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                                                                    EXHIBIT 10.3

                                                              As Amended Through
                                                                January 16, 2003

                              AOL TIME WARNER INC.
                             1994 STOCK OPTION PLAN

1.   PURPOSE OF THE PLAN

         The purpose of the AOL Time Warner Inc. 1994 Stock Option Plan
(hereinafter the "Plan") is to provide for the granting of nonqualified stock
options and stock appreciation rights to certain employees of and consultants
and advisors to the Company and its Subsidiaries in recognition of the valuable
services provided, and contemplated to be provided, by such employees,
consultants and advisors. The general purpose of the Plan is to promote the
interests of the Company and its stockholders and to reward dedicated employees,
consultants and advisors of the Company and its Subsidiaries by providing them
additional incentives to continue and increase their efforts with respect to,
and to remain in the employ of, the Company or its Subsidiaries.

2.   CERTAIN DEFINITIONS

         The following terms (whether used in the singular or plural) have the
meanings indicated when used in the Plan:

                  (a) "Agreement" means the stock option agreement and stock
         appreciation rights agreement specified in Section 12, both
         individually and collectively, as the context so requires.

                  (b) "Affiliate" means any corporation, company or other entity
         whose financial results are consolidated with those of the Company in
         accordance with U.S. generally accepted accounting principles.

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

                  (d) "Approved Transaction" means any transaction in which the
         Board (or, if approval of the Board is not required as a matter of law,
         the stockholders of the Company) shall approve (i) any consolidation or
         merger of the Company in which the Company is not the continuing or
         surviving corporation or pursuant to which shares of

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         Common Stock would be converted into cash, securities or other
         property, other than (x) a merger of Time Warner as contemplated in the
         Amended and Restated Agreement and Plan of Merger dated as of September
         22, 1995 among Time Warner , TW Inc., Time Warner Acquisition Corp., TW
         Acquisition Corp. and Turner Broadcasting System, Inc., as the same may
         be amended from time to time, or (y) 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 (ii) any sale, lease,
         exchange, or other transfer (in one transaction or a series of related
         transactions) of all, or substantially all, of the assets of the
         Company, or (iii) the adoption of any plan or proposal for the
         liquidation or dissolution of the Company.

                  (e) "Award" means grants of Options and/or SARs under this
         Plan.

                  (f)  "Board" means the Board of Directors of the Company.

                  (g) "Board Change" means, during any period of two consecutive
         years, individuals who at the beginning of such period constituted the
         entire Board ceased for any reason to constitute a majority thereof
         unless the election, or the nomination for election by 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.

                  (h) "Change in Control" means either a Corporate Change in
         Control or a Transactional Change in Control.

                  (i) "Code" means the Internal Revenue Code of 1986, as amended
         from time to time, or any successor statute or statutes thereto.
         Reference to any specific Code section shall include any successor
         section.

                  (j) "Committee" means the Committee appointed pursuant to
         Section 4.

                  (k) "Common Stock" means the common stock, par value $.01 per
         share, of the Company.

                  (l) "Company" means (i) with respect to periods prior to
         January 11, 2001, Time Warner and (ii) with respect to periods on and
         after January 11, 2001, AOL Time Warner.

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

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                  (n) "Control Purchase" means any transaction in which any
         person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of
         the Exchange Act), corporation or other entity (other than the Company
         or any employee benefit plan sponsored by the Company or any of its
         Subsidiaries) (i) shall purchase any Common Stock (or securities
         convertible into Common Stock) for cash, securities or any other
         consideration pursuant to a tender offer or exchange offer, without the
         prior consent of the Board, or (ii) shall become the "beneficial owner"
         (as such term is defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of the Company representing 20%
         or more of the combined voting power of the then outstanding securities
         of the Company ordinarily (and apart from the rights accruing under
         special circumstances) having the right to vote in the election of
         directors (calculated as provided in Rule 13d-3(d) in the case of
         rights to acquire the Company's securities).

                  (o) "Corporate Change in Control" means the happening of any
         of the following events:

                      (1) the acquisition by any individual, entity or group (an
                      "Entity"), including any "person" within the meaning of
                      Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
                      beneficial ownership (within the meaning of Rule 13d-3
                      promulgated under the Exchange Act) of 30% or more of
                      either (i) the then outstanding shares of common stock of
                      the Company (the "Outstanding Company Common Stock") or
                      (ii) the combined voting power of the then outstanding
                      securities of the Company entitled to vote generally in
                      the election of directors (the "Outstanding Company Voting
                      Securities"); excluding, however, the following: (A) any
                      acquisition directly from the Company (excluding any
                      acquisition by virtue of the exercise of an exercise,
                      conversion or exchange privilege unless the security being
                      so exercised, converted or exchanged was itself acquired
                      directly from the Company), (B) any acquisition by the
                      Company, or (C) any acquisition by an employee benefit
                      plan (or related trust) sponsored or maintained by the
                      Company or by any corporation controlled by the Company;
                      or

                      (2) a change in the composition of the Board since January
                      12, 2001, such that the individuals who, as of such date,
                      constituted the Board (the "Incumbent Board") cease for
                      any reason to constitute at least a majority of such
                      Board; provided that any individual who becomes a director
                      of the Company subsequent to January 12, 2001 whose
                      election, or nomination for election by the stockholders
                      of the Company, was approved by the vote of at least a
                      majority of the directors then comprising the Incumbent
                      Board shall

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                      be deemed a member of the Incumbent Board; and provided
                      further, that any individual who was initially elected as
                      a director of the Company as a result of an actual or
                      threatened election contest, as such terms are used in
                      Rule 14a-11 of Regulation 14A promulgated under the
                      Exchange Act, or any other actual or threatened
                      solicitation of proxies or consents by or on behalf of any
                      person or Entity other than the Board shall not be deemed
                      a member of the Incumbent Board.

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

                  (q) "Exchange Act" means the Securities Exchange Act of 1934,
         as amended from time to time, or any successor statute or statutes
         thereto. Reference to any specific Exchange Act section shall include
         any successor section.

                  (r) "Fair Market Value" of a share of Common Stock means the
         average of the high and low sales prices of a share of Common Stock on
         the New York Stock Exchange on the date in question, except as
         otherwise provided in Section 6.5.

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

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

                  (u) "Involuntary Employment Action" means any change in the
         terms and conditions of the Holder's employment with the Company or any
         successor, without cause (as defined herein), to such extent that:

                      (1)  the Holder shall fail to be vested with power,
                           authority and resources analogous to the Holder's
                           title and/or office prior to the Change in Control,
                           or

                      (2)  the Holder shall lose any significant duties or
                           responsibilities attending such office, or

                      (3)  there shall occur a reduction in the Holder's base
                           compensation or

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                      (4)  the Holder's employment with the Company, or its
                           successor, is terminated without cause (as defined
                           herein).

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

                  (w) "Minimum Price Per Share" means the highest gross price
         (before brokerage commissions, soliciting dealers' fees and similar
         charges) paid or to be paid for any share of Common Stock (whether by
         way of exchange, conversion, distribution, liquidation or otherwise)
         in, or in connection with, any Approved Transaction or Control Purchase
         which occurs at any time during the period beginning on the sixtieth
         day prior to the date on which Limited SARs are exercised and ending on
         the date on which Limited SARs are exercised. If the consideration paid
         or to be paid in any such Approved Transaction or Control Purchase
         shall consist, in whole or in part, of consideration other than cash,
         the Board shall take such action, as in its judgment it deems
         appropriate, to establish the cash value of such consideration, but
         such valuation shall not be less than the value, if any, attributed to
         such consideration by any other party to such Approved Transaction or
         Control Purchase.

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

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

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

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

                  (bb) "Subsidiary" of a person means any present or future
         subsidiary of such person as such term is defined in section 425 of the
         Code and any present or future trade or business, whether or not
         incorporated, controlled by or under common control with such person.
         An entity shall be deemed a Subsidiary of a person only for such
         periods as the requisite ownership or control relationship is
         maintained.

                  (cc) "Survivors" means a deceased Holder's legal
         representatives and/or any person or persons who acquired the Holder's
         rights to an Option by will or by the laws of descent and distribution.

                  (dd) "Time Warner Inc." means Time Warner Inc., a Delaware
         corporation.

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

                  (ff) "Transactional Change in Control" means any of the
         following transactions to which the Company is a party:

                      (1)   a reorganization, recapitalization, merger or
                            consolidation (a "Corporate Transaction") of the
                            Company, unless securities representing 60% or more
                            of either the outstanding shares of common stock or
                            the combined voting power of the then outstanding
                            voting securities entitled to vote generally in the
                            election of directors of the Company or the
                            corporation resulting from such Corporate
                            Transaction (or the parent of such corporation) are
                            held subsequent to such transaction by the person or
                            persons who were the beneficial holders of the
                            Outstanding Company Common Stock and Outstanding
                            Company Voting Securities immediately prior to such
                            Corporate Transaction, in substantially the same
                            proportions as their ownership immediately prior to
                            such Corporate Transaction; or

                      (2)   the sale, transfer or other disposition of all or
                            substantially all of the assets of the Company.

3.   STOCK SUBJECT TO THE PLAN

         3.1. NUMBER OF SHARES. Subject to the provisions of Section 12 and this
Section 3, the maximum number of shares of Common Stock in respect of which
Awards may be granted is (x) 1.5 (one and one-half) times the sum of (a) 1.5%
(one and one-half percent) of the number of shares of Common Stock outstanding
on December 31, 1993, (b) 1.25% (one and one-quarter percent) of the number of
shares of Common Stock outstanding on December 31, 1994, (c) 1% (one percent) of
the number of shares of Common Stock outstanding on December 31, 1995, (d) 1.2%
(one and two-tenths percent) of the aggregate number of shares of Common Stock
and Series LMCN-V Common Stock, par value $.01 per share, outstanding on
December 31, 1996, (e) 1.4% (one and four-tenths percent) of the aggregate
number of shares of Common Stock and Series LMCN-V Common Stock, par value $.01
per share, outstanding on December 31, 1997, (f) 1.05% (one and five-hundredths
percent) of the aggregate number of shares of Common Stock and Series LMCN-V
Common Stock, par value $.01 per share, outstanding on December 31, 1998, (g)
1.175% (one and one hundred seventy five thousandths percent) of the aggregate
number of shares of Common Stock and Series LMCN-V Common Stock, par value $.01
per share, outstanding on December 31, 1999, and (h) two million; plus (y)
178,100,000;

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plus (z) 110,000,000; plus (aa) 27,816,788. If and to the extent that an
Option shall expire, terminate or be canceled for any reason without having
been exercised (or without having been considered to have been exercised as
provided in Section 6.5(a)), the shares of Common Stock subject to such
expired, terminated or canceled portion of the Option shall again become
available for purposes of the Plan.

         3.2. CHARACTER OF SHARES. Shares of Common Stock deliverable under the
terms of the Plan may be, in whole or in part, authorized and unissued shares of
Common Stock or issued shares of Common Stock held in the Company's treasury, or
both.

         3.3. RESERVATION OF SHARES. The Company shall at all times reserve a
number of shares of Common Stock (authorized and unissued Common Stock, issued
Common Stock held in the Company's treasury, or both) equal to the maximum
number of shares that may be subject to outstanding Awards and future Awards
under the Plan.

4.   ADMINISTRATION

         4.1. POWERS. The Plan shall be administered by the Board. Subject to
the express provisions of the Plan, the Board shall have plenary authority, in
its discretion, to grant Awards under the Plan and to determine the terms and
conditions (which need not be identical) of all Awards so granted, including
without limitation, (a) the individuals to whom, and the time or times at which,
Awards shall be granted or awarded, (b) the number of shares to be subject to
each Award, (c) when an Option or SAR can be exercised and whether in whole or
in installments, and (d) the form, terms and provisions of any Agreement (which
terms may be amended, subject to Section 14).

         4.2. FACTORS TO CONSIDER. In making determinations hereunder, the Board
may take into account the nature of the services rendered by the respective
employees, consultants or advisors, their dedication and past contributions to
the Company and its Subsidiaries, their present and potential contributions to
the success of the Company and its Subsidiaries and such other factors as the
Board in its discretion shall deem relevant.

         4.3. INTERPRETATION. Subject to the express provisions of the Plan, the
Board shall have plenary authority to interpret the Plan, to prescribe, amend
and rescind the rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The determinations of the Board on the matters referred to in this Section 4
shall be conclusive. The Board's determinations under the Plan need not be
uniform and may be made by it selectively among persons who receive, or are
eligible to receive, Awards under the Plan (whether or not such persons are
similarly situated). Without limiting

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the generality of the foregoing, the Board shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Agreements as to (a) the persons to receive Awards
under the Plan, (b) the terms and provisions of Awards under the Plan and (c)
whether a termination of service with the Company or any Subsidiary or
Affiliate has occurred.

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

         Any such Committee shall select one of its members as its chairman and
shall hold its meetings at such times and places as it shall deem advisable. A
majority of members shall constitute a quorum and all determinations shall be
made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held.

5.   ELIGIBILITY

         Prior to January 18, 2001, Awards may be made only to (a) employees of
the Company or any of its Subsidiaries (including officers and directors of any
of the Company's Subsidiaries), other than officers or directors of the Company
who are subject to Section 16 of the Exchange Act, (b) prospective employees of
the Company or any of its Subsidiaries and (c) consultants or advisors to the
Company or any of its Subsidiaries. On or after January 18, 2001, Awards may be
made only to (a) employees of the Company or any of its Affiliates (including
officers and directors of any of the Company's Affiliates), other than officers
and directors of the Company who are subject to Section 16 of the Exchange Act,
(b) prospective employees of the Company or any of its Affiliates and (c)
consultants to the Company or any of its Affiliates. The exercise of Options and
SARs granted to a prospective employee shall be conditioned upon such person
becoming an employee of the Company or any of its Subsidiaries or Affiliates, as
the case may be. For purposes of the Plan, the term "prospective employee" shall
mean any person who holds an outstanding offer of employment on specific terms
from the Company or any of its Subsidiaries or Affiliates, as the case may be.
Only employees

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designated by the Board to be eligible to be granted one or more Options or SARs
under the Plan shall be eligible to receive Awards and "employee" shall not
include any person who is not on the payroll of the Company as a full-time or
part-time employee (regardless of whether a government agency, court or other
entity subsequently determines that such person is an employee of the Company or
any of its Subsidiaries or Affiliates for purposes of employment taxes, benefits
or any other purpose). Awards may be made to employees, consultants and advisors
who hold or have held Awards under this Plan or any similar or other awards
under any other plan of the Company or its Subsidiaries or Affiliates, as the
case may be.

6.   OPTIONS AND SARS

         6.1. OPTION PRICES. The purchase price of the Common Stock under each
Option shall be determined by the Board and set forth in the applicable
Agreement, but shall not be less than 100% of the Fair Market Value of the
Common Stock on the date of grant.

         6.2. TERM OF OPTIONS. The term of each Option shall be for such period
as the Board shall determine, as set forth in the applicable Agreement.

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

         6.4. MANNER OF EXERCISE. Payment of the Option purchase price shall be
made in cash or in whole shares of Common Stock already owned by the person
exercising an Option or, partly in cash and partly in such Common Stock;
provided, however, that such payment may be made in whole or in part in shares
of Common Stock only if and to the extent permitted by the applicable Agreement.
An Option shall be exercised by written notice to the Company upon such terms
and conditions as provided in the Agreement. The Company shall effect the
transfer of the shares of Common Stock purchased under the Option as soon as
practicable, and within a reasonable time thereafter such transfer shall be
evidenced on the books of the Company. No Holder or other person exercising an
Option shall have any of the rights of a stockholder of the Company with respect
to shares of Common Stock subject to an Option granted under the Plan until due
exercise and full payment has been made. No adjustment shall

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be made for cash dividends or other rights for which the record date is prior to
the date of such due exercise and full payment.

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

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

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

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

         (b) General SARs. General SARs shall be exercisable only at the time
the related Option is exercisable and subject to the terms and provisions of
this Section 6.5, upon the exercise of General SARs, the person exercising the
General SAR shall be entitled to receive consideration (in the form hereinafter
provided) equal in value to the excess of the Fair Market Value on the date of
exercise of the shares of Common Stock with respect to which such General SARs
have been exercised over the aggregate related Option purchase price for such
shares; provided, however, that the Board may, in any Agreement granting General
SARs provide that the appreciation realizable upon exercise thereof shall be
measured from a base higher than the related Option purchase price.

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         Upon the exercise of a General SAR, the person exercising the General
SAR may specify the form of consideration to be received by such person
exercising the General SAR, which shall be in shares of Common Stock (valued at
Fair Market Value on the date of exercise of such General SAR), or in cash, or
partly in cash and partly in shares of Common Stock. Any election by the person
exercising the General SAR to receive cash in full or partial settlement of such
General SAR shall comply with all applicable laws and shall be subject to the
discretion of the Board to settle General SARs only in shares of Common Stock if
necessary or advisable in the judgment of the Board to preserve pooling of
interests accounting treatment for any proposed transaction involving the
Company. Unless otherwise specified in the applicable Agreement, the number of
General SARs which may be exercised for cash, or partly for cash and partly for
shares of Common Stock, during any calendar quarter, may not exceed 20% of the
aggregate number of shares of Common Stock originally subject to the related
Option (as such original number, without giving effect to the exercise of any
portion of the related Option, shall have been retroactively adjusted in
accordance with Section 13 or any corresponding provisions of an applicable
Agreement).

         For purposes of this Section 6.5, the date of exercise of a General SAR
shall mean the date on which the Company shall have received notice from the
person exercising the General SAR of the exercise of such General SAR.

         (c) Limited SARs. Limited SARs may be exercised only during the period
(a) beginning on the first day following either (i) the date of an Approved
Transaction, (ii) the date of a Control Purchase, or (iii) the date of a Board
Change, and (b) ending on the ninetieth day (or such other date specified in the
Agreement) following such date. The effective date of exercise of a Limited SAR
shall be deemed to be the date on which the Company shall have received notice
from the person exercising the Limited SAR of the exercise thereof.

         Upon the exercise of Limited SARs granted in connection with an Option,
except as otherwise provided in the Agreement and the immediately succeeding
sentence, the person exercising the Limited SAR shall receive in cash an amount
equal to the product computed by multiplying (a) the excess of (i) the higher of
(A) the Minimum Price Per Share, or (B) the highest reported closing sales price
of a share of Common Stock as reported on the Composite Tape at any time during
the period beginning on the sixtieth day prior to the date on which such Limited
SARs are exercised and ending on the date on which such Limited SARs are
exercised over (ii) the per share Option price of the related Nonqualified Stock
Option, by (b) the number of shares of Common Stock with respect to which such
Limited SARs are being exercised. The Board shall have the discretion to settle
Limited SARs by the delivery of Common Stock rather than cash if in the judgment
of the Board such action is necessary or advisable to preserve pooling of
interests accounting treatment for any proposed transaction involving the
Company.

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         6.6. LIMITED TRANSFERABILITY OF OPTIONS AND SARS. Except as set forth
in this Section 6.6 and Section 22, Options and SARs shall not be transferable
other than by will or the laws of descent and distribution, and Options and SARs
may be exercised during the lifetime of the Holder thereof only by such Holder
(or his or her court appointed legal representative). The Agreement may provide
that Options and SARs are transferable by gift to such persons or entities and
upon such terms and conditions specified in the Agreement.

7.   ACCELERATION OF OPTIONS AND SARS

         7.1 DEATH, DISABILITY AND TOTAL DISABILITY. Unless the applicable
Agreement provides otherwise, if a Holder's employment shall terminate by reason
of Death, Disability or Total Disability, then notwithstanding any contrary
waiting period or installment period in any Agreement or in the Plan, each
outstanding Option or SAR granted under the Plan shall immediately become
exercisable in full in respect of the aggregate number of shares covered
thereby.

         7.2 APPROVED TRANSACTION, BOARD CHANGE AND CONTROL PURCHASE. For
Options and SARs granted prior to January 18, 2001, unless the applicable
Agreement provides otherwise, each outstanding Option or SAR granted under the
Plan shall immediately become exercisable in full in respect of the aggregate
number of shares covered thereby in the event of any Approved Transaction, Board
Change or Control Purchase.

         7.3 CORPORATE CHANGES IN CONTROL. For Options and SARs granted on or
after January 18, 2001, unless the applicable Agreement provides otherwise, in
the event of a Corporate Change in Control,

                  (a) Each Option or SAR outstanding as of the date such
Corporate Change in Control is determined to have occurred, and which is not
then exercisable, shall automatically accelerate so that the Option or SAR shall
become fully exercisable on the first to occur of (i) the date the Option or SAR
becomes exercisable under its original terms (with respect only to such Options
or SAR as otherwise would become exercisable during such one-year period under
their terms), (ii) the first anniversary of the date such Corporate Change in
Control is determined to have occurred, and (iii) the occurrence of an
Involuntary Employment Action; and

                  (b) The Options or SARs so accelerated shall remain so
exercisable until the earlier of the original expiration date of the Option or
SAR and the earlier termination of the Option or SAR in accordance with the Plan
and the Agreement.

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         7.4 TRANSACTIONAL CHANGES IN CONTROL. For Options and SARs granted on
or after January 18, 2001, unless the applicable Agreement provides otherwise,
in the event of a Transactional Change in Control,

                  (a) Each Option or SAR outstanding as of the date such
Transactional Change in Control is determined to have occurred shall be (i)
assumed by the successor corporation (or its parent) or replaced with a
comparable option or stock appreciation right to purchase shares of the capital
stock of the successor corporation (or its parent) on an equitable basis, (ii)
terminated upon written notice to the Holders stating that all Options or SARs
(for purposes of this clause (ii) all Options or SARs then outstanding shall be
deemed to be exercisable) must be exercised within a specified number of days
(which shall not be less than 15 days) from the date such notice is given, at
the end of which period the Options or SARs shall terminate, or (iii) terminated
in exchange for a cash payment equal to the excess of the Fair Market Value of
the shares subject to such Options or SARs (for purposes of this clause (iii)
all Options and SARs then outstanding shall be deemed to be exercisable) over
the exercise price thereof; provided, however, that if any of the treatments of
Options or SARs pursuant to this Plan set forth in clause (i), (ii) or (iii)
above would make a Transactional Change in Control transaction ineligible for
pooling-of-interest accounting under APB No. 16 such that but for the nature of
such treatment such transaction would otherwise be eligible for such accounting
treatment, the Board shall have the ability to substitute for any cash or other
consideration payable under such treatment shares of Common Stock with a Fair
Market Value or other consideration with value equal to the cash or other
consideration that would otherwise be payable pursuant to such treatment. The
determination of which of the treatments set forth in clauses (i), (ii) and
(iii) above to provide and of comparability under clause (i) above shall be made
by the Board and its determinations shall be final, binding and conclusive.

                  (b) Each Option or SAR that is assumed or replaced in
connection with a Transactional Change in Control shall automatically accelerate
so that the Option or SAR shall become fully exercisable on the first to occur
of (i) the date the Option or SAR becomes exercisable under its original terms
(with respect only to such Options or SARs as otherwise would become exercisable
during such one-year period under their terms), (ii) the first anniversary of
the date such Transactional Change in Control is determined to have occurred,
and (iii) the occurrence of an Involuntary Employment Action. The Options or
SARs so accelerated shall remain so exercisable until the earlier of the
original expiration date of the Option or SAR and the earlier termination of the
Option or SAR in accordance with the Plan and the Agreement.

         7.5 CORPORATE TRANSACTION. For Options and SARs granted on or after
January 18, 2001, unless the applicable Agreement provides otherwise, in the
event of a Corporate Transaction that does not constitute a Transactional Change
in Control or in the event of a

                                       13
<PAGE>
similar event, pursuant to which securities of the Company or of another
corporation or entity are issued with respect to the outstanding shares of
Common Stock, a Holder upon exercising an Option or SAR shall be entitled to
receive for the purchase price paid under such exercise the securities which
would have been received if such Option or SAR had been exercised prior to such
Corporate Transaction.

         7.6 DISSOLUTION OR LIQUIDATION OF THE COMPANY. Upon the dissolution or
liquidation of the Company, all Awards granted under this Plan which as of such
date shall not have been exercised will terminate and become null and void;
provided; however, that if the rights of a Holder have not otherwise terminated
and expired, (i) the Holder will have the right immediately prior to such
dissolution or liquidation to exercise any Option to the extent that the Option
is exercisable as of the date immediately prior to such dissolution or
liquidation; and (ii) if a Change in Control shall have occurred within the
twelve months immediately prior to the date of such dissolution or liquidation
such Holder will have the right immediately prior to such dissolution or
liquidation to exercises any Option then outstanding whether or not such Option
is exercisable as of such date.

8.   TERMINATION OF EMPLOYMENT

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

         8.2. TERMINATION FOR CAUSE. If a Holder's employment with the Company
or any of its Subsidiaries or Affiliates shall be terminated for cause by the
Company or such Subsidiary or Affiliate prior to the exercise of any Option,
then unless the applicable Agreement provides otherwise, all Options held by
such Holder and any permitted transferee pursuant to Section 6.6. shall
terminate one month after the date of a termination for cause; provided, that if
such termination for cause is for fraud, misappropriation or embezzlement, all
Options shall terminate immediately. For the purposes of Options granted prior
to January 18, 2001, cause (a) shall have the meaning provided for in any
employment, advisory or consulting agreement to which such Holder and the
Company or any Subsidiary or Affiliate are parties or (b) in the absence
thereof, shall mean insubordination, dishonesty, incompetence, moral turpitude,
other

                                       14
<PAGE>
misconduct of any kind and the refusal to perform such Holder's duties and
responsibilities for any reason other than illness or incapacity, except that if
the termination occurs within 12 months after an Approved Transaction, Control
Purchase or Board Change, cause under this clause (b) shall mean only a felony
conviction for fraud, misappropriation or embezzlement. For purposes of Options
granted on or after January 18, 2001, except as otherwise provided in the
applicable Agreement, (x) cause shall have the meaning provided for in any
employment or consulting agreement to which the Holder and the Company or any
Subsidiary or Affiliate are parties or (y) in the absence thereof, cause shall
include (and is not limited to) dishonesty with respect to the Company or any
Affiliate, insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information and conduct substantially
prejudicial to the business of the Company or any Affiliate. For purposes of
Options granted on or after January 18, 2001, cause is not limited to events
which have occurred prior to a Holder's termination of service, nor is it
necessary that the Board's finding of cause occur prior to termination but
rather, if the Board determines, subsequent to a Holder's termination of service
but prior to the exercise of an Option, that either prior or subsequent to the
Holder's termination the Holder engaged in conduct which could constitute cause,
then the right to exercise any Option is forfeited. The determination of the
Board as to the existence of cause will be conclusive on the Holder and the
Company.

         8.3. SPECIAL RULE. Notwithstanding any other provision of the Plan, the
Board may provide in the applicable Agreement that the Award shall become and/or
remain exercisable at rates and times at variance with the rules otherwise
herein set forth; provided, however, that any such Agreement provisions at
variance with the exercisability rules otherwise set forth herein shall be
effective only if reflected in the terms of an employment agreement approved or
ratified by the Board.

         8.4. MISCELLANEOUS. The Board may determine whether any given leave of
absence constitutes a termination of employment and may make other provisions in
the applicable Agreement relating to leaves of absence. Awards made under the
Plan shall not be affected by any change of employment so long as the Holder
continues to be an employee of (a) for Options granted prior to January 18,
2001, the Company or one of its Subsidiaries and (b) for Options granted on or
after January 18, 2001, the Company or one of its Affiliates.

9.   RIGHT OF COMPANY TO TERMINATE EMPLOYMENT

         Nothing contained in the Plan or in any Award shall confer on any
Holder any right to continue in the employ of the Company or any of its
Subsidiaries or Affiliates or interfere in any way with the right of the Company
or a Subsidiary or Affiliate to terminate the employment of the Holder at any
time, with or without cause; subject, however, to the

                                       15
<PAGE>
provisions of any employment agreement between the Holder and the Company or any
of its Subsidiaries or Affiliates.

10.   NONALIENATION OF BENEFITS

         Except as specifically provided in Section 6.6, no right or benefit
under the Plan shall be subject to anticipation, alienation, sale, assignment,
hypothecation, pledge, exchange, transfer, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange,
transfer, encumber or charge the same shall be void. No right or benefit
hereunder shall in any manner be liable for or subject to the debts, contracts,
liabilities or torts of the person entitled to such benefits.

11.   WRITTEN AGREEMENT

         Each grant of an Option shall be evidenced by a stock option agreement
and each SAR shall be evidenced by a stock appreciation rights agreement, each
in such form and containing such terms and provisions not inconsistent with the
provisions of the Plan as the Board from time to time shall approve; provided,
however, that such Awards may be evidenced by a single agreement. The effective
date of the granting of an Award shall be the date on which the Board approves
such grant. Each grantee of an Option or SAR shall be notified promptly of such
grant and a written Agreement shall be promptly executed and delivered by the
Company and the grantee, provided that for Options granted prior to January 18,
2001, such grant of Options or SARs shall terminate if such written Agreement is
not signed by such grantee (or his attorney) and delivered to the Company within
90 days after the date the Agreement is sent to such grantee for signature. Any
such written Agreement may contain (but shall not be required to contain) such
provisions as the Board deems appropriate to ensure that the penalty provisions
of section 4999 of the Code will not apply to any stock or cash received by the
Holder or such Holder's permitted transferee pursuant to Section 6.6 from the
Company or any of its Subsidiaries or Affiliates.

12.   ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

         12.1 OPTIONS GRANTED PRIOR TO JANUARY 18, 2001. The provisions of this
Section 12.1 shall apply to Options and SARs granted prior to January 18, 2001.
In the event of any stock split, dividend, distribution, combination,
reclassification or recapitalization that changes the character or amount of the
Common Stock while any portion of any Award theretofore granted under the Plan
is outstanding but unexercised, the Board shall make such adjustments in the

                                       16
<PAGE>

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

         12.2 OPTIONS GRANTED ON OR AFTER JANUARY 18, 2001. The provisions of
this Section 12.2 shall apply to Options and SARs granted on or after January
18, 2001. If (a) the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any shares
of Common Stock as a stock dividend on its outstanding Common Stock, or (b)
additional shares or new or different shares or other securities of the Company
or other non-cash assets are distributed with respect to such shares of Common
Stock, the number of shares of Common Stock deliverable upon the exercise of an
Option or SAR may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such subdivision, combination or stock dividend. The number of Shares subject to
options to be granted pursuant to Section 3 of the Plan shall also be
proportionately adjusted upon the occurrence of such events, except as the Board
shall otherwise determine in its sole discretion.

13.   RIGHT OF FIRST REFUSAL

         The Agreements may contain such provisions as the Board shall determine
to the effect that if a Holder, or such other person exercising an Option,
elects to sell all or any shares of Common Stock that such Holder or other
person acquired upon the exercise of an Option awarded under the Plan, then such
Holder or other person shall not sell such shares unless such Holder or other
person shall have first offered in writing to sell such shares to the Company at
Fair Market Value on a date specified in such offer (which date shall be at
least three business days and not more than 10 business days following the date
of such offer). In any such event, certificates (or other evidence of ownership)
representing shares issued upon exercise of Options shall bear a restrictive
legend to the effect that transferability of such shares are subject to the
restrictions contained in the Plan and the applicable Agreement and the Company
may cause the registrar of its Common Stock to place a stop transfer order with
respect to such shares.

                                       17
<PAGE>

14.   TERMINATION AND AMENDMENT

         14.1. GENERAL. Unless the Plan shall theretofore have been terminated
as hereinafter provided, no Awards may be made under the Plan on or after the
tenth anniversary of the Effective Date. The Board may at any time prior to the
tenth anniversary of the Effective Date terminate the Plan, and the Board may at
any time modify or amend the Plan in such respects as it shall deem advisable;
provided, however, that any such modification or amendment shall comply with all
applicable laws and stock exchange listing requirements.

         14.2. MODIFICATION. (a) The following provisions shall apply to Options
and SARs granted prior to January 18, 2001. No termination, modification or
amendment of the Plan may, without the consent of the person to whom any Award
shall theretofore have been granted (or a transferee of such person if the
Award, or any part thereof, has been transferred pursuant to Section 6.6),
adversely affect the rights of such person with respect to such Award. No
modification, extension, renewal or other change in any Award granted under the
Plan shall be made after the grant of such Award, unless the same is consistent
with the provisions of the Plan. With the consent of the Holder (or a transferee
of such Holder if the Award, or any part thereof, has been transferred pursuant
to Section 6.6) and subject to the terms and conditions of the Plan (including
Section 14.1), the Board may amend outstanding Agreements with any Holder (or
any such transferee), including, without limitation, any amendment which would
(a) accelerate the time or times at which the Award may be exercised and/or (b)
extend the scheduled expiration date of the Award. Without limiting the
generality of the foregoing, the Board may but solely with the Holder's consent,
agree to cancel any Award under the Plan held by such Holder and issue a new
Award in substitution therefor, provided that the Award so substituted shall
satisfy all of the requirements of the Plan as of the date such new Award is
made.

                  (b) The following provisions shall apply to Options and SARs
granted on or after January 18, 2001. The Plan may be amended by the Board,
including, without limitation, to the extent necessary to qualify any or all
outstanding Options granted under the Plan or Options to be granted under the
Plan for favorable federal income tax treatment (including deferral of taxation
upon exercise), for as long as the Company has a class of stock registered
pursuant to Section 12 of the 1934 Act and to the extent necessary to qualify
the shares issuable upon exercise of any outstanding Options granted, or Options
to be granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
termination, modification or amendment of the Plan shall not, without the
consent of a Holder (or a transferee of such Holder if the Award, or any part
thereof, has been transferred pursuant to Section 6.6) materially adversely
affect his or her rights under an Option or SAR previously granted to him or
her. With the consent of the affected Holder or any such transferee, the Board
may amend outstanding Agreements in a

                                       18
<PAGE>
manner which may be materially adverse to the Holder but which is not
inconsistent with the Plan. In the discretion of the Board, outstanding
Agreements may be amended by the Board in a manner which is not materially
adverse to the Holder or any such transferee.

15.   EFFECTIVENESS OF THE PLAN

         The Plan shall become effective on November 18, 1993.

16.   GOVERNMENT AND OTHER REGULATIONS

         The obligation of the Company with respect to Awards shall be subject
to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, and the rules and regulations of any securities exchange on which the
Common Stock may be listed. For so long as the Common Stock is registered under
the Exchange Act, the Company shall use its reasonable efforts to comply with
any legal requirements (a) to maintain a registration statement in effect under
the Securities Act of 1933 with respect to all shares of Common Stock that may
be issued to Holders under the Plan, and (b) to file in a timely manner all
reports required to be filed by it under the Exchange Act.

17.   WITHHOLDING

         The Company's obligation to deliver shares of Common Stock or pay cash
in respect of any Award under the Plan shall be subject to applicable federal,
state and local tax withholding requirements. Federal, state and local
withholding taxes paid upon the exercise of any Option may be paid in shares of
Common Stock upon such terms and conditions as the Board shall determine;
provided, however, that the Board in its sole discretion may disapprove such
payment and require that such taxes be paid in cash.

18.   SEPARABILITY

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

                                       19
<PAGE>

19.   NON-EXCLUSIVITY OF THE PLAN

         The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

20.   EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

         By acceptance of an Award, each Holder shall be deemed to have agreed
that such Award is special incentive compensation that will not be taken into
account, in any manner, as salary, compensation or bonus in determining the
amount of any payment under any pension, retirement or other employee benefit
plan of the Company or any of its Subsidiaries or Affiliates. In addition, each
beneficiary of a deceased Holder shall be deemed to have agreed that such Award
will not affect the amount of any life insurance coverage, if any, provided by
the Company or any of its Subsidiaries or Affiliates on the life of the Holder
which is payable to such beneficiary under any life insurance plan covering
employees of the Company or any of its Subsidiaries or Affiliates.

21.   GOVERNING LAW

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

22.   BENEFICIARIES

         Each Holder may designate any person(s) or legal entity(ies), including
his or her estate, as his or her beneficiary under the Plan. Such designation
shall be made in writing on a form filed with the Secretary of the Company or
his or her designee and may be revoked or changed by such Holder at any time by
filing written notice of such revocation or change with the Secretary of the
Company or his or her designee. If no person shall be designated by a Holder as
his or her beneficiary or if no person designated as a beneficiary survives such
Holder, the Holder's beneficiary shall be his or her estate.

                                       20
<PAGE>

23.         DEFERRAL OF OPTIONS GAINS

         The Agreement may contain terms, conditions and procedures permitting
Holders to elect to defer the receipt of shares of Common Stock upon the
exercise of Options for a specific period or until a specified event.

                                       21<PAGE>
                                                                    EXHIBIT 10.4

                                                              As Amended through
                                                               November 18, 1999

                                   TIME WARNER
                                 CORPORATE GROUP
                              STOCK INCENTIVE PLAN

1.       PURPOSE OF THE PLAN

         The purpose of the Time Warner Corporate Group Stock Incentive Plan
(hereinafter the "Plan"), is to provide for the granting of stock options, stock
appreciation rights and restricted shares to certain employees of Time Warner
Inc., Warner Communications Inc., Time Warner Enterprises, Inc. and their
respective Subsidiaries in recognition of the valuable services provided, and
contemplated to be provided, by such employees. The general purpose of the Plan
is to promote the interests of Time Warner and its stockholders and to reward
dedicated employees of these companies by providing such employees additional
incentives to continue and increase their efforts with respect to, and to remain
in the employ of, Time Warner or its Subsidiaries. This plan is being adopted in
connection with the development of an overall long-term compensation program for
these companies and it is expected that certain Options granted hereunder will
become exercisable only if certain performance criteria are met.

2.       CERTAIN DEFINITIONS

         The following terms (whether used in the singular or plural) have the
meanings indicated when used in the Plan:

                  (a)      "Agreement" means the stock option agreement, stock
         appreciation rights agreement and the restricted shares agreement
         specified in Section 12, both individually and collectively, as the
         context so requires.

                  (b)      "Approved Transaction" means any transaction in which
         the Board (or, if approval of the Board is not required as a matter of
         law, the stockholders of Time Warner) shall approve (i) any
         consolidation or merger of Time Warner in which Time Warner is not the
         continuing or

<PAGE>

         surviving corporation or pursuant to which shares of Common Stock would
         be converted into cash, securities or other property, other than a
         merger of Time Warner (x) as contemplated in the Amended and Restated
         Agreement and Plan of Merger dated as of September 22, 1995 among Time
         Warner Inc., TW Inc., Time Warner Acquisition Corp., TW Acquisition
         Corp. and Turner Broadcasting System, Inc., as the same may be amended
         from time to time, or (y) in which the holders of Common Stock
         immediately prior to the merger have the same proportionate ownership
         of common stock of the surviving corporation immediately after the
         merger, or (ii) any sale, lease, exchange, or other transfer (in one
         transaction or a series of related transactions) of all, or
         substantially all, of the assets of Time Warner, or (iii) the adoption
         of any plan or proposal for the liquidation or dissolution of Time
         Warner.

                  (c)      "Award" means grants of Options, SARs and/or
         Restricted Shares under this Plan.

                  (d)      "Board" means the Board of Directors of Time Warner.

                  (e)      "Board Change" means, during any period of two
         consecutive years, individuals who at the beginning of such period
         constituted the entire Board ceased for any reason to constitute a
         majority thereof unless the election, or the nomination for election by
         Time Warner's stockholders, of each new director was approved by a vote
         of at least two-thirds of the directors then still in office who were
         directors at the beginning of the period.

                  (f)      "Cash Award" means the amount of cash, if any, to be
         paid to an employee pursuant to Section 7.5.

                  (g)      "Code" means the Internal Revenue Code of 1986, as
         amended from time to time, or any successor statute or statutes
         thereto. Reference to any specific Code section shall include any
         successor section.

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

                                        2
<PAGE>

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

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

                  (k)      "Control Purchase" means any transaction in which any
         person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of
         the Exchange Act), corporation or other entity (other than Time Warner
         or any employee benefit plan sponsored by Time Warner or any if its
         Subsidiaries) (i) shall purchase any Common Stock (or securities
         convertible into Common Stock) for cash, securities or any other
         consideration pursuant to a tender offer or exchange offer, without the
         prior consent of the Board, or (ii) shall become the "beneficial owner"
         (as such term is defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of Time Warner representing 20%
         or more of the combined voting power of the then outstanding securities
         of Time Warner ordinarily (and apart from the rights accruing under
         special circumstances) having the right to vote in the election of
         directors (calculated as provided in Rule 13d-3(d) in the case of
         rights to acquire Time Warner's securities).

                  (l)      "Dividend Equivalents" means, with respect to
         Restricted Shares to be issued at the end of the Restriction Period, to
         the extent specified by the Board only, an amount equal to the regular
         cash dividends and all other distributions (or the economic equivalent
         thereof) which are payable to stockholders of record during the
         Restriction Period on a like number of shares of Common Stock.

                  (m)      "Effective Date" means the date the Plan becomes
         effective pursuant to Section 16.

                  (n)      "Exchange Act" means the Securities Exchange Act of
                           1934, as amended from time to time, or any successor
         statute or statutes thereto. Reference to any specific Exchange Act
         section shall include any successor section.

                                        3
<PAGE>

                  (o)      "Fair Market Value" of a share of Common Stock means
         the average of the high and low sales prices of a share of Common Stock
         on the Composite Tape on the date in question, except as otherwise
         provided in Section 6.5.

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

                  (q)      "Holder" means an employee of Time Warner or any of
         its Subsidiaries who has received an Award under this Plan.

                  (r)      "ISO" means an incentive stock option within the
         meaning of section 422A(b) of the Code.

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

                  (t)      "Minimum Price Per Share" means the highest gross
         price (before brokerage commissions, soliciting dealers' fees and
         similar charges) paid or to be paid for any share of Common Stock
         (whether by way of exchange, conversion, distribution, liquidation or
         otherwise) in, or in connection with, any Approved Transaction or
         Control Purchase which occurs at any time during the period beginning
         on the sixtieth day prior to the date on which Limited SARs are
         exercised and ending on the date on which Limited SARs are exercised.
         If the consideration paid or to be paid in any such Approved
         Transaction or Control Purchase shall consist, in whole or in part, of
         consideration other than cash, the Board shall take such action, as in
         its judgment it deems appropriate, to establish the cash value of such
         consideration, but such valuation shall not be less than the value, if
         any, attributed to such consideration by any other party to such
         Approved Transaction or Control Purchase.

                  (u)      "Nonqualified Stock Option" means a stock option that
         is designated as a nonqualified stock option.

                  (v)      "Option" means any ISO or Nonqualified Stock Option.

                                        4
<PAGE>

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

                  (x)      "Restricted Shares" means shares of Common Stock or
         the right to receive shares of Common Stock, as the case may be,
         awarded pursuant to Section 7.

                  (y)      "Restriction Period" means a period of time beginning
         on the date of each award of Restricted Shares and ending on the
         Valuation Date with respect to such award.

                  (z)      "Retained Distributions" has the meaning ascribed
         thereto in Section 7.3.

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

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

                  (cc)     "Subsidiary" of a person means any present or future
         subsidiary of such person as such term is defined in section 425 of the
         Code and any present or future trade or business, whether or not
         incorporated, controlled by or under common control with such person.
         An entity shall be deemed a Subsidiary of a person only for such
         periods as the requisite ownership or control relationship is
         maintained.

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

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

                  (ff)     "Valuation Date" with respect to any Restricted
         Shares awarded hereunder means the date designated as such in the
         Agreement with respect to such award of Restricted Shares pursuant to
         Section 7.

3.       STOCK SUBJECT TO THE PLAN

         3.1.     Number of Shares. Subject to the provisions of

                                        5
<PAGE>

Section 13 and this Section 3, the maximum number of shares of Common Stock in
respect of which Awards may be granted is 325,000. If and to the extent that an
Option shall expire, terminate or be canceled for any reason without having been
exercised (or without having been considered to have been exercised as provided
in Section 6.5(a)), the shares of Common Stock subject to such expired,
terminated or canceled portion of the Option shall again become available for
purposes of the Plan. In addition, any Restricted Shares which are forfeited
under the terms of the Plan or any Agreement shall again become available for
purposes of the Plan.

         3.2.     Character of Shares. Shares of Common Stock deliverable under
the terms of the Plan may be, in whole or in part, authorized and unissued
shares of Common Stock or issued shares of Common Stock held in Time Warner's
treasury, or both.

         3.3.     Reservation of Shares. Time Warner shall at all times reserve
a number of shares of Common Stock (authorized and unissued Common Stock, issued
Common Stock held in Time Warner's treasury, or both) equal to the maximum
number of shares that may be subject to outstanding Awards and future Awards
under the Plan.

4.       ADMINISTRATION

         4.1.     Powers. The Plan shall be administered by the Board. Subject
to the express provisions of the Plan, the Board shall have plenary authority,
in its discretion, to grant Awards under the Plan and to determine the terms and
conditions (which need not be identical) of all Awards so granted, including
without limitation, (a) the purchase price, if any, of each Restricted Share,
(b) the individuals to whom, and the time or times at which, Awards shall be
granted or awarded, (c) the number of shares to be subject to each Award, (d)
whether an Option shall be an ISO or a Nonqualified Stock Option, (e) when an
Option or SAR can be exercised and whether in whole or in installments, (f) the
time or times and the conditions subject to which Restricted Shares shall become
vested and any Cash Awards shall become payable, and (g) the form, terms and
provisions of any Agreement (which terms may be amended, subject to Section 15).

                                        6
<PAGE>

         4.2.     Factors to Consider. In making determinations hereunder, the
Board may take into account the nature of the services rendered by the
respective employees, their dedication and past contributions to Time Warner and
its Subsidiaries, their present and potential contributions to the success of
Time Warner and its Subsidiaries and such other factors as the Board in its
discretion shall deem relevant.

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

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

         Any such Committee shall select one of its members as its chairman and
shall hold its meeting at such times and places as it shall deem advisable. A
majority of members shall constitute a quorum and all determinations shall be
made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held.

5.       ELIGIBILITY

         5.1.     General. Awards may be made only to (a) employees

                                        7
<PAGE>

of Time Warner or any of its Subsidiaries (including officers and directors of
any of Time Warner's Subsidiaries), other than officers or directors of Time
Warner who are subject to Section 16 of the Exchange Act, and (b) prospective
employees of Time Warner or any of its Subsidiaries. The exercise of Options and
SARs and the vesting of Restricted Shares granted to a prospective employee
shall be conditioned upon such person becoming an employee of Time Warner or any
of its Subsidiaries. For purposes of the Plan, the term "prospective employee"
shall mean any person who holds an outstanding offer of employment on specific
terms from Time Warner or any of its Subsidiaries. Awards may be made to
employees who hold or have held Awards under this Plan or any similar or other
awards under any other plan of Time Warner or its Subsidiaries.

         5.2.     Special ISO Rule. No ISO shall be granted to an employee who,
at the time the ISO is granted, owns (or is considered as owning within the
meaning of section 425(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of Time Warner or any of its
Subsidiaries, unless at the time the ISO is granted the option price is at least
110% of the Fair Market Value of the Common Stock subject to the ISO and the ISO
by its terms is not exercisable after the expiration of five years from the date
it is granted.

6.       OPTIONS AND SARS

         6.1.     Option Prices. Subject to Section 5.2, the purchase price of
the Common Stock under each Option shall be determined by the Board and set
forth in the applicable Agreement, but shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant.

         6.2.     Term of Options. The term of each Option shall be for such
period as the Board shall determine, as set forth in the applicable Agreement,
but not more than 10 years from the date of grant in the case of an ISO (except
as provided in Section 5.2).

         6.3.     Exercise of Options. An Option granted under the Plan shall
become (and remain) exercisable during the term of

                                        8
<PAGE>

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

         6.4.     Manner of Exercise. Payment of the Option purchase price shall
be made in cash or in whole shares of Common Stock already owned by the person
exercising an Option or, partly in cash and partly in such Common Stock;
provided, however, that such payment may be made in whole or in part in shares
of Common Stock only if and to the extent permitted by the applicable Agreement.
An Option shall be exercised by written notice to Time Warner upon such terms
and conditions as provided in the Agreement. Time Warner shall effect the
transfer of the shares of Common Stock purchased under the Option as soon as
practicable, and within a reasonable time thereafter such transfer shall be
evidenced on the books of Time Warner. No Holder or other person exercising an
Option shall have any of the rights of a stockholder of Time Warner with respect
to shares of Common Stock subject to an Option granted under the Plan until due
exercise and full payment has been made. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date of such
due exercise and full payment.

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

         A SAR may be granted either concurrently with the grant of the related
Option or at any time thereafter prior to the complete exercise, termination,
expiration or cancellation of such related Option. Subject to the terms and
provisions of this Section 6.5, each SAR shall be exercisable to the extent

                                        9
<PAGE>

the related Option is then exercisable (and may be subject to such additional
limitations on exercisability as the Agreement may provide), and in no event
after the complete termination or full exercise of the related Option. SARs
shall be exercisable in whole or in part upon notice to Time Warner upon such
terms and conditions as provided in the Agreement.

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

         The provisions of Sections 4, 6 and 8 through 22 (to the extent that
such provisions are applicable to Options) shall also be applicable to SARs
unless the context otherwise requires.

         (b)      General SARs. General SARs shall be exercisable only at the
time the related Option is exercisable and subject to the terms and provisions
of this Section 6.5, upon the exercise of General SARs, the person exercising
the General SAR shall be entitled to receive consideration (in the form
hereinafter provided) equal in value to the excess of the Fair Market Value on
the date of exercise of the shares of Common Stock with respect to which such
General SARs have been exercised over the aggregate related Option purchase
price for such shares; provided, however, that the Board may, in any Agreement
granting General SARs provide that the appreciation realizable upon exercise
thereof shall be measured from a base higher than the related Option purchase
price.

         Upon the exercise of a General SAR, the person exercising the General
SAR may specify the form of consideration to be received by such person
exercising the General SAR, which shall be in shares of Common Stock (valued at
Fair Market Value on the date of exercise of such General SAR), or in cash, or

                                       10
<PAGE>

partly in cash and partly in shares of Common Stock. Any election by the person
exercising the General SAR to receive cash in full or partial settlement of such
General SAR shall comply with all applicable laws. Unless otherwise specified in
the applicable Agreement, the number of General SARs which may be exercised for
cash, or partly for cash and partly for shares of Common Stock, during any
calendar quarter, may not exceed 20% of the aggregate number of shares of Common
Stock originally subject to the related Option (as such original number, without
giving effect to the exercise of any portion of the related Option, shall have
been retroactively adjusted in accordance with Section 13 or any corresponding
provisions of an applicable Agreement).

         For purposes of this Section 6.5, the date of exercise of a General SAR
shall mean the date on which Time Warner shall have received notice from the
person exercising the General SAR of the exercise of such General SAR.

         (c)      Limited SARs. Limited SARs may be exercised only during the
period (a) beginning on the first day following either (i) the date of an
Approved Transaction, (ii) the date of a Control Purchase, or (iii) the date of
a Board Change, and (b) ending on the ninetieth day (or such other date
specified in the Agreement) following such date. The effective date of exercise
of a Limited SAR shall be deemed to be the date on which Time Warner shall have
received notice from the person exercising the Limited SAR of the exercise
thereof.

         Upon the exercise of Limited SARs granted in connection with an ISO,
except as otherwise provided in the Agreement, the person exercising the Limited
SAR shall receive in cash an amount equal to the excess of the Fair Market Value
on the date of exercise of such Limited SARs of the shares of Common Stock with
respect to which such Limited SARs shall have been exercised over the aggregate
related Option purchase price for such shares.

         Upon the exercise of Limited SARs granted in connection with a
Nonqualified Stock Option, except as otherwise provided in the Agreement, the
person exercising the Limited SAR shall receive in cash an amount equal to the
product computed by multiplying (a) the excess of (i) the higher of (A) the
Minimum Price Per Share, or (B) the highest reported closing sales

                                       11
<PAGE>

price of a share of Common Stock as reported on the Composite Tape at any time
during the period beginning on the sixtieth day prior to the date on which such
Limited SARs are exercised and ending on the date on which such Limited SARs are
exercised over (ii) the per share Option price of the related Nonqualified Stock
Option, by (b) the number of shares of Common Stock with respect to which such
Limited SARs are being exercised.

         6.6.     Limited Transferability of Options and SARs. Except as set
forth in this Section 6.6 and Section 23, Options and SARs shall not be
transferable other than by will or the laws of descent and distribution, and
Options and SARs may be exercised during the lifetime of the Holder thereof only
by such Holder (or his or her court appointed legal representative). The
Agreement may provide that Options and SARs are transferable by gift to such
persons or entities and upon such terms and conditions specified in the
Agreement.

7.       RESTRICTED SHARES

         7.1.     Valuation Date, Issuance and Price. The Board shall determine
whether shares of Common Stock covered by awards of Restricted Shares will be
issued at the beginning or the end of the Restriction Period, whether Dividend
Equivalents will be paid during the Restriction Period in the event shares of
the Common Stock are to be issued at the end of the Restriction Period and shall
designate a Valuation Date with respect to each award of Restricted Shares and
may prescribe other restrictions, terms and conditions applicable to the vesting
of such Restricted Shares in addition to those provided in the Plan. The Board
shall determine the price, if any, to be paid by the Holder for the Restricted
Shares; provided, however, that the issuance of Restricted Shares shall be made
for at least the minimum consideration necessary to permit such Restricted
Shares to be deemed fully paid and nonassessable. All determinations made by the
Board pursuant to this Section 7.1 shall be specified in the Agreement.

         7.2.     Issuance of Restricted Shares at Beginning of the Restriction
Period. If shares of Common Stock are issued at the beginning of the Restriction
Period, the stock certificate or certificates representing such Restricted
Shares shall be

                                       12
<PAGE>

registered in the name of the Holder to whom such Restricted Shares shall have
been awarded. During the Restriction Period, certificates representing the
Restricted Shares and any securities constituting Retained Distributions shall
bear a restrictive legend to the effect that ownership of the Restricted Shares
(and such Retained Distributions), and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms and conditions provided in the
Plan and the applicable Agreement. Such certificates shall remain in the custody
of Time Warner and the Holder shall deposit with Time Warner stock powers or
other instruments of assignment, each endorsed in blank, so as to permit
retransfer to Time Warner of all or any portion of the Restricted Shares and any
securities constituting Retained Distributions that shall be forfeited or
otherwise not become vested in accordance with the Plan and the applicable
Agreement.

         7.3.     Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding shares of Common
Stock for all corporate purposes. The Holder will have the right to vote such
Restricted Shares, to receive and retain all regular cash dividends and such
other distributions, as the Board may in its sole discretion designate, paid or
distributed 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; except, that, (a) the Holder 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 or waived; (b) Time Warner will
retain custody of the stock certificate or certificates representing the
Restricted Shares during the Restriction Period as provided in Section 7.2; (c)
other than regular cash dividends and such other distributions as the Board may
in its sole discretion designate, Time Warner 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 vesting and other 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

                                       13
<PAGE>

segregated in a separate account; (d) the Holder may not sell, assign, transfer,
pledge, exchange, encumber or dispose of the Restricted Shares or any Retained
Distributions or his interest in any of them during the Restriction Period; and
(e) 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.

         7.4.     Issuance of Stock at End of the Restriction Period. Restricted
Shares issued at the end of the Restriction Period shall not constitute issued
and outstanding shares of Common Stock and the Holder shall not have any of the
rights of a stockholder with respect to the shares of Common Stock covered by
such an award of Restricted Shares, in each case, until such shares shall have
been transferred to the Holder at the end of the Restriction Period. If and to
the extent that shares of Common Stock are to be issued at the end of the
Restriction Period, the Holder shall be entitled to receive Dividend Equivalents
with respect to the shares of Common Stock covered thereby either (a) during the
Restriction Period or (b) in accordance with the rules applicable to Retained
Distributions, as the Board may specify in the Agreement.

         7.5.     Cash Awards. In connection with any award of Restricted
Shares, an Agreement may provide for the payment of a cash amount to the Holder
of such Restricted Shares at any time after such Restricted Shares shall have
become vested. Such Cash Awards shall be payable in accordance with such
additional restrictions, terms and conditions as shall be prescribed by the
Board in the Agreement and shall be in addition to any other salary, incentive,
bonus or other compensation payments which such Holder shall be otherwise
entitled or eligible to receive from Time Warner or any of its Subsidiaries.

         7.6.     Completion of Restriction Period. On the Valuation Date with
respect to each award of Restricted Shares, and the satisfaction of any other
applicable restrictions, terms and conditions (a) all or part of such Restricted
Shares shall become vested, (b) any Retained Distributions and any unpaid
Dividend Equivalents with respect to such Restricted Shares shall become vested
to the extent that the Restricted Shares

                                       14
<PAGE>

related thereto shall have become vested and (c) any Cash Award to be received
by the Holder with respect to such Restricted Shares shall become payable, all
in accordance with the terms of the applicable Agreement. Any such Restricted
Shares, Retained Distributions and any unpaid Dividend Equivalents that shall
not become vested shall be forfeited to Time Warner and the Holder shall not
thereafter have any rights (including dividend and voting rights) with respect
to such Restricted Shares, Retained Distributions and any unpaid Dividend
Equivalents that shall have been so forfeited.

8.       ACCELERATION OF OPTIONS, SARS AND RESTRICTED SHARES

         If a Holder's employment shall terminate by reason of death or Total
Disability, notwithstanding any contrary waiting period or installment period or
Restriction Period in any Agreement or in the Plan or in the event of any
Approved Transaction, Board Change or Control Purchase, unless the applicable
Agreement provides otherwise: (a) in the case of an Option or SAR, each such
outstanding Option or SAR granted under the Plan shall immediately become
exercisable in full in respect of the aggregate number of shares covered
thereby; and (b) in the case of Restricted Shares, the Restriction Period
applicable to each such award of Restricted Shares shall be deemed to have
expired and all such Restricted Shares, any related Retained Distributions and
any unpaid Dividend Equivalents shall become vested and any Cash Award payable
pursuant to the applicable Agreement shall be adjusted in such manner as
provided in the Agreement.

9.       TERMINATION OF EMPLOYMENT

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

                                       15
<PAGE>

be treated in accordance with the provisions of Section 9.2.

         9.2.     Termination for Cause. If a Holder's employment with Time
Warner or any of its Subsidiaries shall be terminated by Time Warner or such
Subsidiary during the Restriction Period with respect to any Restricted Shares
or prior to the exercise of any Option for cause (for these purposes, cause
shall have the meaning ascribed thereto in any employment agreement to which
such Holder is a party or, in the absence thereof, shall include but not be
limited to, insubordination, dishonesty, incompetence, moral turpitude, other
misconduct of any kind and the refusal to perform his duties and
responsibilities for any reason other than illness or incapacity; provided,
however, that if such termination occurs within 12 months after an Approved
Transaction, Control Purchase or Board Change, termination for cause shall mean
only a felony conviction for fraud, misappropriation or embezzlement), then (a)
all Options held by such Holder and any permitted transferee pursuant to Section
6.6 shall immediately terminate and (b) such Holder's rights to all Restricted
Shares, Retained Distributions, any unpaid Dividend Equivalents and any Cash
Awards shall be forfeited immediately.

         9.3.     Special Rule. Notwithstanding any other provision of the Plan,
the Board may provide in the applicable Agreement that the Award shall become
and/or remain exercisable at rates and times at variance with the rules
otherwise herein set forth; provided, however, that any such Agreement
provisions at variance with the exercisability rules otherwise set forth herein
shall be effective only if reflected in the terms of an employment agreement
approved or ratified by the Board.

         9.4.     Miscellaneous. The Board may determine whether any given leave
of absence constitutes a termination of employment. Awards made under the Plan
shall not be affected by any change of employment so long as the Holder
continues to be an employee of Time Warner or any of its Subsidiaries.

10.      RIGHT OF COMPANY TO TERMINATE EMPLOYMENT

         Nothing contained in the Plan or in any Award shall confer on any
Holder any right to continue in the employ of Time Warner or any of its
Subsidiaries or interfere in any way with

                                       16
<PAGE>

the right of Time Warner or a Subsidiary to terminate the employment of the
Holder at any time, with or without cause; subject, however, to the provisions
of any employment agreement between the Holder and Time Warner or any of its
Subsidiaries.

11.      NONALIENATION OF BENEFITS

         Except as provided in Section 6.6, no right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits.

12.      WRITTEN AGREEMENT

         Each award of Restricted Shares and any right to a Cash Award hereunder
shall be evidenced by a restricted shares agreement; each grant of an Option
shall be evidenced by a stock option agreement which shall designate the Options
granted thereunder as ISOs or Nonqualified Stock Options; and each SAR shall be
evidenced by a stock appreciation rights agreement, each in such form and
containing such terms and provisions not inconsistent with the provisions of the
Plan as the Board from time to time shall approve; provided, however, that such
Awards may be evidenced by a single agreement. The effective date of the
granting of an Award shall be the date on which the Board approves such grant.
Each grantee of an Option, SAR or Restricted Shares shall be notified promptly
of such grant and a written Agreement shall be promptly executed and delivered
by Time Warner and the grantee, provided that such grant of Options, SARs or
Restricted Shares shall terminate if such written Agreement is not signed by
such grantee (or his attorney) and delivered to Time Warner within 60 days after
the date the Board approved such grant or if the effectiveness of such grant is
conditioned upon the grantee becoming an employee of Time Warner or one of its
Subsidiaries, the execution by the grantee of an employment agreement with Time
Warner or one of its subsidiaries or any other similar

                                       17
<PAGE>

condition, within 60 days after the occurrence of such condition, if later. Any
such written Agreement may contain (but shall not be required to contain) such
provisions as the Board deems appropriate to ensure that the penalty provisions
of section 4999 of the Code will not apply to any stock or cash received by the
Holder or such Holder's permitted transferee pursuant to Section 6.6 from Time
Warner or any of its Subsidiaries.

13.      ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.

         In the event of any stock split, dividend, distribution, combination,
reclassification or recapitalization that changes the character or amount of the
Common Stock while any portion of any Award theretofore granted under the Plan
is outstanding but unexercised or unvested, the Board shall make such
adjustments in the character and number of shares subject to such Award, in the
option price, in the relevant appreciation base and in the Cash Awards, as shall
be applicable, equitable and appropriate in order to make such Award,
immediately after any such change, as nearly as may be practicable, equivalent
to such Award, immediately prior to any such change. If any merger,
consolidation or similar transaction affects the Common Stock subject to any
unexercised or unvested Award theretofore granted under the Plan, the Board or
any surviving or acquiring corporation shall take such action as is equitable
and appropriate to substitute a new award for such Award or to assume such Award
in order to make such new or assumed Award, as nearly as may be practicable,
equivalent to the old Award. If any such change or transaction shall occur, the
number and kind of shares for which Awards may thereafter be granted under the
Plan shall be adjusted to give effect thereto.

14.      RIGHT OF FIRST REFUSAL

         The Agreements may contain such provisions as the Board shall determine
to the effect that if a Holder, or other person exercising an Option, elects to
sell all or any shares of Common Stock that such Holder or other person acquired
upon the exercise of an Option or upon the vesting of Restricted Shares awarded
under the Plan, then such Holder or other person shall

                                       18
<PAGE>

not sell such shares unless such Holder or other person shall have first offered
in writing to sell such shares to Time Warner at Fair Market Value on a date
specified in such offer (which date shall be at least three business days and
not more than 10 business days following the date of such offer). In any such
event, certificates representing shares issued upon exercise of Options and the
vesting of Restricted Shares shall bear a restrictive legend to the effect that
transferability of such shares are subject to the restrictions contained in the
Plan and the applicable Agreement and Time Warner may cause the registrar of its
Common Stock to place a stop transfer order with respect to such shares.

15.      TERMINATION AND AMENDMENT

         15.1.    General. Unless the Plan shall theretofore have been
terminated as hereinafter provided, no Awards may be made under the Plan on or
after the tenth anniversary of the Effective Date. The Board may at any time
prior to the tenth anniversary of the Effective Date terminate the Plan, and the
Board may at any time modify or amend the Plan in such respects as it shall deem
advisable; provided, however, that any such modification or amendment shall
comply with all applicable laws and stock exchange listing requirements.

         15.2.    Modification. No termination, modification or amendment of the
Plan may, without the consent of the person (or a transferee of such person if
the Award, or any part thereof, has been transferred pursuant to Section 6.6) to
whom any Award shall theretofore have been granted, adversely affect the rights
of such person with respect to such Award. No modification, extension, renewal
or other change in any Award granted under the Plan shall be made after the
grant of such Award, unless the same is consistent with the provisions of the
Plan. With the consent of the Holder (or a transferee of such Holder if the
Award, or any part thereof, has been transferred pursuant to Section 6.6) and
subject to the terms and conditions of the Plan (including Section 15.1), the
Board may amend outstanding Agreements with any Holder (or any such transferee),
including, without limitation, any amendment which would (a) accelerate the time
or times at which the Award may be exercised and/or (b) extend the scheduled
expiration date of the Award. Without limiting the generality of the foregoing,

                                       19
<PAGE>

the Board may but solely with the Holder's consent, agree to cancel any Award
under the Plan held by such Holder and issue a new Award in substitution
therefor, provided that the Award so substituted shall satisfy all of the
requirements of the Plan as of the date such new Award is made.

16.      EFFECTIVENESS OF THE PLAN

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

17.      GOVERNMENT AND OTHER REGULATIONS

         The obligation of Time Warner with respect to Awards shall be subject
to all applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation, the
effectiveness of any registration statement required under the Securities Act of
1933, and the rules and regulations of any securities exchange on which the
Common Stock may be listed. For so long as the Common Stock is registered under
the Exchange Act, Time Warner shall use its reasonable efforts to comply with
any legal requirements (a) to maintain a registration statement in effect under
the Securities Act of 1933 with respect to all shares of Common Stock that may
be issued to Holders under the Plan, and (b) to file in a timely manner all
reports required to be filed by it under the Exchange Act.

18.      WITHHOLDING

         Time Warner's obligation to deliver shares of Common Stock or pay cash
in respect of any Award or Cash Award under the Plan shall be subject to
applicable federal, state and local tax withholding requirements. Federal, state
and local withholding taxes paid upon the exercise of any Option and upon the
vesting of Restricted Shares may be paid in shares of Common Stock upon such
terms and conditions as the Board shall determine; provided, however, that the
Board in its sole discretion may disapprove such payment and require that such
taxes be paid in cash.

                                       20
<PAGE>

19.      SEPARABILITY

         If any of the terms or provisions of this Plan conflict with the
requirements of section 422A of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of
section 422A of the Code. If this Plan does not contain any provision required
to be included herein under section 422A of the Code, such provision shall be
deemed to be incorporated herein with the same force and effect as if such
provision had been set out at length herein; provided, however, that to the
extent any Option which is intended to qualify as an ISO cannot so qualify, such
Option, to that extent, shall be deemed to be a Nonqualified Stock Option for
all purposes of the Plan.

20.      NON-EXCLUSIVITY OF THE PLAN

         The adoption of the Plan by the Board shall not be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options and the awarding of stock and cash otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.

21.      EXCLUSION FROM PENSION AND PROFIT-SHARING COMPUTATION

         By acceptance of an Award or Cash Award, as applicable, each Holder
shall be deemed to have agreed that such Award or Cash Award, as applicable, is
special incentive compensation that will not be taken into account, in any
manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan of Time
Warner or any of its Subsidiaries. In addition, each beneficiary of a deceased
Holder shall be deemed to have agreed that such Award or Cash Award, as
applicable, will not affect the amount of any life insurance coverage, if any,
provided by Time Warner or any of its Subsidiaries on the life of the Holder
which is payable to such beneficiary under any life insurance plan covering
employees of Time Warner or any of its Subsidiaries.

                                       21
<PAGE>

22.      GOVERNING LAW

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

23.  BENEFICIARIES

         Each Holder may designate any person(s) or legal entity(ies), including
his or her estate, as his or her beneficiary under the Plan. Such designation
shall be made in writing on a form filed with the Secretary of Time Warner or
his or her designee and may be revoked or changed by such Holder at any time by
filing written notice of such revocation or change with the Secretary of Time
Warner or his or her designee. If no person shall be designated by a Holder as
his or her beneficiary or if no person designated as a beneficiary survives such
Holder, the Holder's beneficiary shall be his or her estate.

23.        DEFERRAL OF OPTION GAINS.

         The Agreement may contain terms, conditions and procedures permitting
Holders to elect to defer the receipt of shares of Common Stock upon the
exercise of Options for a specific period or until a specified event.

                                       22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}]]