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(13)听听Related Party Transactions with Officers and Directors

Chief Executive Officer Compensation Arrangement

In December 2014, the Compensation Committee (the 鈥淐ommittee鈥�) of Liberty approved a compensation arrangement, including term options as discussed in note听14, for its President and Chief Executive Officer (the 鈥淐EO鈥�). The arrangement provides for a five year employment term which began on January听1, 2015 and ends December听31, 2019, with an annual base salary of $960,750, increasing annually by 5% of the prior year鈥檚 base salary, and an annual target cash bonus equal to 250% of the applicable year鈥檚 annual base salary. The arrangement also provides that, in the event the CEO is terminated for 鈥渃ause,鈥� he will be entitled only to his accrued base salary and any amounts due under applicable law and he will forfeit all rights to his unvested term options. If, however, the CEO is terminated by Liberty without cause or if he terminates his employment for 鈥済ood reason,鈥� he will be entitled to his accrued base salary, his accrued but unpaid bonus and any amounts due under applicable law, a severance payment of 1.5 times his base salary during the year of his termination, a payment equal to $11,750,000 pro rated based upon the elapsed number of days in the calendar year of termination, a payment equal to $17.5听million, and his unvested term options will generally vest pro rata based on the portion of the term elapsed through the termination date plus 18 months and for all vested and accelerated听options to remain exercisable until their respective expiration dates. If, however, the CEO terminates his employment without 鈥済ood reason,鈥� he will be entitled to his accrued base salary, his accrued but unpaid bonus and any amounts due under applicable law, a payment equal to $11,750,000 pro rated based upon the elapsed number of days in the calendar year of termination, and for his unvested term options to generally vest pro rata based on the portion of the term elapsed through the termination date and all vested and accelerated options to remain exercisable until their respective expiration dates. Lastly, in the case of the CEO鈥檚 death or his disability, he is entitled to his accrued base salary, his accrued but unpaid bonus and any amounts due under applicable law, a payment of 1.5 times his base salary during the year of his termination, a payment equal to $11,750,000 pro rated based upon the elapsed number of days in the calendar year of termination, a payment equal to $17.5听million, and听听for his unvested term options to fully vest and for his vested and accelerated term options to remain exercisable until their respective expiration dates.

Beginning in 2015, the CEO receives annual performance-based options to purchase shares of Series听C Liberty Formula One common stock with a term of 7 years (the 鈥淧erformance Options鈥�) and performance-based restricted stock units with respect to Series听C Liberty Formula One common stock (the 鈥淧erformance RSUs鈥� and together with the Performance Options, the 鈥淧erformance Awards鈥�) during the employment term. Grants of Performance Awards will be allocated between Liberty and Liberty Interactive. The aggregate target amount to be allocated between Liberty and Liberty Interactive will be $16听million with respect to calendar year 2015, $17听million with respect to calendar year 2016, $18听million with respect to calendar year 2017, $19听million with respect to calendar year 2018 and $20听million with respect to calendar year 2019. Vesting of the Performance Awards will be determined based on satisfaction of performance metrics that will be set by Liberty and Liberty Interactive鈥檚 respective compensation committees in the first quarter of each applicable year, except that the CEO will forfeit his unvested Performance Awards if his employment is terminated for any reason before the end of the applicable year, except that the CEO will forfeit his unvested Performance Awards if his employment is terminated for any reason before the end of the applicable year. In addition, Liberty and Liberty Interactive鈥檚 compensation committees may grant additional Performance Awards, with a value of up to 50% of the target amount allocated to Liberty for the relevant year (the 鈥淎bove Target Awards鈥�), and the compensation committees may determine to establish additional performance metrics with respect to such Above Target Awards.

Salary compensation related to services provided by the CEO is charged from Liberty to Liberty TripAdvisor and Liberty Broadband pursuant to the Services Agreements with each respective company. Any cash bonus attributable to the performance of Liberty or Liberty Interactive is paid directly by each respective company.

Chairman鈥檚 Employment Agreement

On December听12, 2008, the Committee determined to modify its employment arrangements with its Chairman of the Board, to permit the Chairman to begin receiving payments in 2009 in satisfaction of Liberty鈥檚 obligations to him under two deferred compensation plans and a salary continuation plan. Under one of the deferred compensation plans (the 鈥�8% Plan鈥�), compensation has been deferred by the Chairman since January听1, 1993 and accrues interest at the rate of 8% per annum compounded annually from the applicable date of deferral. The amount owed to the Chairman under the 8% Plan aggregated approximately $2.4听million at December听31, 2008. Under the second plan (the 鈥�13% Plan鈥�), compensation was deferred by the Chairman from 1982 until December听31, 1992 and accrues interest at the rate of 13% per annum compounded annually from the applicable date of deferral. The amount owed to the Chairman under the 13% Plan aggregated approximately $20听million at December听31, 2008. Both deferred compensation plans had provided for payment of the amounts owed to him in 240 monthly installments beginning upon termination of his employment. Under his salary continuation plan, the Chairman would have been entitled to receive $15,000 (increased at the rate of 12% per annum compounded annually from January听1, 1998 to the date of the first payment, (the 鈥淏ase Amount鈥�) per month for 240 months beginning upon termination of his employment. The amount owed to the Chairman under the salary continuation plan aggregated approximately $39听million at December听31, 2008. There is no further accrual of interest under the salary continuation plan once payments have begun.

The Committee determined to modify all three plans and began making payments to the Chairman in 2009, while he remains employed by the Company. By commencing payments under the salary continuation plan, interest ceased to accrue on the Base Amount. As a result of these modifications, the Chairman will receive 240 equal monthly installments as follows: (1)听approximately $20,000听under the 8% Plan; (2)听approximately $237,000 under the 13% Plan; and (3)听approximately $164,000 under the salary continuation plan.

The Committee also approved certain immaterial amendments to the Chairman鈥檚 employment agreement intended to comply with Section 409A of the Internal Revenue Code.