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EXHIBIT 10.88
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of January 1, 1998 (this "Agreement"),
between TELE-COMMUNICATIONS, INC., a Delaware corporation (the "Company"), and
XXXX X. XXXXXX, now residing at 00 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000
("Consultant").
On the date hereof, Consultant resigned as an officer, director and
employee of the Company, its subsidiaries and its controlled affiliates, except
that he shall remain a director and Vice Chairman of the Board of Directors of
Tele-Communications International, Inc. ("TINTA") for so long as he is elected
to such Board and such other Boards as requested by the Chief Executive Officer
of TCI for so long as so requested.
This Consulting Agreement replaces the Employment Agreement, dated as of
November 1, 1992 ("Employment Agreement"), between the Company and Consultant
(and all other employment agreements between the Company, any of its
subsidiaries or affiliates 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 December 31,
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. 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. The phrase "designated
beneficiary or beneficiaries" shall mean the person or persons named by
Consultant from time to time in a signed designation filed with the Company
from time to time.
(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
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Section 4(a) hereof if this Agreement remained in full force and
effect for the full balance of the Term.
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
international operations of the Company in particular. If Consultant continues
to serve as, or 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 provide consultancy services to the
Company, Consultant will, where practical, be given seven 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.
4. Compensation Payable to Consultant.
(a) The Company shall pay to Consultant a sum equal to the rate of
$700,000 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) Of each regular payment, approximately 35.714% shall be deferred
(the "monthly deferred amount"), so as to result in the deferral of payment of
Consultant's salary at the annual rate of approximately $250,000 per annum.
Each such monthly deferred amount shall bear interest, compounded annually, at
the rate of 8% per annum, from the first day of the month of deferral to, but
not including, the Determination Date. A statement will be furnished to
Consultant annually, on or about February 1st of each year, stating the sum of
the monthly deferred amounts and the amount of interest accrued thereon as of
the preceding December 31st. As used herein, "Determination Date" shall mean
the first business day of the first full calendar month following the later of
(i) December 31, 2002, and (ii) the date Consultant ceases to be a consultant
pursuant to this Agreement.
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(d) The sum of the monthly deferred amounts pursuant to Section 4(c)
above plus all interest accrued thereon to 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 240-month
period commencing on the Determination Date and continuing on the first day of
each calendar month thereafter until paid in full. Each monthly payment of the
total deferred amount shall be accompanied by a payment of interest thereon
computed at the rate of 8% per annum, compounded annually, from and including
the Determination Date to the date of such payment.
(e) If Consultant dies prior to the Determination Date, the amount
payable pursuant to Section 4(d) 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 the date of his death (which date of calculation shall
for this purpose be the Determination Date) and shall be paid forthwith in a
lump sum to his designated beneficiary or beneficiaries. If Consultant dies
after the Determination Date and before the expiration of the period during
which the deferred payments provided for in Section 4(d) above are to be paid to
him, the remaining deferred payments shall be paid forthwith in a lump sum to
Consultant's designated beneficiary or beneficiaries. 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 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.
(f) 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 or charge, and shall not in any manner be liable 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 9 of this Agreement
during the entire payment period and Consultant shall comply with the
provisions of Sections 8 and 11 of this Agreement, if said provisions are
applicable by their terms, for the first two (2) years of the payment period.
5. 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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6. 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, 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.
7. 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.
8. 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 of (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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9. 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 9 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.
10. 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.
11. 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.
12. 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 8, 9,
10, and 11 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.
13. 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:
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(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. Xxxx X. Xxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
or to such other address as a party may request by notice given in accordance
with this Section 13.
14. 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. 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 TCI Group, Liberty Media Group
or Ventures Group, or TINTA's, Series A Common Stock currently held by
Consultant which by their terms are not currently exercisable are now currently
exercisable. Consultant, as long as Consultant is a consultant hereunder, shall
be deemed to be an employee of the Company for purposes of the option
agreements under which said options were granted.
(c) The TINTA restricted stock granted to Consultant shall vest upon the
expiration of the terms provided by agreements evidencing their respective
grants; and, as long as
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Consultant is a consultant hereunder, Consultant shall be deemed to be an
employee of TINTA for purposes of the agreements under which such restricted
stock awards were granted.
IN WITNESS WHEREOF, this Agreement has been executed as of the day
and year first above written.
TELE-COMMUNICATIONS, INC.
By:
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Xxxx X. Xxxxxx
