As Amended Through
January 18, 2001

TIME WARNER INC.
1988 Restricted Stock Plan For

Non-Employee Directors

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

2. CERTAIN DEFINITIONS.

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

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

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

(d) "Common Stock" shall mean the Common Stock, par value$1 per share, of the Company.

(e) "Company" shall mean Time Warner Inc., a Delaware corporation.

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

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

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

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

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

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

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

The Restricted Shares may be, in whole or in part, authorized but unis sued shares of Common Stock or shares of Common Stock previously issued and outstanding and reacquired by the Company.

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