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EXHIBIT 10.8
CONSULTING AGREEMENT
CONSULTING AGREEMENT (this "Agreement"), dated as of December 21, 2000,
among Classic Communications, Inc., a Delaware corporation, Classic Cable, Inc.,
a Delaware corporation (together the "Company") and J. Xxxxxxx Xxxxxxx
("Xxxxxxx") and the Black Creek Group ("BCG").
WHEREAS, the Company and Xxxxxxx have previously entered into that
certain Employment Agreement, dated as of July 28, 1999 (the "Employment
Agreement");
WHEREAS, it is mutually in the best interests of Xxxxxxx and the
Company to terminate the Employment Agreement;
WHEREAS, the Company desires to continue to benefit from the experience
and ability of Xxxxxxx in the capacity of a consultant to the Company upon
termination of his employment and director relationship with the Company, and
Xxxxxxx is willing to commit himself to serve in the capacity of a consultant to
the Company through his affiliate, BCG; and
WHEREAS, the parties desire to enter into this Agreement setting forth
(i) the terms and conditions of the termination of the employment and director
relationship of Xxxxxxx with the Company and (ii) the terms and conditions of
the retention of BCG as a consultant to the Company.
NOW, THEREFORE, in order to effect the foregoing, in consideration of
the premises and the respective covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. TERMINATION OF EMPLOYMENT AGREEMENT; NON-COMPETITION FEES.
(a) Effective as of the date hereof, the Employment Agreement shall be
terminated and the Company and Xxxxxxx shall have no further rights and/or
obligations under the Employment Agreement, including without limitation, the
Put and Call provisions as set forth in Section 13 of the Employment Agreement.
As of the date hereof (the "Effective Date"), Xxxxxxx hereby resigns his
position as an officer and director of the Company and each of its direct or
indirect subsidiaries. The foregoing notwithstanding, Xxxxxxx shall be entitled
to continue to receive his compensation and benefits as provided under the
Employment Agreement through December 31, 2000.
(b) During the period commencing on the Effective Date and ending on
December 31, 2002 (the "Non-Competition Period"), Xxxxxxx shall be entitled to
receive, in consideration for his obligations pursuant to Section 5 below and in
full satisfaction of
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the termination of the Employment Agreement (i) twenty-four (24) monthly
payments of $29,166.67, which shall be payable in accordance with the Company's
customary payroll practices, subject to applicable withholding requirements, if
any; (ii) all of the Company's interest in the company automobile currently used
by Xxxxxxx and purchased partly by the Company; (iii) all of the Company's
interest in the split dollar life insurance policy issued by Pacific Life
Insurance Company in which Xxxxxxx is the insured; provided, that Xxxxxxx will
be responsible for all costs associated with maintaining the policy after the
Effective Date; and (iv) to the extent assignable and transferable, the Company
will assign to Xxxxxxx permanently and irrevocably for Xxxxxxx'x own use,
Xxxxxxx'x membership in the Xxxxxx Creek Country Club, including any and all
bond or contribution that has been paid to secure the membership; provided that
after the Effective Date, Xxxxxxx will be solely responsible for all costs
associated with continued membership, and that Xxxxxxx will take all steps
necessary to remove any reference to the Company and its subsidiaries from the
membership roster. The Company shall upon request by Xxxxxxx execute and deliver
such instruments and documents as may be reasonably required in order to vest in
Xxxxxxx all of the Company's right, title and interest in and to the items
referenced in (ii) - (iv) above.
(c) During the Non-Competition Period, the Company will continue (y) to
provide, at the Company's cost, health insurance benefits, consistent with those
that may be provided from time to time by the Company to senior officers of the
Company and (z) make matching 401(k) contributions consistent with the matching
program that may be provided from time to time to senior officers of the
Company.
(d) Stock Options. The provisions of the Employment Agreement and that
certain Nonqualified Stock Option Agreement, dated July 28, 1999, between the
Company and Xxxxxxx (the "Stock Option Agreement") notwithstanding, the Company
and Xxxxxxx acknowledge and agree that all of Xxxxxxx'x stock options granted
pursuant to the Stock Option Agreement shall become vested as of the Effective
Date, but shall only remain exercisable until December 31, 2001, and after
December 31, 2001 all unexercised stock options will be cancelled and
terminated.
(e) Tower Bonus Plan. Xxxxxxx shall continue to be a Participant (as
defined) in the Company's Tower Bonus Plan, consistent with the terms and
conditions of the Tower Bonus Plan, as indicated in the letter attached hereto
as Exhibit A.
2. RETENTION AS A CONSULTANT.
(a) General Consulting. Beginning on January 1, 2001 and continuing
through June 30, 2001, unless otherwise extended pursuant to Section 2(b) below
(the "Consulting Period"), BCG shall render such general consulting services to
the Company and its affiliates, including without limitation, consulting
services on specific merger and acquisition transactions and financing projects
as may be reasonably requested by the Chairman of the Board of Directors of the
Company from time to time; provided,
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however, that (i) Xxxxxxx, on behalf of BCG, will not be required to devote more
than twenty-five percent (25%) of his business time to the performance of
consulting services during the Consulting Period. In this regard, the Company
shall provide BCG reasonable notice of such consulting obligations and BCG shall
have the right to reschedule commitments to the Company to accommodate the
requirements of Xxxxxxx'x other outside interests.
(b) Extension of Term. BCG agrees to extend the term of the consulting
services to be provided by BCG, as described in Section 2(a) above, until
December 31, 2001, if the Company provides notice to BCG on, or prior to, June
1, 2001 of its desire to extend the term of the consulting period. If the
Company desires to extend the Consulting Period beyond December 31, 2001, the
Company and BCG hereby agree to negotiate in good faith the terms and
conditions, including the compensation to be paid to BCG as a result thereof, of
such extension of consulting services by BCG.
(c) Xxxxxxx'x Services for BCG. Xxxxxxx agrees that he will devote such
of his business time and efforts to BCG as are necessary in order to enable BCG
to fulfill its obligations under this Section 2 to the Company.
3. CONSULTING FEES.
(a) For the general consulting services described in Section 2(a)
above, BCG shall be entitled to receive, during the Consulting Period, $8,333.33
per month, subject to applicable withholding requirements, if any.
(b) Pursuant to the Company's regular policies and procedures, the
Company shall promptly reimburse BCG for direct business expenses that are
necessary for the performance of BCG's consulting services hereunder.
4. WAIVER AND RELEASE.
(a) In consideration of the promises and benefits outlined herein,
Xxxxxxx, on behalf of his heirs, executors, administrators, and assigns and
agents hereby knowingly and voluntarily releases, acquits and forever discharges
the Company and any past, present and future affiliates, officers, directors,
employees, agents, legal representatives, successors, assigns and shareholders
from and against any and all claims and causes of action arising out of (i)
Xxxxxxx'x employment by the Company or termination therefrom, (ii) the
Employment Agreement (including, without limitation, any accrued and unpaid
vacation time), (iii) any discrimination claim whether or not arising under any
local, state or federal law or regulation, public policy or common law
(including, without limitation, the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the
Older Workers Benefit Protection Act), and (iv) any state, federal or local
statute, regulation, public policy, contract or tort principle in any way
governing or regulating Xxxxxxx'x employment or the termination thereof,
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including claims under the Texas Employment Discrimination Law, the Texas
Commission on Human Rights Act, Labor Code Section 21.001, et. seq., and the
Texas Disability Discrimination Law, whether known or unknown, which could have
been brought up to and including the date hereof, including, but not limited to,
any and all claims for damages, attorney's fees and equitable relief which have
been asserted, or could have been asserted; provided, however, that this release
shall not apply to (y) any claim relating to Xxxxxxx'x enforcement of the
matters described in this Agreement and any claims under any group benefit plan
or (z) Xxxxxxx'x indemnification rights under the Company's certificate of
incorporation or bylaws, under the Indemnification Agreement (as defined in
Section 8) or under applicable law.
(b) In consideration of the promises and benefits outlined herein, the
Company, on behalf of itself and its officers, directors, subsidiaries,
affiliates, assigns and agents hereby knowingly and voluntarily releases,
acquits and forever discharges Xxxxxxx and his heirs, executors, administrators,
agents, legal representatives, successors and assigns from and against any and
all claims and causes of action arising out of (i) Xxxxxxx'x employment by the
Company or Xxxxxxx'x performance of his duties as a director, officer, employee
or shareholder in the Company or its subsidiaries or affiliates, (ii) the
Employment Agreement, or (iii) any claim arising out of, in connection with or
related to, in any way, any action taken by Xxxxxxx in his capacity of director,
officer, employee, shareholder or authorized representative of the Company or
its subsidiaries or affiliates, whether known or unknown, which could have been
brought up to and including the date hereof, including, but not limited to, any
and all claims for damages, attorney's fees and equitable relief which have been
asserted, or could have been asserted; provided, however, that this release
shall not apply to any claim relating to or arising out of (i) actions or
omissions by Xxxxxxx which are fraudulent or which result from gross negligence,
bad faith or willful misconduct or (ii) the Company's enforcement of the matters
described in this Agreement.
(c) Xxxxxxx acknowledges that the Company has advised him to consult
with an attorney of his choosing prior to signing this Agreement and that he
have twenty-one (21) days during which to consider the provisions of this
Agreement, although he may sign and return it sooner. Xxxxxxx further
acknowledges that he has been advised by the Company that he has the right to
revoke this Agreement for a period of seven (7) days after signing it and that
this Agreement shall not become effective or enforceable until such seven
(7)-day revocation period has expired. Xxxxxxx acknowledges and agrees that, if
he wishes to revoke this Agreement, he must do so in writing, signed by him and
received by the Company at its headquarters no later than 5:00 p.m. Central
Standard Time on the seventh (7th) day after Xxxxxxx has signed this Agreement.
Xxxxxxx acknowledges and agrees that, in the event that he revokes this
Agreement, he shall have no right to receive any payment hereunder. Xxxxxxx
further acknowledges and agrees that he would not receive the enhanced payments
set forth in Sections 1 and 3 hereof of this Agreement except for his signing of
this Agreement and his fulfillment of his promises set forth in this Agreement.
Xxxxxxx understands and agrees that the Company is under no
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obligation to offer such payment or consent to the release set forth in Section
4(b) of this Agreement and that Xxxxxxx is under no obligation to consent to the
release set forth in Section 4(a) of this Agreement. Xxxxxxx represents that he
has read this Agreement and understands its terms and that he has entered into
this Agreement freely, voluntarily, and without coercion.
5. NON-COMPETITION AND NON-SOLICITATION.
Xxxxxxx hereby acknowledges that, during and solely as a result of his
employment by the Company, he has received and may continue to receive: (1)
special training and education with respect to the operations of a cable
television company and other related matters, and (2) access to confidential
information and business and professional contacts. In consideration of the
payments to be received pursuant to this Agreement as well as the special and
unique opportunities afforded to Xxxxxxx by the Company as a result of Xxxxxxx'x
employment, as outlined in the previous sentence, Xxxxxxx hereby agrees as
follows:
(a) During the Non-Competition Period, Xxxxxxx shall not, without the
prior written consent of the Company, (i) directly or indirectly engage in any
business that competes with the Company or any Affiliate of the Company in their
conduct of the cable television business, or otherwise receive compensation for
any services rendered regarding any aspect of the cable television business
anywhere within the states in which any cable television system is operated by
the Company or any affiliate of the Company, provided, however, that (y) Xxxxxxx
may participate as a passive investor in businesses which are similar to that of
the Company so long as the investment is limited to not more than 10% of the
ownership interests of such entity and (z) Xxxxxxx may continue to invest in,
acquire or receive compensation for services rendered on behalf of Mid-South
Telecommunications Company, North Texas Telephone, and other Approved Rural
Local Exchange Carriers, as defined below (such activities specified in (y) and
(z) above being referred to as the "Permitted Activities") or (ii) engage or
participate, directly or indirectly, in any business which is substantially
similar to that of the Company or any affiliate of the Company on the Effective
Date, including, without limitation, serving as a consultant, administrator,
officer, director, employee, manager, landlord, lender, guarantor, or in any
similar or related capacity or otherwise receive compensation for services
rendered regarding any aspect of the cable television business anywhere within
the states in which any cable television system is operated by the Company or
any affiliate of the Company on the Effective Date; provided, however, that
Xxxxxxx may engage in the Permitted Activities. An "Approved Rural Local
Exchange Carrier" shall be defined as a rural local exchange carrier that (y)
Xxxxxxx wishes to invest in, acquire or receive compensation from and (z) (A)
Xxxxxxx has identified to the Company, in writing, not less than 30 days prior
to, nor more than 60 days prior to the date Xxxxxxx wishes to engage in the
activities described in subsection (y) above and (B) the Company has determined,
within 20 days of receiving such notice from Xxxxxxx, not to seek to invest in
or acquire all or part of such entity; provided, that the Company's failure to
deliver
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written notice to Xxxxxxx within 20 days after receipt of such notice from
Xxxxxxx that the Company intends to seek in good faith such investment or
acquisition will be deemed to be a determination by the Company not to seek such
investment or acquisition. Xxxxxxx acknowledges that these limited prohibitions
are reasonable as to time, geographical area and scope of activities to be
restrained and that the limited prohibitions do not impose a greater restraint
than is necessary to protect the Company's goodwill, proprietary information and
other business interests. The mere ownership of a de minimis amount of
securities in any competitive enterprise and exercise of rights appurtenant
thereto, and participation in management of any such enterprise or business
operation other than in connection with the competitive operation of such
enterprise, are not prohibited.
(b) During the Non-Competition Period, Xxxxxxx agrees he will refrain
from and will not, directly or indirectly, as an individual, partner, officer,
director, stockholder, employee, advisor, independent contractor, joint
venturer, consultant, agent, representative, salesman or otherwise (1) solicit
any of the employees of the Company to terminate their employment; provided,
however, that Xxxxxxx may solicit Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxx
Xxxxxxxx and Xxxxx Xxxxxxx to terminate their employment with the Company; or
(2) accept employment with or seek remuneration by any of the clients or
customers of the Company with whom the Company did business during the term of
Xxxxxxx'x employment or during the Non-Competition Period.
(c) The period of time during which Xxxxxxx is prohibited from engaging
in certain business practices pursuant to Sections 5(a) or (b) shall be extended
by any length of time during which Xxxxxxx is in breach of such covenants.
(d) It is understood by and between the parties hereto that the
foregoing restrictive covenants set forth in Sections 5(a) through (c) are
essential elements of this Agreement, and that, but for the agreement of Xxxxxxx
to comply with such covenants, the Company would not have agreed to enter into
this Agreement. Such covenants by Xxxxxxx shall be construed as agreements
independent of any other provision in this Agreement.
(e) It is agreed by the Company and Xxxxxxx that if any portion of the
covenants set forth in this Section 5 are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such covenants shall be
considered divisible both as to time and geographical area. The Company and
Xxxxxxx agree that, if any court of competent jurisdiction determines the
specified time period or the specified geographical area applicable to this
Section 5 to be invalid, unreasonable, arbitrary or against public policy, a
lesser time period or geographical area which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced against Xxxxxxx. The
Company and Xxxxxxx agree that the foregoing covenants are appropriate and
reasonable when considered in light of the nature and extent of the business
conducted by the Company.
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6. CONFIDENTIALITY.
Xxxxxxx agrees to keep in strict secrecy and confidence any and all
confidential and proprietary information Xxxxxxx assimilates or to which Xxxxxxx
has access during his prior employment with the Company or during the Consulting
Period, and which has not been publicly disclosed and is not a matter of common
knowledge in the fields of work of the Company. Xxxxxxx agrees that both during
and after the Consulting Period, Xxxxxxx will not, without the prior written
consent of the Company, disclose any such confidential and proprietary
information to any third person, partnership, joint venture, company,
corporation or other organization.
7. NON-DISPARAGEMENT.
(a) Xxxxxxx agrees that he will not intentionally make any derogatory
or disparaging statements about the Company or its past, present and future
affiliates, officers and employees that may adversely affect their current or
potential business reputation.
(b) The Company agrees that it will not intentionally make any
derogatory or disparaging statement with regard to Xxxxxxx or Xxxxxxx'x
employment with the Company or the termination of Xxxxxxx'x employment that may
adversely affect his current or potential business or personal reputation.
8. INDEMNIFICATION.
The Company hereby acknowledges and agrees that nothing in this
Agreement is intended to modify or otherwise alter any rights to indemnification
pursuant to the Company's certificate of incorporation or bylaws or your
indemnification agreement dated July 28, 1999 (the "Indemnification Agreement").
9. SUCCESSOR.
This Agreement and all rights of Xxxxxxx hereunder shall inure to the
benefit of and be enforceable by Xxxxxxx'x personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If Xxxxxxx should die while any amounts would still be payable or
benefits would still be provided to him and/or his family pursuant to Section 1
hereunder if he had continued to live, all such amounts and benefits, unless
otherwise provided herein, shall be paid or provided in accordance with the
terms of this Agreement to Xxxxxxx'x devisees, legatees, or other designees or,
if there be no such designee, to Xxxxxxx'x estate.
10. NOTICE.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed
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to have been duly given when delivered or (unless otherwise specified) mailed by
United States certificated or registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Xxxxxxx:
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxx 00000
With a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxx Xxxxxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxxx
If to the Company:
Classic Communications, Inc.
0000 Xxxxxx Xxxx
Xxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
With a copy to:
Skadden, Arps, Slate, Meager & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of changes of address shall
be effective in accordance herewith, except that notices of change of address
shall be effective only upon receipt.
11. MODIFICATION OF AGREEMENT; GOVERNING LAW.
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed
by Xxxxxxx and such officer of the Company as may be specifically designated by
the Board. No waiver by either party hereto at any time of any breach by the
other party hereto or, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at
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the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Texas without regard to
its conflicts of law principles.
12. VALIDITY.
The validity or enforceability of any provision or provisions of this
Agreement shall not be affected by the invalidity or unenforceability of any
other provision of this Agreement, and such valid and enforceable provisions
shall remain in full force and effect.
13. ENTIRE AGREEMENT.
This Agreement sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto which are related to the subject matter of
the Employment Agreement or the termination thereof.
14. CONFLICT WAIVER.
The Company acknowledges that (y) Xxxxxx & Xxxxxx L.L.P. ("VE") has
from time to time represented the Company and its subsidiaries in various legal
matters unrelated to this Agreement and (z) with the Company's consent, after
consultation with the Company's counsel in this transaction (Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois)), Xxxxxxx has engaged VE to represent him and
BCG in connection with this Agreement. The Company consents to VE's
representation of Xxxxxxx and BCG in connection with this Agreement and waives
any conflict related to such representation.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date and year first written above.
CLASSIC COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: President and Chief Operating Officer
CLASSIC CABLE, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: President and Chief Operating Officer
/s/ J. Xxxxxxx Xxxxxxx
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J. XXXXXXX XXXXXXX
The Black Creek Group joins in the execution and
delivery of this Agreement for the purpose of being
bound by the provisions of Section 2 of this
Agreement.
THE BLACK CREEK GROUP
By: /s/ J. Xxxxxxx Xxxxxxx
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Name: J. Xxxxxxx Xxxxxxx
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