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EXHIBIT 10.10
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of March 11, 1995, between
TELECOMMUNICATIONS, INC., a Delaware corporation (the "Company"), and X. X.
XXXXXXXX, now residing at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx 00000
("Consultant").
On the date hereof, Consultant resigned as an officer,
director and employee of the Company, its subsidiaries and its controlled
affiliates.
This Consulting Agreement replaces the Employment Agreement
dated as of November 1, 1992 ("Employment Agreement"), between TCI
Communications, Inc. and Consultant which was assumed by the Company pursuant
to an Assignment and Assumption Agreement, dated as of August 4, 1994, among
TCI/Liberty Holding Company, the Company and Consultant, and sets forth the
terms and conditions of the consultancy arrangement between the Company and
Consultant.
In consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties, intending to be
legally bound, do hereby agree as follows:
1. Term and Termination.
(a) Term. The term of Consultant's consultant arrangement under
this Agreement (the "Term") shall commence on the date hereof and end on
September 30, 2002. During the Term, Consultant agrees to serve the Company as
a consultant as provided herein upon and subject to the terms and conditions
set forth in this Agreement.
(b) Termination by the Company. Consultant's consultancy by the
Company may be terminated by the Company only as provided in clauses (i) and
(ii) below.
(i) Upon the death of Consultant.
(ii) Upon giving written notice of such termination to
Consultant six (6) months prior to the effective date thereof and by
paying to Consultant in a lump sum upon such termination all remaining
compensation that would have been payable under Section 4 hereof if
this Agreement remained in full force and effect for the full balance
of the Term.
(c) Effect of Death of Consultant. If Consultant dies prior to
December 31, 1997, the Company shall, as promptly as practicable following
Consultant's death, pay to Consultant's designated beneficiary or beneficiaries
in a lump sum an amount equal to one year's compensation under Section 4(a) of
this Agreement, in each case calculated at the annual rate in effect at the
time of Consultant's death. The phrase "designated beneficiary or
beneficiaries" has the meaning ascribed to such phrase in Section 4(d) hereof.
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2. Services to Be Rendered by Consultant.
Consultant agrees to serve the Company as a consultant (when
and for what purpose as then requested by the Company's Chief Executive
Officer) to advise the Company's Chief Executive Officer regarding the
allocation of the Company's resources and other matters generally and with
respect to the domestic cable operations of the Company in particular. If
Consultant is elected a director of the Company's subsidiaries or affiliates,
Consultant will serve in any such capacities without further compensation
except as may be decided by the Company at the Company's sole election.
Consultant shall discharge his responsibilities and shall in all other respects
serve the Company faithfully and to the best of his ability.
3. Time to Be Devoted by Consultant.
(a) If Consultant is requested to provided consultancy services to
the Company, Consultant will, where practical, be given 14 days' notice. In no
event will Consultant be required to provide more than 700 hours per year in
consultancy services to the Company.
(b) Company shall provide to Consultant an office at the Company's
headquarters and secretarial service if such is required by Consultant to
reasonably provide any Company-requested consultancy services; but in any
event, until March 31, 1996, Consultant will be provided with an office and
secretarial services at the Company's headquarters.
4. Compensation Payable to Consultant.
(a) From March 11, 1995, through December 31, 1997, the Company
shall pay to Consultant a sum equal to the rate of $773,000 per annum. From
January 1, 1998, through the Term, the Company shall pay to Consultant a sum
equal to the rate of $500,000 per annum.
(b) Consultant's annual payments shall be paid in accordance with
the Company's regular policy but not less frequently than once a month.
(c) (i) The sum of the amounts deferred pursuant to Section 4(b)
of the Employment Agreement plus all interest (compounded annually at the rate
of 8% per annum) accrued thereon to December 31, 1997 (the "Determination
Date") (the "total deferred amount") shall be calculated as of the
Determination Date and shall be paid to Consultant in substantially equal
monthly payments over a 120-month period commencing on the first business day
immediately following the Determination Date and continuing on the first day of
each calendar month thereafter until paid in full. Each such payment shall
equal $7294.32. Consultant and Company agree to such payment notwithstanding
the terms of the Employment Agreement.
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(ii) The provisions of Section 4 of the Employment
Agreement, dated as of January 1, 1983, between the Company and Consultant, as
heretofore amended (the "Prior Agreement"), shall continue to govern with
respect to the calculation of, and accrual of interest on, the payments which
were deferred in accordance with the terms of Section 4 of the Prior Agreement,
and such provisions as they relate to such deferred compensation shall survive
the execution and delivery of this Agreement unaffected hereby, except as
modified hereby and except that the 240 monthly payments set forth therein
shall be made in equal monthly payments of $15,116.03. The Consultant and the
Company agree to such payments notwithstanding the terms of the Prior
Agreement.
(d) Upon the death of Consultant, all payments due to Consultant
under Section 4(c) be made to Consultant's then surviving spouse. If there is
no such surviving spouse at the time of Consultant's death, or upon the
subsequent death of such surviving spouse (either such event shall be called a
"Lump Sum Payment Event"), the following shall occur:
(i) If the Lump Sum Payment Event occurs prior to the
Determination Date, the amount payable pursuant to Section 4(c) above shall be
calculated as promptly as practicable but in no event later than the first
business day of the first full calendar month following such date (which date
of calculation shall for this purpose be the Determination Date) and shall be
paid forthwith in a lump sum to Consultant's designated beneficiary or
beneficiaries.
(ii) If the Lump Sum Payment Event occurs after the
Determination Date and before the expiration of the respective periods during
which the deferred payments provided for in Section 4(c) above are to be paid,
the remaining deferred payments, adjusted by deducting therefrom the interest
portion thereon (at their respective interest rates of 8% and 13%), shall be
paid forthwith in a lump sum to Consultant's designated beneficiary or
beneficiaries.
(iii) The phrase "designated beneficiary or beneficiaries"
shall mean the person or persons named from time to time by Consultant in a
signed instrument filed with the Company. If such a designation was not made,
is not in force or if the designation made in any such signed instrument shall
for any reason be ineffective, the phrase "designated beneficiary or
beneficiaries" shall mean Consultant's estate.
(e) The amount of deferred compensation payable hereunder
(together with the interest applicable thereto) shall not in any way be
reserved or held in trust by the Company. Neither Consultant nor any designated
beneficiary or personal representative shall have any rights against the
Company in respect of such deferred payments other than the rights of an
unsecured creditor of the Company. Deferred payments provided for herein shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment pledge, encumbrance of charge, and shall not in any manner be liable
for or subject to the debts, contracts, liabilities, engagements or torts of
Consultant, nor of any designated beneficiary or personal representative. The
payment to Consultant of such deferred payments shall be subject to the
further condition that Consultant shall comply with the provisions of Section
10 of this Agreement during the entire payment period, and Consultant shall
comply with the provisions of Sections 9 and 12 of this Agreement for the
first two (2) years of the payment period.
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5. Salary Continuation Plan.
(a) Commencing January 1, 1998, Consultant shall be entitled to
receive from the Company 240 consecutive monthly payments of $6,250, increased
at the rate of 12% per annum compounded annually from January 1, 1988, to
January 1, 1998 (the foregoing being referred to in this Agreement as the
"Benefit"). At January 1, 1998, the amount of the 240 equal monthly payments
which shall commence on January 1, 1998, shall be $19,411.55.
(b) Upon the Lump Sum Payment Event, the payments provided for in
Section 5(a) above (or, if such Lump Sum Payment Event occurs after December
31, 1997, and during the payment period contemplated by Section 5(a), any
remaining such payments) shall be made to Consultant's designated beneficiary
or beneficiaries, as defined in Section 4(d) above.
(c) The payment to Consultant of the Benefit shall be subject to
the condition that Consultant shall comply with the provisions of Section 10 of
this Agreement during the entire payment period, and Consultant shall comply
with the provisions of Sections 9 and 12 of this Agreement during the first two
years of the payment period.
(d) The Benefit payable under this Agreement shall not in any way
be reserved or held in trust by the Company. Neither Consultant nor any
designated beneficiary or personal representative shall have any rights against
the Company in respect of such Benefit other than the rights of an unsecured
general creditor of the Company. Payments of the Benefit shall not be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and shall not in any manner be liable for or subject to
the debts, contracts, liabilities, engagements or torts of Consultant, nor of
any designated beneficiary or personal representative. The Company shall not be
obligated under any circumstances to fund its obligations under this Section
5, but it may, however, at its sole option elect to fund such obligations, in
whole or in part, in any manner whatsoever, including, but not limited to, the
purchase of life insurance on the life of Consultant, in any amounts the Company
deems appropriate. Any such funding shall remain a general unrestricted asset
of the Company and in no way security for the Company's performance under this
Section 5. Consultant Agrees to cooperate with the Company, if so requested, in
its obtaining such insurance.
(e) The Benefit provided for in this Section 5 is intended by the
parties to be in substitution for, and not in addition to, the "Benefit" as
defined in and contemplated by Section 5 of the Prior Agreement and,
accordingly, the terms and provisions of Section 5 of the Prior Agreement are
superseded in their entirety by the terms and provisions of this Section 5.
6. Expenses.
The Company shall reimburse Consultant for the reasonable amount of
dining, hotel, traveling, entertainment and other expenses necessarily incurred
by Consultant in the discharge of his consulting obligations hereunder.
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7. Executive Benefit Plans
During the Term, Consultant shall be entitled to participate
in and to be accorded all rights and benefits under all group insurance
policies maintained or established by the Company for the benefit of its
employees, and for this purpose Consultant shall be deemed to be a full-time
employee of the Company during such period. Further, during the period that
continues after the Term ("Deferred Compensation Period") that any deferred
compensation is payable to Consultant pursuant to Section 4 of this Agreement
or Section 4 of the Prior Agreement, Consultant shall continue to be entitled
to participate in, and to be accorded all rights and benefits under, all group
insurance policies maintained or established by the Company for the benefit of
its employees, and for this purpose Consultant shall be deemed to be a
full-time employee of the Company during such period. In addition, during the
Term and Deferred Compensation Period, Consultant shall be entitled to free
cable television service if Consultant has residences located within areas
serviced by the Company's cable television services.
8. Indemnification.
The Company will indemnify and hold harmless Consultant, 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 threat thereof, by reason of his being or having been an
officer or director of, or a consultant to, the Company or any subsidiary of
the Company, or his serving or having served at the request of the Company 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 reasonable counsel fees) of defending any such claim, action, suit
or proceeding in advance of its final disposition, upon receipt of an
undertaking by Consultant to repay all amounts advanced if it should ultimately
be determined that Consultant is not entitled to be indemnified under this
Section.
9. Noncompetition.
Consultant agrees that during the Term he 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 directly competes in a material respect with the business of the Company
or any of its majority-owned subsidiaries as it is then conducted. Nothing
herein contained shall be construed as denying Consultant (i) 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 or (ii) provide consultancy services
to others which may violate the provisions of the first sentence of this
Section if the Company's Chief Executive Officer approves in writing of such
provision of consultancy services.
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10. Confidentiality.
Consultant agrees that during the Term (otherwise than in the
performance of his duties hereunder) and thereafter, not to, directly or
indirectly, make use of, or divulge to any person, firm, corporation, entity or
business organization, and he shall 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; but this Section 10 shall not prevent Consultant from responding to
any subpoena, court order or threat of other legal duress, provided Consultant
notifies the Company thereof with reasonable promptness to that the Company may
seek a protective order or other appropriate relief
11. Delivery of Materials.
Consultant agrees that upon the expiration of the Term he will
deliver to the Company all documents, papers, materials and other property of
the Company relating to its affairs which may then be in his possession or
under his control.
12. Noninterference.
Consultant agrees that he will not during the Term solicit the
employment of any employee of the Company 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 and the
Company.
13. Remedies of the Company.
Consultant agrees that, in the event of a material breach by
Consultant of this Agreement, in addition to any other rights that the Company
may have pursuant to this Agreement, the Company shall be entitled, if it so
elects, 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 Consultant or to enjoin Consultant from engaging in any
activity in violation hereof. Consultant agrees that because Consultant's
services to the Company are of such a unique and extraordinary character, a
suit at law may be an inadequate remedy with respect to a breach by Consultant
of Sections 9, 10, 11 and 12 hereof, and that upon any such breach or
threatened breach by him of such Sections the Company shall be entitled, in
addition to any other lawful remedies that may be available to it, to
injunctive relief.
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14. Notices.
All notices to be given hereunder shall be deemed duly given
when delivered personally in writing or mailed, certified mail, return receipt
requested, postage prepaid and addressed as follows:
(a) If to be given to the Company:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx
with a copy similarly addressed
and marked to the attention of
the Legal Department
(b) If to be given to Consultant:
Xx. X. X. Xxxxxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
or to such other address as a party may request by notice given in accordance
with this Section 14.
15. Miscellaneous.
(a) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and replaces and supersedes
as of the date hereof any and all prior agreements and understandings with
respect to Consultant's employment by the Company, whether oral or written,
between the parties hereto, including, without limitation, the Employment
Agreement and, except to the extent provided in Section 4(c) hereof, the Prior
Agreement. This Agreement may not be changed nor may any provision hereof by
waived except by an instrument in writing duly signed by the party to be
charged. This Agreement shall be interpreted, governed and controlled by the
law of the State of Colorado without reference to principles of conflict of
laws.
(b) All options to acquire the Company's Class A Common Stock
currently held by Consultant which by their terms are not currently exercisable
are now currently exercisable. Consultant shall be deemed to be an employee of
the Company for purposes of paragraph 8 of the option agreements under which
said options were granted.
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IN WITNESS WHEREOF, this Agreement has been executed as of the
day and year first above written.
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Executive Vice President
/s/ X. X. XXXXXXXX
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X. X. Xxxxxxxx
ATTEST:
/s/ Xxxxxxx X. Xxxxx
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