EMPLOYMENT AGREEMENT

 

     This Employment Agreement ("Agreement") is made as of December 28, 2005

(the "Effective Date") by and between Liberty Media Corporation, a Delaware

corporation (the "Company"), and Robert R. Bennett (the "Executive").

 

                                    RECITALS

 

     The Executive currently is an officer, director and employee of the

Company. On August 2, 2005, the Executive resigned his position as Chief

Executive Officer of the Company and anticipates that he will resign his

position as President of the Company within the next several months. The board

of directors of the Company (the "Board") has determined that it is in the best

interests of the Company to continue the Executive's employment with the

Company, and the Executive desires to continue as an employee of the Company.

The Company and the Executive desire to memorialize the terms of the Executive's

employment with the Company.

 

                                    AGREEMENT

 

     In consideration of the mutual covenants set forth in this Agreement and

other good and valuable consideration, the receipt and sufficiency of which are

acknowledged, the parties, intending to be legally bound, agree as follows:

 

     1.   TERM. The Company will employ the Executive, and the Executive will

serve the Company, on the terms and conditions set forth in this Agreement, for

the period beginning on the Effective Date and ending on the earlier of August

31, 2014 or the date on which the Executive's employment with the Company is

terminated in accordance with Section 4 below (the "Term"). The Term will

consist of the following: (i) the Current Employment Period, which will begin on

the Effective Date and conclude on the earlier of March 31, 2006 or the

expiration of the Term, (ii) if the Term does not expire on or prior to April 1,

2006, the Second Employment Period, which will begin on April 1, 2006 and

conclude on the earlier of March 31, 2008 or the expiration of the Term, and

(iii) if the Term does not expire on or prior to April 1, 2008, the Third

Employment Period, which will begin on April 1, 2008 and conclude on the earlier

of August 31, 2014 or the expiration of the Term (each, an "Employment Period").

 

     2.   POSITION AND DUTIES.

 

          (a)  DESCRIPTION. The Executive will continue to serve as President of

the Company until the earlier of (i) his resignation from such office or (ii)

his removal from such office and/or the appointment of a successor by the Board

in accordance with the bylaws of the Company, in any case on or before the end

of the Current Employment Period. During the Second Employment Period and the

Third Employment Period, the Executive will provide assistance with special

projects as reasonably determined by the Company, taking into account, among

other things, the expertise of Executive. All such projects shall be consistent

with the duties of the Executive's past positions and responsibilities with the

Company.

 

<Page>

 

          (b)  LOCATION. The Executive's services will be performed primarily at

the principal office of the Company (or otherwise within 35 miles of such

office), subject to any travel requirements necessary to perform his duties

hereunder; provided that Executive may, if reasonably possible, perform services

on a telecommuting basis.

 

          (c)  REPORTING. During the Term, the Executive shall report to the

Chairman of the Board or such other individual as the Board designates by notice

to the Executive.

 

          (d)  OTHER ACTIVITIES. It will not be considered a violation of this

Agreement for the Executive to (i) serve on corporate, civic or charitable

boards or committees, (ii) deliver lectures, fulfill speaking engagements or

teach at educational institutions, (iii) manage personal investments and (iv)

engage in employment with one or more other entities, so long as such activities

do not significantly interfere with the performance of the Executive's

responsibilities as an employee of the Company in accordance with this

Agreement.

 

     3.   COMPENSATION; BENEFITS; TIME DEVOTED TO EMPLOYMENT.

 

          (a)  CURRENT EMPLOYMENT PERIOD. During the Current Employment Period,

the Executive will devote reasonable attention and time during normal business

hours to the business and affairs of the Company as necessary to carry out the

responsibilities of Executive's current position with the Company. Through the

conclusion of the Current Employment Period, the Executive will continue to

receive an annual base salary of $1,000,000, payable pursuant to the Company's

normal payroll practices. The Executive will also be entitled to receive a

performance bonus in the amount of $750,000 (the "Performance Bonus").

 

          (b)  SECOND EMPLOYMENT PERIOD. During the Second Employment Period,

upon request by the Company, the Executive shall devote up to 450 hours per

annum during normal business hours to the performance of services reasonably

requested by the Company as described in Section 2(a) above. During the Second

Employment Period, the Executive will be entitled to receive an annual base

salary of $500,000, payable pursuant to the Company's normal payroll practices.

 

          (c)  THIRD EMPLOYMENT PERIOD. During the Third Employment Period, if

requested by the Company, the Executive shall devote to the performance of

services described in Section 2(a) above during normal business hours such

number of hours as the Executive and the Company shall agree. During the Third

Employment Period, the Executive will be entitled to receive (i) an annual base

salary of $3,000, payable pursuant to the Company's normal payroll practices,

and (ii) an additional amount of cash compensation based upon an hourly rate to

be agreed between the Company and the Executive, payable pursuant to the

Company's normal payroll practices.

 

          (d)  BENEFITS. During the Term, the Executive will be entitled to

continue participating in savings and welfare benefit plans, practices, policies

and programs ("plans") as the Company may make available generally to senior

executives of the Company to the extent such participation is permitted under

the terms of such plans, subject to the terms and conditions of such plans and

subject to the continued maintenance of such plans by the Company.

 

                                       2

<Page>

 

          (e)  EXPENSES. During the Term, the Executive will be entitled to

receive prompt reimbursement for all reasonable business expenses incurred by

the Executive in accordance with the Company's policies, practices and

procedures in performing services pursuant to this Agreement.

 

          (f)  VACATION, PERSONAL AND SICK LEAVE. The Executive acknowledges and

agrees that (i) prior to the commencement of the Second Employment Period, the

Executive will have taken all vacation, personal and sick leave to which the

Executive will have become entitled as of March 31, 2006, (ii) the Executive

will not accrue vacation, personal or sick leave during any portion of the Term

following commencement of the Second Employment Period, and (iii) the Executive

will not be entitled to any payment for accrued but unused vacation, personal or

sick leave at any time, including upon termination of the Executive's employment

with the Company.

 

          (g)  OFFICE SUPPORT; USE OF CORPORATE APARTMENT. From the Effective

Date through the conclusion of the Second Employment Period, (i) the Company

will provide office space and administrative support to the Executive at the

principal office of the Company for the performance of the Executive's duties

hereunder, and (ii) the Executive shall have access to the Company's apartment

in New York City in accordance with the policies and practices of the Company

with respect to use of such apartment by its senior executives.

 

          (h)  DEFERRED COMPENSATION ARRANGEMENTS. The Company and the Executive

acknowledge that, as of the Effective Date, the Executive is entitled to the

benefits described in each of the deferred compensation agreements identified in

Exhibit A (the "Deferred Compensation Agreements"). The Executive acknowledges

that, except for deferred compensation governed by the Deferred Compensation

Agreements, Executive will not be entitled to receive any form or amount of

deferred compensation on account of his past or future employment with the

Company.

 

          (i)  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. The Company and the

Executive acknowledge that, as of the Effective Date, the Executive holds the

options and stock appreciation rights described in Exhibit B (the "Existing

Awards") pursuant to the agreements identified in Exhibit B (the "Existing Award

Agreements"). The Company further acknowledges and agrees that, notwithstanding

any provision to the contrary in any Existing Award Agreement, all of the

Existing Awards shall be fully exercisable as of the Effective Date. In all

other respects, each Existing Award shall remain subject to the terms and

conditions of the applicable Existing Award Agreement. For so long as the

Executive is employed by the Company pursuant to this Agreement, he shall be

considered by the Company to be employed for all purposes relating to the

Existing Awards. In consideration of the benefits provided to the Executive

under this Section 3(i), and notwithstanding any provision of this Agreement or

any communication, documentation or other evidence to the contrary, the

Executive acknowledges and agrees that he will not be entitled to receive any

additional stock options, stock appreciation rights, restricted stock, stock

units or other equity-based award (collectively, "Awards") during the Term,

regardless of whether the Company grants any such Award to any other officer,

director or employee of the Company during the Term.

 

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<Page>

 

          (j)  USE OF COMPANY AIRCRAFT. The Company and the Executive agree

that, during the period beginning on August 2, 2005, and ending on April 30,

2006, the Executive shall be entitled to 60 hours of personal flight time on

aircraft in which the Company has an ownership or leasehold interest ("Company

Aircraft"), subject, in the case of any particular aircraft, to the availability

of such aircraft during such period. The fair market value of such personal

flight time will be calculated based on the Standard Industry Fair Level (or

SIFL) formula pursuant to 26 C.F.R. ss. 1.61-21(g) or any successor provision

for purposes of determining the amount of compensation to the Executive

represented by such personal flight time. This provision shall supersede any

agreement(s), oral or written, between the Company regarding the Executive's

personal use of Company Aircraft.

 

          (k)  INDEMNIFICATION. The Company and Executive acknowledge and agree

that they are parties to an Indemnification Agreement dated August 10, 2001 (the

"Indemnification Agreement") pursuant to which the Company has agreed to

indemnify the Executive with respect to Claims relating to Indemnifiable Events

(as such terms are defined in the Indemnification Agreement). The Company and

the Executive further acknowledge and agree that the Indemnification Agreement

shall remain in full force and effect according to its terms, notwithstanding

that Executive has resigned his position as Chief Executive Officer of the

Company and will cease to hold the office of President of the Company on or

before March 31, 2006.

 

     4.   TERMINATION OF EMPLOYMENT.

 

          (a)  DEATH OR DISABILITY. The Executive's employment will terminate

automatically upon the Executive's death during the Term. The Company will be

entitled to terminate the Executive's employment because of the Executive's

Disability during the Employment Period. "Disability" means that the Executive

is unable to engage in any substantial gainful activity by reason of any

medically determinable physical or mental impairment which can be expected to

result in death or can be expected to last for a continuous period of not less

than 12 months, as certified by a physician selected by the Company or its

insurers and reasonably acceptable to the Executive or the Executive's legal

representative. A termination of the Executive's employment by the Company for

Disability will be communicated to the Executive or the Executive's legal

representative by written notice, and will be effective on the 10th day after

receipt of such notice by the Executive or the Executive's legal representative

(the "Disability Effective Date").

 

          (b)  BY THE COMPANY. The Company may terminate the Executive's

employment during the Employment Period for Cause. "Cause" will mean illegal

conduct or gross misconduct by the Executive, in either case that is willful and

results in material and demonstrable damage to the business or reputation of the

Company or any of its affiliates. A termination of employment by the Company for

Cause will be effectuated by giving the Executive written notice ("Notice of

Termination for Cause") of the termination, setting forth in reasonable detail

the specific conduct of the Executive that constitutes Cause. A termination of

employment by the Company for Cause will be effective (unless disputed by the

Executive) on the fifth business day following the date when the Notice of

Termination for Cause is received by the Executive, unless the notice sets forth

a later date (which date set forth in the notice will in no event be later than

30 days after the notice is received by the Executive).

 

                                       4

<Page>

 

          (c)  BY THE EXECUTIVE. The Executive may terminate his employment with

the Company at any time for any reason.

 

          (d)  DATE OF TERMINATION. The "Date of Termination" means the date of

the Executive's death, the Disability Effective Date, the date on which the

termination of the Executive's employment by the Company or by the Executive is

effective, or August 31, 2014, as the case may be.

 

     5.   OBLIGATIONS OF THE COMPANY UPON TERMINATION. Following the Executive's

Date of Termination, the Company will have the obligations to the Executive set

forth in this Section 5, and will have no further obligations under this

Agreement, other than, if applicable, any obligations to reimburse expenses due

to the Executive under Section 3(e) and as otherwise expressly set forth herein.

 

          (a)  DEATH OR DISABILITY. If the Executive's employment is terminated

because of death or the Company terminates the Executive's employment on account

of Disability, the Company will pay the Executive or his legal representative,

within 10 days following the Date of Termination: (i) if such termination occurs

during the First Employment Period or the Second Employment Period, the portion

of the Executive's annual base salary for the period from the most recent

preceding payroll date through the end of the Second Employment Period, less all

applicable federal, state and local withholdings, or (ii) if such termination

occurs during the Third Employment Period, the portion of the Executive's annual

base salary for the period from the most recent preceding payroll date through

the end of the Term, less all applicable federal, state and local withholdings.

The payments and benefits provided pursuant to this Section 5(a) are intended as

liquidated damages for a termination of the Executive's employment with the

Company as a result of death or Disability, and will be the sole and exclusive

remedy therefor.

 

          (b)  CAUSE; VOLUNTARY TERMINATION BY EXECUTIVE. If, during the Term,

the Executive's employment is terminated by the Company for Cause or the

Executive voluntarily terminates employment with the Company, the Company will

pay the Executive, within 10 days following the Date of Termination, the portion

of the Executive's annual base salary for the period from the most recent

preceding payroll date through the Date of Termination, less all applicable

federal, state and local withholdings.

 

     6.   FULL SETTLEMENT. The Company's obligation to make the payments

provided for in, and otherwise to perform its obligations under, this Agreement

will not be affected by any set-off, counterclaim, recoupment, defense or other

claim, right or action that the Company may have against the Executive or

others. In no event will the Executive be obligated to seek other employment or

take any other action by way of mitigation of the amounts payable to the

Executive under any of the provisions of this Agreement, and such amounts will

not be reduced, regardless of whether the Executive obtains other employment.

 

     7.   CONFIDENTIAL INFORMATION. The Executive will hold in a fiduciary

capacity for the benefit of the Company all secret or confidential information,

knowledge or data relating to the Company and its respective businesses that the

Executive has obtained or obtains during the Executive's employment by the

Company (before and after the Effective Date) and that is not public knowledge

(other than as a result of the Executive's violation of this Section 7)

 

                                       5

<Page>

 

("Confidential Information"). The Executive will not communicate, divulge or

disseminate Confidential Information at any time during or after the Executive's

employment with the Company, except with the prior written consent of the

Company or as otherwise required by law or legal process. Notwithstanding

anything herein to the contrary, the Executive may disclose the terms of this

Agreement to (a) attorneys or accountants for Executive for the rendition of

legal or tax advice (in which case Executive will be responsible for his

attorney's or accountant's compliance with the restrictions stated in this

Section 7), (b) Executive's spouse (in which case Executive will be responsible

for his spouse's compliance with the restrictions stated in this Section 7), or

(c) as required by law.

 

     8.   DISPUTE RESOLUTION. At the option of the Executive or the Company, any

dispute, controversy, or question arising under, out of or relating to this

Agreement or the breach thereof, other than that for injunctive relief to this

Agreement or the breach thereof, will be referred for decision by arbitration in

the Denver metropolitan area of the State of Colorado by a neutral arbitrator

selected by the parties hereto. The proceeding will be governed by the Rules of

the American Arbitration Association then in effect or such rules last in effect

(in the event such Association is no longer in existence). If the parties are

unable to agree upon such a neutral arbitrator within 30 days after either party

has given the other written notice of the desire to submit the dispute,

controversy or question for decision as aforesaid, then either party may apply

to the American Arbitration Association for an appointment of a neutral

arbitrator, or if such Association is not then in existence or does not act in

the matter within 30 days of application, either party may apply to the

Presiding Judge of the District Court of any county in Colorado for an

appointment of a neutral arbitrator to hear the parties and settle the dispute,

controversy or question, and such Judge is hereby authorized to make such

appointment. In the event that either party exercises the right to submit a

dispute arising hereunder to arbitration, the decision of the neutral arbitrator

will be final, conclusive and binding on all interested persons and no action at

law or equity will be instituted or, if instituted, further prosecuted by either

party other than to enforce the award of the neutral arbitrator. The award of

the neutral arbitrator may be entered in any court that has jurisdiction. In the

event that the Executive is successful in pursuing any claim(s) or dispute(s)

arising out of this Agreement, the Company will pay the Executive's attorneys'

fees and costs and expenses of any Arbitrator in connection with such claims or

disputes. In any other case, the Executive and the Company will each bear all

their own costs and attorneys' fees, except the Company will in all events pay

the costs of any arbitrator appointed hereunder.

 

     9.   ASSIGNMENT; ENFORCEABILITY.

 

          (a)  This Agreement is personal to the Executive and, without the

prior written consent of the Company, will not be assignable by the Executive

otherwise than by will or the laws of descent and distribution. This Agreement

will inure to the benefit of and be enforceable by the Executive's legal

representatives.

 

          (b)  This Agreement will inure to the benefit of and be enforeceable

by the Company and its successors and assigns.

 

     10.  MISCELLANEOUS.

 

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<Page>

 

          (a)  This Agreement will be governed by, and construed in accordance

with, the laws of the State of Colorado, without reference to principles of

conflict of laws. The captions of this Agreement are not part of the provisions

hereof and will have no force or effect. This Agreement may not be amended or

modified except by a written agreement executed by the parties hereto or their

respective successors and legal representatives.

 

          (b)  All notices and other communications under this Agreement will be

in writing and will be given by hand delivery or telecopy to the other party or

by registered or certified mail, return receipt requested, postage prepaid,

addressed as follows:

 

               If to the Executive:  Mr. Robert R. Bennett

                                     XXXXXXXXXXXXXXXXXX

                                     XXXXXXXXXXXXXXXXXXXXXXXX

                                     Facsimile:  XXXXXXXXXXXX

 

 

               If to the Company:    Liberty Media Corporation

                                     12300 Liberty Boulevard

                                     Englewood, CO   80112

                                     Attn: General Counsel

                                     Telecopy: 720-875-5382

 

or to such other address or telecopy as either party furnishes to the other in

writing in accordance with this Section 10(b). Notices and communications will

be effective when actually received by the addressee.

 

          (c)  The invalidity or unenforceability of any provision of this

Agreement will not affect the validity or enforceability of any other provision

of this Agreement. If any provision of this Agreement will be held invalid or

unenforceable in part, the remaining portion of such provision, together with

all other provisions of this Agreement, will remain valid and enforceable and

continue in full force and effect to the fullest extent consistent with law.

 

          (d)  Notwithstanding any other provision of this Agreement, the

Company may withhold from amounts payable under this Agreement all federal,

state, local and foreign taxes that are required to be withheld by applicable

laws or regulations.

 

          (e)  The Executive's or the Company's failure to insist upon strict

compliance with any provision of, or to assert any right under, this Agreement

will not be deemed to be a waiver of such provision or right or of any other

provision of or right under this Agreement.

 

          (f)  Except as to (i) the Deferred Compensation Agreements referenced

in Section 3(h) above, (ii) the Existing Award Agreements referenced in Section

3(i) above and the Indemnification Agreement referenced in Section 3(k) above,

the Executive and the Company acknowledge that this Agreement supersedes any

other agreement between them or between the Executive and any predecessor or

affiliate of the Company (collectively with the Company, the "Employing

Entities"), or any plan or practice of any of the Employing Entities concerning

the subject matter hereof, including the Company's Severance Pay Plan or any

other severance plan

 

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or policy of any of the Employing Entities or any of their respective affiliates

(collectively, the "Severance Plans"). The Executive hereby irrevocably waives

any rights to severance benefits under the Severance Plans or to acceleration of

equity awards under the Severance Plans or any equity award plan of any of the

Employing Entities except as may be provided in this Agreement.

 

          (g)  This Agreement may be executed in several counterparts, each of

which will be deemed an original, and said counterparts will constitute but one

and the same instrument.

 

          (h)  Each party will bear any costs, including attorneys' fees,

incurred by such party in connection with negotiating and entering into this

Agreement.

 

          (i)  In the event of breach or alleged breach of this Agreement by the

Executive, termination of the Executive's employment by the Company shall be the

Company's sole and exclusive remedy.

 

     IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and

the Company has caused this Agreement to be executed in its name on its behalf,

all as of the day and year first above written.

 

 

                                     /s/ Robert R. Bennett

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

                                     Robert R. Bennett

 

 

                                     LIBERTY MEDIA CORPORATION

 

 

                                     By: /s/ Charles Y. Tanabe

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

                                        Charles Y. Tanabe, Senior Vice President

 

 

                                       8

<Page>

 

                                    EXHIBIT A

 

                                       TO

 

              EMPLOYMENT AGREEMENT DATED DECEMBER 28, 2005 BETWEEN

                 LIBERTY MEDIA CORPORATION AND ROBERT R. BENNETT

 

 

                        DEFERRED COMPENSATION AGREEMENTS

 

 

 

1.   Deferred Compensation Agreement dated as of July 1, 2005 between Liberty

     Media Corporation and Robert R. Bennett (2005 Lump Sum Payment)

 

2.   Amended and Restated Deferred Compensation Agreement dated as of December

     28, 2005 between Liberty Media Corporation and Robert R. Bennett (2004 Lump

     Sum Payment)

 

3.   Amended and Restated Deferred Compensation Agreement dated as of December

     28, 2005 between Liberty Media Corporation and Robert R. Bennett

     (Installment Payments)

 

<Page>

 

                                    EXHIBIT B

 

                                       TO

 

              EMPLOYMENT AGREEMENT DATED DECEMBER 28, 2005 BETWEEN

                 LIBERTY MEDIA CORPORATION AND ROBERT R. BENNETT

 

 

                            EXISTING AWARD AGREEMENTS

 

 

<Table>

<Caption>

 

                                                                            OPTIONS/SARS

                                                                          OUTSTANDING AND             BASE PRICE

                             AGREEMENT                                      EXERCISABLE                  AS OF

                                                                        AS OF EFFECTIVE DATE        EFFECTIVE DATE

 

<S>                                                                   <C>                           <C>

Non-Qualified  Stock Option Agreement and Stock Appreciation  Rights  25,640 LMC Series A               $19.40

Agreement dated July 11, 1997 between TCI Music,  Inc. and Robert R.  Options with Tandem

Bennett                                                               Stock Appreciation

                                                                      Rights

 

Non-Qualified  Stock  Option  Agreement  dated as of August 10, 2001  16,679,853 LMC Series B      $11.03 (Series B)

between  Liberty  Media  Corporation  and Robert R. Bennett  (issued  Options (or, at

pursuant to the Liberty Media  Corporation  2000  Incentive Plan (As  Executive's election,        $10.77 (Series A)

Amended and Restated Effective August 10, 2001))                      Series A Options)

 

Stock  Appreciation  Rights  Agreement  dated  as of July  31,  2003  1,000,000 LMC Series A             $7.98

between  Liberty  Media  Corporation  and Robert R. Bennett  (issued  Free-Standing Stock

pursuant to the Liberty Media  Corporation  2000  Incentive Plan (As  Appreciation Rights

Amended and Restated Effective September 11, 2002))

 

Stock  Appreciation  Rights  Agreement  dated as of  August  6, 2004  1,000,000 LMC Series A             $7.27

between  Liberty  Media  Corporation  and Robert R. Bennett  (issued  Free-Standing Stock

pursuant to the Liberty Media  Corporation  2000  Incentive Plan (As  Appreciation Rights

Amended and Restated Effective April 19, 2004))