<PAGE>


                                 AMENDMENT NO. 3
                                     TO THE
                                TIME WARNER INC.
                           DEFERRED COMPENSATION PLAN

1.   Section 1.2 is amended by adding the following sentence at the end thereof:

          On July 1, 2000, or such later date as determined by the Committee,
          the Plan will also accept transfers of account balances attributable
          to compensation previously irrevocably transferred under the Time
          Warner Excess Profit Sharing Plan (the "Excess Profit Sharing Plan"),
          subject to the terms and conditions for making such transfers
          specified in the Excess Profit Sharing Plan.

2.   Section 2.5 is amended by adding the following three sentences at the end
     thereof:

          The beneficiary designation, if any, in effect for the Plan will
          override and supercede any Excess Profit Sharing Plan designation. If
          there is none on file for the Plan, the Excess Profit Sharing Plan
          designation will continue to apply to any transferred balance from the
          Excess Profit Sharing Plan until a Plan designation is made. Any such
          new designation will apply to all balances in the Plan.

3.   Section 2.18 is amended by adding the term "the Excess Profit Sharing Plan"
     after the term "the Pre-1999 Plan."

4.   Section 3.6 is amended by adding the following section 3.6(c) at the end
     thereof:

          (c) Each "Eligible Participant" in the Excess Profit Sharing Plan may
          make a one time election no later than July 1, 2000 or such other date
          as may be determined by the Committee (which shall become irrevocable
          as of such date) by a written notice to the Committee to have his or
          her entire account balance in the Excess Profit Sharing Plan
          transferred to and deferred under his or her Deferred Compensation
          Account in the Plan. For purposes of this Section, an "Eligible
          Participant" is any Participant in the Excess Profit Sharing Plan who
          has not been designated (either individually or by class) by the
          Committee, in its sole discretion, as being ineligible to make such
          transfers.

5.   Section 5.4(b)(i) is amended to read as follows:

          (i)  must be for full Years, and for no fewer than 36 months from the
               beginning of the month in which the in-service deferral would
               have been paid but for the additional deferral,




<PAGE>


                                                                               2

6.   Section 5.4(b)(iii) is amended to read as follows:

          (iii) can only be made five times (once prior to September 13, 1999
                and three times prior to October 25, 1999) with respect to any
                in-service payment,

7.   Article V is amended by adding the following section 5.13 at the end
     thereof:

          5.13 Transfers from the Pre-1999 Plan and the Excess Profit Sharing
          Plan. All balances transferred from the Pre-1999 Plan and the Excess
          Profit Sharing Plan shall be subject to the provisions of this Article
          V as part of a Participant's or Inactive Participant's Deferred
          Compensation Account.