Document:

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                                                                    EXHIBIT 10.2

                                                              As Amended through
                                                                  April 27, 2006

                                TIME WARNER INC.
            1988 Restricted Stock and Restricted Stock Unit Plan For
                             Non-Employee Directors

         1.       PURPOSE. The purpose of the Plan is to supplement the
compensation paid to Outside Directors and to increase their proprietary
interest in the Company and their identification with the interests of the
Company's stockholders, by grants of annual awards with respect to Common Stock.

         2.       CERTAIN DEFINITIONS.

                  (a)      "Time Warner" shall mean Time Warner Inc. (formerly
named AOL Time Warner Inc.), a Delaware corporation, and any successor thereto.

                  (b)      "Average Market Price" shall mean the average
(rounded to the nearest cent) of the means between the high and low sales prices
of a share of Common Stock as reported on the New York Stock Exchange Composite
Tape for the ten consecutive trading days ending on the date of the annual
meeting of stockholders of the Company for the year with respect to which an
annual grant of Restricted Shares or Restricted Stock Units is made pursuant to
paragraph 5 of the Plan.

                  (c)      "Board" shall mean the Board of Directors of the
Company.

                  (d)      "Commission" shall mean the Securities and Exchange
Commission.

                  (e)      "Common Stock" shall mean the Common Stock, par value
$.01 per share, of the Company.

                  (f)      "Company" shall mean (i) with respect to periods
prior to January 11, 2001, Historic TW Inc. (formerly named Time Warner Inc.)
and (ii) with respect to periods on and after January 11, 2001, Time Warner.

                  (g)      "Grant Date" shall have the meaning set forth in
paragraph 5 of the Plan.

                  (h)      "Outside Director" shall mean a member of the Board
of Directors of the Company who, as of the close of business on the date of the
annual meeting of stockholders of the Company, is not an employee of the Company
or any subsidiary of the Company. For the purposes hereof, a "subsidiary" of the
Company shall mean any corporation, partnership or other entity in which the
Company owns, directly or indirectly, an equity interest of 50% or more.

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                  (i)      "Plan" shall mean this 1988 Restricted Stock and
Restricted Stock Unit Plan for Non-Employee Directors of the Company.

                  (j)      "Retained Distributions" shall mean distributions
which are retained by the Company pursuant to paragraph 6(b) and (c) of the
Plan.

                  (k)      "Restricted Shares" shall mean shares of Common Stock
granted to an Outside Director pursuant to paragraph 5 of the Plan.

                  (l)      "Restricted Stock Units" means a contingent
obligation of the Company to deliver shares of Common Stock granted to an
Outside Director pursuant to paragraph 5 of the Plan.

                  (m)      "Restriction Period" shall mean the period of time
specified in paragraph 6(a) hereof applicable to all awards granted under the
Plan.

         3.       SHARES SUBJECT TO THE PLAN. Subject to the provisions of
paragraph 9 hereof, the maximum aggregate number of Restricted Shares and
Restricted Stock Units which may be issued under the Plan in any calendar year,
commencing with calendar year 1999, shall be equal to .003% of the shares of
Common Stock outstanding on December 31st of the preceding calendar year. Any
Restricted Shares and Restricted Stock Units available for grant in any calendar
year which are not granted in that calendar year shall not be available for
grant in any subsequent calendar year and any Restricted Shares and Restricted
Stock Units awarded in any calendar year that are forfeited by the terms of the
Plan in any subsequent calendar year shall not again be available for awards. No
fractional shares of Common Stock shall be granted or issued under the Plan.

         Shares utilized in respect of Restricted Shares or Restricted Stock
Units may be, in whole or in part, authorized but unissued shares of Common
Stock or shares of Common Stock previously issued and outstanding and reacquired
by the Company.

         4.       ELIGIBILITY. Subject to the last sentence of paragraph 5
hereof, the only persons eligible to participate in the Plan shall be Outside
Directors.

         5.       ANNUAL GRANTS. Subject to the provisions of paragraph 3
hereof, each Outside Director shall automatically be granted under the Plan, as
of the conclusion of each annual meeting of stockholders of the Company (the
"Grant Date"), (a) for Grant Dates occurring during calendar years 1990 through
1998, that number of Restricted Shares equal to $30,000 divided by the Average
Market Price of the Common Stock on the Grant Date and (b) for Grant Dates
occurring during calendar year 1999 and thereafter, that number of Restricted
Shares or Restricted Stock Units, as determined by the Board prior to the Grant
Date, as is equal to a dollar amount determined by the Board of Directors on or
before the Grant Date divided by the Average Market Price of the Common Stock on
the Grant Date, and except as hereinafter provided, the Company shall promptly
thereafter issue such Restricted Shares or Restricted Stock Units, in each case
without any further action required to be taken by the Board or any committee
thereof. The Company shall not be required to issue fractions of Restricted
Shares or

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Restricted Stock Units and in lieu thereof any fractional Restricted Share or
Restricted Stock Unit shall be rounded up to the next whole number.
Notwithstanding the foregoing, in the case of an Outside Director who, as of any
Grant Date, has not continuously served as a member of the Board for a period of
at least six consecutive months (a "new Outside Director"), the Restricted
Shares or Restricted Stock Units granted to such new Outside Director on such
Grant Date shall not be issued in such new Outside Director's name until six
months after such new Outside Director shall have first become a new Outside
Director. An individual who shall become an Outside Director subsequent to the
date of the annual meeting of stockholders of the Company for any year shall
first become eligible to participate in the Plan commencing on the date of the
next annual meeting of stockholders of the Company.

         6.       RESTRICTION PERIOD; RESTRICTIONS APPLICABLE TO RESTRICTED
SHARES AND RESTRICTED STOCK UNITS; CERTIFICATES REPRESENTING RESTRICTED SHARES;
DIVIDEND EQUIVALENTS APPLICABLE TO RESTRICTED STOCK UNITS.

                  (a)      Restricted Shares and Restricted Stock Units granted
to an Outside Director pursuant to the Plan shall be subject to the possibility
of forfeiture for a period (the "Restriction Period") commencing on the date
such Restricted Shares or Restricted Stock Units shall have been granted to such
Outside Director pursuant to paragraph 5 of the Plan and ending on the earliest
of the following events:

                           (i) (A) the date such Outside Director ceases to be a
         director of the Company by reason of mandatory retirement pursuant to
         any policy or plan of the Company applicable to Outside Directors, or
         (B) with respect to Restricted Stock Units only, the date such Outside
         Director ceases to be a director of the Company, provided the Outside
         Director has either (x) completed at least five years of service as a
         director, in the aggregate or (y) served as a director of the Company
         for at least five consecutive annual meetings of stockholders of the
         Company;

                           (ii) the date such Outside Director, having been
         nominated for reelection, is not re-elected by the stockholders of the
         Company to serve as a member of the Board or, having been re-elected by
         fewer than a majority "for" votes of the votes cast by the stockholders
         at a stockholders' meeting in an uncontested election of directors, the
         date such Outside Director's offer to resign from the Board is accepted
         by the Board;

                           (iii) the date of death of such Outside Director;

                           (iv) the date such Outside Director terminates
         service on the Board on account of medical or health reasons which
         render such Outside Director unable to continue to serve as a member of
         the Board;

                           (v) the occurrence of a Change in Control of the
         Company (as defined in paragraph 6(c) below); or

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                           (vi) in each of the four years following the date of
         grant, on the first day of the month in which a grant of Restricted
         Shares or Restricted Stock Units was made to an Outside Director
         pursuant to paragraph 5 of the Plan with respect to 25% of the number
         of Restricted Shares or Restricted Stock Units in such grant, beginning
         with grants made in 2003;

provided, however, that, in the discretion of the Board on a case by case basis,
the Restriction Period applicable to all Restricted Shares and Restricted Stock
Units granted to an Outside Director shall end and be deemed completed for all
purposes of the Plan in the event an Outside Director (a "withdrawing Outside
Director") terminates his or her service as a member of the Board (A) for
reasons of personal or financial hardship; (B) to serve in any governmental,
diplomatic or any other public service position or capacity; (C) to avoid or
protect against a conflict of interest of any kind; (D) on the advice of legal
counsel; or (E) for any other extraordinary circumstance that the Board
determines to be comparable to the foregoing; provided that in the case of a
Restricted Stock Unit, the payment of the shares shall not occur before the
first date on which a payment could be made without subjecting the Outside
Director to tax under the provisions of Section 409A of the Internal Revenue
Code of 1986, as amended (the "Code"). The withdrawing Outside Director shall
abstain from participating in any determination made by the Board with respect
to any matter relating to the foregoing.

                  (b)      Restricted Shares, when issued, will be represented
by a stock certificate or certificates registered in the name of the Outside
Director to whom such Restricted Shares shall have been granted. Each such
certificate shall bear a legend in substantially the following form:

                  "The shares represented by this certificate are subject to the
                  terms and conditions (including forfeiture and restrictions
                  against transfer) contained in the Time Warner Inc. 1988
                  Restricted Stock and Restricted Stock Unit Plan for
                  Non-Employee Directors. A copy of such Plan is on file in the
                  Office of the Secretary of Time Warner Inc."

                  Such certificates shall be deposited by such Outside Director
with the Company, together with stock powers or other instruments of assignment,
each endorsed in blank, which will permit transfer to the Company of all or any
portion of the Restricted Shares and any securities constituting Retained
Distributions that shall be forfeited or that shall not become vested in
accordance with the Plan. Restricted Shares shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The Outside
Director will have the right to vote such Restricted Shares, to receive and
retain all regular cash dividends paid on such Restricted Shares and to exercise
all other rights, powers and privileges of a holder of Common Stock with respect
to such Restricted Shares, with the exception that (i) the Outside Director will
not be entitled to delivery of the stock certificate or certificates
representing such Restricted Shares until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Shares during the
Restriction Period; (iii)

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other than regular cash dividends, the Company will retain custody of all
distributions ("Retained Distributions") made or declared with respect to the
Restricted Shares (and such Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the Restricted Shares)
until such time, if ever, as the Restricted Shares with respect to which such
Retained Distributions shall have been made, paid or declared shall have become
vested, and such Retained Distributions shall not bear interest or be segregated
in separate accounts; (iv) an Outside Director may not sell, assign, transfer,
pledge, exchange, encumber or dispose of any Restricted Shares or any Retained
Distributions during the Restriction Period; and (v) a breach of any
restrictions, terms or conditions provided in the Plan or established by the
Board with respect to any Restricted Shares or Retained Distributions will cause
a forfeiture of such Restricted Shares and any Retained Distributions with
respect thereto.

                  (c)      If the Company shall pay any regular cash dividend on
its shares of Common Stock, the Outside Director will have the right to receive
and retain an amount equal to the dividends paid on the number of shares of
Common Stock equal to the number of Restricted Stock Units held by the Outside
Director on the dividend record date ("Dividend Equivalents"). If the Company
shall pay any dividend other than a cash dividend on its shares of Common Stock,
the Outside Director will not have the right to receive an amount equal or
equivalent to such distribution with respect to the Restricted Stock Units
outstanding on the record date for such distribution (the "RSU Retained
Distribution"), but the Company will retain custody of such RSU Retained
Distributions (and such RSU Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the Restricted Stock
Units) until such time, if ever, as the Restricted Stock Units with respect to
which such RSU Retained Distributions shall relate shall have become vested, and
such RSU Retained Distributions shall not bear interest or be segregated in
separate accounts. An Outside Director may not sell, assign, transfer, pledge,
exchange, encumber or dispose of any Restricted Stock Units or any RSU Retained
Distributions during the Restriction Period. A breach of any restrictions, terms
or conditions provided in the Plan or established by the Board with respect to
any Restricted Stock Units will cause a forfeiture of such Restricted Stock
Units and any RSU Retained Distributions with respect thereto. Notwithstanding
anything else contained in this paragraph 6(c), no payment of Dividend
Equivalents or RSU Retained Distributions to an Outside Director shall occur
before the first date on which a payment could be made without subjecting the
Outside Director to tax under the provisions of Section 409A of the Code.

                  (d)      A "Change in Control" of the Company shall be deemed
to have occurred on the date upon which (i) the Board (or, if approval of the
Board is not required as a matter of law, the stockholders of the Company) shall
approve (a) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of
Common Stock would be converted into cash, securities or other property, other
than a merger of the Company in which the holders of Common Stock immediately
prior to the merger have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger, or (b) any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company, or (c)
the adoption of any plan or proposal for the liquidation or dissolution of the
Company, or (ii) any person (as such term is defined in Section 13(d)(3) and
14(d)(2) of the

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Securities Exchange Act of 1934, as amended (the "Exchange Act")), corporation,
or other entity shall purchase any Common Stock of the Company (or securities
convertible into the Common Stock) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, without the prior
consent of the Board, or any such person, corporation or other entity (other
than the Company or any benefit plan sponsored by the Company or any subsidiary)
shall become the "beneficial owner" (as such term is defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20 percent or more of the combined voting power of the then
outstanding securities of the Company ordinarily (and apart from rights accruing
under special circumstances) having the right to vote in the election of
directors (calculated as provided in paragraph (d) of such Rule 13d-3 in the
case of rights to acquire the Company's securities), or (iii) during any period
of two consecutive years, individuals who at the beginning of such period
constitute the entire Board shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.

         7.       COMPLETION OF RESTRICTION PERIOD; FORFEITURE. Upon the
completion of the Restriction Period with respect to Restricted Shares or
Restricted Stock Units of an Outside Director, and the satisfaction of any other
applicable restrictions, terms and conditions, such Restricted Shares issued to
such Outside Director and any Retained Distributions with respect to such
Restricted Shares shall become vested and shares of Common Stock subject to
Restricted Stock Units shall be thereafter delivered to the Outside Director.
The Company shall promptly thereafter issue and deliver to the Outside Director
new stock certificates or instruments representing the Restricted Shares and any
other Retained Distributions related to such Restricted Shares registered in the
name of the Outside Director or, if deceased, his or her legatee, personal
representative or distributee, which do not contain the legend set forth in
paragraph 6(b) hereof.

                  If an Outside Director ceases to be a member of the Board for
any reason other than as set forth in clauses (i) through (v) of paragraph 6(a)
hereof or as the Board may otherwise approve in accordance with paragraph 6(a),
then those Restricted Shares and Restricted Stock Units granted to such Outside
Director and all Retained Distributions with respect to the Restricted Shares or
Restricted Stock Units that have not satisfied the Restriction Period because
the time periods set forth in clause (vi) of paragraph 6(a) have not passed,
shall be forfeited to the Company, and the Outside Director shall not thereafter
have any rights (including dividend and voting rights) with respect to such
Restricted Shares, Restricted Stock Units and Retained Distributions with
respect thereto.

         8.       STATEMENT OF ACCOUNT. Each Outside Director shall receive an
annual statement, on or about June 1st, showing the number of Restricted Shares
and Restricted Stock Units granted to such Outside Director for that year and
the aggregate number of Restricted Shares and Restricted Stock Units that have
been granted to such Outside Director under the Plan in or after 2003.

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         9.       ADJUSTMENT IN EVENT OF CHANGES IN COMMON STOCK. In the event
of a recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation or liquidation or the like, the aggregate number
and class of Restricted Shares and Restricted Stock Units available for grant
under the Plan and the number and character of shares subject to any outstanding
award thereunder shall be appropriately adjusted by the Board, whose
determination shall be conclusive.

         10.      NO RIGHT TO NOMINATION. Nothing contained in the Plan shall
confer upon any Outside Director the right to be nominated for reelection to the
Board.

         11.      NONALIENATION OF BENEFITS. No right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefit. If any Outside Director or
beneficiary hereunder should become bankrupt or attempt to anticipate, alienate,
sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge any
right or benefit hereunder, then such right or benefit shall, in the discretion
of the Board, cease and terminate, and in such event, the Board in its
discretion may hold or apply the same or any part thereof for the benefit of the
Outside Director, his or her beneficiary, spouse, children or other dependents,
or any of them, in such manner and in such proportion as the Board may deem
proper.

         12.      APPOINTMENT OF ATTORNEY-IN-FACT. Upon the issuance of any
Restricted Shares hereunder and the delivery by an Outside Director of the stock
power referred to in paragraph 6(b) hereof, such Outside Director shall be
deemed to have appointed the Company, its successors and assigns, the
attorney-in-fact of the Outside Director, with full power of substitution, for
the purpose of carrying out the provisions of this Plan and taking any action
and executing any instruments which such attorney-in-fact may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact shall be irrevocable and coupled with an interest. The Company
as attorney-in-fact for the Outside Director may in the name and stead of the
Outside Director make and execute all conveyances, assignments and transfers of
the Restricted Shares and Retained Distributions deposited with the Company
pursuant to paragraph 6(b) of the Plan and the Outside Director hereby ratifies
and confirms all that the Company, as said attorney-in-fact, shall do by virtue
thereof.

                  Nevertheless, the Outside Director shall, if so requested by
the Company, execute and deliver to the Company all such instruments as may, in
the judgment of the Company, be advisable for the purpose.

         13.      SECTION 4999 RULES. Notwithstanding any provisions to the
contrary contained in the Plan, if the Payment (as hereinafter defined) due to
the Outside Director hereunder upon the occurrence of a Change in Control of the
Company would be subject to the excise tax imposed by Section 4999 (or any
successor thereto) of the Code, then any such Payment hereunder payable to the
Outside Director shall be reduced to the largest amount that

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will result in no portion of the aggregate of the Payments from the Company
being subject to such excise tax. The term "Payment" shall mean any transfer of
property within the meaning of Section 280G (or any successor thereto) of the
Code.

                  The determination of any reduction in Payments under the Plan
shall be made by the Outside Director in good faith, and such determination
shall be conclusive and binding on the Company. The Outside Director shall have
the right to determine the extent to which the aggregate amount of any such
reduction shall be applied against any cash or any shares of stock of the
Company or any other securities or property to which the Outside Director would
otherwise have been entitled under the Plan, the extent to which the Payments
hereunder and any other payments due to the Outside Director from the Company
shall be reduced, and whether to waive the right to the acceleration of any
portion of the Payment due hereunder or otherwise due to the Outside Director
from the Company, and any such determination shall be conclusive and binding on
the Company. To the extent that Payments hereunder are not paid as a consequence
of the limitation contained in this paragraph 13, then the Restricted Shares,
Restricted Stock Units and Retained Distributions not so accelerated shall be
deemed to remain outstanding and shall be subject to the provisions of the Plan
as if no acceleration had occurred.

                  If (a) the Company shall make any Payments pursuant to the
Plan to the Outside Director, (b) an excise tax under Section 4999 (or any
successor thereto) of the Code is in fact paid by the Outside Director (or is
claimed by the Internal Revenue Service to be due) as a result of any such
Payment, either alone or together with any other Payments received or to be
received by the Outside Director from the Company, and (c) if nationally
recognized counsel to the Outside Director or the Company shall have given an
opinion of counsel that repayment of all or a portion of such Payments would
result in such excise tax being refunded to the Outside Director (or, if not
paid, in such excise tax not being imposed), then the Outside Director shall
repay to the Company all or such portion of such Payments so that such excise
tax will be refunded (or will not apply).

                  The Company shall pay all legal fees and expenses which the
Outside Director may incur in any contest of the Outside Director's
interpretation of, or determinations under, the provisions of this paragraph 13.

         14.      WITHHOLDING TAXES.

                  (a)      At the time any Restricted Shares or Retained
Distributions become vested, or amounts become payable pursuant to a Restricted
Stock Unit, each Outside Director shall pay to the Company the amount of any
Federal, state or local taxes of any kind required by law to be withheld with
respect thereto.

                  (b)      If an Outside Director properly elects (which, apart
from any other notice required by law, shall require that the Outside Director
notify the Company of such election at the time it is made) within 30 days after
the Company grants Restricted Shares to an Outside Director to include in gross
income for Federal income tax purposes an amount equal to the fair market value
of such Restricted Shares at the Grant Date, he or she shall pay to the Company
at

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the time of such election the amount of any Federal, state or local taxes
required to be withheld with respect to such Restricted Shares.

                  (c)      If an Outside Director shall fail to make the
payments required hereunder, the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise due to such
Outside Director any Federal, state or local taxes of any kind required by law
to be withheld with respect to such Restricted Shares and Restricted Stock
Units.

         15.      AMENDMENT AND TERMINATION OF PLAN. The Plan shall have a term
of 10 years from the date stockholder approval regarding the Plan was last
obtained and, therefore, the Plan shall terminate on May 19, 2009, and no
further Restricted Shares or Restricted Stock Units may be granted pursuant to
the Plan after that date. The Board may terminate the Plan at any time prior to
such termination date and may make such amendments to the Plan as it shall deem
advisable; provided, however, that no termination or amendment of the Plan shall
adversely affect the right of any Outside Director (without his or her consent)
under any grant previously made and any amendment shall comply with all
applicable laws and regulations and stock exchange listing requirements.

         16.      GOVERNMENT AND OTHER REGULATIONS. Notwithstanding any other
provisions of the Plan, the obligations of the Company with respect to
Restricted Shares and Restricted Stock Units shall be subject to all applicable
laws, rules and regulations, and such approvals by any governmental agencies as
may be required or deemed appropriate by the Company. The Company reserves the
right to delay or restrict, in whole or in part, the issuance or delivery of
Common Stock pursuant to any grants of Restricted Shares or Restricted Stock
Units under the Plan until such time as:

                  (a)      any legal requirements or regulations shall have been
met relating to the issuance of such shares or to their registration,
qualification or exemption from registration or qualification under the
Securities Act of 1933 or any applicable state securities laws; and

                  (b)      satisfactory assurances shall have been received that
such shares when delivered will be duly listed on any applicable stock exchange.

         17.      NONEXCLUSIVITY OF PLAN. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including without limitation, the awarding of stock otherwise than under the
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

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

         19.      EFFECTIVE DATE OF THE PLAN. The Plan shall become effective on
a date which is the latter of (i) the date the Plan is approved by the
stockholders of the Company entitled to vote at the annual meeting of
stockholders of the Company to be held in 1988, or any

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adjournment thereof; and (ii) the date on which the Company receives a favorable
interpretative letter from the Commission to the effect that (x) the grant of
Restricted Shares under the Plan is exempt from the operation of Section 16(b)
of the Exchange Act and (y) Outside Directors who receive Restricted Shares
under the Plan will continue to be "disinterested persons" within the meaning of
Rule 16b-3 under the Exchange Act with respect to administration of the
Company's other stock related plans in which only employees of the Company
(including officers, whether or not they are directors) and its subsidiaries may
participate.

         20.      BENEFICIARIES. The Outside Director's beneficiary in the event
of his or her death shall be his or her estate.<PAGE>

                                                                    EXHIBIT 10.3

                                                                 1999 Stock Plan
                                                                Option Agreement
                                                             Directors Version 5
                                                      For Use Beginning May 2006

                                TIME WARNER INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

         Time Warner Inc., formerly named AOL Time Warner Inc. (the "Company"),
has granted the Optionee an option (the "Option") to purchase shares of its
common stock, $.01 par value per share (the "Shares"), on the Date of Grant set
forth on the Notice of Grant of Stock Option (the "Notice") that has separately
been provided to the Optionee.

         The Option is not intended to qualify as an "incentive stock option"
under Section 422 of the Code and shall for all purposes be treated as a
nonstatutory stock option.

         1.       GRANT OF OPTION. The Company hereby grants to the Optionee the
right and option to purchase the number of Shares set forth in the Notice, on
the terms and conditions and subject to all the limitations set forth herein and
in the Plan, which is incorporated herein by reference.

         2.       EXERCISE PRICE. The exercise price of the Shares covered by
this Option shall be as set forth in the Notice, subject to adjustment as
provided in the Plan.

         3.       VESTING AND EXERCISABILITY. Subject to the terms and
conditions set forth in this Agreement and the Plan, so long as the Optionee
remains an employee, director or consultant of the Company or an Affiliate, this
Option shall vest and become exercisable ratably in four equal annual
installments, on each of the first, second, third and fourth anniversaries of
the Date of Grant as set forth in the Notice.

         As a condition to the exercise of any Option evidenced by this
Agreement, the Optionee agrees to hold, for a period of twelve (12) months
following the date of such exercise, a number of Shares issued pursuant to such
exercise equal to 75% (rounded down to the nearest whole Share) of the quotient
of (A) and (B), where (A) is the product of (1) the number of Shares exercised
by the Optionee multiplied by (2) fifty percent (50%) of the excess of the Fair
Market Value of a Share on the date of exercise over the exercise price and (B)
is the Fair Market Value of a Share on the date of exercise. The holding
requirement related to Shares that is established in this Paragraph 3

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shall terminate with respect to the Options evidenced by this Agreement (as well
as any Shares issued pursuant to the exercise of such Options) on the first
anniversary of the date the Optionee ceases to be a director of the Company.

         4.       TERM OF OPTION. Unless earlier terminated pursuant to the
provisions of this Agreement or the Plan, the unexercised portion of the Option
shall expire and cease to be exercisable at 5:00 p.m. Eastern Time on the day
preceding the tenth anniversary of the Date of Grant (the "Expiration Date").

         5.       TERMINATION OF SERVICE. In the event of the termination of the
Optionee's service relationship (whether as an employee, director or consultant)
with the Company or an Affiliate before the Optionee has exercised the Option in
full or the Option has terminated pursuant to Paragraph 4, the following rules
shall apply:

                  (a) Cause. If the Optionee is removed as a director of the
         Company for "cause" (within the meaning of the Company's Restated
         Certificate of Incorporation and By-laws or the provisions of the
         General Corporation Law of the State of Delaware), the unvested portion
         of the Option shall immediately terminate, and the vested portion of
         the Option shall remain exercisable for one (1) month following the
         Optionee's date of termination and shall not be exercisable after the
         end of such one-month period; provided, that if the Optionee is removed
         for cause on account of one or more acts of fraud, embezzlement or
         misappropriation committed by the Optionee, the unvested and vested
         portions of the Option shall immediately terminate.

                  (b) Retirement. If the Optionee's service relationship is
         voluntarily terminated by the Optionee at any time (i) following the
         attainment of age 55 with ten (10) years of service with the Company or
         any Affiliate or (ii) pursuant to a mandatory retirement program for
         non-employee directors of the Company, then the Option shall fully vest
         and become immediately exercisable, and shall remain exercisable for
         five (5) years following the Optionee's date of termination and shall
         not be exercisable after the end of such five-year period; provided,
         that if the Company has given the Optionee notice that his or her
         service relationship is being terminated under the circumstances
         described in Paragraph 5(a) above prior to the Optionee's election to
         terminate under this Paragraph 5(b), then the provisions of Paragraph
         5(a) shall be controlling.

                  (c) Disability. If the Optionee's service relationship is
         terminated as a result of the Optionee's Disability (as defined in the
         Plan), then the Option shall fully vest and become immediately
         exercisable, and shall remain exercisable for three (3) years following
         the Optionee's date of termination and shall not be exercisable after
         the end of such three-year period.

<PAGE>

                                                                               3

                  (d) Death. If the Optionee's service relationship is
         terminated as a result of the Optionee's death, then the Option shall
         fully vest and become immediately exercisable, and shall remain
         exercisable by the Optionee's designated beneficiary or, if there is no
         designated beneficiary, the Optionee's Survivors for three (3) years
         following the Optionee's date of death and shall not be exercisable
         after the end of such three-year period.

                  (e) Not Re-elected as a Director. If the Optionee's service
         relationship is terminated because (i) the Optionee is not nominated by
         the Company's Board of Directors to stand for re-election at an annual
         stockholders' meeting at which directors are to be elected, (ii) having
         been nominated for re-election, is not re-elected by the stockholders
         at such stockholders' meeting, (iii) having been re-elected by fewer
         than a majority "for" votes of the votes cast by the stockholders at
         such stockholders' meeting in an uncontested election of directors, the
         Optionee's offer to resign from the Board of Directors is accepted by
         the Board of Directors, or (iv) any similar events that result in the
         Optionee ceasing to serve as a director of the Company, the Option
         shall fully vest and become immediately exercisable and shall remain
         exercisable for three (3) years following the Optionee's date of
         termination and shall not be exercisable after the end of such
         three-year period; provided, that if at the time the Optionee ceases to
         be a director of the Company under this Paragraph 5(e), the Optionee
         satisfies the age and service requirements described in Paragraph 5(b),
         then the provisions of Paragraph 5(b) shall be controlling.

                  (f) Merger, Reorganization. If the Optionee's service
         relationship is terminated by the Company as a result of any corporate
         reorganization, merger or consolidation of the Company or because of a
         reduction in the size of the Board of Directors, then the Option shall
         fully vest and become immediately exercisable, and shall remain
         exercisable for three (3) years following the Optionee's date of
         termination and shall not be exercisable after the end of such
         three-year period; provided that if at the time the Optionee ceases to
         be a director of the Company under this Paragraph 5(f), the Optionee
         satisfies the age and service requirements described in Paragraph 5(b),
         then the provisions of Paragraph 5(b) shall be controlling.

                  (g) Certain Resignations. If the Optionee's service
         relationship is voluntarily terminated by the Optionee (i) for medical
         reasons, (ii) to accept a position with any federal, state or local
         government or any agency thereof, (iii) on the advice of counsel, due
         to a conflict of interest or (iv) in the discretion of the
         Administrator, for any reason the Administrator determines to be
         similar to the foregoing, then the Option shall fully vest and become
         immediately exercisable and shall remain exercisable for three (3)
         years following the Optionee's date of termination and shall not be
         exercisable after the end of such three-year period.

<PAGE>

                                                                               4

                  (h) Other. If the Optionee's service relationship is
         terminated other than under any of the circumstances described in
         Paragraphs 5(a) through 5(g) above, then the unvested portion of the
         Option shall immediately terminate (subject to Paragraph 6 below), and
         the vested portion of the Option shall remain exercisable for three (3)
         months following the Optionee's date of termination and shall not be
         exercisable after the end of such three-month period; provided, that if
         the Optionee's service relationship is terminated by the Company other
         than under the circumstances described in Paragraphs 5(a), 5(c) or 5(d)
         above, and at the time the Optionee ceases to be a director of the
         Company, the Optionee satisfies the age and service requirements
         described in Paragraph 5(b), then the provisions of Paragraph 5(b)
         shall be controlling.

         Notwithstanding anything to the contrary in this Paragraph 5, in no
event shall any portion of this Option remain exercisable after the Expiration
Date. If the Optionee is a party to any employment or consulting agreement with
the Company or any of its Affiliates, and such agreement provides for treatment
of the Option that is inconsistent with the provisions of this Paragraph 5, the
more favorable provisions shall control. A change in status of an Optionee
within or among the Company and its Affiliates shall not affect the Option,
except that a change in status from employee of the Company or an Affiliate to a
consultant of the Company or an Affiliate shall be treated and have the same
effect as if the Optionee had ceased to be an employee, director or consultant
of the Company or any Affiliate, unless the Administrator determines otherwise.

         6.        CHANGE IN CONTROL; DISSOLUTION AND LIQUIDATION. In the event
a Change in Control (as defined in the Plan) has occurred, the unvested portion
of the Option shall fully vest and become exercisable upon the earlier of (i)
the expiration of the one-year period immediately following the Change in
Control, provided that the Optionee's service relationship with the Company has
not been terminated or (ii) the termination of the Optionee's service
relationship by the Company under the circumstances described in Paragraph 5(h).
Upon the dissolution or liquidation of the Company, the Option shall terminate;
provided that to the extent the Option has not yet terminated pursuant to
Paragraph 4 or Paragraph 5, (i) the Optionee or the Optionee's Survivors shall
have the right immediately prior to such dissolution or liquidation to exercise
the Option to the extent that the Option is then currently vested and
exercisable, and (ii) if a Change in Control shall have occurred within the
twelve months immediately prior to the date of such liquidation or dissolution,
the Optionee or the Optionee's Survivors shall have the right immediately prior
to such dissolution and liquidation to exercise the Option in full whether or
not the Option is otherwise vested and exercisable as of such date.

         7.       METHOD OF EXERCISING OPTION. Subject to the terms and
conditions of this Agreement, the Option may be exercised through an approved
broker/dealer by written notice on such form as is provided by the Company or
pursuant

<PAGE>

                                                                               5

to other procedures established by the Company. Such notice shall state the
number of Shares with respect to which the Option is being exercised and shall
be signed (whether or not in electronic form) by the person exercising the
Option. Payment of the exercise price for such Shares shall be made (a) in
United States dollars in cash or by check or by wire transfer to the Company,
(b) at the discretion of the Administrator, in accordance with procedures
established by the Company, by delivery of Shares, having a fair market value
equal as of the date of the exercise to the exercise price, (c) at the
discretion of the Company, in accordance with a cashless exercise program
established with a securities brokerage firm, and approved by the Company, (d)
through such other method of payment approved by the Company, (e) at the
discretion of the Company, by any combination of (a),(b),(c), and (d) above. The
Company shall deliver a certificate or certificates (or other evidence of
ownership) representing such Shares as soon as practicable after the notice, the
exercise price and any required withholding taxes have been received by the
Company, provided, that the Company may delay issuance of such Shares until
completion of any action or obtaining of any consent, which the Company deems
necessary or appropriate under any applicable law (including, without
limitation, state securities or "blue sky" laws) and such Shares shall be
subject to such restrictions as the Administrator may determine in accordance
with the Plan. The certificate or certificates (or other evidence of ownership)
representing the Shares as to which the Option shall have been so exercised
shall be registered in the name of the Optionee and if the Optionee shall so
request in the notice exercising the Option, shall be registered in the name of
the Optionee and another person jointly, with right of survivorship and shall be
delivered as provided above to or upon the written order of the person or
persons exercising the Option. In the event the Option shall be exercised by any
person or person other than the Optionee, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and nonassessable.

         8.       PARTIAL EXERCISE. Exercise of vested Options in accordance
with this Agreement may be made in whole or in part at any time and from time to
time, except that no fractional Share shall be issued pursuant to the Option.

         9.       NON-ASSIGNABILITY. The Option shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and distribution, or
as may be permitted under policies that may be adopted from time to time by the
Administrator in its sole discretion. The Option shall be exercisable, during
the Optionee's lifetime, only by the Optionee (or, in the event of legal
incapacity or incompetency, by the Optionee's guardian or representative) and
shall not be assigned, pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge, hypothecation or
other disposition of the Option or of any rights granted hereunder contrary to
the provisions of this Paragraph 9, or the levy of any attachment or similar
process upon the Option or such rights shall be null and void.

<PAGE>

                                                                               6

         10.      NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall
have no rights as a stockholder with respect to Shares subject to this Agreement
until the issuance of the Shares. Except as is expressly provided in the Plan
with respect to certain changes in the capitalization of the Company, no
adjustment shall be made for dividends or similar rights for which the record
date is prior to the date of such registration.

         11.      CAPITAL CHANGES AND BUSINESS SUCCESSIONS. The Plan contains
provisions covering the treatment of Options in a number of contingencies such
as stock splits and mergers. Provisions in the Plan for adjustment with respect
to Shares subject to the Option and the related provisions with respect to
successors to the business of the Company are hereby made applicable hereunder
and are incorporated herein by reference.

         12.      TAXES. Upon exercise of the Option, the Optionee shall be
required to pay to the Company the amount of any applicable federal, state and
local withholding taxes due as a result of such exercise. The Optionee agrees
that the Company may withhold from the Optionee's remuneration, if any, the
appropriate amount of federal, state and local withholding attributable to such
amount that the Company believes it is obligated to withhold under the Code,
including, but not limited to, income and employment taxes. Subject to the right
of the Administrator to disapprove any such election and require the Optionee to
pay the required withholding taxes in cash, the Optionee shall have the right to
elect to pay the withholding taxes with Shares to be received upon exercise of
the Option, in accordance with procedures to be established by the
Administrator. Unless the Company shall permit another valuation method to be
elected by the Optionee, Shares used to pay any required withholding tax shall
be valued at the average of the high and low trading price of a Share as
reported on the New York Stock Exchange on the date the withholding tax becomes
due. Any election to pay withholding taxes with Shares must be made on or prior
to the date the withholding tax becomes due and shall be irrevocable once made.
Any such election must be in conformity with the conditions established by the
Company from time to time. The Optionee further agrees that, if the Company does
not withhold an amount from the Optionee's remuneration sufficient to satisfy
the Company's income tax withholding obligation, the Optionee shall reimburse
the Company, in cash, for the amount under-withheld within thirty (30) days
after the Company has given the Optionee notice of such under-withheld amount.

         13.      NO OBLIGATION TO MAINTAIN RELATIONSHIP OR GRANT OPTIONS. The
Company is not by the Plan or this Option obligated to continue the Optionee as
an employee, director or consultant of the Company. The Optionee also agrees and
acknowledges that grants of Options under the Plan are discretionary and any
grant of Options under the Plan does not imply any obligation on the part of the
Company to make any future option grants.

<PAGE>

                                                                               7

         14.      NOTICES. Any notices required or permitted by the terms of
this Agreement or the Plan shall be given by recognized courier service,
facsimile, registered or certified mail, return receipt requested, addressed as
follows:

         If to the Company:      Time Warner Inc.
                                 One Time Warner Center
                                 New York, NY  10019
                                 Attn: Senior Vice President-Global Compensation
                                 and Benefits

         If to the Optionee:     at the most recent address information set
                                 forth in the Company's records;

or such other address or addresses of which notice in the same manner has
previously been given. Any such notice shall be deemed to have been given upon
the earlier of the receipt, one business day following delivery to a nationally
recognized overnight courier service or three business days following mailing by
registered or certified mail.

         15.      GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to its principles of conflicts of laws. The parties
further agree that any and all disputes related to the subject matter of this
Agreement shall be brought only in a state or federal court of competent
jurisdiction sitting in Manhattan, New York, and the parties hereby irrevocably
submit to the jurisdiction of any such court and irrevocably agree that venue
for any such action shall be only in any such court.

         16.      BENEFIT OF AGREEMENT. Subject to the provisions of the Plan
and the other provisions hereof, this Agreement shall be for the benefit of and
shall be binding upon the heirs, executors, administrators, successors and
assigns of the parties hereto.

         17.      ENTIRE AGREEMENT. This Agreement, together with the Notice and
the Plan, embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior oral
or written agreements and understandings relating to the subject matter hereof.
No statement, representation, warranty, covenant or agreement not expressly set
forth in this Agreement or the Notice shall affect or be used to interpret,
change or restrict, the express terms and provisions of this Agreement or the
Notice; provided, that this Agreement and the Notice shall be subject to and
governed by the Plan, and in the event of any inconsistency between the
provisions of this Agreement or the Notice and the provisions of the Plan, the
provisions of the Plan shall govern.

<PAGE>

                                                                               8

         18.      MODIFICATIONS AND AMENDMENTS. The terms and provisions of this
Agreement and the Notice may be modified or amended as provided in the Plan.

         19.      WAIVERS AND CONSENTS. Except as provided in the Plan, the
terms and provisions of this Agreement and the Notice may be waived, or consent
for the departure therefrom granted, only by a written document executed by the
party entitled to the benefits of such terms or provisions. No such waiver or
consent shall be deemed to be or shall constitute a waiver or consent with
respect to any other terms or provisions of this Agreement or the Notice,
whether or not similar. Each such waiver or consent shall be effective only in
the specific instance and for the purpose for which it was given, and shall not
constitute a continuing waiver or consent.

         20.      REFORMATION; SEVERABILITY. If any provision of this Agreement
or the Notice (including any provision of the Plan that is incorporated herein
by reference) shall hereafter be held to be invalid, unenforceable or illegal,
in whole or in part, in any jurisdiction under any circumstances for any reason,
(i) such provision shall be reformed to the minimum extent necessary to cause
such provision to be valid, enforceable and legal while preserving the intent of
the parties as expressed in, and the benefits of the parties provided by, this
Agreement, the Notice and the Plan or (ii) if such provision cannot be so
reformed, such provision shall be severed from this Agreement or the Notice and
an equitable adjustment shall be made to this Agreement or the Notice
(including, without limitation, addition of necessary further provisions) so as
to give effect to the intent as so expressed and the benefits so provided. Such
holding shall not affect or impair the validity, enforceability or legality of
such provision in any other jurisdiction or under any other circumstances.
Neither such holding nor such reformation or severance shall affect the
legality, validity or enforceability of any other provision of this Agreement,
the Notice or the Plan.

         21.      ENTRY INTO FORCE. By entering into this Agreement, the
Optionee agrees and acknowledges that the Optionee has received and read a copy
of the Plan. This Agreement shall not constitute a valid and binding obligation
of the Company to the Optionee until signed or electronically acknowledged and
agreed to by the Optionee.

         22.      DEFINED TERMS. Any terms used but not defined herein shall
have the meanings given to such terms in the Plan.

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