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                                                                 Exhibit 10.2

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         AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of March 19, 1998
effective as of January 1, 1998 (the "Effective Date"), as amended on December
2, 1998 and April 20, 2001, between TIME WARNER INC., a Delaware corporation
(the "Company"), and Gerald M. Levin (the "Executive").

         The Executive is currently employed by the Company pursuant to an
Employment Agreement dated as of November 15, 1990, as amended by an amendment
dated as of May 22, 1992 (the "Prior Agreement"). The Company wishes to restate
the Prior Agreement and secure the services of the Executive on a full-time
basis for an extended period to and including December 31, 2003 (the "Term
Date") on and subject to the terms and conditions set forth in this Agreement,
and the Executive is willing for the Prior Agreement to be so restated and to
provide such services on and subject to the terms and conditions set forth in
this Agreement. The parties therefore agree as follows:

         1. Term of Employment. The Executive's "term of employment", as this
phrase is used throughout this Agreement, shall be for the period beginning on
the Effective Date and ending on the Term Date, subject, however, to the terms
and conditions set forth in this Agreement. Notwithstanding the foregoing or
anything to the contrary contained in this Agreement, the "term of employment",
as used in Section 3.6, 3.7, 3.8 and 8 through 12 shall include the term of any
Advisory Period (as defined in Section 13).

         2. Employment. During the term of employment, the Company shall employ
the Executive, and the Executive shall serve, as Chief Executive Officer of the
Company and shall have the authority, functions, duties, powers and
responsibilities normally associated with such position and as the Board of
Directors of the Company may from time to time delegate to the Executive in
addition thereto. The Executive shall, subject to his election as such from time
to time and without additional compensation, serve during the term of employment
in such additional offices of comparable or greater stature and responsibility
in the Company and its subsidiaries and as a director and as a member of any
committee of the Board of Directors of the Company and its subsidiaries, to
which he may be elected from time to time. During the term of employment, (i)
the Executive's services shall be rendered on a substantially full-time,
exclusive basis and he will apply on a full-time basis all of his skill and
experience to the performance of his duties in such employment, (ii) the
Executive shall report only to the Company's Board of Directors; (iii) the
Executive shall have no other employment and, without the prior consent of a
majority of the members of the Company's Board of Directors, no outside business
activities which require the devotion of substantial amounts of the Executive's
time and (iv) the place for the performance of the Executive's services shall be
the principal executive offices of the Company which shall be in the New York
City metropolitan area, subject to such reasonable travel as may be appropriate
or required in the performance of the Executive's duties in the business of the
Company. The

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foregoing shall be subject to the Company's written policies, as in effect from
time to time, regarding vacations, holidays, illness and the like and shall not
prevent the Executive from devoting such time to his personal affairs as shall
not interfere with the performance of his duties hereunder, provided that the
Executive complies with the provisions of Sections 9 and 10 and any of the
Company's written policies on conflicts of interest and service as a director of
another corporation, partnership, trust or other entity ("Entity").

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

         3. Compensation.

              3.1 Base Salary. The Company shall pay or cause to be paid to the
Executive a base salary of not less than $1,000,000 per annum during the term of
employment (the "Base Salary"). The Company may increase, but not decrease, the
Base Salary at any time and from time to time during the term of employment and
upon each such increase the term "Base Salary" shall mean such increased amount.
Base Salary shall be payable in monthly or more frequent installments in
accordance with the Company's then current practices and policies with respect
to senior executives. For the purposes of this Agreement "senior executives"
shall mean the executive officers of the Company.

              3.2 Intentionally left blank.

              3.3 Deferred Compensation. In addition to Base Salary and bonus as
set forth in Sections 3.1 and 3.2, the Executive shall be credited with a
defined contribution which shall be determined and paid out on a deferred basis
("deferred compensation") as provided in this Agreement, including Annex A
hereto. Unless the Executive shall make the election described in the last
sentence of this Section 3.3, during the term of employment through December 31,
2000, the Company shall pay to the trustee (the "Trustee") of a Company grantor
trust (the "Rabbi Trust") for credit to a special account maintained on the
books of the Rabbi Trust for the Executive (the "Trust Account"), monthly, an
amount equal to 50% of one-twelfth of the Executive's then current Base Salary.
If a lump sum payment is made pursuant to Section 4.2.2 or 4.2.3, the Company
shall pay to the Trustee for credit to the Trust Account at the time of such
payment an amount equal to 50% of the Base Salary portion of such lump sum
payment; provided, however, that the Executive may elect by written notice to
the Company no later than the date the Executive makes the election provided for
in the first paragraph of Section 4.2 to have such amount credited instead to
the

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Deferred Compensation Plan established by the Company on November 18, 1998, as
the same may be amended from time to time (as so amended, the "Deferred Plan").
The Trust Account shall be maintained by the Trustee in accordance with the
terms of this Agreement, including Annex A, and the trust agreement (the "Trust
Agreement") establishing the Rabbi Trust (which Trust Agreement shall in all
respects be in furtherance of, and not inconsistent with, the terms of this
Agreement, including Annex A), until the full amount which the Executive is
entitled to receive therefrom has been paid in full. Effective April 1, 1998,
the Company shall establish and maintain the Rabbi Trust as a grantor trust
within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of
the Code and shall pay all fees and expenses of the Trustee and shall enforce
the provisions of the Trust Agreement for the benefit of the Executive. Prior to
April 1, 1998, the Company shall credit the Executive with deferred compensation
in accordance with the provisions of Section 3.3 of the Prior Agreement. The
Executive may elect by written notice delivered to the Company at least 15 days
prior to the commencement of any calendar year during the term of employment
(except that for calendar year 1999, such election shall be made no later than
January 31, 1999) to have (a) all of the payments to be made to the Rabbi Trust
pursuant to the second sentence of this Section 3.3 to be credited instead to
the Deferred Plan or (b) to have 50% of the payments to be made by the Company
pursuant to the second sentence of this Section 3.3 to be credited instead to
the Deferred Plan and the remaining 50% to be paid to the Rabbi Trust. The
Company shall have no obligation to pay the Executive deferred compensation
pursuant to this Section 3.3 for any period after December 31, 2000. Any
deferred compensation paid to the Trust Account prior to January 1, 2001 will
continue to be governed by the terms of this Section 3.3 and Annex A.

              3.4 Deferred Salary and Bonus. In addition to any other deferred
salary or deferred bonus plan in which the Executive may be entitled to
participate, the Executive may elect by written notice delivered to the Company
at least 15 days prior to the commencement of any calendar year during the term
of employment (except that for calendar year 1999, such election shall be made
no later than January 31, 1999), to defer payment of and to have the Company
credit all or any portion of the Executive's salary and/or bonus for such year
to either the Trust Account or the Deferred Plan, or a combination of both,
subject in the case of a deferral to the Deferred Plan to the terms and
conditions of the Deferred Plan. Any such election shall only apply to the
calendar year during the term of employment with respect to which such election
is made and a new election shall be required with respect to each successive
calendar year during the term of employment. Notwithstanding the foregoing, the
Executive hereby elects to defer payment of and have the Company pay to the
Trustee for credit to the Trust Account $300,000 of the Base Salary payable to
the Executive for the period beginning on the Effective Date and ending on the
Term Date. The Executive may change the election provided in the preceding
sentence for any calendar year by written notice delivered to the Company at
least 10 days prior to the commencement of any such calendar year.

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              3.5 Prior Account. The parties confirm that the Company has
maintained a deferred compensation account (the "Prior Account") for the
Executive in accordance with the Prior Agreement. The Prior Account shall be
promptly transferred to, and shall for all purposes be deemed part of, the Trust
Account and shall be maintained by the Trustee in accordance with this Agreement
and the Trust Agreement. All prior credits to the Prior Account shall be deemed
to be credits made under this Agreement, all "Account Retained Income"
thereunder shall be deemed to be Account Retained Income under this Agreement
and all increases or decreases to the Prior Account as a result of income,
gains, losses and other changes shall be deemed to have been made under this
Agreement.

              3.6 Reimbursement. The Company shall reasonably promptly pay or
reimburse the Executive for all reasonable travel, entertainment and other
business expenses actually incurred or paid by the Executive during the term of
employment in the performance of his services under this Agreement provided such
expenses are incurred or paid in accordance with the Company's then current
written practices and policies with respect to senior executives of the Company
and upon presentation of expense statements or vouchers or such other supporting
information as the Company may customarily require of its senior executives.

              3.7 No Anticipatory Assignments. Except as specifically
contemplated in Section 12.8 or under the life insurance policies and benefit
plans referred to in Sections 7 and 8, respectively, neither the Executive, his
legal representative nor any beneficiary designated by him shall have any right,
without the prior written consent of the Company, to assign, transfer, pledge,
hypothecate, anticipate or commute to any person or Entity any payment due in
the future pursuant to any provision of this Agreement, and any attempt to do so
shall be void and shall not be recognized by the Company.

              3.8 Indemnification. The Executive shall be entitled throughout
the term of employment in his capacity as an officer or director of the Company
or any of its subsidiaries or an officer or member of the Board of
Representatives or other governing body of any partnership or joint venture in
which the Company has an equity interest (and after the term of employment, to
the extent relating to his service as such officer, director or member) to the
benefit of the indemnification provisions contained on the date hereof in the
Certificate of Incorporation and By-Laws of the Company (not including any
amendments or additions after the date of execution hereof that limit or narrow,
but including any that add to or broaden, the protection afforded to the
Executive by those provisions), to the extent not prohibited by applicable law
at the time of the assertion of any liability against the Executive.

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         4. Termination.

              4.1 Termination for Cause. The Company may terminate the term of
employment, the Advisory Period (if any) and all of the Company's obligations
under this Agreement, other than its obligations set forth below in this Section
4.1, for "cause" but only if the term of employment or any Advisory Period has
not previously been terminated pursuant to any other provision of this
Agreement. Termination by the Company for "cause" shall mean termination by
action of the Company's Board of Directors, or a committee thereof, because of
the Executive's conviction (treating a nolo contendere plea as a conviction) of
a felony (whether or not any right to appeal has been or may be exercised) or
willful refusal without proper cause to perform his obligations under this
Agreement or because of the Executive's breach of any of the covenants provided
for in Section 9. Such termination shall be effected by written notice thereof
delivered by the Company to the Executive and shall be effective as of the date
of such notice; provided, however, that if (i) such termination is because of
the Executive's willful refusal without proper cause to perform any one or more
of his obligations under this Agreement, (ii) such notice is the first such
notice of termination for any reason delivered by the Company to the Executive
under this Section 4.1, and (iii) within 15 days following the date of such
notice the Executive shall cease his refusal and shall use his best efforts to
perform such obligations, the termination shall not be effective.

              In the event of such termination by the Company for cause, without
prejudice to any other rights or remedies that the Company may have at law or in
equity, the Company shall have no further obligations to the Executive other
than (i) to pay Base Salary and make credits of deferred compensation as
provided in Sections 3.1 and 3.3, or to pay Advisory Period compensation, if
applicable, accrued through the effective date of termination, (ii) to pay any
annual bonus pursuant to Section 3.2 to the Executive in respect of the calendar
year prior to the calendar year in which such termination is effective, in the
event such annual bonus has been determined but not yet paid as of the date of
such termination and (iii) with respect to any rights the Executive has in
respect of amounts credited to the Trust Account or pursuant to any insurance or
other benefit plans or arrangements of the Company maintained for the benefit of
its senior executives. The Executive hereby disclaims any right to receive a pro
rata portion of the Executive's annual bonus with respect to the year in which
such termination occurs. The fourth sentence of Section 3.3 and the provisions
of Sections 3.8, 8.2, 8.3 and 9 through 12 and Annex A shall survive any
termination pursuant to this Section 4.1.

              4.2 Termination by Executive for Material Breach by the Company
and Termination by the Company Without Cause. Unless previously terminated
pursuant to any other provision of this Agreement and unless a Disability Period
shall be in effect, the

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Executive shall have the right, exercisable by written notice to the Company, to
terminate the term of employment or, if applicable, the Advisory Period,
effective 15 days after the giving of such notice, if, at the time of the giving
of such notice, the Company shall be in material breach of its obligations under
this Agreement; provided, however, that, with the exception of clause (i) below,
this Agreement shall not so terminate if such notice is the first such notice of
termination delivered by the Executive pursuant to this Section 4.2 and within
such 15-day period the Company shall have cured all such material breaches of
its obligations under this Agreement. A material breach by the Company shall
include, but not be limited to, (i) the Company failing to cause the Executive
to retain the title specified in the first sentence of Section 2 during the term
of employment; (ii) the Executive being required to report to persons other than
those specified in Section 2 during the term of employment; (iii) the Company
violating the provisions of Section 2 with respect to the Executive's authority,
functions, duties, powers or responsibilities (whether or not accompanied by a
change in title) during the term of employment; (iv) the Company requiring the
Executive's primary services to be rendered at a place other than at the
Company's principal executive offices in the New York City metropolitan area;
and (v) the Company failing to cause the successor to all or substantially all
of the business and assets of the Company expressly to assume the obligations of
the Company under this Agreement.

              The Company shall have the right, exercisable by written notice to
the Executive, to terminate the Executive's employment under this Agreement
without cause, effective at least 30 days after the giving of such notice, which
notice shall specify the effective date of such termination.

              In the event of a termination pursuant to this Section 4.2, the
Executive shall be entitled to elect by delivery of written notice to the
Company, within 30 days after written notice of such termination is given
pursuant to this Section 4.2, either (A) to cease being an employee of the
Company and receive a lump sum payment as provided in Section 4.2.2 or (B) to
remain an employee of the Company as provided in Section 4.2.3. After the
Executive makes such election, the following provisions shall apply:

                   4.2.1 Regardless of the election made by the Executive
pursuant to the preceding paragraph, (i) after the effective date of such
termination, the Executive shall have no further obligations or liabilities to
the Company whatsoever, except that Sections 4.4 and 4.5 and Sections 6 through
12 shall survive such termination, and (ii) the Executive shall be entitled to
receive any earned and unpaid Base Salary or Advisory Period compensation, as
the case may be, accrued through the effective date of such termination.

                   4.2.2 In the event the Executive shall make the election
provided in clause (A) above, the Company shall pay to the Executive as damages
in a lump

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sum within 30 days thereafter (provided that if the Executive was named in the
compensation table in the Company's then most recent proxy statement, such lump
sum payment shall be made within 30 days after the end of the calendar year in
which such notice of termination is given) an amount (discounted as provided in
the immediately following sentence) equal to (a) in the event such termination
occurs during the term of employment, all amounts otherwise payable pursuant to
Section 3.1 for the year in which such termination occurs and for each
subsequent year through the Term Date and (b) in the event such termination
occurs during the Advisory Period, all amounts otherwise payable pursuant to
Section 13 from the date of such termination through the Term Date. Any payments
required to be made to the Executive pursuant to this Section 4.2.2 upon such
termination shall be discounted to present value as of the date of payment from
the times at which such amounts would have become payable absent any such
termination at an annual discount rate for the relevant periods equal to 120% of
the "applicable Federal rate" (within the meaning of Section 1274(d) of the
Internal Revenue Code of 1986 (the "Code")), in effect on the date of such
termination, compounded semi-annually, the use of which rate is hereby elected
by the parties hereto pursuant to Treas. Reg. ss.1.280G-1 Q/A 32 (provided that,
in the event such election is not permitted under Section 280G of the Code and
the regulations thereunder, such other rate determined as of such other date as
is applicable for determining present value under Section 280G of the Code shall
be used).

                   4.2.3 In the event the Executive shall make the election
provided in clause (B) above, the term of employment or, if applicable, the
Advisory Period shall continue and the Executive shall remain an employee of the
Company through the Term Date and during such period the Executive shall be
entitled to receive, whether or not he becomes disabled during such period but
subject to Section 6, (a) in the event such termination occurs during the term
of employment, Base Salary (all or a portion of which may be deferred by the
Executive pursuant to Section 3.4) at an annual rate equal to his Base Salary in
effect immediately prior to the notice of termination as provided in Section 3.1
and (b) in the event such termination occurs during the Advisory Period,
Advisory Period compensation as provided in Section 13. Except as provided in
the next sentence, if the Executive accepts full-time employment with any other
Entity during such period or notifies the Company in writing of his intention to
terminate his status as an employee during such period, then the term of
employment or, if applicable, the Advisory Period shall cease and the Executive
shall cease to be an employee of the Company effective upon the commencement of
such employment or the effective date of such termination as specified by the
Executive in such notice, whichever is applicable, and the Executive shall be
entitled to receive as severance in a lump sum within 30 days after such
commencement or such effective date (provided that if the Executive was named in
the compensation table in the Company's then most recent proxy statement, such
lump sum payment shall be made within 30 days after the end of the calendar year
in which such commencement or effective date occurred) an amount

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(discounted as provided in the second sentence of Section 4.2.2, except that the
"applicable Federal rate" shall be determined as of the date the Executive shall
cease to be an employee of the Company) for the balance of (x) the Base Salary
(assuming no deferral pursuant to Section 3.4) or (y) the Advisory Period
compensation, as the case may be, the Executive would have been entitled to
receive pursuant to this Section 4.2.3 had the Executive remained on the
Company's payroll until the Term Date. Notwithstanding the preceding sentence,
if the Executive accepts employment with any charitable or not-for-profit
Entity, or any family-owned corporation, trust or partnership, then the
Executive shall be entitled to remain an employee of the Company and receive the
payments as provided in the first sentence of this Section 4.2.3; and if the
Executive accepts full-time employment with any affiliate of the Company, then
the payments provided for in this Section 4.2.3 and the term of employment or,
if applicable, the Advisory Period shall cease and the Executive shall not be
entitled to any such lump sum payment. For purposes of this Agreement, the term
"affiliate" shall mean any Entity which, directly or indirectly, controls, is
controlled by, or is under common control with, the Company.

              4.3 Office Facilities. In the event the Executive shall make the
election provided in clause (B) of Section 4.2, then for the period beginning on
the day the Executive makes such election and ending one year thereafter, the
Company shall, without charge to the Executive, make available to the Executive
office space at the Executive's principal job location immediately prior to his
termination of employment, or other location reasonably close to such location,
together with secretarial services, office facilities, services and furnishings,
in each case reasonably appropriate to an employee of the Executive's position
and responsibilities prior to such termination of employment but taking into
account the Executive's reduced need for such office space, secretarial services
and office facilities, services and furnishings as a result of the Executive no
longer being a full-time employee.

              4.4 Release. In partial consideration for the Company's obligation
to make the payments described in Section 4.2, the Executive shall execute and
deliver to the Company a release in substantially the form attached hereto as
Annex B. The Company shall deliver such release to the Executive within 10 days
after the written notice of termination is delivered pursuant to Section 4.2 and
the Executive shall execute and deliver such release to the Company within 21
days after receipt thereof. If the Executive shall fail to execute and deliver
such release to the Company within such 21 day period, or if the Executive shall
revoke his consent to such release as provided therein, the Executive's term of
employment shall terminate as provided in Section 4.2, but the Executive shall
receive, in lieu of the payments provided for in said Section 4.2, a lump sum
cash payment in an amount determined in accordance with the written personnel
policies of the Company relating to notice and severance then generally
applicable to employees with length of service and compensation level of the
Executive.

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              4.5 Mitigation. In the event of termination of the term of
employment or, if applicable, the Advisory Period pursuant to Section 4.2, the
Executive shall not be required to seek other employment in order to mitigate
his damages hereunder unless Section 280G of the Code would apply to any
payments by the Company to the Executive and the Executive's failure to mitigate
would result in the Company losing tax deductions to which it would otherwise
have been entitled. In such an event, the Executive will engage in whatsoever
mitigation is necessary to preserve the Company's tax deductions. With respect
to the preceding sentences, any payments or rights to which the Executive is
entitled by reason of the termination of the term of employment and the Advisory
Period by the Executive or the Company pursuant to Section 4.2 shall be
considered as damages hereunder. Any obligation of the Executive to mitigate his
damages pursuant to this Section 4.5 shall not be a defense or offset to the
Company's obligation to pay the Executive in full the amounts provided in
Section 4.2.2 or 4.2.3, as the case may be, at the time provided therein or the
timely and full performance of any of the Company's other obligations under this
Agreement.

              4.6 Payments. So long as the Executive remains on the payroll of
the Company or any subsidiary of the Company, payments of salary, deferred
compensation and bonus required to be made pursuant to Section 4.2 shall be made
at the same times as such payments are made to senior executives of the Company
or such subsidiary.

         5. Disability. If during the term of employment and prior to any
termination of this Agreement under Section 4.2, the Executive shall become
physically or mentally disabled, whether totally or partially, so that he is
prevented from performing his usual duties for a period of six consecutive
months, or for shorter periods aggregating six months in any twelve-month
period, the Company shall, nevertheless, continue to pay the Executive his full
compensation, when otherwise due, as provided in Section 3, through the last day
of the sixth consecutive month of disability or the date on which the shorter
periods of disability shall have equaled a total of six months in any
twelve-month period (such last day or date being referred to herein as the
"Disability Date"). If the Executive has not resumed his usual duties on or
prior to the Disability Date, the Company shall pay the Executive disability
benefits for the period ending on the Term Date (the "Disability Period"), in an
annual amount equal to 75% of the Executive's Base Salary at the time the
Executive becomes disabled. If during the Disability Period the Executive shall
fully recover from his disability, the Company shall have the right (exercisable
within 60 days after notice from the Executive of such recovery), but not the
obligation, to restore the Executive to full-time service at full compensation.
If the Company elects to restore the Executive to full-time service, then this
Agreement shall continue in full force and effect in all respects and the Term
Date and the Advisory Period shall not be extended by virtue of the occurrence
of the Disability Period. If the Company elects not to restore the Executive to
full-time service, the Executive shall be entitled to obtain other employment,
subject, however, to the following: (i) the Executive shall be

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obligated to perform advisory services during any balance of the Disability
Period; and (ii) the provisions of Sections 9 and 10 shall continue to apply to
the Executive during the Disability Period. The advisory services referred to in
clause (i) of the immediately preceding sentence shall consist of rendering
advice concerning the business, affairs and management of the Company as
requested by the Board of Directors or the Chief Executive Officer of the
Company but the Executive shall not be required to devote more than five days
(up to eight hours per day) each month to such services, which shall be
performed at a time and place mutually convenient to both parties. Any income
from such other employment shall not be applied to reduce the Company's
obligations under this Agreement. The Company shall be entitled to deduct from
all payments to be made to the Executive during the Disability Period pursuant
to this Section 5 an amount equal to all disability payments received by the
Executive during the Disability Period from Workmen's Compensation, Social
Security and disability insurance policies maintained by the Company; provided,
however, that for so long as, and to the extent that, proceeds paid to the
Executive from such disability insurance policies are not includible in his
income for federal income tax purposes, the Company's deduction with respect to
such payments shall be equal to the product of (i) such payments and (ii) a
fraction, the numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to individuals at
the time of receipt of such payments. All payments made under this Section 5
after the Disability Date are intended to be disability payments, regardless of
the manner in which they are computed. If a Disability Date occurs during the
Advisory Period, the Company shall pay to the Executive the full amount of the
Advisory Period compensation in accordance with Section 13 through the Term Date
without regard to the preceding two sentences. Except as otherwise provided in
this Section 5, the during the Disability Period and the Advisory Period, the
Executive shall be entitled to all of the rights and benefits provided for in
this Agreement, except that Section 4.2 shall not apply during the Disability
Period and the term of employment or, if applicable, the Advisory Period shall
end and the Executive shall cease to be an employee of the Company on the Term
Date and shall not be entitled to notice and severance or to receive or be paid
for any accrued vacation time or unused sabbatical.

         6. Death. Upon the death of the Executive during the term of employment
or, if applicable, the Advisory Period, this Agreement and all obligations of
the Company to make any payments under Sections 3, 4, 5 and 13 shall terminate
except that (i) the Executive's estate (or a designated beneficiary) shall be
entitled to receive, to the extent being received by the Executive immediately
prior to his death, Base Salary or, if applicable, Advisory Period compensation,
to the last day of the month in which his death occurs and (ii) the Trust
Account shall be liquidated and revalued as provided in Annex A as of the date
of the Executive's death (except that all taxes shall be computed and charged to
the Trust Account as of such date of death to the extent not theretofore so
computed and charged) and the entire balance thereof (plus any amount due under
the last paragraph of Section A.6 of

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Annex A) shall be paid to the Executive's estate (or a designated beneficiary)
in a single payment not later than 75 days following such date of death.

         7. Life Insurance. The Company shall maintain $6,000,000 face amount of
split ownership life insurance on the life of the Executive, to be owned by the
Executive or the trustees of a trust for the benefit of the Executive's spouse
and/or descendants. Until the death of the Executive, and irrespective of any
termination of this Agreement except pursuant to Section 4.1, the Company shall
pay all premiums on such policy and shall maintain such policy (without
reduction of the face amount of the coverage). The Company shall not borrow from
the cash value of such policy. At the death of the Executive, or on the earlier
surrender of such policy by the owner, the Executive agrees that the owner of
the policy shall promptly pay to the Company an amount equal to the premiums on
such policy paid by the Company (net of (i) tax benefits, if any, to the Company
in respect of payments of such premiums, (ii) any amounts payable by the Company
which had been paid by or on behalf of the Executive with respect to such
insurance, (iii) dividends received by the Company in respect of such premiums,
but only to the extent such dividends are not used to purchase additional
insurance on the life of the Executive, and (iv) any unpaid borrowings by the
Company on the policy), whether before, during or after the term of this
Agreement. The owner of the policy from time to time shall execute, deliver and
maintain a customary split dollar insurance and collateral assignment form,
assigning to the Company the proceeds of such policy but only to the extent
necessary to secure the reimbursement obligation contained in the preceding
sentence. In addition to the foregoing, during the Executive's employment with
the Company, the Company shall (x) provide the Executive with $50,000 of group
life insurance and (y) pay to the Executive annually an amount equal to the
premium that the Executive would have to pay to obtain life insurance under the
Group Universal Life ("GUL") insurance program made available by the Company in
an amount equal to (i) twice the Executive's Base Salary minus (ii) $50,000. The
Executive shall be under no obligation to use the payments made by the Company
pursuant to the preceding sentence to purchase GUL insurance or to purchase any
other life insurance. If the Company discontinues its GUL insurance program, the
Company shall nevertheless make the payments required by this Section 7 as if
such program were still in effect. The payments made to the Executive pursuant
to this Section 7 shall not be considered as "salary" or "compensation" or
"bonus" in determining the amount of any payment under any pension, retirement,
profit-sharing or other benefit plan of the Company or any subsidiary of the
Company.

         8. Other Benefits.

              8.1 General Availability. To the extent that (a) the Executive is
eligible under the general provisions thereof and (b) the Company maintains such
plan or program for the benefit of its senior executives, during the term of
employment and any

<PAGE>

                                                                             12

Advisory Period and so long as the Executive is an employee of the Company, the
Executive shall be eligible to participate in any pension, profit-sharing, stock
option or similar plan or program and in any group life insurance (to the extent
set forth in Section 7), hospitalization, medical, dental, accident, disability
or similar plan or program of the Company now existing or established hereafter.
In addition, so long as the Executive is an employee of the Company the
Executive shall be entitled to receive other benefits generally available to all
senior executives of the Company to the extent the Executive is eligible under
the general provisions thereof, including, without limitation, to the extent
maintained in effect by the Company for its senior executives, an automobile
allowance and financial services.

              8.2 Benefits After a Termination or Disability. During the period
the Executive remains on the payroll of the Company after a termination pursuant
to Section 4.2 and during the Disability Period and any Advisory Period, the
Executive shall continue to be eligible to participate in the benefit plans and
to receive the benefits required to be provided to the Executive under Sections
7 and 8.1 to the extent such benefits are maintained in effect by the Company
for its senior executives; provided, however, the Executive shall not be
entitled to any additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. The Executive shall continue to be an
employee of the Company for purposes of any stock option and restricted shares
agreements and any other incentive plan awards during the term of employment and
any Advisory Period and until such time as the Executive shall leave the payroll
of the Company. At the time the Executive's term of employment and any Advisory
Period terminates and he leaves the payroll of the Company pursuant to the
provisions of Section 4.1, 4.2, 5 or 6, the Executive's rights to benefits and
payments under any benefit plans or any insurance or other death benefit plans
or arrangements of the Company or under any stock option, restricted stock,
stock appreciation right, bonus unit, management incentive or other plan of the
Company shall be determined, subject to the other terms and provisions of this
Agreement, in accordance with the terms and provisions of such plans and any
agreements under which such stock options, restricted stock or other awards were
granted; provided, however, that notwithstanding the foregoing or any more
restrictive provisions of any such plan or agreement (but without affecting any
less restrictive or more favorable to the Executive provisions of any such plan
or agreement), if the Executive leaves the payroll of the Company as a result of
a termination pursuant to Section 4.2, then (i) all stock options granted to the
Executive by the Company shall vest and become immediately exercisable at the
time the Executive shall leave the payroll of the Company pursuant to Section
4.2, (ii) all stock options granted to the Executive by the Company shall remain
exercisable (but not beyond the term thereof) during the remainder of the term
of employment and any Advisory Period and for a period of three months
thereafter or such longer period as shall be specified in any applicable stock
option agreement and (iii) the Company shall not be permitted to determine that
the Executive's employment was

<PAGE>

                                                                              13

terminated for "unsatisfactory performance" within the meaning of any stock
option agreement between the Company and the Executive.

              8.3 Payments in Lieu of Other Benefits. In the event the term of
employment and the Executive's employment with the Company is terminated
pursuant to Sections 4.1, 4.2, 5 or 6 (and regardless of whether the Executive
elects clause (A) or (B) as provided in Section 4.2), the Executive shall not be
entitled to notice and severance or to be paid for any accrued vacation time or
unused sabbatical, the payments provided for in such Sections being in lieu
thereof.

         9. Protection of Confidential Information; Non-Compete. The provisions
of Section 9.2 shall continue to apply through the latest of (i) the date the
Executive ceases to be an employee of the Company and leaves the payroll of the
Company for any reason and (ii) for twelve months after the effective date of
any notice of termination of the Executive's employment pursuant to Section 4.1,
4.2 or 4.3. The provisions of Sections 9.1 and 9.3 shall continue to apply until
three years after the latest of the events described in the preceding sentence.

              9.1 Confidentiality Covenant. The Executive acknowledges that his
employment by the Company (which, for purposes of this Section 9 shall mean Time
Warner Inc. and its affiliates) will, throughout the term of employment and any
Advisory Period, bring him into close contact with many confidential affairs of
the Company, including information about costs, profits, markets, sales,
products, key personnel, pricing policies, operational methods, technical
processes and other business affairs and methods and other information not
readily available to the public, and plans for future development. The Executive
further acknowledges that the services to be performed under this Agreement are
of a special, unique, unusual, extraordinary and intellectual character. The
Executive further acknowledges that the business of the Company is international
in scope, that its products are marketed throughout the world, that the Company
competes in nearly all of its business activities with other Entities that are
or could be located in nearly any part of the world and that the nature of the
Executive's services, position and expertise are such that he is capable of
competing with the Company from nearly any location in the world. In recognition
of the foregoing, the Executive covenants and agrees:

                   9.1.1 The Executive shall keep secret all confidential
matters of the Company and shall not intentionally disclose such matters to
anyone outside of the Company, either during or after the term of employment and
any Advisory Period, except with the Company's written consent, provided that
(i) the Executive shall have no such obligation to the extent such matters are
or become publicly known other than as a result of the Executive's breach of his
obligations hereunder and (ii) the Executive may, after giving

<PAGE>

                                                                              14

prior notice to the Company to the extent practicable under the circumstances,
disclose such matters to the extent required by applicable laws or governmental
regulations or judicial or regulatory process;

                   9.1.2 The Executive shall deliver promptly to the Company on
termination of his employment by the Company, or at any other time the Company
may so request, at the Company's expense, all memoranda, notes, records, reports
and other documents (and all copies thereof) relating to the Company's business,
which he obtained while employed by, or otherwise serving or acting on behalf
of, the Company and which he may then possess or have under his control; and

                   9.1.3 If the term of employment is terminated pursuant to
Section 4.1 or 4.2, for a period of one year after such termination, without the
prior written consent of the Company, the Executive shall not employ, and shall
not cause any Entity of which he is an affiliate to employ, any person who was a
full-time exempt employee of the Company at the date of such termination or
within six months prior thereto.

              9.2 Non-Compete. The Executive shall not, directly or indirectly,
without the prior consent of a majority of the members of the Company's Board of
Directors, render any services to any person or Entity or acquire any interest
of any type in any Entity, that might be deemed in competition with the Company;
provided, however, that the foregoing shall not be deemed to prohibit the
Executive from (a) acquiring, solely as an investment and through market
purchases, securities of any Entity which are registered under Section 12(b) or
12(g) of the Securities Exchange Act of 1934 and which are publicly traded, so
long as he is not part of any control group of such Entity and such securities,
if converted, do not constitute more than one percent (1%) of the outstanding
voting power of that Entity, (b) acquiring, solely as an investment, any
securities of an Entity (other than an Entity that has outstanding securities
covered by the preceding clause (a)) so long as he remains a passive investor in
such Entity and does not become part of any control group thereof and so long as
such Entity is not, directly or indirectly, in competition with the Company, (c)
serving as a director of any Entity that is not in competition with the Company
or (d) during the Advisory Period, being a partner in or of counsel to a law
firm that represents any person or Entity that is in competition with the
Company so long as the Executive does not personally provide or assist in the
provision of services to any such person or Entity. For purposes of the
foregoing, a person or Entity shall be deemed to be in competition with the
Company if such person or it engages in any line of business that is
substantially the same as either (i) any line of operating business which the
Company engages in, conducts or, to the knowledge of the Executive, has
definitive plans to engage in or conduct or (ii) any operating business that is
engaged in or conducted by the Company and as to which, to the knowledge of the
Executive, the Company covenants in writing, in connection with the disposition
of such business, not to

<PAGE>

                                                                              15

compete therewith.. Notwithstanding the preceding sentences, following the
effective date of any termination under Section 4 of this Agreement (including
during the Advisory Period contemplated by Section 13), only the following
Entities shall be deemed to be in competition with the Company: AT&T
Corporation, Bertelsmann A.G., The Walt Disney Company, EarthLink, Inc., General
Electric Corporation, Microsoft Corporation, The News Corporation, Sony
Corporation, Viacom Inc., Vivendi Universal, S.A., Yahoo! Inc. and their
respective subsidiaries and affiliates and any affiliates and any successor to
any of the internet service provider, media or entertainment businesses thereof.

              9.3 Specific Remedy. In addition to such other rights and remedies
as the Company may have at equity or in law with respect to any breach of this
Agreement, if the Executive commits a material breach of any of the provisions
of Section 9.1, the Company shall have the right and remedy to have such
provisions specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company.

              9.4 Liquidated Damages. If the Executive commits a material breach
of the provisions of Section 9.2, the Executive shall pay to the Company as
liquidated damages an amount equal to two and one-half times the Executive's
then current Base Salary, or if the Executive is not employed by the Company at
the time of such breach, an amount equal to two and one-half times the most
recent Base Salary paid to the Executive by the Company. The Company shall be
entitled to offset any amounts owed by the Executive to the Company under this
Section 9.4 against any amounts owed by the Company to the Executive under any
provision of this Agreement or otherwise, including without limitation, amounts
payable to the Executive under Section 4.2. The Company and the Executive agree
that it is impossible to determine with any reasonable accuracy the amount of
prospective damages to the Company upon a breach of Section 9.2 by the Executive
and further agree that the damages set forth in this Section 9.4 are reasonable,
and not a penalty, based upon the facts and circumstances of the parties and
with due regard to future expectations.

         10. Ownership of Work Product. The Executive acknowledges that during
the term of employment, he may conceive of, discover, invent or create
inventions, improvements, new contributions, literary property, material, ideas
and discoveries, whether patentable or copyrightable or not (all of the
foregoing being collectively referred to herein as "Work Product"), and that
various business opportunities shall be presented to him by reason of his
employment by the Company. The Executive acknowledges that all of the foregoing
shall be owned by and belong exclusively to the Company and that he shall have
no personal interest therein, provided that they are either related in any
manner to the business (commercial or experimental) of the Company, or are, in
the case of Work Product, conceived

<PAGE>

                                                                              16

or made on the Company's time or with the use of the Company's facilities or
materials, or, in the case of business opportunities, are presented to him for
the possible interest or participation of the Company. The Executive shall (i)
promptly disclose any such Work Product and business opportunities to the
Company; (ii) assign to the Company, upon request and without additional
compensation, the entire rights to such Work Product and business opportunities;
(iii) sign all papers necessary to carry out the foregoing; and (iv) give
testimony in support of his inventorship or creation in any appropriate case.
The Executive agrees that he will not assert any rights to any Work Product or
business opportunity as having been made or acquired by him prior to the date of
this Agreement except for Work Product or business opportunities, if any,
disclosed to and acknowledged by the Company in writing prior to the date
hereof.

         11. Notices. All notices, requests, consents and other communications
required or permitted to be given under this Agreement shall be effective only
if given in writing and shall be deemed to have been duly given if delivered
personally or sent by prepaid telegram, or mailed first-class, postage prepaid,
by registered or certified mail, as follows (or to such other or additional
address as either party shall designate by notice in writing to the other in
accordance herewith):

              11.1 If to the Company:

                   Time Warner Inc.
                   75 Rockefeller Plaza
                   New York, New York  10019

                   Attention:  President

                   (with a copy, similarly addressed
                   but Attention: General Counsel)

              11.2 If to the Executive, to his residence address set forth on
the records of the Company.

         12. General.

              12.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the substantive laws of the State of
New York applicable to agreements made and to be performed entirely in New York.

<PAGE>

                                                                              17

              12.2 Captions. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

              12.3 Entire Agreement. This Agreement, including Annexes A and B,
sets forth the entire agreement and understanding of the parties relating to the
subject matter of this Agreement and supersedes all prior agreements,
arrangements and understandings, written or oral, between the parties, including
without limitation, the Prior Agreement.

              12.4 No Other Representations. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or be liable for any alleged representation,
promise or inducement not so set forth.

              12.5 Assignability. This Agreement and the Executive's rights and
obligations hereunder may not be assigned by the Executive. The Company may
assign its rights together with its obligations hereunder, in connection with
any sale, transfer or other disposition of all or substantially all of its
business and assets; and such rights and obligations shall inure to, and be
binding upon, any successor to all or substantially all of the business and
assets of the Company, whether by merger, purchase of stock or assets or
otherwise. The Company shall cause such successor expressly to assume such
obligations.

              12.6 Amendments; Waivers. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by both of the parties hereto, or
in the case of a waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any provision hereof shall
in no manner affect such party's right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.

              12.7 Resolution of Disputes. Any dispute or controversy arising
with respect to this Agreement shall, at the election of either the Company or
the Executive, be submitted to JAMS/ENDISPUTE for resolution in arbitration in
accordance with the rules and procedures of JAMS/ENDISPUTE. Either party shall
make such election by delivering written notice thereof to the other party at
any time (but not later than 45 days after such party receives notice of the
commencement of any administrative or regulatory proceeding or the filing of any
lawsuit relating to any such dispute or controversy) and thereupon any such
dispute or controversy shall be resolved only in accordance with the provisions
of this Section

<PAGE>

                                                                              18

12.7. Any such proceedings shall take place in New York City before a single
arbitrator (rather than a panel of arbitrators), pursuant to any streamlined or
expedited (rather than a comprehensive) arbitration process, before a
nonjudicial (rather than a judicial) arbitrator, and in accordance with an
arbitration process which, in the judgment of such arbitrator, shall have the
effect of reasonably limiting or reducing the cost of such arbitration. The
resolution of any such dispute or controversy by the arbitrator appointed in
accordance with the procedures of JAMS/ENDISPUTE shall be final and binding.
Judgment upon the award rendered by such arbitrator may be entered in any court
having jurisdiction thereof, and the parties consent to the jurisdiction of the
New York courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys fees and the
fees of experts) from the losing party. If at the time any dispute or
controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in
business or is no longer providing arbitration services, then the American
Arbitration Association shall be substituted for JAMS/ENDISPUTE for the purposes
of the foregoing provisions of this Section 12.7. If the Executive shall be the
prevailing party in such arbitration, the Company shall promptly pay, upon
demand of the Executive, all legal fees, court costs and other costs and
expenses incurred by the Executive in any legal action seeking to enforce the
award in any court.

              12.8 Beneficiaries. Whenever this Agreement provides for any
payment to the Executive's estate, such payment may be made instead to such
beneficiary or beneficiaries as the Executive may designate by written notice to
the Company. The Executive shall have the right to revoke any such designation
and to redesignate a beneficiary or beneficiaries by written notice to the
Company (and to any applicable insurance company) to such effect.

              12.9 No Conflict. The Executive represents and warrants to the
Company that this Agreement is legal, valid and binding upon the Executive and
the execution of this Agreement and the performance of the Executive's
obligations hereunder does not and will not constitute a breach of, or conflict
with the terms or provisions of, any agreement or understanding to which the
Executive is a party (including, without limitation, any other employment
agreement). The Company represents and warrants to the Executive that this
Agreement is legal, valid and binding upon the Company and the execution of this
Agreement and the performance of the Company's obligations hereunder does not
and will not constitute a breach of, or conflict with the terms or provisions
of, any agreement or understanding to which the Company is a party.

              12.10 Withholding Taxes. Payments made to the Executive pursuant
to this Agreement shall be subject to withholding and social security taxes and
other ordinary and customary payroll deductions.

<PAGE>

                                                                              19

              12.11 No Offset. Except as provided in Section 9.4 of this
Agreement, neither the Company nor the Executive shall have any right to offset
any amounts owed by one party hereunder against amounts owed or claimed to be
owed to such party, whether pursuant to this Agreement or otherwise, and the
Company and the Executive shall make all the payments provided for in this
Agreement in a timely manner.

              12.12 Severability. If any provision of this Agreement shall be
held invalid, the remainder of this Agreement shall not be affected thereby;
provided, however, that the parties shall negotiate in good faith with respect
to equitable modification of the provision or application thereof held to be
invalid. To the extent that it may effectively do so under applicable law, each
party hereby waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.

              12.13 Definitions. The following terms are defined in this
Agreement in the places indicated:

          Account Retained Income - Section A.6 of Annex A
          Advisory Period - Section 13
          affiliate - Section 4.2.3
          Applicable Tax Law - Section A.5 of Annex A
          Base Salary - Section 3.1
          cause - Section 4.1
          Code - Section 4.2.2
          Company - the first paragraph on page 1 and Section 9.1
          deferred compensation - Section 3.3
          Disability Date - Section 5
          Disability Period - Section 5
          Effective Date - the first paragraph on page 1
          eligible securities - Section A.1 of Annex A
          Entity - Section 2
          Executive - the first paragraph in page 1
          fair market value - Section A.1 of Annex A
          Investment Advisor - Section A.1 of Annex A
          Pay-Out Period - Section A.6 of Annex A
          Prior Account - Section 3.5
          Prior Agreement - the second paragraph on page 1
          Rabbi Trust - Section 3.3
          senior executives - Section 3.1
          Term Date - the second paragraph on page 1
          term of employment - Section 1
          Trust Account - Section 3.3
          Trust Agreement - Section 3.3

<PAGE>

                                                                              20

          Trustee - Section 3.3
          Valuation Date - Section A.6 of Annex A
          Work Product - Section 10

         13. Advisory Services. Notwithstanding anything to the contrary
contained in this Agreement (except the last sentence of Section 1), the
Executive shall have the right to elect by delivery of written notice to the
Company, which notice may be delivered at any time on or after January 1, 2002,
to terminate the term of employment and his position as Chairman and Chief
Executive Officer of the Company effective six months after the delivery of such
notice and to serve as an advisor to the Company for the period from the
effective date of such notice through the Term Date (the "Advisory Period").
During the Advisory Period, the Executive will provide such advisory services
concerning the business, affairs and management of the Company as may be
required by the Board of Directors or the Chief Executive Officer of the
Company, but shall not be required to devote more than five days (up to eight
hours per day) each month to such service, which shall be performed at a time
and place mutually convenient to both parties and consistent with the
Executive's other activities. If at any time during the Advisory Period, the
Executive engages in other full-time employment, the Executive shall not be
deemed to be in breach of this Section 13, but unless such employment consists
of the Executive providing services to one or more (i) charitable or non-profit
organizations or (ii) family-owned corporations, trusts, or partnerships, the
Advisory Period shall terminate, the Executive shall leave the payroll of the
Company and the Company shall have no further obligations under this agreement
other than with respect to earned and unpaid compensation and benefits.
Notwithstanding the foregoing, but subject to Section 9 of this Agreement,
during the Advisory Period the Executive may provide part-time services to third
parties (including serving as a member of the Board of Directors of any such
party). During the Advisory Period, the Executive shall be entitled to receive
annual compensation in an amount equal to the Base Salary being received by the
Executive pursuant to Section 3.1 at the time the Executive delivers the notice
provided for in this Section 13 and shall continue to be entitled to the
benefits described in Sections 7 and 8 hereof; provided, however, that the
Executive shall not be entitled to any additional grants of stock options during
the Advisory Period, shall not accrue any vacation time during the Advisory
Period and shall not be entitled to any severance pay at the end thereof. In
addition, during the Advisory Period the Company shall provide the Executive
with an office, office facilities and a secretary in accordance with the
provisions of Section 4.3.

<PAGE>

                                                                              21

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

                                            TIME WARNER INC.

                                            By
                                              ----------------------------------
                                                     Richard D. Parsons
                                                        President

                                              ----------------------------------
                                                       Gerald M. Levin

<PAGE>

                                                                               1

                                                                         ANNEX A

                          Deferred Compensation Account

         A.1 Investments. Funds credited to the Trust Account shall be actually
invested and reinvested in an account in securities selected from time to time
by an investment advisor designated from time to time by the Company (the
"Investment Advisor"), substantially all of which securities shall be "eligible
securities". The designation from time to time by the Company of an Investment
Advisor shall be subject to the approval of the Executive, which approval shall
not be withheld unreasonably. "Eligible securities" are common and preferred
stocks, warrants to purchase common or preferred stocks, put and call options,
and corporate or governmental bonds, notes and debentures, either listed on a
national securities exchange or for which price quotations are published in
newspapers of general circulation, including The Wall Street Journal, and
certificates of deposit. Eligible securities shall not include the common or
preferred stock, any warrants, options or rights to purchase common or preferred
stock or the notes or debentures of the Company or any corporation or other
entity of which the Company owns directly or indirectly 5% or more of any class
of outstanding equity securities. The Investment Advisor shall have the right,
from time to time, to designate eligible securities which shall be actually
purchased and sold for the Trust Account on the date of reference. Such
purchases may be made on margin; provided that the Company may, from time to
time, by written notice to the Executive, the Trustee and the Investment
Advisor, limit or prohibit margin purchases in any manner it deems prudent and,
upon three business days written notice to the Executive, the Trustee and the
Investment Advisor, cause all eligible securities theretofore purchased on
margin to be sold. The Investment Advisor shall send notification to the
Executive and the Trustee in writing of each transaction within five business
days thereafter and shall render to the Executive and the Trustee written
quarterly reports as to the current status of his or her Trust Account. In the
case of any purchase, the Trust Account shall be charged with a dollar amount
equal to the quantity and kind of securities purchased multiplied by the fair
market value of such securities on the date of reference and shall be credited
with the quantity and kind of securities so purchased. In the case of any sale,
the Trust Account shall be charged with the quantity and kind of securities
sold, and shall be credited with a dollar amount equal to the quantity and kind
of securities sold multiplied by the fair market value of such securities on the
date of reference. Such charges and credits to the Trust Account shall take
place immediately upon the consummation of the transactions to which they
relate. As used herein "fair market value" means either (i) if the security is
actually purchased or sold by the Rabbi Trust on the date of reference, the
actual purchase or sale price per security to the Rabbi Trust or (ii) if the
security is not purchased or sold on the date of reference, in the case of a
listed security, the closing price per security on the date of reference, or if
there were no sales on

<PAGE>

                                                                 A-2           2

such date, then the closing price per security on the nearest preceding day on
which there were such sales, and, in the case of an unlisted security, the mean
between the bid and asked prices per security on the date of reference, or if no
such prices are available for such date, then the mean between the bid and asked
prices per security on the nearest preceding day for which such prices are
available. If no bid or asked price information is available with respect to a
particular security, the price quoted to the Trustee as the value of such
security on the date of reference (or the nearest preceding date for which such
information is available) shall be used for purposes of administering the Trust
Account, including determining the fair market value of such security. The Trust
Account shall be charged currently with all interest paid by the Trust Account
with respect to any credit extended to the Trust Account. Such interest shall be
charged to the Trust Account, for margin purchases actually made, at the rates
and times actually paid by the Trust Account. The Company may, in the Company's
sole discretion, from time to time serve as the lender with respect to any
margin transactions by notice to the then Investment Advisor and the Trustee and
in such case interest shall be charged at the rate and times then charged by an
investment banking firm designated by the Company with which the Company does
significant business. Brokerage fees shall be charged to the Trust Account at
the rates and times actually paid.

         A.2 Dividends and Interest. The Trust Account shall be credited with
dollar amounts equal to cash dividends paid from time to time upon the stocks
held therein. Dividends shall be credited as of the payment date. The Trust
Account shall similarly be credited with interest payable on interest bearing
securities held therein. Interest shall be credited as of the payment date,
except that in the case of purchases of interest-bearing securities the Trust
Account shall be charged with the dollar amount of interest accrued to the date
of purchase, and in the case of sales of such interest-bearing securities the
Trust Account shall be credited with the dollar amount of interest accrued to
the date of sale. All dollar amounts of dividends or interest credited to the
Trust Account pursuant to this Section A.2 shall be charged with all taxes
thereon deemed payable by the Company (as and when determined pursuant to
Section A.5). The Investment Advisor shall have the same right with respect to
the investment and reinvestment of net dividends and net interest as he has with
respect to the balance of the Trust Account.

         A.3 Adjustments. The Trust Account shall be equitably adjusted to
reflect stock dividends, stock splits, recapitalizations, mergers,
consolidations, reorganizations and other changes affecting the securities held
therein.

         A.4 Obligation of the Company. Without in any way limiting the
obligations of the Company otherwise set forth in the Agreement or this Annex A,
the Company shall have the obligation to establish, maintain and enforce the
Rabbi Trust and to make payments

<PAGE>

                                                                 A-3           3

to the Trustee for credit to the Trust Account in accordance with the provisions
of Section 3.3 of the Agreement, to use due care in selecting the Trustee or any
successor trustee and to in all respects work cooperatively with the Trustee to
fulfill the obligations of the Company and the Trustee to the Executive. The
Trust Account shall be charged with all taxes (including stock transfer taxes),
interest, brokerage fees and investment advisory fees, if any, payable by the
Company and attributable to the purchase or disposition of securities designated
by the Investment Advisor (in all cases net after any tax benefits that the
Company would be deemed to derive from the payment thereof, as and when
determined pursuant to Section A.5) and only in the event of a default by the
Company of its obligation to pay such fees and expenses, the fees and expenses
of the Trustee in accordance with the terms of the Trust Agreement, but no other
costs of the Company. Subject to the terms of the Trust Agreement, the
securities purchased for the Trust Account as designated by the Investment
Advisor shall remain the sole property of the Company, subject to the claims of
its general creditors, as provided in the Trust Agreement. Neither the Executive
nor his legal representative nor any beneficiary designated by the Executive
shall have any right, other than the right of an unsecured general creditor,
against the Company or the Trust in respect of any portion of the Trust Account.

         A.5 Taxes. The Trust Account shall be charged with all federal, state
and local taxes deemed payable by the Company with respect to income recognized
upon the dividends and interest received by the Trust Account pursuant to
Section A.2 and gains recognized upon sales of any of the securities which are
sold pursuant to Sections A.1, A.6 or A.7. The Trust Account shall be credited
with the amount of the tax benefit received by the Company as a result of any
payment of interest actually made pursuant to Section A.1 or A.2 and as a result
of any payment of brokerage fees and investment advisory fees made pursuant to
Section A.1. If any of the sales of the securities which are sold pursuant to
Sections A.1, A.6 or A.7 results in a loss to the Trust Account, such net loss
shall be deemed to offset the income and gains referred to in the second
preceding sentence (and thus reduce the charge for taxes referred to therein) to
the extent then permitted under the Internal Revenue Code of 1986, as amended
from time to time, and under applicable state and local income and franchise tax
laws (collectively referred to as "Applicable Tax Law"); provided, however, that
for the purposes of this Section A.5 the Trust Account shall, except as provided
in the third following sentence, be deemed to be a separate corporate taxpayer
and the losses referred to above shall be deemed to offset only the income and
gains referred to in the second preceding sentence. Such losses shall be carried
back and carried forward within the Trust Account to the extent permitted by
Applicable Tax Law in order to minimize the taxes deemed payable on such income
and gains within the Trust Account. For the purposes of this Section A.5, all
charges and credits to the Trust Account for taxes shall be deemed to be made as
of the end of the Company's taxable year during which the transactions, from
which the liabilities for such taxes are deemed to have arisen, are deemed to
have occurred. Notwithstanding the

<PAGE>

                                                                 A-4           4

foregoing, if and to the extent that in any year there is a net loss in the
Trust Account that cannot be offset against income and gains in any prior year,
then an amount equal to the tax benefit to the Company of such net loss (after
such net loss is reduced by the amount of any net capital loss of the Trust
Account for such year) shall be credited to the Trust Account on the last day of
such year. If and to the extent that any such net loss of the Trust Account
shall be utilized to determine a credit to the Trust Account pursuant to the
preceding sentence, it shall not thereafter be carried forward under this
Section A.5. For purposes of determining taxes payable by the Company under any
provision of this Annex A it shall be assumed that the Company is a taxpayer and
pays all taxes at the maximum marginal rate of federal income taxes and state
and local income and franchise taxes (net of assumed federal income tax
benefits) applicable to business corporations and that all of such dividends,
interest, gains and losses are allocable to its corporate headquarters, which
are currently located in New York City.

         A.6 One-Time Transfer to Deferred Plan. So long as the Executive is an
employee of the Company, the Executive shall have the right to elect at any
time, but only once during the Executive's lifetime, by written notice to the
Company to transfer to the Deferred Plan all or a portion of the Net
Transferable Balance (determined as provided in the next sentence) of the Trust
Account. If the Executive shall make such an election, the Net Transferable
Balance shall be determined as of the end of the calendar quarter following the
date of such election (unless such election is made during the ten calendar days
following the end of a calendar quarter, in which case such determination shall
be made as of the end of such preceding calendar quarter) by adjusting all of
the securities held in the Trust Account to their fair market value (net of the
tax adjustment that would be made thereon if sold, as estimated by the Company
or the Trustee) and by deducting from such value the amount of all outstanding
indebtedness and any other amounts payable by the Trust Account. Transfers to
the Deferred Plan shall be made in cash as promptly as reasonably practicable
after the end of such calendar quarter and the Investment Advisor (or the
Company or the Trustee if the Investment Advisor shall fail to act in a timely
manner) shall cause securities held in the Trust Account to be sold to provide
cash equal to the portion of the Net Transferable Balance of the Trust Account
selected to be transferred by the Executive. If the Executive elects to transfer
more than 75% of the Net Transferable Balance of the Trust Account to the
Deferred Plan, the Company or the Trustee shall be permitted to take such action
as they may deem reasonably appropriate, including but not limited to, retaining
a portion of such Net Transferable Balance in the Trust Account, to ensure that
the Trust Account will have sufficient assets to pay the Company the amount of
taxes payable on such sales of securities at the end of the year in which such
sales are made.

<PAGE>

                                                                 A-5           5

         A.7 Payments. Payments of deferred compensation shall be made as
provided in this Section A.7. Unless the Executive makes the election referred
to in the next succeeding sentence, deferred compensation shall be paid
bi-weekly for a period of ten years (the "Pay-Out Period") commencing on the
first Company payroll date in the month following the later of (i) the Term Date
and (ii) the date the Executive ceases to be an employee of the Company and
leaves the payroll of the Company for any reason, provided, however, that if the
Executive was named in the compensation table in the Company's then most recent
proxy statement, such payments shall commence on the first Company payroll date
in January of the year following the year in which the latest of such events
occurs. The Executive may elect a shorter Pay-Out Period by delivering written
notice to the Company or the Trustee at least one-year prior to the commencement
of the Pay-Out Period, which notice shall specify the shorter Pay-Out Period. On
each payment date, the Trust Account shall be charged with the dollar amount of
such payment. On each payment date, the amount of cash held in the Trust Account
shall be not less than the payment then due and the Company or the Trustee may
select the securities to be sold to provide such cash if the Investment Advisor
shall fail to do so on a timely basis. The amount of any taxes payable with
respect to any such sales shall be computed, as provided in Section A.5 above,
and deducted from the Trust Account, as of the end of the taxable year of the
Company during which such sales are deemed to have occurred. Solely for the
purpose of determining the amount of payments during the Pay-Out Period, the
Trust Account shall be valued on the fifth trading day prior to the end of the
month preceding the first payment of each year of the Pay-Out Period, or more
frequently at the Company's or the Trustee's election (the "Valuation Date"), by
adjusting all of the securities held in the Trust Account to their fair market
value (net of the tax adjustment that would be made thereon if sold, as
estimated by the Company or the Trustee) and by deducting from the Trust Account
the amount of all outstanding indebtedness. The extent, if any, by which the
Trust Account, valued as provided in the immediately preceding sentence, plus
any amounts that have been transferred to the Deferred Plan pursuant to section
A.6 hereof and not theretofore distributed or deemed distributed therefrom,
exceeds the aggregate amount of credits to the Trust Account pursuant to
Sections 3.3, 3.4 and 3.5 of the Agreement as of each Valuation Date and not
theretofore distributed or deemed distributed pursuant to this Section A.7 is
herein called "Account Retained Income". The amount of each payment for the
year, or such shorter period as may be determined by the Company or the Trustee,
of the Pay-Out Period immediately succeeding such Valuation Date, including the
payment then due, shall be determined by dividing the aggregate value of the
Trust Account, as valued and adjusted pursuant to the second preceding sentence,
by the number of payments remaining to be paid in the Pay-Out Period, including
the payment then due; provided that each payment made shall be deemed made first
out of Account Retained Income (to the extent remaining after all prior
distributions thereof since the last Valuation Date). The balance of the Trust
Account, after all the securities held therein have been sold and all
indebtedness liquidated, shall be

<PAGE>

                                                                 A-6           6

paid to the Executive in the final payment, which shall be decreased by
deducting therefrom the amount of all taxes attributable to the sale of any
securities held in the Trust Account since the end of the preceding taxable year
of the Company, which taxes shall be computed as of the date of such payment.

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

         If the Executive becomes disabled within the meaning of Section 5 of
the Agreement and is not thereafter returned to full-time employment with the
Company as provided in said Section 5, then deferred compensation shall be paid
bi-weekly during the Pay-Out Period commencing on the first Company payroll date
in the month following the end of the Disability Period in accordance with the
provisions of the first paragraph of this Section A.7.

         If the Executive shall die at any time whether during or after the term
of employment, the Trust Account shall be valued as of the date of the
Executive's death and the balance of the Trust Account shall be paid to the
Executive's estate or beneficiary within 75 days of such death in accordance
with the provisions of the second preceding paragraph.

         Notwithstanding the foregoing provisions of this Section A.7, if the
Rabbi Trust shall terminate in accordance with the provisions of the Trust
Agreement, the Trust Account shall be valued as of the date of such termination
and the balance of the Trust Account shall be paid to the Executive within 15
days of such termination in accordance with the provisions of the third
preceding paragraph.

         If a transfer to the Deferred Plan has been made pursuant to Section
A.6 hereof, payments made to the Executive from the Deferred Plan (a) shall be
deemed made

<PAGE>

                                                                 A-7           7

first from the amounts transferred to the Deferred Plan pursuant to Section A.6
and (b) shall be deemed made first out of Account Retained Income.

         Within 90 days after the end of each taxable year of the Company in
which payments are made, directly or indirectly, to the Executive from the Trust
Account or from the Deferred Plan with respect to amounts transferred to the
Deferred Plan from the Trust Account pursuant to Section A.6 and at the time of
the final payment from the Trust Account, the Company or the Trustee shall
compute and the Company shall pay to the Trustee for credit to the Trust
Account, the amount of the tax benefit assumed to be received by the Company
from the payment to the Executive of amounts of Account Retained Income during
such taxable year or since the end of the last taxable year, as the case may be.
No additional credits shall be made to the Trust Account pursuant to the
preceding sentence in respect of the amounts credited to the Trust Account
pursuant to the preceding sentence. Notwithstanding any provision of this
Section A.7, the Executive shall not be entitled to receive pursuant to this
Annex A (including any amounts that have been transferred to the Deferred Plan
pursuant to Section A.6 hereof) an aggregate amount that shall exceed the sum of
(i) all credits made to the Trust Account pursuant to Sections 3.3, 3.4 and 3.5
of the Agreement, (ii) the net cumulative amount (positive or negative) of all
income, gains, losses, interest and expenses charged or credited to the Trust
Account pursuant to this Annex A (excluding credits made pursuant to the second
preceding sentence), after all credits and charges to the Trust Account with
respect to the tax benefits or burdens thereof, and (iii) an amount equal to the
tax benefit to the Company from the payment of the amount (if positive)
determined under clause (ii) above; and the final payment(s) otherwise due may
be adjusted or eliminated accordingly. In determining the tax benefit to the
Company under clause (iii) above, the Company shall be deemed to have made the
payments under clause (ii) above with respect to the same taxable years and in
the same proportions as payments of Account Retained Income were actually made
from the Trust Account. Except as otherwise provided in this paragraph, the
computation of all taxes and tax benefits referred to in this Section A.7 shall
be determined in accordance with Section A.5 above.

<PAGE>

                                                                               1
                                                                         ANNEX B

                                     RELEASE

         Pursuant to the terms of the Employment Agreement made as of
_____________, between TIME WARNER INC., a Delaware corporation (the "Company"),
75 Rockefeller Plaza, New York, New York 10019 and the undersigned (the
"Agreement"), and in consideration of the payments made to me and other benefits
to be received by me pursuant thereto, I, [Name], being of lawful age, do hereby
release and forever discharge the Company and its officers, shareholders,
subsidiaries, agents, and employees, from any and all actions, causes of action,
claims, or demands for general, special or punitive damages, attorney's fees,
expenses, or other compensation, which in any way relate to or arise out of my
employment with the Company or any of its subsidiaries or the termination of
such employment, which I may now or hereafter have under any federal, state or
local law, regulation or order, including without limitation, under the Age
Discrimination in Employment Act, as amended, through and including the date of
this Release; provided, however, that the execution of this Release shall not
prevent the undersigned from bringing a lawsuit against the Company to enforce
its obligations under the Agreement.

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

         I further state that I have read this document and the Agreement
referred to herein, that I know the contents of both and that I have executed
the same as my own free act.

         WITNESS my hand this ____ day of ___________ , ____.

                            ---------------------------
                                      [Name]<PAGE>

                                                                Exhibit 10.3

1

                  AMENDED AND RESTATED EMPLOYMENT AGREEMENT made as of March 25,
1999, effective as of January 1, 1999 (the "Effective Date"), as amended on
October 26, 2000 and April 20, 2001, between AOL Time Warner Inc., a Delaware
corporation (the "Company"), as assignee of Time Warner Inc., a Delaware
corporation, and Richard D. Parsons (the "Executive").

                  The Executive is currently employed by the Company pursuant to
an Employment Agreement made as of March 18, 1998 (the "Prior Agreement"). The
Company wishes to amend and restate the Prior Agreement and secure the services
of the Executive on a full-time basis for the period to and including January
31, 2005 (the "Term Date") on and subject to the terms and conditions set forth
in this Agreement, and the Executive is willing for the Prior Agreement to be so
amended and restated and to provide such services on and subject to the terms
and conditions set forth in this Agreement. The parties therefore agree as
follows:

                  1. Term of Employment. The Executive's "term of employment",
as this phrase is used throughout this Agreement, shall be for the period
beginning on the Effective Date and ending on the Term Date, subject, however,
to the terms and conditions set forth in this Agreement.

                  2. Employment. During the term of employment, the Company
shall employ the Executive, and the Executive shall serve, as the Co-Chief
Operating Officer of the Company. In such capacity the Executive shall have
responsibility for the direction and supervision of the following functions,
divisions and subsidiaries of the Company, with the authority, duties and powers
appropriate and customary to discharge such responsibility: Warner Bros. (except
the WB Television Network), New Line Cinema Corporation, Warner Music Group
(both before and after the consummation of the publicly announced proposed
transaction with EMI Group, plc), Time Warner Trade Publishing and the legal and
human resources or people development corporate staff functions. The chief
executive officer of each such division or subsidiary and the Executive or
Senior Vice President of each such staff function shall report to the Executive.
In addition, the Executive shall have such other authority, functions, duties,
powers and responsibilities as the Board of Directors or the Chief Executive
Officer of the Company may from time to time delegate to the Executive in
addition thereto, consistent with his stature as the Co-Chief Operating Officer
of the Company. The Executive shall, subject to his election as such from time
to time and without additional compensation, serve during the term of employment
in such additional offices of comparable or greater stature and responsibility
in the Company and its subsidiaries and as a director and as a member of any
committee of the Board of Directors of the Company and its subsidiaries, to
which he may be elected from time to time. During the

<PAGE>

2

term of employment, (i) the Executive's services shall be rendered on a
substantially full-time, exclusive basis and he will apply on a full-time basis
all of his skill and experience to the performance of his duties in such
employment, (ii) the Executive shall report only to the Company's Board of
Directors and to the Company's Chief Executive Officer, (iii) the Executive
shall have no other employment and, without the prior written consent of the
Chief Executive Officer of the Company, no outside business activities which
require the devotion of substantial amounts of the Executive's time and (iv) the
place for the performance of the Executive's services shall be the principal
executive offices of the Company which shall be in the New York City
metropolitan area, subject to such reasonable travel as may be appropriate or
required in the performance of the Executive's duties in the business of the
Company. The foregoing shall be subject to the Company's written policies, as in
effect from time to time, regarding vacations, holidays, illness and the like
and shall not prevent the Executive from devoting such time to his personal
affairs as shall not interfere with the performance of his duties hereunder,
provided that the Executive complies with the provisions of Sections 9 and 10
and any generally applicable written policies of the Company on conflicts of
interest and service as a director of another corporation, partnership, trust or
other entity ("Entity").

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

                  3. Compensation.

                           3.1 Base Salary. The Company shall pay or cause to be
paid to the Executive a base salary of not less than $1,000,000 per annum during
the term of employment (the "Base Salary"). The Company may increase, but not
decrease, the Base Salary at any time and from time to time during the term of
employment and upon each such increase the term "Base Salary" shall mean such
increased amount (subject to Section 5). Base Salary shall be payable in monthly
or more frequent installments in accordance with the Company's then current
practices and policies with respect to senior executives. For the purposes of
this Agreement "senior executives" shall mean the executive officers of the
Company.

                           3.2 Intentionally left blank.

                           3.3 Deferred Compensation. In addition to Base Salary
and bonus as set forth in Sections 3.1 and 3.2, the Executive shall be credited
with a defined contribution which shall be determined and paid out on a deferred
basis ("deferred compensation") as provided in this Agreement, including Annex A
hereto. Unless the Executive shall make the election described in the last
sentence of this Section 3.3, during the term of employment through

<PAGE>

3

December 31, 2000, the Company shall pay to the trustee (the "Trustee") of a
Company grantor trust (the "Rabbi Trust") for credit to a special account
maintained on the books of the Rabbi Trust for the Executive (the "Trust
Account"), monthly, an amount equal to 50% of one-twelfth of the Executive's
then current Base Salary. If a lump sum payment is made pursuant to Section
4.2.2, the Company shall pay to the Trustee for credit to the Trust Account at
the time of such payment an amount equal to 50% of the Base Salary portion of
such lump sum payment; provided, however, that the Executive may elect by
written notice to the Company at least 15 days prior to the date of any such
lump sum payment, to have such amount credited instead to the Deferred
Compensation Plan established by the Company on November 18, 1998, as the same
may be amended from time to time (as so amended, the "Deferred Plan"). The Trust
Account shall be maintained by the Trustee in accordance with the terms of this
Agreement, including Annex A, and the trust agreement (the "Trust Agreement")
establishing the Rabbi Trust (which Trust Agreement shall in all respects be in
furtherance of, and not inconsistent with, the terms of this Agreement,
including Annex A), until the full amount which the Executive is entitled to
receive therefrom has been paid in full. The Company shall maintain the Rabbi
Trust as a grantor trust within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Code and shall pay all fees and expenses of the
Trustee and shall enforce the provisions of the Trust Agreement for the benefit
of the Executive. The Executive may elect by written notice delivered to the
Company at least 15 days prior to the commencement of any calendar year during
the term of employment (except that for calendar year 1999, such election shall
be made no later than January 31, 1999) to have (a) all of the payments to be
made to the Rabbi Trust pursuant to the second sentence of this Section 3.3 to
be credited instead to the Deferred Plan or (b) to have 50% of the payments to
be made by the Company pursuant to the second sentence of this Section 3.3 to be
credited instead to the Deferred Plan and the remaining 50% to be paid to the
Rabbi Trust. The Company shall have no obligation to pay the Executive deferred
compensation pursuant to this Section 3.3 for any period after December 31,
2000. Any deferred compensation paid to the Trust Account prior to January 1,
2001 will continue to be governed by the terms of this Section 3.3 and Annex A.

                           3.4 Deferred Bonus. In addition to any other deferred
bonus plan in which the Executive may be entitled to participate, the Executive
may elect by written notice delivered to the Company at least 15 days prior to
the commencement of any calendar year during the term of employment during which
an annual cash bonus would otherwise accrue or to which it would relate (except
that for calendar year 1999, such election shall be made no later than January
31, 1999), to defer payment of and to have the Company credit all or any portion
of the Executive's bonus for such year to either the Trust Account or the
Deferred Plan, or a combination of both, subject in the case of a deferral to
the Deferred Plan to the terms and

<PAGE>

4

conditions of the Deferred Plan. Any such election shall only apply to the
calendar year during the term of employment with respect to which such election
is made and a new election shall be required with respect to each successive
calendar year during the term of employment.

                           3.5 Prior Account. The parties confirm that the
Company has maintained a deferred compensation account (the "Prior Account") for
the Executive in accordance with the Prior Agreement. The Prior Account shall be
promptly transferred to, and shall for all purposes be deemed part of, the Trust
Account and shall be maintained by the Trustee in accordance with this Agreement
and the Trust Agreement. All prior credits to the Prior Account shall be deemed
to be credits made under this Agreement, all "Account Retained Income"
thereunder shall be deemed to be Account Retained Income under this Agreement
and all increases or decreases to the Prior Account as a result of income,
gains, losses and other changes shall be deemed to have been made under this
Agreement.

                           3.6 Reimbursement. The Company shall reasonably
promptly pay or reimburse the Executive for all reasonable travel, entertainment
and other business expenses actually incurred or paid by the Executive during
the term of employment in the performance of his services under this Agreement
provided such expenses are incurred or paid in accordance with the Company's
then current written practices and policies with respect to senior executives of
the Company and upon presentation of expense statements or vouchers or such
other supporting information as the Company may customarily require of its
senior executives.

                           3.7 No Anticipatory Assignments. Except as
specifically contemplated in Section 12.8 or under the life insurance policies
and benefit plans referred to in Sections 7 and 8, respectively, neither the
Executive, his legal representative nor any beneficiary designated by him shall
have any right, without the prior written consent of the Company, to assign,
transfer, pledge, hypothecate, anticipate or commute to any person or Entity any
payment due in the future pursuant to any provision of this Agreement, and any
attempt to do so shall be void and shall not be recognized by the Company.

                           3.8 Indemnification. The Executive shall be entitled
throughout the term of employment in his capacity as an officer or director of
the Company or any of its

<PAGE>

5

subsidiaries or an officer or member of the Board of Representatives or other
governing body of any partnership or joint venture in which the Company has an
equity interest or as a trustee or fiduciary of any plan, program, trust or
other entity established for the benefit of the Company, its subsidiaries or any
of their respective employees in connection with the business of the Company
(and after the term of employment, to the extent relating to his service as such
officer, director, member, trustee or fiduciary) to the benefit of the
indemnification provisions contained on the date hereof in the Certificate of
Incorporation and By-Laws of the Company (not including any amendments or
additions after the date of execution hereof that limit or narrow, but including
any that add to or broaden, the protection afforded to the Executive by those
provisions), to the extent not prohibited by applicable law at the time of the
assertion of any liability against the Executive.

                  4. Termination.

                           4.1 Termination for Cause. The Company may terminate
the term of employment and all of the Company's obligations hereunder, other
than its obligations set forth below in this Section 4.1, for "cause" but only
if the term of employment has not previously been terminated pursuant to any
other provision of this Agreement. Termination by the Company for "cause" shall
mean termination by action of the Company's Board of Directors, or a committee
thereof, after a hearing at which the Executive has had the opportunity to
address the Board, because of the Executive's conviction (treating a nolo
contendere plea as a conviction) of a felony (whether or not any right to appeal
has been or may be exercised) or willful refusal without proper cause to perform
his obligations under this Agreement or because of the Executive's breach of any
of the covenants provided for in Section 9. Such termination shall be effected
by written notice thereof delivered by the Company to the Executive and shall be
effective as of the date of such notice; provided, however, that if (i) such
termination is because of the Executive's willful refusal without proper cause
to perform any one or more of his obligations under this Agreement, (ii) such
notice is the first such notice of termination for any reason delivered by the
Company to the Executive under this Section 4.1, and (iii) within 15 days
following the date of such notice the Executive shall cease his refusal and
shall use his best efforts to perform such obligations, the termination shall
not be effective.

<PAGE>

6

                           In the event of such termination by the Company for
cause, without prejudice to any other rights or remedies that the Company may
have at law or in equity, the Company shall have no further obligations to the
Executive other than (i) to pay Base Salary and make credits of deferred
compensation as provided in Sections 3.1 and 3.3 accrued through the effective
date of termination, (ii) to pay any annual bonus pursuant to Section 3.2 to the
Executive in respect of the calendar year prior to the calendar year in which
such termination is effective, in the event such annual bonus has been
determined but not yet paid as of the date of such termination and (iii) with
respect to any rights the Executive has in respect of amounts credited to the
Trust Account through the effective date of termination or pursuant to any
insurance or other benefit plans or arrangements of the Company maintained for
the benefit of its senior executives. The Executive hereby disclaims any right
to receive a pro rata portion of the Executive's annual bonus with respect to
the year in which such termination occurs. The fourth sentence of Section 3.3
and the provisions of Sections 3.8, 8.2, 8.3 and 9 through 12 and Annex A shall
survive any termination pursuant to this Section 4.1.

                           4.2 Termination by Executive for Material Breach by
the Company and Termination by the Company Without Cause. Unless previously
terminated pursuant to any other provision of this Agreement and unless a
Disability Period shall be in effect, the Executive shall have the right,
exercisable by written notice to the Company, to terminate the term of
employment (other than those provisions that specifically survive such
termination) effective 15 days after the giving of such notice, if, at the time
of the giving of such notice, the Company shall be in material breach of its
obligations under this Agreement; provided, however, that with the exception of
clause (i) below, this Agreement shall not so terminate if such notice is the
first such notice of termination delivered by the Executive pursuant to this
Section 4.2 and within such 15 day period the Company shall have cured all such
material breaches of its obligations under this Agreement. A material breach by
the Company shall include, but not be limited to, (i) the Company failing to
cause the Executive to retain the title of President or, if the Executive is
appointed President and Chief Operating Officer, to thereafter retain such
title, (ii) the Executive being required to report to persons other than those
specified in Section 2; (iii) the Company violating the provisions of Section 2
or any written delegation from the Chief Executive Officer with respect to the
Executive's authority, functions, duties, powers or

<PAGE>

7

responsibilities (whether or not accompanied by a change in title); (iv) the
Company requiring the Executive's primary services to be rendered at a place
other than at the Company's principal executive offices in the New York City
metropolitan area; (v) the Company breaching its obligations under the last
paragraph of Section 2; and (vi) the Company failing to cause the successor to
all or substantially all of the business and assets of the Company expressly to
assume the obligations of the Company under this Agreement.

                           The Company shall have the right, exercisable by
written notice to the Executive, to terminate the Executive's employment under
this Agreement without cause, effective at least 30 days after the giving of
such notice, which notice shall specify the effective date of such termination.

                           In the event of a termination pursuant to this
Section 4.2, the Executive shall remain an employee of the Company as provided
in Section 4.2.2. In such case, the following provisions shall apply:

                                    4.2.1 After the effective date of such
termination, the Executive shall have no further obligations or liabilities to
the Company whatsoever, except that Sections 3.8, 4.6 and 4.8 and Sections 6
through 12 and Annex A shall survive such termination, and the Executive shall
be entitled to receive any earned and unpaid Base Salary accrued through the
effective date of such termination.

                                    4.2.2 After the effective date of
termination pursuant to this Section 4.2, the Executive shall remain an employee
of the Company for the period ending on the Term Date, and during such period
the Executive shall be entitled to receive, whether or not the Executive becomes
disabled during such period but subject to Section 6, salary at an annual rate
equal to the Base Salary. Except as provided in the second succeeding sentence,
if the Executive accepts full-time employment with any other Entity during such
period or notifies the Company in writing of his intention to terminate his
status as an employee during such period, then the Executive shall cease to be
an employee of the Company effective upon the commencement of such employment or
the effective date of such termination as specified by the

<PAGE>

8

Executive in such notice, whichever is applicable, and the Executive shall be
entitled to receive as severance in a lump sum within 30 days after such
commencement or such effective date (provided that if the Executive was named in
the compensation table in the Company's then most recent proxy statement, such
lump sum payment shall be made within 30 days after the end of the calendar year
in which such commencement or effective date occurred) an amount (discounted as
provided in the immediately following) equal to the balance of the Base Salary
the Executive would have been entitled to receive pursuant to this Section 4.2.2
had the Executive remained on the Company's payroll until the Term Date. The
lump sum payment required to be made to the Executive pursuant to this Section
4.2.2 shall be discounted to present value as of the date of payment from the
times at which such amounts would have become payable absent any such
termination at an annual discount rate for the relevant periods equal to 120% of
the "applicable Federal rate" (within the meaning of Section 1274(d) of the
Code), in effect on the date of such termination, compounded semi-annually.
Notwithstanding the foregoing, if the Executive accepts employment with any
not-for-profit Entity, then the Executive shall be entitled to remain an
employee of the Company and receive the payments as provided in the first
sentence of this Section 4.2.2; and if the Executive accepts full-time
employment with any affiliate of the Company, then the payments provided for in
this Section 4.2.2 shall cease and the Executive shall not be entitled to any
such lump sum payment. For purposes of this Agreement, the term "affiliate"
shall mean any Entity which, directly or indirectly, controls, is controlled by,
or is under common control with, the Company.

                           4.3 Optional Termination by Executive. The Executive
shall have the right to elect by delivery of written notice to the Company,
which notice may be delivered at any time on or after July 1, 2001, to terminate
the term of employment and the Executive's position with the Company effective
six months after the delivery of such notice and to serve as an advisor to the
Company from the effective date of such notice through January 31, 2005 (the
"Advisory Period"). During the Advisory Period, the Executive will remain an
employee of the Company and will provide such advisory services concerning the
business, affairs and management of the Company as may be required by the Board
of Directors or the Chief Executive Officer of the Company, but shall not be
required to devote more than five days (up to eight hours per day) each month to
such service, which shall be performed at a time and place mutually convenient
to both parties and consistent with the Executive's other activities. If at any

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9

time during the Advisory Period, the Executive engages in other full-time
employment, the Executive shall not be deemed to be in breach of this Section
4.3, but unless such employment consists of the Executive providing services to
one or more (i) charitable or non-profit organizations or (ii) family owned
corporations, trusts, or partnerships, the Advisory Period shall terminate, the
Executive shall leave the payroll of the Company and the Company shall have no
further obligations under this agreement other than with respect to earned and
unpaid compensation and benefits. Notwithstanding the foregoing, but subject to
Section 9 of this Agreement, during the Advisory Period the Executive may
provide part-time services to third parties (including serving as a member of
the Board of Directors of any such party). During the Advisory Period, the
Executive shall be entitled to receive a Base Salary paid at the rate of
$500,000 per annum and shall continue to be entitled to the benefits described
in Sections 7 and 8 of the Agreement; provided, however, that the Executive
shall not be entitled to deferred compensation, an annual bonus or any
additional grants of stock options during the Advisory Period, shall not accrue
any vacation time during the Advisory Period and shall not be entitled to any
severance pay at the end thereof. In addition, during the Advisory Period, the
Company shall provide the Executive with an office, office facilities and a
secretary in accordance with the provisions of Section 4.5 of this Agreement.

                           4.4 After the Term Date. If at the Term Date, the
term of employment shall not have been previously terminated pursuant to the
provisions of this Agreement, no Disability Period is then in effect and the
parties shall not have agreed in writing to an extension or renewal of this
Agreement or on the terms of a new written employment agreement, then the term
of employment shall continue and the Executive shall continue to be employed by
the Company pursuant to the terms of this Agreement, subject to termination by
either party hereto on 90 days written notice delivered to the other party. Such
90-day notice may be given by either party on or after October 1, 2004 so that
the term of employment may end on the Term Date or any date thereafter. If this
Agreement shall be terminated on or after the Term Date for any reason (other
than by the Company for cause as defined in Section 4.1, in which case Section
4.1 shall apply), then the Executive shall receive Base Salary through the
effective date of termination. At the end of the 90-day notice period provided
for in the first sentence of this Section 4.4, the term of employment shall end
and the Executive shall cease to be an employee

<PAGE>

10

of the Company and the Executive shall have no further obligations or
liabilities to the Company whatsoever, except that Sections 3.8, 4.6 and 4.8 and
Sections 6 through 12 and Annex A shall survive such termination.

                           4.5 Office Facilities. In the event of a termination
of the Executive's employment pursuant to Section 4.2, 4.3 or 4.4, then for the
period beginning on the effective date of such termination and ending one year
thereafter, the Company shall, without charge to the Executive, make available
to the Executive office space at the Executive's principal job location
immediately prior to his termination of employment, or other location reasonably
close to such location, together with secretarial services, office facilities,
services and furnishings, in each case reasonably appropriate to an employee of
the Executive's position and responsibilities prior to such termination of
employment but taking into account the Executive's reduced need for such office
space, secretarial services and office facilities, services and furnishings as a
result of the Executive no longer being a full-time employee.

                           4.6 Release. In partial consideration for the
Company's obligation to make the payments described in Section 4.2, the Company
shall be entitled to require the Executive to execute and deliver to the Company
a release in substantially the form attached hereto as Annex B. If the Company
so elects, the Company shall deliver such release to the Executive within 10
days after the written notice of termination is delivered pursuant to Section
4.2 and the Executive shall execute and deliver such release to the Company
within 21 days after receipt thereof. Upon receipt by the Company of such
release signed by the Executive, the Company shall deliver to the Executive a
release substantially in the form attached hereto as Annex C, signed by the
Company. If the Company shall request the Executive to execute an Annex B
release and the Executive shall fail to execute and deliver such release to the
Company within such 21 day period, or if the Executive shall revoke his consent
to such release as provided therein, the Company shall have no obligation to
deliver the Annex C release and the Executive's term of employment shall
terminate as provided in Section 4.2, but the Executive shall receive, in lieu
of the payments provided for in said Section 4.2, a lump sum cash payment in an
amount determined in accordance with the written personnel policies of the
Company relating to notice and severance then generally applicable to senior
executives of the Company with length of service and compensation level of the
Executive.

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11

                           4.7 Retirement. Notwithstanding the provisions of
Sections 4.2, 4.4 or 5, if the term of employment is in effect and the Executive
is still employed by the Company pursuant to this Agreement on the date the
Executive first becomes eligible for normal retirement as defined in any
applicable retirement plan of the Company or any subsidiary of the Company (the
"Retirement Date"), then this Agreement shall terminate automatically on such
date and the Executive's employment with the Company shall thereafter be
governed by the policies generally applicable to employees of the Company, and
the Executive shall not thereafter be entitled to the payments provided in such
Sections to the extent not received by the Executive on or prior to the
Retirement Date. In addition, no benefits or payments provided in Sections 4.2,
4.4 or 5 shall include any period after the Retirement Date and if the provision
of benefits or calculation of payments provided in any such Section would
include any period subsequent to the Retirement Date, such provision of benefits
shall end on the Retirement Date and the calculation of payments shall cover
only the period ending on the Retirement Date. Notwithstanding the foregoing,
the provisions of Annex A and the Trust Agreement shall apply to the investment
and payment of deferred compensation after such termination, the provisions of
Section 7 of this Agreement shall survive any such termination and the
provisions of Sections 12.1 and 12.7 shall apply to any dispute with respect to
this Agreement that arises after any such termination.

                           4.8 Mitigation. The payments provided for in this
Agreement in the event of a termination without cause are not subject to
mitigation unless the Executive's failure to mitigate would result in the
Company losing tax deductions to which it would otherwise have been entitled. In
such an event, the Executive will engage in whatsoever mitigation is necessary
to preserve the Company's tax deductions. With respect to the preceding
sentences, any payments or rights to which the Executive is entitled by reason
of the termination of employment without cause shall be considered as damages
hereunder. Any obligation of the Executive to mitigate the damages pursuant to
this Section 4.8 shall not be a defense or offset to the Company's obligation to
pay the Executive in full the amounts provided in this Agreement upon the
occurrence of a termination without cause, at the time provided herein, or the
timely and full performance of any of the Company's other obligations under this
Agreement.

<PAGE>

12

                           4.9 Payments. So long as the Executive remains on the
payroll of the Company or any subsidiary of the Company, payments of salary,
deferred compensation and bonus required to be made pursuant to Section 4.2, 4.3
or 4.4 shall be made at the same times as such payments are made to senior
executives of the Company or such subsidiary.

                  5. Disability. If during the term of employment and prior to
any termination of this Agreement under Section 4.2, 4.3 or 4.4, the Executive
shall become physically or mentally disabled, whether totally or partially, so
that he is prevented from performing his usual duties for a period of six
consecutive months, or for shorter periods aggregating six months in any
twelve-month period, the Company shall, nevertheless, continue to pay the
Executive his full compensation as provided in Section 3 through the last day of
the sixth consecutive month of disability or the date on which the shorter
periods of disability shall have equaled a total of six months in any
twelve-month period (such last day or date being referred to herein as the
"Disability Date"). If the Executive has not resumed his usual duties on or
prior to the Disability Date, the Company shall pay the Executive disability
benefits for the period from the Disability Date through the Term Date (the
"Disability Period"), in an annual amount equal to 75% of the Base Salary. If
during the Disability Period the Executive shall fully recover from his
disability, the Company shall have the right (exercisable within 60 days after
notice from the Executive of such recovery), but not the obligation, to restore
the Executive to full-time service at full compensation. The Disability Period
shall continue during such 60-day period. If the Company elects to restore the
Executive to full-time service, then this Agreement shall continue in full force
and effect in all respects, including without limitation, the provisions of
Section 3 which shall apply in lieu of the Disability provisions of this Section
5, and the Term Date shall not be extended by virtue of the occurrence of the
Disability Period. If the Company elects not to restore the Executive to
full-time service, the Executive may terminate this Agreement by written notice
to the Company within 60 days after the termination of the sixty-day period
provided for above, in which case neither party shall have any further
obligations hereunder after the date of such termination. If the Company elects
not to restore the Executive to full-time service and the Executive does not
elect to terminate this Agreement, the Executive shall be entitled to obtain
other employment, subject, however, to the following: (i) the Executive shall be
obligated to perform advisory services during any balance of the Disability
Period; and

<PAGE>

13

(ii) the provisions of Sections 9 and 10 shall continue to apply to
the Executive during the Disability Period. The advisory services referred to in
clause (i) of the immediately preceding sentence shall consist of rendering
advice concerning the business, affairs and management of the Company as
requested by the Board of Directors or the Chief Executive Officer of the
Company but the Executive shall not be required to devote more than five days
(up to eight hours per day) each month to such services, which shall be
performed at a time and place mutually convenient to both parties. Any income
from such other employment shall not be applied to reduce the Company's
obligations under this Agreement. The Company shall be entitled to deduct from
all payments to be made to the Executive during the Disability Period pursuant
to this Section 5 an amount equal to all disability payments received by the
Executive during the Disability Period from Workmen's Compensation, Social
Security and disability insurance policies maintained by the Company; provided,
however, that for so long as, and to the extent that, proceeds paid to the
Executive from such disability insurance policies are not includible in his
income for federal income tax purposes, the Company's deduction with respect to
such payments shall be equal to the product of (i) such payments and (ii) a
fraction, the numerator of which is one and the denominator of which is one less
the maximum marginal rate of federal income taxes applicable to individuals at
the time of receipt of such payments. All payments made under this Section 5
with respect to periods after the Disability Date are intended to be disability
payments, regardless of the manner in which they are computed. Except as
otherwise provided in this Section 5, the term of employment shall continue
during the Disability Period and the Executive shall be entitled to all of the
rights and benefits provided for in this Agreement, except that Section 4.2
shall not apply during the Disability Period (unless the Company terminates this
Agreement in breach hereof in which case Section 4.2 shall apply) and unless the
Company has restored the Executive to full-time service at full compensation
prior to the end of the Disability Period, the term of employment shall end and
the Executive shall cease to be an employee of the Company at the end of the
Disability Period and shall not be entitled to notice and severance or to
receive or be paid for any accrued vacation time or unused sabbatical.

                  6. Death. Upon the death of the Executive during the term of
employment, this Agreement and all obligations of the Company to make any
payments under Sections 3, 4 and 5 shall terminate except that (i) the
Executive's estate (or a designated beneficiary) shall be entitled

<PAGE>

14

to receive, to the extent being received by the Executive immediately prior to
his death, Base Salary to the last day of the month in which his death occurs
and (ii) the Trust Account shall be liquidated and revalued as provided in Annex
A as of the date of the Executive's death (except that all taxes shall be
computed and charged to the Trust Account as of such date of death to the extent
not theretofore so computed and charged) and the entire balance thereof (plus
any amount due under the last paragraph of Section A.7 of Annex A) shall be paid
to the Executive's estate (or a designated beneficiary) in a single payment not
later than 75 days following such date of death.

                  7. Life Insurance. Subject to the Executive's satisfactory
completion of any applications and other documentation and any physical
examinations that may be required by the insurer for any additional insurance,
the Company shall obtain $5,000,000 face amount of split ownership life
insurance on the life of the Executive, to be owned by the Executive or the
trustees of a trust for the benefit of the Executive's spouse and/or
descendants. Until the death of the Executive, and irrespective of any
termination of this Agreement except pursuant to Section 4.1, the Company shall
pay all premiums on such policy and shall maintain such policy (without
reduction of the face amount of the coverage). The Company shall not borrow from
the cash value of such policy. The Executive shall be entitled to designate the
beneficiary or beneficiaries of such policy, which may include a trust. At the
death of the Executive, or on the earlier surrender of such policy by the owner,
the Executive agrees that the Executive's estate or the owner of the policy
shall promptly pay to the Company an amount equal to the premiums on such policy
paid by the Company (net of (i) tax benefits, if any, to the Company in respect
of payments of such premiums, (ii) any amounts payable by the Company which had
been paid by or on behalf of the Executive with respect to such insurance, (iii)
dividends received by the Company in respect of such premiums, but only to the
extent such dividends are not used to purchase additional insurance on the life
of the Executive, and (iv) any unpaid borrowings by the Company on the policy),
whether before, during or after the term of this Agreement but in no event shall
such payment to the Company exceed the amount of the death benefit paid under
the policy. If other than the Company, the owner of the policy from time to time
shall execute, deliver and maintain a customary split dollar insurance and
collateral assignment form, assigning to the Company the proceeds of such policy
but only to the extent necessary to secure the reimbursement obligation
contained in the preceding sentence. In addition to the foregoing,

<PAGE>

15

during the Executive's employment with the Company, the Company shall (x)
provide the Executive with $50,000 of group life insurance and (y) pay to the
Executive annually an amount equal to the premium that the Executive would have
to pay to obtain life insurance under the Group Universal Life ("GUL") insurance
program made available by the Company in an amount equal to (i) twice the
Executive's Base Salary minus (ii) $50,000. The Executive shall be under no
obligation to use the payments made by the Company pursuant to the preceding
sentence to purchase GUL insurance or to purchase any other life insurance. If
the Company discontinues its GUL insurance program, the Company shall
nevertheless make the payments required by this Section 7 as if such program
were still in effect. The payments made to the Executive pursuant to this
Section 7 shall not be considered as "salary" or "compensation" or "bonus" in
determining the amount of any payment under any pension, retirement,
profit-sharing or other benefit plan of the Company or any subsidiary of the
Company.

<PAGE>

16

                  8.   Other Benefits.

                           8.1 General Availability. To the extent that (a) the
Executive is eligible under the general provisions thereof and (b) the Company
maintains such plan or program for the benefit of its senior executives, during
the term of employment and so long as the Executive is an employee of the
Company, the Executive shall be eligible to participate in any pension,
profit-sharing, stock option or similar plan or program and in any group life
insurance (to the extent set forth in Section 7), hospitalization, medical,
dental, accident, disability or similar plan or program of the Company now
existing or established hereafter. In addition, the Executive shall be entitled
during the term of employment and so long as the Executive is an employee of the
Company, to receive other benefits generally available to all senior executives
of the Company to the extent the Executive is eligible under the general
provisions thereof, including, without limitation, to the extent maintained in
effect by the Company for its senior executives, an automobile allowance and
financial services.

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

<PAGE>

17

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

                           8.2 Benefits After a Termination or Disability.
During the period the Executive remains on the payroll of the Company after a
termination pursuant to Section 4.2 and during the Disability Period, the
Executive shall continue to be eligible to participate in the benefit plans and
to receive the benefits required to be provided to the Executive under Sections
7 and 8.1 to the extent such benefits are maintained in effect by the Company
for its senior executives; provided, however, the Executive shall not be
entitled to any additional awards or grants under any stock option, restricted
stock or other stock based incentive plan. The Executive shall continue to be an
employee of the Company for purposes of any stock option and restricted shares
agreements and any other incentive plan awards during the term of employment and
until such time as the Executive shall leave the payroll of the Company. At the
time the Executive's term of employment with the Company terminates and he
leaves the payroll of the Company pursuant to the provisions of Section 4.1,
4.2, 4.3, 4.4, 5 or 6, the Executive's rights to benefits and payments under any
benefit plans, programs or practices or any insurance or other death benefit
plans or arrangements of the Company or under any stock option, restricted
stock, stock appreciation right, bonus unit, management incentive or other plan
of the Company shall be determined, subject to the other terms and provisions of
this Agreement, in accordance with the terms and provisions of such plans,
programs or practices and any agreements under which such stock options,
restricted stock or other awards were granted; provided, however, that
notwithstanding the foregoing or any more restrictive provisions of any such
plan or agreement,

<PAGE>

18

if the Executive leaves the payroll of the Company as a result of a termination
pursuant to Section 4.2 or 4.3, then (i) all stock options granted to the
Executive by the Company shall vest and become immediately exercisable at the
time the Executive shall leave the payroll of the Company pursuant to Section
4.2 or 4.3, (ii) all stock options granted to the Executive by the Company shall
remain exercisable (but not beyond the expiration of the option term) during the
remainder of the term of employment and for a period of three months thereafter
or such longer period as shall be specified in any applicable stock option
agreement and (iii) the Company shall not be permitted to determine that the
Executive's employment was terminated for "unsatisfactory performance" within
the meaning of any stock option agreement between the Company and the Executive.

                           8.3 Payments in Lieu of Other Benefits. In the event
the term of employment and the Executive's employment with the Company is
terminated pursuant to Sections 4.1, 4.2, 4.3, 4.4, 5 or 6, the Executive shall
not be entitled to notice and severance or to be paid for any accrued vacation
time or unused sabbatical, the payments provided for in such Sections being in
lieu thereof.

                           8.4 Stock Options. During the term of employment, the
Executive shall be eligible to receive grants of stock options in the discretion
of the Compensation Committee of the Company's Board of Directors. If the term
of employment is terminated pursuant to Section 4.3, then all stock options
granted to the Executive after the Effective Date shall become immediately
exercisable in full on the date of such termination and shall remain exercisable
(but not beyond the expiration of the option term) for five years after the date
of such termination.

                  9. Protection of Confidential Information; Non-Compete. The
Executive acknowledges that his employment by the Company (which, for purposes
of this Section 9 shall mean Time Warner Inc. and its affiliates) will,
throughout the term of employment, bring him into close contact with many
confidential affairs of the Company, including information about costs, profits,
markets, sales, products, key personnel, pricing policies, operational methods,
technical processes and other business affairs and methods and other information
not readily available to the public, and plans for future development. The
Executive further acknowledges that the services to be performed under this
Agreement are of a special, unique, unusual,

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19

extraordinary and intellectual character. The Executive further acknowledges
that the business of the Company is international in scope, that its products
are marketed throughout the world, that the Company competes in nearly all of
its business activities with other Entities that are or could be located in
nearly any part of the world and that the nature of the Executive's services,
position and expertise are such that he is capable of competing with the Company
from nearly any location in the world. In recognition of the foregoing, the
Executive covenants and agrees as set forth below in this Section 9.

                           9.1 Confidentiality Covenant. The Executive covenants
and agrees that (i) through the date he ceases to be an employee of the Company
and leaves the payroll of the Company for any reason, and (ii) for twelve months
after the effective date of termination of the Executive's employment and of the
other provisions of this Agreement pursuant to Section 4.1, 4.2, 4.3 or 4.4, and
(iii) with respect to Sections 9.1.1. and 9.1.2, for an additional 36 months
after the later of the dates described in clauses (i) and (ii) above:

                                    9.1.1 The Executive shall keep secret all
confidential matters of the Company and shall not intentionally disclose such
matters to anyone outside of the Company, either during or after the term of
employment, except during the term of employment, in connection with his duties
hereunder, or except with the Company's written consent, provided that (i) the
Executive shall have no such obligation to the extent such matters are or become
publicly known other than as a result of the Executive's breach of his
obligations hereunder and (ii) the Executive may, after giving prior notice to
the Company to the extent practicable under the circumstances, disclose such
matters to the extent required by applicable laws or governmental regulations or
judicial or regulatory process.

                                    9.1.2 The Executive shall deliver promptly
to the Company on termination of his employment by the Company, or at any other
time the Company may so request, at the Company's expense, all memoranda, notes,
records, reports and other documents (and all copies thereof) relating to the
Company's business, other than publicly available documents or documents
relating to the terms and conditions of the Executive's employment, which he
obtained while employed by, or otherwise serving or acting on behalf of, the
Company

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20

and which he may then possess or have under his control; provided that if the
Executive is to continue as a director, consultant or advisor to the Company
after such termination, the Executive may retain such documents as are necessary
or appropriate to the performance of his duties unless and until the Company
requests that such documents be delivered to it; and

                                    9.1.3 If the term of employment is
terminated pursuant to Section 4.1, 4.2 , 4.3 or 4.4, the Executive shall not
employ, and shall not cause any Entity of which he is an affiliate to employ,
without the prior written consent of the Company, any person who was a full-time
exempt employee of the Company at the date of such termination or within six
months prior thereto.

                           9.2 Non-Compete. The Executive covenants and agrees
that (i) through the date the Executive ceases to be an employee of the Company
and leaves the payroll of the Company for any reason, and (ii) with respect to
an Entity that is engaged in competition with the Company and that had, or the
parent Entity or predecessor Entity of which had, consolidated gross revenues
from all sources, including non-competitive businesses, of $2 billion or more
for the fiscal year preceding the Executive's commencement of service for such
Entity, through the date that is the earlier of (a) twelve months after the
effective date of any notice of termination of the Executive's employment with
the Company pursuant to Section 4.1 or 4.2 and (b) the Term Date, the Executive
shall not, directly or indirectly, without the prior written consent of the
Chief Executive Officer of the Company, render any services to any person or
Entity or acquire any interest of any type in any Entity, that shall be deemed
in competition with the Company; provided, however, that the foregoing shall not
be deemed to prohibit the Executive from (a) acquiring, solely as an investment
and through market purchases, securities of any Entity which are registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and which
are publicly traded, so long as he is not part of any control group of such
Entity and such securities, if converted, do not constitute more than one
percent (1%) of the outstanding voting power of that Entity or (b) acquiring,
solely as an investment, any securities of an Entity (other than an Entity that
has outstanding securities covered by the preceding clause (a)) so long as he
remains a passive investor in such Entity and does not become part of any
control group thereof. Notwithstanding the foregoing, if the term of employment
is terminated pursuant to Section 4.3, then the provisions of the preceding
sentence shall not apply to the Executive after the effective

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21

date of such termination. For purposes of the foregoing, a person or Entity
shall be deemed to be in competition with the Company if such person or it
engages in any line of business that is substantially the same as either (i) any
line of operating business which the Company engages in, conducts or, to the
knowledge of the Executive, has definitive plans to engage in or conduct or (ii)
any operating business that is engaged in or conducted by the Company and as to
which, to the knowledge of the Executive, the Company covenants in writing, in
connection with the disposition of such business, not to compete therewith.
Notwithstanding the preceding sentence, following the effective date of any
termination under Section 4 of this Agreement (including during the Advisory
Period contemplated by Section 4.3), only the following Entities shall be deemed
to be in competition with the Company: AT&T Corporation, Bertelsmann A.G., The
Walt Disney Company, General Electric Corporation, The News Corporation, The
Seagram Company, Ltd., Sony Corporation, Viacom Inc. and their respective
subsidiaries and affiliates and any successor to any of the media and
entertainment business thereof.

                           9.3 Specific Remedy. In addition to such other rights
and remedies as the Company may have at equity or in law with respect to any
breach of this Agreement, if the Executive commits a material breach of any of
the provisions of Section 9.1, the Company shall have the right and remedy to
have such provisions specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.

                           9.4 Liquidated Damages. If the Executive commits a
material breach of the provisions of Section 9.2, the Executive shall pay to the
Company as liquidated damages an amount equal to three times the Executive's
then current Base Salary, or if the Executive is not employed by the Company at
the time of such breach, an amount equal to three times the most recent Base
Salary paid to the Executive by the Company. The Company shall be entitled to
offset any amounts owed by the Executive to the Company under this Section 9.4
against any amounts owed by the Company to the Executive under any provision of
this Agreement or otherwise, including without limitation, amounts payable to
the Executive under Sections 4.2, 4.3 or 4.4. The Company and the Executive
agree that it is impossible to determine with any

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22

reasonable accuracy the amount of prospective damages to the Company upon a
breach of Section 9.2 by the Executive and further agree that the damages set
forth in this Section 9.4 are reasonable, and not a penalty, based upon the
facts and circumstances of the parties and with due regard to future
expectations.

                  10. Ownership of Work Product. The Executive acknowledges that
during the term of employment, he may conceive of, discover, invent or create
inventions, improvements, new contributions, literary property, material, ideas
and discoveries, whether patentable or copyrightable or not (all of the
foregoing being collectively referred to herein as "Work Product"), and that
various business opportunities shall be presented to him by reason of his
employment by the Company. The Executive acknowledges that all of the foregoing
shall be owned by and belong exclusively to the Company and that he shall have
no personal interest therein, provided that they are either related in any
manner to the business (commercial or experimental) of the Company, or are, in
the case of Work Product, conceived or made on the Company's time or with the
use of the Company's facilities or materials, or, in the case of business
opportunities, are presented to him for the possible interest or participation
of the Company. The Executive shall (i) promptly disclose any such Work Product
and business opportunities to the Company; (ii) assign to the Company, upon
request and without additional compensation, the entire rights to such Work
Product and business opportunities; (iii) sign all papers necessary to carry out
the foregoing; and (iv) give testimony in support of his inventorship or
creation in any appropriate case. The Executive agrees that he will not assert
any rights to any Work Product or business opportunity as having been made or
acquired by him prior to the date of this Agreement except for Work Product or
business opportunities, if any, disclosed to and acknowledged by the Company in
writing prior to the date hereof. Notwithstanding the foregoing, the Executive
may, provided that Section 9.2 is complied with, acquire an interest in any
business opportunity presented to the Company hereunder if the Company declines
to pursue such business opportunity and if such investment is approved by the
Chief Executive Officer of the Company in writing.

                  11. Notices. All notices, requests, consents and other
communications required or permitted to be given under this Agreement shall be
effective only if given in writing and shall be deemed to have been duly given
if delivered personally or sent by prepaid telegram, or

<PAGE>

23

mailed first-class, postage prepaid, by registered or certified mail, as follows
(or to such other or additional address as either party shall designate by
notice in writing to the other in accordance herewith):

                           11.1   If to the Company:

                                    Time Warner Inc.
                                    75 Rockefeller Plaza
                                    New York, New York  10019
                                    Attention: Chief Executive Officer

                                    (with a copy, similarly addressed
                                    but Attention:  General Counsel)

                           11.2   If to the Executive, to his residence address
set forth on the records of the Company.

                  12. General.

                           12.1 Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the substantive laws of the
State of New York applicable to agreements made and to be performed entirely in
New York.

                           12.2 Captions. The section headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

                           12.3 Entire Agreement. This Agreement, including
Annexes A, B and C, sets forth the entire agreement and understanding of the
parties relating to the subject matter of this Agreement and supersedes all
prior agreements, arrangements and understandings, written or oral, between the
parties, including without limitation, the Prior Agreement.

<PAGE>

24

                           12.4 No Other Representations. No representation,
promise or inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or be liable for any alleged
representation, promise or inducement not so set forth.

                           12.5 Assignability. This Agreement and the
Executive's rights and obligations hereunder may not be assigned by the
Executive. The Company may (but is not obligated to) assign its rights together
with its obligations hereunder (a) to AOL Time Warner Inc., or (b) in connection
with any sale, transfer or other disposition of all or substantially all of its
business and assets; and upon any such assignment, such rights and obligations
shall inure to and be binding upon AOL Time Warner Inc. and any successor to all
or substantially all of the business and assets of the Company, whether by
merger, purchase of stock or assets or otherwise, as the case may be.

                           12.6 Amendments; Waivers. This Agreement may be
amended, modified, superseded, cancelled, renewed or extended and the terms or
covenants hereof may be waived only by written instrument executed by both of
the parties hereto, or in the case of a waiver, by the party waiving compliance.
The failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect such party's right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.

                           12.7 Resolution of Disputes. Any dispute or
controversy arising with respect to this Agreement shall, at the election of
either the Company or the Executive, be submitted to JAMS/ENDISPUTE for
resolution in arbitration in accordance with the rules and procedures of
JAMS/ENDISPUTE. Either party shall make such election by delivering written
notice thereof to the other party at any time (but not later than 45 days after
such party receives notice of the commencement of any administrative or
regulatory proceeding or the filing of any lawsuit relating to any such dispute
or controversy) and thereupon any such dispute or controversy shall be resolved
only in accordance with the provisions of this Section 12.7. Any

<PAGE>

25

such proceedings shall take place in New York City before a single arbitrator
(rather than a panel of arbitrators), pursuant to any streamlined or expedited
(rather than a comprehensive) arbitration process, before a nonjudicial (rather
than a judicial) arbitrator, and in accordance with an arbitration process
which, in the judgment of such arbitrator, shall have the effect of reasonably
limiting or reducing the cost of such arbitration. The resolution of any such
dispute or controversy by the arbitrator appointed in accordance with the
procedures of JAMS/ENDISPUTE shall be final and binding. Judgment upon the award
rendered by such arbitrator may be entered in any court having jurisdiction
thereof, and the parties consent to the jurisdiction of the New York courts for
this purpose. The prevailing party shall be entitled to recover the costs of
arbitration (including reasonable attorneys fees and the fees of experts) from
the losing party. If at the time any dispute or controversy arises with respect
to this Agreement, JAMS/ENDISPUTE is not in business or is no longer providing
arbitration services, then the American Arbitration Association shall be
substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions of
this Section 12.7. If the Executive shall be the prevailing party in such
arbitration, the Company shall promptly pay, upon demand of the Executive, all
legal fees, court costs and other costs and expenses incurred by the Executive
in any legal action seeking to enforce the award in any court.

                           12.8 Beneficiaries. Whenever this Agreement provides
for any payment to the Executive's estate, such payment may be made instead to
such beneficiary or beneficiaries as the Executive may designate by written
notice to the Company. The Executive shall have the right to revoke any such
designation and to redesignate a beneficiary or beneficiaries by written notice
to the Company (and to any applicable insurance company) to such effect.

                           12.9 No Conflict. The Executive represents and
warrants to the Company that this Agreement is legal, valid and binding upon the
Executive and the execution of this Agreement and the performance of the
Executive's obligations hereunder does not and will not constitute a breach of,
or conflict with the terms or provisions of, any agreement or understanding to
which the Executive is a party (including, without limitation, any other
employment agreement). The Company represents and warrants to the Executive that
this Agreement is legal, valid and binding upon the Company and the execution of
this Agreement

<PAGE>

26

and the performance of the Company's obligations hereunder does not and will not
constitute a breach of, or conflict with the terms or provisions of, any
agreement or understanding to which the Company is a party.

                           12.10 Withholding Taxes. Payments made to the
Executive pursuant to this Agreement shall be subject to withholding and social
security taxes and other ordinary and customary payroll deductions.

                           12.11 No Offset. Except as provided in Section 9.4 of
this Agreement, neither the Company nor the Executive shall have any right to
offset any amounts owed by one party hereunder against amounts owed or claimed
to be owed to such party, whether pursuant to this Agreement or otherwise, and
the Company and the Executive shall make all the payments provided for in this
Agreement in a timely manner.

                           12.12 Severability. If any provision of this
Agreement shall be held invalid, the remainder of this Agreement shall not be
affected thereby; provided, however, that the parties shall negotiate in good
faith with respect to equitable modification of the provision or application
thereof held to be invalid. To the extent that it may effectively do so under
applicable law, each party hereby waives any provision of law which renders any
provision of this Agreement invalid, illegal or unenforceable in any respect.

                           12.13 Definitions. The following terms are defined in
this Agreement in the places indicated:

                  Account Retained Income - Section A.6 of Annex A
                  affiliate - Section 4.2.2
                  Applicable Tax Law - Section A.5 of Annex A
                  Base Salary - Section 3.1
                  cause - Section 4.1
                  Code - Section 3.2
                  Company - the first paragraph on page 1 and Section 9.1
                  deferred compensation - Section 3.3
                  Disability Date - Section 5

<PAGE>

27

                  Disability Period - Section 5
                  Effective Date - the first paragraph on page 1
                  eligible securities - Section A.1 of Annex A
                  Entity - Section 2
                  Excess Amount - Section 8.1
                  Executive - the first paragraph in page 1
                  fair market value - Section A.1 of Annex A
                  Investment Advisor - Section A.1 of Annex A
                  Pay-Out Period - Section A.6 of Annex A
                  Pension Plan - Section 8.1
                  Prior Account - Section 3.5
                  Prior Agreement - the second paragraph on page 1
                  Rabbi Trust - Section 3.3
                  Retirement Date - Section 4.7
                  senior executives - Section 3.1
                  Term Date - the second paragraph on page 1
                  term of employment - Section 1
                  Trust Account - Section 3.3
                  Trust Agreement - Section 3.3
                  Trustee - Section 3.3
                  Valuation Date - Section A.6 of Annex A
                  Work Product - Section 10

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

                                       TIME WARNER INC.

                                       By ___________________________
                                                 Gerald M. Levin
                                                 Chairman and Chief
                                                 Executive Officer

<PAGE>

28

                                          ___________________________
                                          Richard D. Parsons

<PAGE>

1

                                                                            A-1

                                                                         ANNEX A

                          Deferred Compensation Account

                  A.1 Investments. Funds credited to the Trust Account shall be
actually invested and reinvested in an account in securities selected from time
to time by an investment advisor designated from time to time by the Company
(the "Investment Advisor"), substantially all of which securities shall be
"eligible securities". The designation from time to time by the Company of an
Investment Advisor shall be subject to the approval of the Executive, which
approval shall not be withheld unreasonably. "Eligible securities" are common
and preferred stocks, warrants to purchase common or preferred stocks, put and
call options, and corporate or governmental bonds, notes and debentures, either
listed on a national securities exchange or for which price quotations are
published in newspapers of general circulation, including The Wall Street
Journal, and certificates of deposit. Eligible securities shall not include the
common or preferred stock, any warrants, options or rights to purchase common or
preferred stock or the notes or debentures of the Company or any corporation or
other entity of which the Company owns directly or indirectly 5% or more of any
class of outstanding equity securities. The Investment Advisor shall have the
right, from time to time, to designate eligible securities which shall be
actually purchased and sold for the Trust Account on the date of reference. Such
purchases may be made on margin; provided that the Company may, from time to
time, by written notice to the Executive, the Trustee and the Investment
Advisor, limit or prohibit margin purchases in any manner it deems prudent and,
upon three business days written notice to the Executive, the Trustee and the
Investment Advisor, cause all eligible securities theretofore purchased on
margin to be sold. The Investment Advisor shall send notification to the
Executive and the Trustee in writing of each transaction within five business
days thereafter and shall render to the Executive and the Trustee written
quarterly reports as to the current status of his or her Trust Account. In the
case of any purchase, the Trust Account shall be charged with a dollar amount
equal to the quantity and kind of securities purchased multiplied by the fair
market value of such securities on the date of reference and shall be credited
with the quantity and kind of securities so purchased. In the case of any sale,
the Trust Account shall be charged with the

<PAGE>

2                                                                            A-2

quantity and kind of securities sold, and shall be credited with a dollar amount
equal to the quantity and kind of securities sold multiplied by the fair market
value of such securities on the date of reference. Such charges and credits to
the Trust Account shall take place immediately upon the consummation of the
transactions to which they relate. As used herein "fair market value" means
either (i) if the security is actually purchased or sold by the Rabbi Trust on
the date of reference, the actual purchase or sale price per security to the
Rabbi Trust or (ii) if the security is not purchased or sold on the date of
reference, in the case of a listed security, the closing price per security on
the date of reference, or if there were no sales on such date, then the closing
price per security on the nearest preceding day on which there were such sales,
and, in the case of an unlisted security, the mean between the bid and asked
prices per security on the date of reference, or if no such prices are available
for such date, then the mean between the bid and asked prices per security on
the nearest preceding day for which such prices are available. If no bid or
asked price information is available with respect to a particular security, the
price quoted to the Trustee as the value of such security on the date of
reference (or the nearest preceding date for which such information is
available) shall be used for purposes of administering the Trust Account,
including determining the fair market value of such security. The Trust Account
shall be charged currently with all interest paid by the Trust Account with
respect to any credit extended to the Trust Account. Such interest shall be
charged to the Trust Account, for margin purchases actually made, at the rates
and times actually paid by the Trust Account. The Company may, in the Company's
sole discretion, from time to time serve as the lender with respect to any
margin transactions by notice to the then Investment Advisor and the Trustee and
in such case interest shall be charged at the rate and times then charged by an
investment banking firm designated by the Company with which the Company does
significant business. Brokerage fees shall be charged to the Trust Account at
the rates and times actually paid.

                  A.2 Dividends and Interest. The Trust Account shall be
credited with dollar amounts equal to cash dividends paid from time to time upon
the stocks held therein. Dividends shall be credited as of the payment date. The
Trust Account shall similarly be credited with interest payable on interest
bearing securities held therein. Interest shall be credited as of the payment
date, except that in the case of purchases of interest-bearing securities the
Trust Account shall be charged with the dollar amount of interest accrued to the

<PAGE>

3                                                                            A-3

date of purchase, and in the case of sales of such interest-bearing securities
the Trust Account shall be credited with the dollar amount of interest accrued
to the date of sale. All dollar amounts of dividends or interest credited to the
Trust Account pursuant to this Section A.2 shall be charged with all taxes
thereon deemed payable by the Company (as and when determined pursuant to
Section A.5). The Investment Advisor shall have the same right with respect to
the investment and reinvestment of net dividends and net interest as he has with
respect to the balance of the Trust Account.

                  A.3 Adjustments. The Trust Account shall be equitably adjusted
to reflect stock dividends, stock splits, recapitalizations, mergers,
consolidations, reorganizations and other changes affecting the securities held
therein.

                  A.4 Obligation of the Company. Without in any way limiting the
obligations of the Company otherwise set forth in the Agreement or this Annex A,
the Company shall have the obligation to establish, maintain and enforce the
Rabbi Trust and to make payments to the Trustee for credit to the Trust Account
in accordance with the provisions of Section 3.3 of the Agreement, to use due
care in selecting the Trustee or any successor trustee and to in all respects
work cooperatively with the Trustee to fulfill the obligations of the Company
and the Trustee to the Executive. The Trust Account shall be charged with all
taxes (including stock transfer taxes), interest, brokerage fees and investment
advisory fees, if any, payable by the Company and attributable to the purchase
or disposition of securities designated by the Investment Advisor (in all cases
net after any tax benefits that the Company would be deemed to derive from the
payment thereof, as and when determined pursuant to Section A.5) and only in the
event of a default by the Company of its obligation to pay such fees and
expenses, the fees and expenses of the Trustee in accordance with the terms of
the Trust Agreement, but no other costs of the Company. Subject to the terms of
the Trust Agreement, the securities purchased for the Trust Account as
designated by the Investment Advisor shall remain the sole property of the
Company, subject to the claims of its general creditors, as provided in the
Trust Agreement. Neither the Executive nor his legal representative nor any
beneficiary designated by the Executive shall have any right, other

<PAGE>

4                                                                            A-4

than the right of an unsecured general creditor, against the Company or the
Trust in respect of any portion of the Trust Account.

                  A.5 Taxes. The Trust Account shall be charged with all
federal, state and local taxes deemed payable by the Company with respect to
income recognized upon the dividends and interest received by the Trust Account
pursuant to Section A.2 and gains recognized upon sales of any of the securities
which are sold pursuant to Section A.1, A.6 or A.7. The Trust Account shall be
credited with the amount of the tax benefit received by the Company as a result
of any payment of interest actually made pursuant to Section A.1 or A.2 and as a
result of any payment of brokerage fees and investment advisory fees made
pursuant to Section A.1. If any of the sales of the securities which are sold
pursuant to Section A.1, A.6 or A.7 results in a loss to the Trust Account, such
net loss shall be deemed to offset the income and gains referred to in the
second preceding sentence (and thus reduce the charge for taxes referred to
therein) to the extent then permitted under the Internal Revenue Code of 1986,
as amended from time to time, and under applicable state and local income and
franchise tax laws (collectively referred to as "Applicable Tax Law"); provided,
however, that for the purposes of this Section A.5 the Trust Account shall,
except as provided in the third following sentence, be deemed to be a separate
corporate taxpayer and the losses referred to above shall be deemed to offset
only the income and gains referred to in the second preceding sentence. Such
losses shall be carried back and carried forward within the Trust Account to the
extent permitted by Applicable Tax Law in order to minimize the taxes deemed
payable on such income and gains within the Trust Account. For the purposes of
this Section A.5, all charges and credits to the Trust Account for taxes shall
be deemed to be made as of the end of the Company's taxable year during which
the transactions, from which the liabilities for such taxes are deemed to have
arisen, are deemed to have occurred. Notwithstanding the foregoing, if and to
the extent that in any year there is a net loss in the Trust Account that cannot
be offset against income and gains in any prior year, then an amount equal to
the tax benefit to the Company of such net loss (after such net loss is reduced
by the amount of any net capital loss of the Trust Account for such year) shall
be credited to the Trust Account on the last day of such year. If and to the
extent that any such net loss of the Trust Account shall be utilized to
determine a credit to the Trust Account pursuant to the preceding sentence, it
shall not thereafter be carried forward under this Section A.5. For purposes of
determining

<PAGE>

5                                                                            A-5

taxes payable by the Company under any provision of this Annex A it shall be
assumed that the Company is a taxpayer and pays all taxes at the maximum
marginal rate of federal income taxes and state and local income and franchise
taxes (net of assumed federal income tax benefits) applicable to business
corporations and that all of such dividends, interest, gains and losses are
allocable to its corporate headquarters, which are currently located in New York
City.

                  A.6 One-Time Transfer to Deferred Plan. So long as the
Executive is an employee of the Company, the Executive shall have the right to
elect at any time, but only once during the Executive's lifetime, by written
notice to the Company to transfer to the Deferred Plan all or a portion of the
Net Transferable Balance (determined as provided in the next sentence) of the
Trust Account. If the Executive shall make such an election, the Net
Transferable Balance shall be determined as of the end of the calendar quarter
following the date of such election (unless such election is made during the ten
calendar days following the end of a calendar quarter, in which case such
determination shall be made as of the end of such preceding calendar quarter) by
adjusting all of the securities held in the Trust Account to their fair market
value (net of the tax adjustment that would be made thereon if sold, as
estimated by the Company or the Trustee) and by deducting from such value the
amount of all outstanding indebtedness and any other amounts payable by the
Trust Account. Transfers to the Deferred Plan shall be made in cash as promptly
as reasonably practicable after the end of such calendar quarter and the
Investment Advisor (or the Company or the Trustee if the Investment Advisor
shall fail to act in a timely manner) shall cause securities held in the Trust
Account to be sold to provide cash equal to the portion of the Net Transferable
Balance of the Trust Account selected to be transferred by the Executive. If the
Executive elects to transfer more than 75% of the Net Transferable Balance of
the Trust Account to the Deferred Plan, the Company or the Trustee shall be
permitted to take such action as they may deem reasonably appropriate, including
but not limited to, retaining a portion of such Net Transferable Balance in the
Trust Account, to ensure that the Trust Account will have sufficient assets to
pay the Company the amount of taxes payable on such sales of securities at the
end of the year in which such sales are made.

<PAGE>

6                                                                            A-6

                  A.7 Payments. Payments of deferred compensation shall be made
as provided in this Section A.7. Unless the Executive makes the election
referred to in the next succeeding sentence, deferred compensation shall be paid
bi-weekly for a period of ten years (the "Pay-Out Period") commencing on the
first Company payroll date in the month following the later of (i) the Term Date
and (ii) the date the Executive ceases to be an employee of the Company and
leaves the payroll of the Company for any reason, provided, however, that if the
Executive was named in the compensation table in the Company's then most recent
proxy statement, such payments shall commence on the first Company payroll date
in January of the year following the year in which the latest of such events
occurs. The Executive may elect a shorter Pay-Out Period by delivering written
notice to the Company or the Trustee at least one-year prior to the commencement
of the Pay-Out Period, which notice shall specify the shorter Pay-Out Period. On
each payment date, the Trust Account shall be charged with the dollar amount of
such payment. On each payment date, the amount of cash held in the Trust Account
shall be not less than the payment then due and the Company or the Trustee may
select the securities to be sold to provide such cash if the Investment Advisor
shall fail to do so on a timely basis. The amount of any taxes payable with
respect to any such sales shall be computed, as provided in Section A.5 above,
and deducted from the Trust Account, as of the end of the taxable year of the
Company during which such sales are deemed to have occurred. Solely for the
purpose of determining the amount of payments during the Pay-Out Period, the
Trust Account shall be valued on the fifth trading day prior to the end of the
month preceding the first payment of each year of the Pay-Out Period, or more
frequently at the Company's or the Trustee's election (the "Valuation Date"), by
adjusting all of the securities held in the Trust Account to their fair market
value (net of the tax adjustment that would be made thereon if sold, as
estimated by the Company or the Trustee) and by deducting from the Trust Account
the amount of all outstanding indebtedness. The extent, if any, by which the
Trust Account, valued as provided in the immediately preceding sentence, plus
any amounts that have been transferred to the Deferred Plan pursuant to Section
A.6 hereof and not theretofore distributed or deemed distributed therefrom,
exceeds the aggregate amount of credits to the Trust Account pursuant to
Sections 3.3, 3.4 and 3.5 of the Agreement as of each Valuation Date and not
theretofore distributed or deemed distributed pursuant to this Section A.6 is
herein called "Account Retained Income". The amount of each payment for the
year, or such shorter period as may be determined by the Company or the Trustee,
of the Pay-Out Period immediately succeeding such Valuation Date, including the
payment then due, shall be

<PAGE>

7                                                                            A-7

determined by dividing the aggregate value of the Trust Account, as valued and
adjusted pursuant to the second preceding sentence, by the number of payments
remaining to be paid in the Pay-Out Period, including the payment then due;
provided that each payment made shall be deemed made first out of Account
Retained Income (to the extent remaining after all prior distributions thereof
since the last Valuation Date). The balance of the Trust Account, after all the
securities held therein have been sold and all indebtedness liquidated, shall be
paid to the Executive in the final payment, which shall be decreased by
deducting therefrom the amount of all taxes attributable to the sale of any
securities held in the Trust Account since the end of the preceding taxable year
of the Company, which taxes shall be computed as of the date of such payment.

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

                  If the Executive becomes disabled within the meaning of
Section 5 of the Agreement and is not thereafter returned to full-time
employment with the Company as provided in said Section 5, then deferred
compensation shall be paid bi-weekly during the Pay-Out Period commencing on the
first Company payroll date in the month following the end of the Disability
Period in accordance with the provisions of the first paragraph of this Section
A.7.

                  If the Executive shall die at any time whether during or after
the term of employment, the Trust Account shall be valued as of the date of the
Executive's death and the

<PAGE>

8                                                                            A-7

balance of the Trust Account shall be paid to the Executive's estate or
beneficiary within 75 days of such death in accordance with the provisions of
the second preceding paragraph.

                  Notwithstanding the foregoing provisions of this Section A.7,
if the Rabbi Trust shall terminate in accordance with the provisions of the
Trust Agreement, the Trust Account shall be valued as of the date of such
termination and the balance of the Trust Account shall be paid to the Executive
within 15 days of such termination in accordance with the provisions of the
third preceding paragraph.

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

                  Within 90 days after the end of each taxable year of the
Company in which payments are made, directly or indirectly, to the Executive
from the Trust Account or from the Deferred Plan with respect to amounts
transferred to the Deferred Plan from the Trust Account pursuant to Section A.6
and at the time of the final payment from the Trust Account, the Company or the
Trustee shall compute and the Company shall pay to the Trustee for credit to the
Trust Account, the amount of the tax benefit assumed to be received by the
Company from the payment to the Executive of amounts of Account Retained Income
during such taxable year or since the end of the last taxable year, as the case
may be. No additional credits shall be made to the Trust Account pursuant to the
preceding sentence in respect of the amounts credited to the Trust Account
pursuant to the preceding sentence. Notwithstanding any provision of this
Section A.7, the Executive shall not be entitled to receive pursuant to this
Annex A (including any amounts that have been transferred to the Deferred Plan
pursuant to Section A.6 hereof) an aggregate amount that shall exceed the sum of
(i) all credits made to the Trust Account pursuant to Sections 3.3, 3.4 and 3.5
of the Agreement, (ii) the net cumulative amount (positive or negative) of all
income, gains, losses, interest and expenses charged or credited to the Trust
Account pursuant to this Annex A (excluding credits made pursuant to the second
preceding sentence), after all credits and charges to the Trust Account with
respect to the tax benefits or burdens thereof, and (iii) an amount equal to the
tax benefit to the Company from the payment of the amount (if positive)
determined under clause (ii)

<PAGE>

9                                                                            A-7

above; and the final payment(s) otherwise due may be adjusted or eliminated
accordingly. In determining the tax benefit to the Company under clause (iii)
above, the Company shall be deemed to have made the payments under clause (ii)
above with respect to the same taxable years and in the same proportions as
payments of Account Retained Income were actually made from the Trust Account.
Except as otherwise provided in this paragraph, the computation of all taxes and
tax benefits referred to in this Section A.7 shall be determined in accordance
with Section A.5 above.

<PAGE>

1                                                                        ANNEX B

                                     RELEASE

                  Pursuant to the terms of the Employment Agreement made as of
_____________, between TIME WARNER INC., a Delaware corporation (the "Company"),
75 Rockefeller Plaza, New York, New York 10019 and the undersigned (the
"Agreement"), and in consideration of the payments made to me and other benefits
to be received by me pursuant thereto, I, [Name], being of lawful age, do hereby
release and forever discharge the Company and its officers, shareholders,
subsidiaries, agents, and employees, from any and all actions, causes of action,
claims, or demands for general, special or punitive damages, attorney's fees,
expenses, or other compensation, which in any way relate to or arise out of my
employment with the Company or any of its subsidiaries or the termination of
such employment, which I may now or hereafter have under any federal, state or
local law, regulation or order, including without limitation, under the Age
Discrimination in Employment Act, as amended, through and including the date of
this Release; provided, however, that the execution of this Release shall not
prevent the undersigned from bringing a lawsuit against the Company to enforce
its obligations under the Agreement.

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

                  I further state that I have read this document and the
Agreement referred to herein, that I know the contents of both and that I have
executed the same as my own free act.

                  WITNESS my hand this ____ day of ___________ , ____.

<PAGE>

2

                                            ---------------------------
                                                              [Name]

<PAGE>

3

                                                                         ANNEX C

                                     RELEASE

                  In connection with the Employment Agreement made as of
_________, between TIME WARNER INC., (the "Company"), and [TK] (the
"Agreement"), the Company does hereby release and forever discharge [TK] and his
estate, heirs, beneficiaries and representatives, from any and all actions,
causes of action, claims, or demands for general, special or punitive damages,
attorney's fees, expenses, or other compensation, which in any way relate to or
arise out of his employment with the Company or any of its affiliates or the
termination of such employment, which the Company may now or hereafter have
under any federal, state or local law, regulation or order, through and
including the date of this Release; provided, however, that the execution of
this Release shall not prevent the Company from bringing a lawsuit against [TK]
(x) to enforce his obligations under [Section 9] of the Agreement or (y) to seek
damages or reimbursement for fraud or embezzlement committed by him during his
employment with the Company.

                  IN WITNESS WHEREOF the Company has caused this Release to be
executed on its behalf by a duly authorized officer this day of , 199 .

                                       TIME WARNER INC.

                                       ---------------------------

April 2001

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