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                                                                   EXHIBIT 10.20

         EMPLOYMENT AGREEMENT made December 18, 2003, effective as of December
17, 2003 (the "Effective Date"), between TIME WARNER INC., a Delaware
corporation (the "Company"), and Richard D. Parsons ("You").

         You are currently employed by the Time Warner Inc. (the "Company")
pursuant to an Amended and Restated Employment Agreement, effective as of
January 1, 1999, as amended by letter agreements dated October 26, 2000 and
April 20, 2001 (as so amended, the "Prior Agreement"). The Company wishes to
amend and restate the terms of your employment with the Company and to secure
your services on a full-time basis for the period to and including May 15, 2008
(the "Term Date") on and subject to the terms and conditions set forth in this
Agreement, and you are willing to provide such services on and subject to the
terms and conditions set forth in this Agreement. You and the Company therefore
agree as follows:

         1. Term of Employment. Your "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 earlier termination as
set forth in this Agreement.

         2. Employment. During your employment, you shall serve as Chairman and
Chief Executive Officer of the Company and you shall have the authority,
functions, duties, powers and responsibilities normally associated with such
position and such additional authority, functions, duties, powers and
responsibilities as the Board of Directors may from time to time delegate to you
in addition thereto. You shall, subject to your 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 you may be elected from time to time. During your employment, (i) your
services shall be rendered on a substantially full-time, exclusive basis and you
will apply on a full-time basis all of your skill and experience to the
performance of your duties, (ii) you shall report only to the Board of Directors
of the Company, (iii) you shall have no other employment and, without the prior
written consent of a majority of the Company's Board of Directors, no outside
business activities which require the devotion of substantial amounts of your
time, and (iv) the place for the performance of your services shall be the
principal executive offices of the Company in the New York City metropolitan
area, subject to such reasonable travel as may be required in the performance of
your duties. 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 you from devoting such time to your personal affairs
as shall not interfere with the performance of your duties hereunder, provided
that you

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comply with the provisions of the Confidentiality Agreement and any generally
applicable written policies of the Company on conflicts of interest and service
as a director of another corporation, partnership, trust or other entity
("Entity").

         The Company shall use its best efforts to cause you to be a member of
its Board of Directors throughout the term of employment and shall include you
in the management slate for election during the term of employment as a director
at every stockholder's meeting at which your term as a director would otherwise
expire.

         3. Compensation.

                  3.1      Base Salary. The Company shall pay you a base salary
at the rate of not less than $ 1,500,000 per annum during the term of employment
("Base Salary"). The Company may increase, but not decrease, your Base Salary
during the term of employment and upon such increase the term "Base Salary"
shall mean such increased amount (subject to Section 5). Base Salary shall be
paid 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, you may be
entitled to receive during the term of employment an annual cash bonus ("Bonus")
subject to and pursuant to the Company's Annual Bonus Plan for Executive
Officers (such plan, together with any successor plan of Company intended to
comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), being hereinafter referred to as the "Annual Bonus Plan"). Although
your Bonus is fully discretionary, your target annual Bonus is $5,500,000.
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 its 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 Account. Pursuant to the terms
of your previous employment agreements with the Company, you have been paid
deferred compensation which has been deposited in a special account (the "Trust
Account" maintained on the books of a Time Warner Inc. grantor trust (the "Rabbi
Trust) for your benefit. The Trust Account shall be maintained by the trustee
(the "Trustee") thereof in accordance with the terms of Annex A attached hereto
and the trust agreement (the Trust Agreement") establishing the Rabbi Trust
(which Trust Agreement shall in all respects be consistent with the terms of
Annex A), until the full amount which you are entitled to receive therefrom has
been paid in full. The Company shall pay all fees and expenses of the Trustee
and shall enforce the provisions of the Trust Agreement for your benefit.

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                  3.4      Long Term Incentive Compensation. Company shall
provide you with long term incentive compensation with an annualized competitive
target award as determined by the Compensation Committee of the Company's Board
of Directors from time to time, through a combination of stock option grants,
restricted stock and long-term plan as may be developed (in proportions to be
determined annually by the Company in its sole discretion). The parties
acknowledge that the grant for 2003 was targeted to a competitive level of
$8,000,000.

         In the event of a termination under Section 4.2 of the Agreement, you
shall be entitled to a pro rata payment of any long-term compensation under this
Section 3.4.

                  3.5      Deferred Bonus. In addition to any other deferred
bonus plan in which you may be entitled to participate, you may elect by written
notice delivered to the Company at least 15 days prior to the commencement of
any calendar year during the term of employment during which an annual cash
bonus would otherwise accrue or to which it would relate, to defer payment of
and to have the Company credit all or any portion of your bonus for such year to
either the Trust Account or the Deferred Compensation Plan established by the
Company on November 18, 1998, as the same may be amended from time to time (and
as so amended, 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.

                  3.6      Indemnification. You shall be entitled throughout the
term of employment (and after the end of the term of employment, to the extent
relating to service during the term of employment) 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 hereof that limit or narrow, but including any that add
to or broaden, the protection afforded to you by those provisions).

         4. Termination.

                  4.1      Termination for Cause. The Company may terminate the
term of employment and all of the Company's obligations under this Agreement,
other than its obligations set forth below in this Section 4.1, for "cause".
Termination by the Company for "cause" shall mean termination because of your
(a) 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), (b) willful
failure or refusal without proper cause to perform your duties with the Company,

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including your obligations under this Agreement (other than any such failure
resulting from your incapacity due to physical or mental impairment), (c)
misappropriation, embezzlement or reckless or willful destruction of Company
property, (d) breach of any statutory or common law duty of loyalty to the
Company; (e) intentional and improper conduct materially prejudicial to the
business of the Company or any of its affiliates, or (f) breach of any of the
covenants provided for in the Confidentiality Agreement. Such termination shall
be effected by written notice thereof delivered by the Company to you and shall
be effective as of the date of such notice; provided, however, that if (i) such
termination is because of your willful failure or refusal without proper cause
to perform any one or more of your obligations under this Agreement, (ii) such
notice is the first such notice of termination for any reason delivered by the
Company to you under this Section 4.1, and (iii) within 15 days following the
date of such notice you shall cease your refusal and shall use your best efforts
to perform such obligations, the termination shall not be effective.

         In the event of termination by the Company for cause, without prejudice
to any other rights or remedies that the Company may have at law or in equity,
the Company shall have no further obligation to you other than (i) to pay Base
Salary through the effective date of termination, (ii) to pay any Bonus for any
year prior to the year in which such termination occurs that has been determined
but not yet paid as of the date of such termination, and (iii) with respect to
any rights you have with respect of amounts credited to the Trust Account
through the effective date of termination or pursuant to any insurance or other
benefit plans or arrangements of the Company. You hereby disclaim any right to
receive a pro rata portion of any Bonus with respect to the year in which such
termination occurs.

                  4.2      Termination by You 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, you 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
is in material breach of its obligations under this Agreement; provided,
however, that, with the exception of clause (i) below, this Agreement shall not
so terminate if such notice is the first such notice of termination delivered by
you pursuant to this Section 4.2 and within such 15-day period the Company shall
have cured all such material breaches. A material breach by the Company shall
include, but not be limited to, (i) the Company violating Section 2 with respect
to your title, reporting lines or place of employment; (ii) the Company
violating Section 2 with respect to your authorities, functions duties, powers
or responsibilities (whether or not accompanied by a change in title); and (iii)
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.

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         The Company shall have the right, exercisable by written notice to you,
to terminate your employment under this Agreement without cause, which notice
shall specify the effective date of such termination.

                  4.2.1    After the effective date of a termination pursuant to
this Section 4.2 (a "termination without cause"), you shall receive Base Salary
and a pro rata portion of your Average Annual Bonus (as defined below) through
the effective date of termination. Your Average Annual Bonus shall be equal to
the average of the regular annual bonus amounts (excluding the amount of any
special or spot bonuses) in respect of the two calendar years during the most
recent five calendar years for which the annual bonus received by you during
your employment as Chairman and Chief Executive Officer was the greatest;
provided, however, if the Company has previously paid you less than two annual
bonuses, then your Average Annual Bonus shall equal your target Bonus.

                  4.2.2    After the effective date of a termination without
cause, you shall remain an employee of the Company for a period ending on the
date (the "Severance Term Date") which is the earlier of (i) the Term Date and
(ii) the date which is thirty-six months after the effective date of such
termination and during such period you shall be entitled to receive, whether or
not you become disabled during such period but subject to Section 6, (a) Base
Salary at an annual rate equal to your Base Salary in effect immediately prior
to the notice of termination, and (b) an annual Bonus in respect of each
calendar year or portion thereof (in which case a pro rata portion of such Bonus
will be payable) during such period equal to your Average Annual Bonus. Except
as provided in the second succeeding sentence, if you accept other full-time
employment during such period or notify the Company in writing of your intention
to terminate your status as an employee during such period, you shall cease to
be an employee of the Company effective upon the commencement of such other
employment or the effective date of such termination as specified by you in such
notice, whichever is applicable, and you shall be entitled to receive, as
severance, a lump sum payment within 30 days after such commencement or such
effective date (provided that if you were named in the compensation table in the
Company's then most recent proxy statement, such lump sum payment shall be made
within 30 days after the end of the calendar year in which such commencement or
effective date occurred), discounted as provided in the immediately following
sentence, equal to the balance of the payments you would have received pursuant
to this Section 4.2.2 had you remained on the Company's payroll. That lump sum
shall be discounted to present value as of the date of payment from the times at
which such amounts would otherwise have become payable absent such commencement
or 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, as amended (the "Code"), in effect on the date of
such commencement

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or termination, compounded semi-annually. Notwithstanding the foregoing, if you
accept employment with any not-for-profit entity or government institution, then
you shall be entitled to remain an employee of the Company and receive the
payments as provided in the first sentence of this Section 4.2.2; and if you
accept full-time employment with any affiliate of the Company, then the payments
provided for in this Section 4.2.2 shall immediately cease and you shall not be
entitled to any 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 of a termination of
your employment pursuant to Section 4.2, then for the period beginning on the
effective date of such termination and ending one year thereafter, the Company
shall, without charge to you, make available to you office space at your
principal job location immediately prior to your 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 your position and responsibilities prior to such
termination of employment but taking into account your reduced need for such
office space, secretarial services and office facilities, services and
furnishings as a result of your no longer being a full-time employee.

                  4.4      Release. A condition precedent to the Company's
obligation to make the payments associated with a termination without cause
shall be your execution and delivery of a release in the form attached hereto as
Annex B. If you shall fail to execute and deliver such release, or if you revoke
such release as provided therein, then in lieu of the payments provided for
herein, you shall receive a severance payment determined in accordance with the
Company's policies relating to notice and severance.

                  4.5      Retirement. Notwithstanding the provisions of
Sections 4.2 or 5, if the term of employment is in effect and you are still
employed by the Company pursuant to this Agreement on the date you first become
eligible for normal retirement as defined in any applicable retirement plan of
the Company or any subsidiary of the Company (the "Retirement Date"), then this
Agreement shall terminate automatically on such date and your employment with
the Company shall thereafter be governed by the policies generally applicable to
employees of the Company, and you shall not thereafter be entitled to the
payments provided in such Sections to the extent not received by you on or prior
to the Retirement Date. In addition, no benefits or payments provided in
Sections 4.2 or 5 shall include any period after the Retirement Date and if the
provision of benefits or calculation of payments provided in any such Section
would include any period subsequent to the Retirement Date, such provision of
benefits shall end on the Retirement date and the calculation of payments shall
cover only the period ending on the Retirement Date. Notwithstanding the
foregoing, the provisions of Annex A and the Trust

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Agreement shall apply to the investment and payment of deferred compensation
after such termination, the provisions of Section 7 of this Agreement shall
survive any such termination and the provisions of Sections 5 and 6 of the
Confidentiality Agreement shall apply to any dispute with respect to this
Agreement that arises after any such termination.

                  4.6      Mitigation. In the event of a termination without
cause under this Agreement, you shall not be required to seek other employment
in order to mitigate your damages hereunder, unless Section 280G of the Code
would apply to any payments to you by the Company and your failure to mitigate
would result in the Company losing tax deductions to which it would otherwise
have been entitled. In such an event, you will engage in whatever mitigation is
necessary to preserve the Company's tax deductions. With respect to the
preceding sentences, any payments or rights to which you are entitled by reason
of the termination of employment without cause shall be considered as damages
hereunder. In addition, whether or not you are required to mitigate your damages
hereunder, if following a termination without cause you obtain other employment
with any entity, other than a not-for-profit entity or government institution,
then you shall pay over to the Company the total cash salary and bonus (of any
kind) payable to you in connection with such other employment for services
during the period prior to the Severance Term Date (whether paid or deferred),
at the time received by you, to the extent of the amounts previously paid to you
by the Company following your termination with respect to such period, as
damages or severance, in excess of the Company's standard policy. (The
provisions of the foregoing sentence shall not apply to any equity interest,
stock option, phantom or restricted stock or similar benefit received in
connection with such other employment). Any obligation to mitigate your damages
pursuant to this Section 4.6 shall not be a defense or offset to the Company's
obligation to pay you in full the amounts provided in this Agreement upon the
occurrence of a termination without cause, at the time provided herein, or the
timely and full performance of any of the Company's other obligations under this
Agreement.

         5. Disability.

                  5.1      Disability Payments. If during the term of employment
and prior to the delivery of any notice of termination without cause, you become
physically or mentally disabled, whether totally or partially, so that you are
prevented from performing your 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 your full compensation
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 you have not resumed your usual duties on or prior to
the Disability Date, the Company shall pay you

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a pro rata Bonus (based on your Average Annual Bonus) for the year in which the
Disability Date occurs and thereafter shall pay you disability benefits for the
period ending on the later of (i) the Term Date or (ii) the date which is twelve
months after the Disability Date (in the case of either (i) or (ii), the
"Disability Period"), in an annual amount equal to 75% of (a) your Base Salary
at the time you become disabled and (b) the Average Annual Bonus.

                  5.2      Recovery from Disability. If during the Disability
Period you shall fully recover from your disability, the Company shall have the
right (exercisable within 60 days after notice from you of such recovery), but
not the obligation, to restore you to full-time service at full compensation. If
the Company elects to restore you 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 you to full-time service, you shall be entitled to
obtain other employment, subject, however, to the following: (i) you shall
perform advisory services during any balance of the Disability Period; and (ii)
you shall comply with the provisions of the Confidentiality Agreement during the
Disability Period. 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 Board of
Directors or the Chief Executive Officer of the Company but you 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. Any income from such other employment shall not be applied to
reduce the Company's obligations under this Agreement.

                  5.3      Other Disability Provisions. The Company shall be
entitled to deduct from all payments to be made to you during the Disability
Period pursuant to this Section 5 an amount equal to all disability payments
received by you during the Disability Period from Worker'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 you from
such disability insurance policies are not includible in your income for federal
income tax purposes, the Company's deduction with respect to such payments shall
be equal to the product of (i) such payments and (ii) a fraction, the numerator
of which is one and the denominator of which is one less the maximum marginal
rate of federal income taxes applicable to individuals at the time of receipt of
such payments. All payments made under this Section 5 after the Disability Date
are intended to be disability payments, regardless of the manner in which they
are computed. Except as otherwise provided in this Section 5, the term of
employment shall continue during the Disability Period and you shall be entitled
to all of the rights and benefits provided for in this Agreement, except that
Sections 4.2 shall not apply during the Disability Period and unless the Company
has restored you to full-time service at full compensation prior to the end of
the Disability Period, the term of employment shall end and you shall cease to
be an

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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. If you die during the term of employment, this Agreement and
all obligations of the Company to make any payments hereunder shall terminate
except that your estate (or a designated beneficiary) shall be entitled to
receive Base Salary to the last day of the month in which your death occurs and
Bonus compensation (at the time bonuses are normally paid) based on the Average
Annual Bonus, but prorated according to the number of whole or partial months
you were employed by the Company in such calendar year.

         7. Life Insurance. The parties confirm that pursuant to the terms of
your previous employment agreements with the Company, the Company maintained
$5,000,000 face amount of split ownership life insurance on your life. The
Company shall continue to maintain such life insurance and shall maintain such
policy (without reduction in the face amount of the coverage) until your death
and irrespective of any termination of this Agreement, except pursuant to
Section 4.1. You shall be entitled to designate the beneficiary or beneficiaries
of such policy, which may include a trust. At your death, or on the earlier
surrender of such policy by the owner, your estate (or the owner of the policy)
shall promptly pay to the Company an amount equal to the premiums on such policy
paid by the Company and its subsidiaries (net of (i) tax benefits, if any, to
the Company and its subsidiaries in respect of payments of such premiums, (ii)
any amounts payable by the Company which have been paid by you or on your behalf
with respect to such insurance, (iii) dividends received by the Company and its
subsidiaries in respect of such premiums, but only to the extent such dividends
are not used to purchase additional insurance on your life, and (iv) any unpaid
borrowings by the Company and its subsidiaries under the policy. If other than
the Company, the owner of the policy from time to time shall execute, deliver
and maintain a customary split dollar insurance agreement and collateral
assignment form, assigning to the Company the proceeds of the policy but only to
the extent necessary to secure the reimbursement of the obligation contained in
the preceding sentence. The Company agrees that it will not borrow against the
policy an amount in excess of the premiums on such policy paid by the Company
and its subsidiaries (net of the amounts referred to in clauses (i), (ii) and
(iii) above). The life insurance provided for in this Section 7 shall be in
addition to any other insurance hereafter provided by the Company or any of its
subsidiaries on your life under any group or individual policy.

         In addition to the foregoing, during your employment with the Company,
the Company shall (x) provide you with $50,000 of group life insurance and (y)
pay you annually an amount equal to the premium you 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 your Base Salary minus
(ii) $50,000. You shall be under no obligation to use the

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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 you hereunder 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. The parties intend that any
life insurance provided under this Section 7 shall be provided in a manner
consistent with applicable laws.

         8. General Availability of Benefits. To the extent that (a) you are
eligible under the general provisions thereof (including without limitation, any
plan provision providing for participation to be limited to persons who were
employees of the Company or certain of its subsidiaries prior to a specific
point in time) and (b) the Company maintains such plan or program for the
benefit of its senior executives, during the term of employment and so long as
you are an employee of the Company, you 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, you shall be entitled during
the term of employment and so long as you are an employee of the Company, to
receive other benefits generally available to all senior executives of the
Company to the extent you are eligible under the general provisions thereof,
including, without limitation, to the extent maintained in effect by the Company
for its senior executives, and financial services.

         Pursuant to the terms of your previous employment agreements with the
Company, in addition to any retirement benefits to which you are entitled under
the Time Warner Employees' Pension Plan, any supplemental retirement or excess
benefit plan maintained by the Company or any of its affiliates or any successor
plans thereto (hereinafter collectively referred to as the "Pension Plan"), the
Company will, following your termination of employment for any reason, except by
the Company for cause pursuant to Section 4.1 and except for a termination by
you in breach of this Agreement, pay or cause to be paid to you or your
beneficiary as the case may be, in accordance with the following provisions, an
amount which is equivalent to the excess of (the "Excess Amount") (i) the amount
you or your beneficiary would be entitled to receive under the Pension Plan
assuming you had five additional years of service (as such term is defined in
the Pension Plan) taking into account all the provisions of the Pension Plan as
are from time to time in effect and applicable to you or your beneficiary over
(ii) the amount you or your beneficiary would be entitled to receive under the
Pension Plan based on actual years of

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service taking into account all the provisions of the Pension Plan as are from
time to time in effect and applicable to you or your beneficiary.

         If you are your beneficiary is entitled to an Excess Amount as
described in the preceding paragraph, the Company shall pay the Excess Amount to
you or your beneficiary as follows. If you are otherwise entitled to benefits
under the Pension Plan, then the Excess Amount shall be paid at the same times
and in the same manner as shall be elected by you or your beneficiary for
payment of amounts under the Pension Plan. If you are not otherwise entitled to
benefits under the Pension Plan, then the Excess Amount shall be paid at the
time(s) and in one of the forms of payment permitted under the Pension Plan as
elected by you or your beneficiary. If you or your beneficiary dies before any
payments described above have been made, the payments shall be made to the
beneficiary thereof at the same time and in the same manner as they would have
been paid if the payments were to be made under the Pension Plan.

         9. Benefits After a Termination or Disability. During the period you
remain on the payroll of the Company after a termination without cause or during
the Disability Period, you shall continue to be an employee of the Company and
shall continue to be eligible to participate in the benefit plans and to receive
the benefits required to be provided to you under this Agreement to the extent
such benefits are maintained in effect by the Company for its executives;
provided, however, you shall not be entitled to any additional awards or grants
under any stock option, restricted stock or other stock based incentive plan. At
the time you leave the payroll of the Company, your rights to benefits and
payments under any benefit plans or any insurance or other death benefit plans
or arrangements of the Company or under any stock option, restricted stock,
stock appreciation right, bonus unit, management incentive or other plan of the
Company shall be determined 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. However, notwithstanding the foregoing or any more
restrictive provisions of any such plan or agreement, (a) all stock options
granted to you by the Company prior to the Effective Date shall be continue to
be governed by the terms and provisions of the applicable stock option plan or
agreement under which such options were awarded, as modified by the Prior
Agreement; (b) if your employment with the Company is terminated as a result of
a termination pursuant to Section 4.2, then (i) all stock options and restricted
stock granted to you by the Company under this Agreement shall continue to vest
while you remain on the payroll of the Company (and thereafter receive a pro
rata portion of unvested restricted stock) and (ii) the Company shall not be
permitted to determine that your employment was terminated for "unsatisfactory
performance" within the meaning of any stock option agreement between you and
the Company; and (c) if your employment is voluntarily terminated by you at any
time (x) following the attainment of age 55 with ten years of service with the
Company or any Affiliate or (y) pursuant to a retirement plan or early
retirement program of the Company or any Affiliate, then all options

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granted to you by the Company shall vest and become immediately exercisable, and
shall remain exercisable for five years following your date of termination (but
not beyond the term of such options); provided, however, that if the Company has
given notice of termination under Section 4.1 of this Agreement prior to your
election to terminate pursuant to this subsection, then the terms of the
applicable stock option plan or agreement shall be controlling.

         10. Payments in Lieu of Other Benefits. In the event the term of
employment and your employment with the Company is terminated pursuant to any
section of this Agreement, you shall not be entitled to notice and severance
under the Company's general employee policies or to be paid for any accrued
vacation time or unused sabbatical, the payments provided for in such sections
being in lieu thereof.

         11. Assignability. This Agreement and your rights and obligations
hereunder may not be assigned by you and except as specifically contemplated in
this Agreement or under the life insurance policies and benefit plans referred
to in Sections 7 and 8, respectively, neither you, your legal representative nor
any beneficiary designated by you shall have any right, without the prior
written consent of the Company, to assign, transfer, pledge, hypothecate,
anticipate or commute to any person or 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. The Company shall assign its
rights together with its obligations hereunder in connection with any sale,
transfer or other disposition of all or substantially all of the Company's
business and assets, whether by merger, purchase of stock or assets or
otherwise, as the case may be. Upon any such assignment, the Company shall cause
any such successor expressly to assume such obligations, and such rights and
obligations shall inure to and be binding upon any such successor.

         12. Confidentiality, Non-Competition and Non-Disclosure Agreement. This
Agreement includes the Confidentiality, Non Competition and Ownership of Work
Product Agreement (the "Confidentiality Agreement"), which is attached hereto
and by this reference made a part of this Agreement. In the event of any
conflict between the terms of the Confidentiality Agreement and any express term
or condition provided in above, the express terms and conditions provided above
shall prevail.

         13. Entire Agreement. This Agreement, including Annexes A, B, and the
accompanying Confidentiality, Non Competition and Ownership of Work Product
Agreement, represents the entire agreement and understanding of the parties
relating to the subject matter of this Agreement and, except as otherwise
specifically provided in this Agreement, supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties. This
Agreement may be amended, modified, superseded, cancelled, renewed or extended
and the

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<PAGE>

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.

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

                                    TIME WARNER INC.

                                    By: /s/ Wayne H. Pace
                                        ----------------------------------------
                                        Wayne H. Pace
                                        Executive Vice President and
                                        Chief Financial Officer

                                        /s/ Richard D. Parsons
                                    ------------------------------------------
                                    Richard D. Parsons

Approved by the Compensation
Subcommittee for Senior Officer
Bonuses and Stock Options

By   /s/ Frank Caufield
   ---------------------------------
   Frank Caufield

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<PAGE>

                                                                         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 his or her 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
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

                                       14
<PAGE>

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 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

                                       15
<PAGE>

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
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

                                       16
<PAGE>

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 often years (the "Pay-Out Period") commencing on the
first Company payroll date in the month following the later of (i) the Term Date
and (ii) the date the Executive ceases to be an employee of the Company and
leaves the payroll of the Company for any reason, 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, and 3.5 of the Agreement as of each Valuation Date and not
theretofore distributed or deemed distributed pursuant to this Section A.6 is
herein called "Account Retained Income". The amount of each payment for the
year, or such shorter period as may be determined by the Company or the Trustee,
of the Pay-Out Period immediately succeeding such Valuation Date, including the
payment then due, shall be determined by dividing the aggregate value of the
Trust Account, as valued and adjusted 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

                                       17
<PAGE>

computed as of the date of such payment.

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

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

                                       18
<PAGE>

aggregate amount that shall exceed the sum of(i) all credits made to the Trust
Account pursuant to Sections 3.3. 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.

                                       19
<PAGE>

                                                                         ANNEX B

                                     RELEASE

         Pursuant to the terms of the Employment Agreement made as of
_____________, between TIME WARNER INC., a Delaware corporation (the "Company"),
75 Rockefeller Plaza, New York, New York 10019 and the undersigned (the
"Agreement"), and in consideration of the payments made to me and other benefits
to be received by me pursuant thereto, I, [Name], being of lawful age, do hereby
release and forever discharge the Company and any successors, subsidiaries,
affiliates, related entities, predecessors, merged entities and parent entities
and their respective officers, directors, shareholders, employees, benefit plan
administrators and trustees, agents, attorneys, insurers, representatives,
affiliates, successors and assigns from any and all actions, causes of action,
claims, or demands for general, special or punitive damages, attorney's fees,
expenses, or other compensation or damages (collectively, "Claims"), which in
any way relate to or arise out of my employment with the Company or any of its
subsidiaries or the termination of such employment, which I may now or hereafter
have under any federal, state or local law, regulation or order, including
without limitation, Claims related to any stock options held by me or granted to
me by the Company that are scheduled to vest subsequent to my termination of
employment and Claims under the Age Discrimination in Employment Act (with the
exception of Claims that may arise after the date I sign this Release), Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the
Fair Labor Standards Act, the Family and Medical Leave Act and the Employee
Retirement Income Security Act, each as amended through and including the date
of this Release; provided, however, that the execution of this Release shall not
prevent the undersigned from bringing a lawsuit against the Company to enforce
its obligations under the Agreement.

         I acknowledge that I have been given at least 21 days from the day I
received a copy of this Release to sign it and that I have been advised to
consult an attorney. I understand that I have the right to revoke my consent to
this Release for seven days following my signing. This Release shall not become
effective or enforceable until the expiration of the seven-day period following
the date it is signed by me.

         I ALSO ACKNOWLEDGE THAT BY SIGNING THIS RELEASE I MAY BE GIVING UP
VALAUBLE LEGAL RIGHTS AND THAT I HAVE BEEN ADVISED TO CONSULT A LAWYER BEFORE
SIGNING. I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.

         WITNESS my hand this ____ day of ___________, ____.


                                          ___________________________________
                                       20