this Agreement is terminated by the Company pursuant to
Section 4.1 or if the Executive terminates this Agreement or the term of
employment in breach of this Agreement, the Trust Account shall be valued as of
the later of (i) the Term Date or (ii) twelve months after termination of the
Executive's employment with the Company, and the balance of the Trust Account,
after the securities held therein have been sold and all related indebtedness
liquidated, shall be paid to the Executive as soon as practicable and in any
event within 75 days following the later of such dates in a final lump sum
payment, which shall be decreased by deducting therefrom the amount of all taxes
attributable to the sale of any securities held in the Trust Account since the
end of the preceding taxable year of the Company, which taxes shall be computed
as of the date of such payment. Payments made pursuant to this paragraph shall
be deemed made first out of Account Retained Income.

                  If the Executive becomes disabled within the meaning of
Section 5 of the Agreement and is not thereafter returned to full-time
employment with the Company as provided in said Section 5, then deferred
compensation shall be paid bi-weekly during the Pay-Out Period commencing on the
first Company payroll date in the month following the end of the Disability
Period in accordance with the provisions of the first paragraph of this Section
A.6.

                  If the Executive shall die at any time whether during or after
the term of employment, the Trust Account shall be valued as of the date of the
Executive's death and the balance of the Trust Account shall be paid to the
Executive's estate or beneficiary within 75 days of such death in accordance
with the provisions of the second preceding paragraph.

                  Notwithstanding the foregoing provisions of this Section A.6,
if the Rabbi Trust shall terminate in accordance with the provisions of the
Trust Agreement, the Trust Account shall be valued as of the date of such
termination and the balance of the Trust Account shall be paid to the Executive
within 15 days of such termination in accordance with the provisions of the
third preceding paragraph.




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<PAGE>


                                                                            A-6

                  Within 90 days after the end of each taxable year of the
Company in which payments have been made from the Trust Account and at the time
of the final payment from the Trust Account, the Company or the Trustee shall
compute and the Company shall pay to the Trustee for credit to the Trust
Account, the amount of the tax benefit assumed to be received by the Company
from the payment to the Executive of amounts of Account Retained Income during
such taxable year or since the end of the last taxable year, as the case may be.
No additional credits shall be made to the Trust Account pursuant to the
preceding sentence in respect of the amounts credited to the Trust Account
pursuant to the preceding sentence. Notwithstanding any provision of this
Section A.6, the Executive shall not be entitled to receive pursuant to this
Annex A an aggregate amount that shall exceed the sum of (i) all credits made to
the Trust Account pursuant to Sections 3.3, 3.4 and 3.5 of the Agreement to
which this Annex is attached, (ii) the net cumulative amount (positive or
negative) of all income, gains, losses, interest and expenses charged or
credited to the Trust Account pursuant to this Annex A (excluding credits made
pursuant to the second preceding sentence), after all credits and charges to the
Trust Account with respect to the tax benefits or burdens thereof, and (iii) an
amount equal to the tax benefit to the Company from the payment of the amount
(if positive) determined under clause (ii) above; and the final payment(s)
otherwise due may be adjusted or eliminated accordingly. In determining the tax
benefit to the Company under clause (iii) above, the Company shall be deemed to
have made the payments under clause (ii) above with respect to the same taxable
years and in the same proportions as payments of Account Retained Income were
actually made from the Trust Account. Except as otherwise provided in this
paragraph, the computation of all taxes and tax benefits referred to in this
Section A.6 shall be determined in accordance with Section A.5 above.




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<PAGE>




                                                                       ANNEX B

                                CONTRACT OPTIONS

To be granted promptly after October 10, 1996 :

         Options to purchase not less than 1,300,000 shares of Common Stock,
allocated as follows:
<TABLE>
<CAPTION>

                  No. of Shares                               Exercise Price
                  -------------                               ---------------
                           <S>                                   <C>        
                  650,000                                     fair market value*
                  325,0000                                    125% of fair market value*
                  325,0000                                    150% of fair market value*
</TABLE>

To be granted on or before each of the first four anniversaries of October 10,
1996 :

         Options to purchase not less than 300,000 shares of Common Stock, to be
awarded at exercise prices no less favorable to the Executive (on a percentage
basis) than those most recently granted to the Chief Executive Officer of the
Company.

         All Contract Options shall have a term of 10 years from the date of
grant and, upon becoming exercisable, shall remain exercisable by the Executive
(or his estate or beneficiary) for the full ten-year term thereof; provided,
however, that the Contract Options shall (a) terminate immediately if the
Executive's employment is terminated for "cause" pursuant to Section 4.1 of the
Employment Agreement to which this Annex B is attached or pursuant to any
similar provision of any successor employment agreement and (b) terminate one
year after the death of the Executive (but not beyond the option term). All
Contract Options will become vested and exercisable in installments of one-third
on each of the first three anniversaries of the date of grant except that
Contract Options granted after termination of the term of employment pursuant to
Section 4.2 will vest in full on the date of grant and will become exercisable
in full twelve months thereafter. All Contract Options will become immediately
exercisable in full if the Executive's employment terminates by reason of death
or Total Disability.

*        In each case, fair market value is determined at date of grant.








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