1
EXHIBIT 10.24
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
-----------------------------------------
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
dated as of February 13, 2001, between LIBERTY DIGITAL, INC., a Delaware
corporation (the "Company"), and XXXX XXXX, also known as Xxx Xxxxxxx
("Executive").
WHEREAS, Executive is a party to an Employment Agreement with the
Company dated as of September 9, 1999;
WHEREAS, concurrently with the execution and delivery of this Agreement
Liberty, Executive and Company are entering into an Amended and Restated
Deferred Compensation and Stock Appreciation Rights Agreement in the form
attached as Exhibit A (the "Compensation Agreement");
WHEREAS, the Executive Committee of the Board of Directors of Liberty
Media Corporation ("Liberty") has adopted a policy pursuant to the Compensation
Agreement that the Company shall be the primary (but not exclusive) vehicle for
the pursuit of Interactive Programming Opportunities (as defined in the
Contribution Agreement) that are provided or otherwise made available to Liberty
(the "Liberty Policy");
WHEREAS, Executive is President and Chief Executive Officer of the
Company;
WHEREAS, the parties desire to amend and restate the Employment
Agreement dated as of September 9, 1999;
WHEREAS, this Agreement sets forth the terms and conditions of the
employment by the Company of Executive; and
WHEREAS, in consideration of the mutual covenants set forth in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, agree as follows:
1. Termination of Liberty Employment Agreement; Term and Termination.
(a) Termination of Liberty Employment Agreement. Upon execution
and delivery of this Agreement the Liberty Employment Agreement is terminated.
-1-
2
(b) Term. Subject to the terms and conditions of this Agreement,
the Company will employ Executive, and Executive will serve the Company, from
the date of this Agreement until December 15, 2002 (the "Employment Term").
(c) Termination by the Company. Executive's employment may be
terminated by the Company only as follows:
(i) Upon the death of Executive;
(ii) Upon 180 days prior notice from the Company to Executive
(the "Notice Period"), in the event of an illness or other disability
which has incapacitated Executive from performing his duties hereunder,
as defined in a long-term liability insurance policy to be purchased by
Executive, a copy of which will be provided to the Company or, if such
policy is not purchased or a copy thereof is not delivered to the
Company, as determined in good faith by the Board of Directors of the
Company (the "Board"), for at least 180 consecutive days during the
twelve calendar months preceding the month in which such notice is
given; provided, however, that in the event that, prior to the end of
the Notice Period, Executive recovers from such illness or other
disability to an extent permitting him to perform his duties hereunder,
the notice of termination pursuant to this clause (ii) will be of no
further force and effect;
(iii) At any time upon notice of termination of Executive
pursuant to this Section 1(c)(iii) and by paying to Executive in a lump
sum on the effective date of such termination compensation for the
remaining term of this Agreement pursuant to Section 4(a), calculated
at the annual rate then in effect;
(iv) At any time for "cause" (a "Termination for Cause"),
which for purposes of this Agreement will be deemed to have occurred
only on the happening of any of the following:
(A) the plea of guilty to, or conviction for, the
commission of a felony offense by Executive, provided,
however, that after indictment the Company may suspend
Executive from the rendition of services but without limiting
or modifying in any other way the Company's obligations under
this Agreement;
(B) a material breach by Executive of a material
fiduciary duty owed to the Company;
(C) a material breach by Executive of any of the
covenants made by him in Sections 8 and 9; or
(D) the willful and gross neglect by Executive of the
material duties specifically and expressly required by this
Agreement;
-2-
3
provided, however, that any claim that "cause," within the
meaning of clause (B), (C) or (D) above, exists for the
termination of Executive's employment may be asserted on
behalf of the Company only by a duly adopted resolution of the
Board and only after 30 days' prior notice to Executive during
which period he may cure the breach or neglect that is the
basis of any such claim, if curable; provided, further, that
no state of facts that, with or without notice to Executive or
the passage of time or both, would give rise to the right of
the Company to terminate Executive's employment pursuant to
clause (ii) of this Section 1(c) may, directly or indirectly,
in whole or in part, be the basis for a claim that "cause,"
within the meaning of clause (D) above, exists for the
termination of Executive's employment.
(d) Termination by Executive. Executive may terminate his employment by
the Company at any time by giving notice thereof to the Company. For purposes of
this Agreement, any termination by Executive will be deemed to be a "Voluntary
Termination" unless it is a "Termination for Good Reason," which will be deemed
to have occurred if Employee terminates his employment because of (i) a material
diminution of Executive's duties as President and Chief Executive Officer of the
Company, including, without limitation, the appointment by the Company of a
Co-President or Co-Chief Executive Officer, (ii) the imposition by the Board of
a requirement that Executive report to a person other than such Board, (iii)
Executive ceasing to serve as a director of the Company, other than due to
Executive's resignation, refusal to stand for reelection or death, (iv) the
failure of Liberty (as defined in the Compensation Agreement), on or after
January 1, 2002, to follow the Liberty Policy if, and only if, the Per Share
Fair Market Value as of the Valuation Date corresponding to Executive's
termination pursuant to this clause (iv) is greater than the Target Per Share
Value as of such date (with Per Share Fair Market Value, Valuation Date and
Target Per Share Value having the meanings given them in, and being determined
pursuant to, the Compensation Agreement)), (v) an arbitrator's determination
pursuant to Section 11 of the Compensation Agreement that a valuation made by
the Board pursuant to clause (i) of the last paragraph of Section 10.b. of the
Compensation Agreement in connection with the issuance of Common Stock or a
Derivative Security to Liberty or an Affiliate of Liberty (with Common Stock,
Derivative Security, Liberty and Affiliate having the meanings given them in the
Compensation Agreement) was not made in good faith or (vi) the breach by the
Company in any material respect of any of its material obligations under this
Agreement, and, in any such case (but only if correction or cure is possible),
the failure by the Company to correct or cure the circumstance or breach on
which such termination is based within 30 days after receiving notice from
Executive describing such circumstance or breach in reasonable detail.
(e) Effect of Termination. If Executive's employment by the Company is
terminated by Executive or by the Company pursuant to Section 1(c), all
compensation under Section 4 of this Agreement that has accrued in favor of
Executive as of the date of such termination, to the extent unpaid or
undelivered, will be paid or delivered to Executive on the date of termination.
If Executive's termination of his employment is a Termination for Good Reason,
Executive will be entitled to a lump sum payment in the same amount as would be
payable to Executive if such termination were by the Company pursuant to
-3-
4
clause (iii) of Section 1(c). Upon termination of Executive's employment and
payment of such amount (and, if applicable, the full amount payable pursuant to
clause (iii) of Section 1(c) or the preceding sentence), the Company's
obligations under this Agreement will terminate, except as provided in the
fifth, sixth and seventh sentences of this Section 1(e) (if and to the extent
applicable), Section 5 (as it relates to expenses incurred prior to such
termination) and Section 7 of this Agreement. Executive acknowledges that his
obligations under Sections 8, 9, 10 and 11 will survive any such termination. If
Executive dies while employed by the Company or during the period that he is
receiving payments pursuant to the immediately succeeding sentence, the Company
will, as promptly as practicable following Executive's death, pay to Executive's
designated beneficiary or beneficiaries in a lump sum an amount equal to one
year's compensation under Section 4(a) of this Agreement, calculated at the
annual rate in effect at the time of Executive's death. If Executive's
employment is terminated pursuant to Section 1(c)(ii) of this Agreement, the
Company will continue to pay to Executive his annual salary (at the rate in
effect at the time of termination of his employment) as and when the same would
otherwise be due in accordance with Section 4 of this Agreement for one year
from such date of termination. The phrase "designated beneficiary or
beneficiaries" means the person or persons named from time to time by Executive
in a signed instrument filed with the Company; provided, however, that if a
designation made in any such instrument is for any reason ineffective, or if no
such designation has been made, the phrase "designated beneficiary or
beneficiaries" will mean the Executive's estate.
(f) At least 180 days prior to the end of the initial term of this
Agreement, the Company and Executive will notify the other if such party does
not intend to renew this Agreement beyond such initial term.
2. Services to be Rendered by Executive. Executive will serve as a director
and as President and Chief Executive Officer of the Company. In such capacities,
Executive will perform all reasonable acts customarily associated with such
positions, or necessary or desirable to protect and advance the best interests
of the Company and its subsidiaries. Without limiting the generality of the
foregoing, Executive will be responsible for directing the development and
integration of the Company's business and for developing, in coordination with
Liberty, new media or cable programming businesses that take advantage of the
competencies of the Company, in each case with the goal of maximizing the value
of the Company's stock. If Executive is currently serving as or is elected a
director of Liberty or a director or an officer of any of Liberty's subsidiaries
or affiliates in addition to the Company, Executive will serve in any such
capacities without further compensation except as may be decided by the Company
at the Company's sole election. Executive will perform such acts and carry out
such duties, and will in all other respects serve the Company, faithfully and to
the best of his ability. Executive will, during the Employment Term, be based in
Los Angeles, California, with the understanding that Executive will travel as
reasonably required in the performance of his duties under this Agreement.
3. Time to Be Devoted by Executive. Executive will devote substantially all
of his business time, attention, efforts and abilities to the business of the
Company and will use his best efforts to promote the interests of the Company
and not to commit acts detrimental to the
-4-
5
Company's interest. Executive confirms that he has no business interests of any
kind which will require a significant portion of his business time other than
his employment by the Company. Notwithstanding anything to the contrary stated
above, but subject to Section 8, Executive will be permitted to make and manage
business investments and to engage in noncompetitive activities of any nature
whatsoever so long as those activities do not interfere in any material respect
with the performance by Executive of the duties contemplated by this Agreement.
4. Compensation Payable to Executive.
(a) Subject to Section 12, during the Employment Term, the Company will
pay to Executive salary at the rate of $750,000 per annum, such rate to be
increased annually on each January 1, beginning January 1, 2000, by the greater
of (a) the percentage increase, if any, in the Consumer Price Index, All Urban
Consumers (CPI-U), U.S. City Average, All Items, as published by the U.S.
Department of Labor, Bureau of Labor Statistics (or any similar successor index)
from December 31, 1998, in the case of the year beginning January 1, 2000, and
from each December 31 thereafter for each succeeding year or (b) 5%. All
payments under this Agreement will be subject to applicable withholding and
similar taxes. The Board of Directors will review Executive's compensation
annually to determine, in its sole discretion, whether any additional increase
in the Executive's salary is appropriate.
(b) Executive's annual compensation will be paid to Executive in
accordance with the Company's regular policy but not less frequently than once a
month.
5. Expenses. The Company will reimburse Executive for the reasonable amount
of dining, hotel, travel, entertainment and other expenses (consistent with the
Company's reimbursement standards for its most senior officers) necessarily
incurred by Executive in the discharge of his duties hereunder.
6. Executive Benefit Plans and Vacations. Executive will be entitled to
participate in all formal incentive compensation, incentive stock option,
retirement, insurance, hospitalization and disability plans that are in
existence or may be adopted by the Company or in which employees of the Company
are eligible to participate, provided that Executive is eligible by the terms
thereof to participate therein. Executive will be entitled to paid vacation for
a number of weeks per year which Executive reasonably deems appropriate in light
of his duties under this Agreement.
7. Indemnification. The Company will indemnify and hold harmless Executive,
to the fullest extent permitted by applicable law, in respect of any liability,
damage, cost or expense (including reasonable counsel fees) incurred in
connection with the defense of any claim, action, suit or proceeding to which he
is a party, or any threat thereof, by reason of his being or having been an
officer or director of the Company or any subsidiary of the Company, or his
serving or having served at the request of the Company or Liberty as a director,
officer, employee or agent of another corporation or of a partnership, joint
venture, trust, business organization, enterprise or other entity, including
service with respect to employee benefit plans. Without limiting the generality
of the foregoing, the Company will pay the expenses (including
-5-
6
reasonable counsel fees) of defending any such claim, action, suit or proceeding
in advance of its final disposition, upon receipt of an undertaking by Executive
to repay all amounts advanced if it should ultimately be adjudicated by a court
of competent jurisdiction that Executive is not entitled to be indemnified under
this Section.
8. Noncompetition. So long as Executive is employed by the Company and for
the Applicable Period (as defined below) following the termination of his
employment, Executive will not, directly or indirectly, as principal or agent,
or in any other capacity, own, manage, operate, participate in or be employed by
or otherwise be interested in, or connected in any manner with, any person,
firm, corporation or other enterprise which competes in the United States or
elsewhere in the world in any material respect with any business conducted by
the Company or any of its subsidiaries as such business is conducted while
Executive is employed by the Company. Nothing herein contained will be construed
as denying Executive the right to own securities of any such corporation which
is listed on a national securities exchange or quoted in the NASDAQ system to
the extent of an aggregate of 5% of the amount of such securities outstanding.
For purposes hereof, the term "Applicable Period" will apply only in the case of
a Voluntary Termination or a Termination for Cause and means the period
beginning on the effective date of the termination of Executive's employment
with the Company (the "Effective Date") and ending on the earlier of (i) the
second anniversary of the Effective Date or (ii) December 31, 2002.
9. Confidentiality. Other than in the performance of his duties hereunder,
Executive will not, so long as he is employed by the Company or thereafter,
directly or indirectly make use of, or divulge to any person, firm, corporation,
entity or business organization, and he will use his best efforts to prevent the
publication or disclosure of, any confidential or proprietary information
concerning, the business, accounts or finances of, or any of the methods of
doing business used by the Company or of the dealings, transactions or affairs
of the Company or any of its customers which have or which may have come to his
knowledge during his employment with the Company; but this Section 9 will not
prevent Executive from responding to any subpoena, court order or threat of
other legal duress, provided Executive notifies the Company hereof with
reasonable promptness so that the Company may seek a protective order or other
appropriate relief.
10. Delivery of Materials. Upon termination of Executive's employment,
Executive will deliver to the Company all documents, papers, materials and other
property of the Company and of any of its subsidiaries or affiliates relating to
their respective affairs, which may then be in his possession or under his
control.
11. Noninterference. Executive will not, while in the employ of the Company
and for the two-year period following the effective date of the termination of
his employment, solicit the employment of any employee of the Company or any of
its subsidiaries or affiliates on behalf of any other person, firm, corporation,
entity or business organization or otherwise interfere with the employment
relationship between any employee or officer of the Company or any of its
subsidiaries or affiliates and the Company or any of its subsidiaries or
affiliates.
-6-
7
12. Remedies. In the event of a material breach by Executive of this
Agreement, or termination of his employment by the Company pursuant to Section
1(c)(iv), he will be deemed to have relinquished all rights to any amounts
payable under Section 4 and all other benefits hereunder at and after the time
of such breach or termination, but will be required to comply with the
provisions of Sections 8, 9, 10 and 11 of this Agreement. Upon any such breach
or termination, the Company will be entitled, if it so elects and in addition to
any other lawful remedies that may be available to it, to institute and
prosecute proceedings at law or in equity to obtain damages with respect to such
breach or to enforce the specific performance of this Agreement by Executive or
to enjoin Executive from engaging in any activity in violation thereof.
Executive acknowledges and agrees that any breach or threatened breach by
Executive of any of Sections 8, 9, 10 and 11 hereof will cause immediate,
irreparable injury to the Company and that money damages will not provide an
adequate remedy for any such breach or threatened breach. Accordingly, upon any
such breach or threatened breach by Executive of such Sections the Company will
be entitled, in addition to any other lawful remedies that may be available to
it, to injunctive relief, and no bond or other security will be required.
13. Notices. All notices to be given hereunder will be in writing and will
be deemed duly given when delivered personally or mailed, certified mail, return
receipt requested, postage prepaid and addressed as follows:
(a) If to be given to the Company:
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
(b) If to be given to Executive:
Xxx Xxxxxxx
c/o Xxxx Xxxx
00000 Xxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
with a copy to:
Xxxxxxx Xxxxx, Esq.
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
or to such other address as a party may furnish to the other in writing in
accordance with this Section 13.
14. Severability. The provisions of this Agreement are severable and if any
such provision or the application thereof to any person or circumstance is held
by a court or
-7-
8
governmental authority of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, will remain in full force and effect and will in
no way be affected, impaired or invalidated thereby. Without limiting the
generality of the foregoing, should any court or governmental authority of
competent jurisdiction determine that the provisions of Section 8 are
unenforceable in respect of scope, duration, geographic area or any other
matter, such court or governmental authority will be empowered to substitute, to
the extent enforceable, similar provisions or other provisions so as to provide,
to the fullest extent permitted by applicable law, the benefits intended by
Section 8.
15. Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion will not be considered a waiver of any
other breach of that or any other provision hereof.
16. Withholding. The Company will be entitled to withhold from amounts or
other consideration payable or issuable to Executive hereunder such amounts as
may be required by law.
17. Miscellaneous. This Agreement may not be changed nor can any provision
hereof be waived except by an instrument in writing duly signed by the party to
be charged, and constitutes the entire agreement between the Company and
Executive and supersedes all prior oral or written agreements and understandings
with respect to the subject matter hereof. Notwithstanding that the Compensation
Agreement provides that it will be constructed and enforced in accordance with
the internal laws of the State of California without regard to choice of law
principles as provided in Section 13.f. thereof, this Agreement will be
interpreted, governed and controlled by the internal laws of the State of
Colorado, without reference to principles of conflict of laws.
-8-
9
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first above written.
---------------------------------------------
Xxxx Xxxx, a/k/a Xxx Xxxxxxx
LIBERTY DIGITAL, INC.
By:
---------------------------------------
Xxxxx X. Xxxx
Vice President
-9-
