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                                                              As Amended Through
                                                                  March 16, 2000

                                TIME WARNER INC.
                             1993 STOCK OPTION PLAN

1.       PURPOSE OF THE PLAN

         The purpose of the Time Warner Inc. 1993 Stock Option Plan (hereinafter
the "Plan") is to provide for the granting of nonqualified stock options and
stock appreciation rights to certain employees of and consultants and advisors
to Time Warner Inc. and its Subsidiaries in recognition of the valuable services
provided, and contemplated to be provided, by such employees, consultants and
advisors. The general purpose of the Plan is to promote the interests of Time
Warner and its stockholders and to reward dedicated employees, consultants and
advisors of Time Warner and its Subsidiaries by providing them 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
Time Warner and its Subsidiaries.

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 and stock
         appreciation rights agreement specified in Section 12, both
         individually and collectively, as the context so requires.

                  (b) "Approved Transaction" means any transaction in which the
         Board (or, if approval of the Board is not required as a matter of law,
         the stockholders of Time Warner) shall approve (i) any consolidation or
         merger of Time Warner in which Time Warner is not the continuing or
         surviving corporation or pursuant to which shares of Common Stock would
         be converted into cash, securities or other property, other than a
         merger of Time Warner (x) as contemplated in the Amended and Restated
         Agreement and Plan of Merger dated as of September 22, 1995 among Time
         Warner Inc., TW Inc., Time Warner Acquisition Corp., TW Acquisition
         Corp. and Turner Broadcasting System, Inc., as the same may be amended
         from time to time, or (y) in which the









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         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 and/or SARs 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) "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.

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

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

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

                  (j) "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 of 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

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         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).

                  (k) "Effective Date" means the date the Plan becomes effective
         pursuant to Section 15.

                  (l) "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.

                  (m) "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.

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

                  (o) "Holder" means an employee of or a consultant or advisor
         to Time Warner or any of its Subsidiaries who has received an Award
         under this Plan.

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

                  (q) "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.

                  (r) "Option" means any nonqualified stock option granted
         pursuant to this Plan.

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

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

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

                  (v) "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.

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

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

3.       STOCK SUBJECT TO THE PLAN

         3.1. Number of Shares. Subject to the provisions of Section 12 and this
Section 3, the maximum number of shares of Common Stock in respect of which
Awards may be granted is four million plus 1.5% (one and one-half percent) of
the number of shares of Common Stock outstanding on December 31, 1992. 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.

         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.

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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 individuals to whom, and the time or times at which,
Awards shall be granted or awarded, (b) the number of shares to be subject to
each Award, (c) when an Option or SAR can be exercised and whether in whole or
in installments, and (d) the form, terms and provisions of any Agreement (which
terms may be amended, subject to Section 14).

         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, consultants or advisors, their dedication and past contributions to
Time Warner and its Subsidiaries, their present and potential contributions to
the success of Time Warner and its Subsidiaries and such other factors as the
Board in its discretion shall deem relevant.

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

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

         Any such Committee shall select one of its members as its chairman and
shall hold its meetings 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.

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5.       ELIGIBILITY

         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, (b) prospective employees of Time Warner or
any of its Subsidiaries and (c) consultants or advisors to Time Warner or any of
its Subsidiaries. The exercise of Options and SARs 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, consultants and advisors 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.

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.

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

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

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

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

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

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

         The provisions of Sections 4 and 6 through 21 (to the extent that such
provisions are applicable to Options) shall also be applicable to SARs unless
the context otherwise requires.

         (b) General SARs. General SARs shall be exercisable only at the time
the related Option is exercisable and subject to the terms and provisions of
this Section 6.5, upon the exercise of General SARs, the person exercising the
General SAR shall be entitled to receive

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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.

         Upon the exercise of Limited SARs granted in connection with an 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

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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 22, 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.       ACCELERATION OF OPTIONS AND SARS

         If a Holder's employment shall terminate by reason of death or Total
Disability, notwithstanding any contrary waiting period or installment 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,
each outstanding Option or SAR granted under the Plan shall immediately become
exercisable in full in respect of the aggregate number of shares covered
thereby.

8.       TERMINATION OF EMPLOYMENT

         8.1. General. If a Holder's employment shall terminate prior to the
complete exercise of an Option (or deemed exercise thereof, as provided in
Section 6.5(a)), then such Option shall thereafter be exercisable solely to the
extent provided in the applicable Agreement; provided, however, that (a) no
Option may be exercised after the scheduled expiration date of such Option; (b)
if the Holder's employment terminates by reason of death or Total Disability,
the Option shall remain exercisable for a period of at least one year following
such termination (but not later than the scheduled expiration of such Option);
and (c) any termination by the employing company for cause will be treated in
accordance with the provisions of Section 8.2.

         8.2. 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 prior to the exercise of any Option, then unless the applicable
Agreement provides otherwise, all Options held by such Holder and any permitted
transferee pursuant to Section 6.6 shall 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. 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 Subsidiary are

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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.

         8.3. 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.

         8.4. 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 one of its Subsidiaries.

9.       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.

10.      NONALIENATION OF BENEFITS

         Except as specifically 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.

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11.      WRITTEN AGREEMENT

         Each grant of an Option shall be evidenced by a stock option agreement
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 or SAR 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 or SARs shall
terminate if such written Agreement is not signed by such grantee (or his
attorney) and delivered to Time Warner within 60 days after the date the Board
approved such grant or if the effectiveness of such grant is conditioned upon
the grantee becoming an employee of Time Warner or one of its Subsidiaries, the
execution by the grantee of an employment agreement with Time Warner or one of
its Subsidiaries or any other similar condition, within 60 days after the
occurrence of such condition, if later. Any such written Agreement may contain
(but shall not be required to contain) such provisions as the Board deems
appropriate to ensure that the penalty provisions of section 4999 of the Code
will not apply to any stock or cash received by the Holder or such Holder's
permitted transferee pursuant to Section 6.6 from Time Warner or any of its
Subsidiaries.

12.      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, the Board shall make such adjustments in the
character and number of shares subject to such Award and, in the option price,
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 Award theretofore granted under the Plan, the Board or any surviving
or acquiring corporation shall take such action as is equitable and appropriate
to substitute a new award for such Award or to assume such Award in order to
make such new or assumed Award, as nearly as may be practicable, equivalent to
the old Award. If any such change or transaction shall occur, the number and
kind of shares for which Awards may thereafter be granted under the Plan shall
be adjusted to give effect thereto.

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13.      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 awarded under the Plan, then such Holder or other
person shall not sell such shares unless such Holder or other person shall have
first offered in writing to sell such shares to Time Warner at Fair Market Value
on a date specified in such offer (which date shall be at least three business
days and not more than 10 business days following the date of such offer). In
any such event, certificates representing shares issued upon exercise of Options
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.

14.      TERMINATION AND AMENDMENT

         14.1. 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.

         14.2. Modification. No termination, modification or amendment of the
Plan may, without the consent of the person to whom any Award shall theretofore
have been granted (or a transferee of such person if the Award, or any part
thereof, has been transferred pursuant to Section 6.6), 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 14.1), 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.

15.      EFFECTIVENESS OF THE PLAN

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

16.      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.

17.      WITHHOLDING

         Time Warner's obligation to deliver shares of Common Stock or pay cash
in respect of any 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 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.

18.      SEPARABILITY

         If any of the terms or provisions of this Plan conflict with the
requirements of applicable law, then such terms or provisions shall be deemed
inoperative to the extent necessary to avoid the conflict with applicable law
without invalidating the remaining provisions hereof.

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19.      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.

20.      EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

         By acceptance of an Award, each Holder shall be deemed to have agreed
that such Award 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 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.

21.      GOVERNING LAW

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

22.      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.

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23.      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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