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                                                                   Exhibit 10.14

            AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of March 25, 1998
and effective as of January 1, 1998, (the "Effective Date"), as amended December
15, 1998, 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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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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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. Unless the Executive shall make the 

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election described in the last sentence of this Section 3.3, during the term of
employment, the Company shall pay to the trustee (the "Trustee") of a Company
grantor trust (the "Rabbi 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; provided, however, that the Executive may elect by written notice to
the Company no later than the expiration of the 15-day period provided for in
the first paragraph of Section 4.2 or the expiration of the 30-day period
provided for in the second paragraph of Section 4.2, as the case may be, to have
such amount credited instead to the Deferred Compensation Plan established by
the Company on November 18, 1998, as the same may be amended from time to time
(as so amended, the "Deferred Plan"). 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 the 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 Code 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. 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 (except that for
calendar year 1999, such election shall be made no later than January 31, 1999)
to have (a) all of the payments to be made to the Rabbi Trust pursuant to the
second sentence of this Section 3.3 to be credited instead to the Deferred Plan
or (b) to have 50% of the payments to be made by the Company pursuant to the
second sentence of this Section 3.3 to be credited instead to the Deferred Plan
and the remaining 50% to be paid to the Rabbi Trust.

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                  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 (except
that for calendar year 1999, such election shall be made no later than January
31, 1999), to defer payment of and to have the Company credit all or any portion
of the Executive's bonus for such year to either the Trust Account or the
Deferred Plan, or a combination of both, subject in the case of a deferral to
the Deferred Plan to the terms and conditions of the Deferred Plan. 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 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 

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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.

            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 

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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 as provided in Sections
3.1 and 3.3 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 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 

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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 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 

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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
or the Deferred Plan in accordance with any previous election made by the
Executive 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 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 payment
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 

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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 the Company) for the balance of the Base Salary,
deferred compensation (which shall be credited 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 

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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 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 or the Deferred Plan 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 

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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 or the Deferred Plan
in accordance with any previous election made by the Executive 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 aggregating six months in any
twelve-month period, the Company shall, nevertheless, continue to pay the
Executive his full compensation and continue to make the deferred compensation
credits, when otherwise due, as provided in Section 3, 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 by the
Company pursuant to Section 3.3 as further 

<PAGE>   13
                                                                              13


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 Sections 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 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 

<PAGE>   14
                                                                              14


(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 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 

<PAGE>   15
                                                                              15


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.

                  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 

<PAGE>   16
                                                                              16


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 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, 

<PAGE>   17
                                                                              17


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 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 processes 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 

<PAGE>   18
                                                                              18


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;

                        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 

<PAGE>   19
                                                                              19


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 purchases, 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 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, improvements, 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 participation
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 

<PAGE>   20
                                                                              20


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):

                  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.

<PAGE>   21
                                                                              21


                  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 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 

<PAGE>   22
                                                                              22


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 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.

<PAGE>   23
                                                                              23


                  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
            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

<PAGE>   24
                                                                              24


            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 III
                                          -------------------------------------
                                           R.E. Turner III
<PAGE>   25

                                                                         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
the case of an unlisted security, the mean between the bid and asked prices per
security on the 
<PAGE>   26
                                                                             A-2


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 respects
work cooperatively with the Trustee to fulfill the obligations of the Company
and the Trustee to the Executive. The Trust Account shall be

<PAGE>   27
                                                                             A-3


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, A.6 or A.7. 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, A.6 or A.7 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

<PAGE>   28
                                                                             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 One-Time Transfer to Deferred Plan. So long as the Executive is
an employee of the Company, the Executive shall have the right to elect at any
time, but only once during the Executive's lifetime, by written notice to the
Company to transfer to the Deferred Plan all or a portion of the Net
Transferable Balance (determined as provided in the next sentence) of the Trust
Account. If the Executive shall make such an election, the Net Transferable
Balance shall be determined as of the end of the calendar quarter following the
date of such election (unless such election is made during the ten calendar days
following the end of a calendar quarter, in which case such determination shall
be made as of the end of such preceding calendar quarter) 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 such value the amount of all outstanding
indebtedness and any other amounts payable by the Trust Account. Transfers to
the Deferred Plan shall be made in cash as promptly as reasonably practicable
after the end of such calendar quarter and the Investment Advisor (or the
Company or the Trustee if the Investment Advisor shall fail to act in a timely
manner) shall cause securities held in the Trust Account to be sold to provide
cash equal to the portion of the Net Transferable Balance of the Trust Account
selected to be transferred by the Executive. If the Executive elects to transfer
more than 75% of the Net Transferable Balance of the Trust Account to the
Deferred Plan, the Company or the Trustee shall be permitted to take such action
as they may deem reasonably appropriate, including but not limited to, retaining
a portion of such Net Transferable Balance in the Trust Account, to ensure that
the Trust Account will have sufficient assets to pay the Company the amount of
taxes payable on such sales of securities at the end of the year in which such
sales are made.

            A.7 Payments. Payments of deferred compensation shall be made as
provided in this Section A.7. 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 

<PAGE>   29
                                                                             A-5


Company and leaves the payroll of the Company for any reason, provided, however,
that if the Executive was named in the compensation table in the Company's then
most recent proxy statement, such payments shall commence on the first Company
payroll date in January of the year following the year in which the latest of
such events occurs. 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,
plus any amounts that have been transferred to the Deferred Plan pursuant to
Section A.6 hereof and not theretofore distributed or deemed distributed
therefrom, 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.7 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 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.

<PAGE>   30
                                                                             A-6


            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.7.

            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.7, 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.

            If a transfer to the Deferred Plan has been made pursuant to Section
A.6 hereof, payments made to the Executive from the Deferred Plan (a) shall be
deemed made first from the amounts transferred to the Deferred Plan pursuant to
Section A.6 and (b) shall be deemed made first out of Account Retained Income.

            Within 90 days after the end of each taxable year of the Company in
which payments are made, directly or indirectly, to the Executive from the Trust
Account or from the Deferred Plan with respect to amounts transferred to the
Deferred Plan from the Trust Account pursuant to Section A.6 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 

<PAGE>   31
                                                                             A-7


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.7, the Executive shall not be entitled to receive pursuant to
this Annex A (including any amounts that have been transferred to the Deferred
Plan pursuant to Section A.6 hereof) 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, (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.7 shall
be determined in accordance with Section A.5 above.
<PAGE>   32

                                                                         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.