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EXHIBIT 10.22
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement"), made, entered into, and executed
and is between AZURIX CORP. ("Company"), a Delaware corporation, having its
offices in Houston, Texas, and XXXXXX X. XXXXXXXX ("Xx. Xxxxxxxx"), an
individual, residing at 0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000, with respect
to the termination of Xx. Xxxxxxxx'x employment as of the Termination Date (as
defined below).
WITNESSETH:
WHEREAS, the Company and Xx. Xxxxxxxx have entered into an Executive
Employment Agreement effective as of November 9, 1998, as amended (the
"Employment Agreement");
WHEREAS, because of changes in the Company's business strategies in
November 19999, the Company and Xx. Xxxxxxxx concluded that Xx. Xxxxxxxx'x
services are no longer required for the Company's benefit;
WHEREAS, Xx. Xxxxxxxx agreed to continue in the employment of the Company
until February 15, 2000 (the "Termination Date"), but on that date his
employment would terminate; and
WHEREAS, the Company and Xx. Xxxxxxxx have agreed upon the terms and
conditions under which Xx. Xxxxxxxx'x employment with the Company will
terminate;
NOW, THEREFORE, for and in consideration of the recitals and covenants
herein set forth, the parties agree as follows:
1. Employment. Xx. Xxxxxxxx'x termination of employment with the Company shall
be effective on the Termination Date. Xx. Xxxxxxxx shall resign as an officer of
the various subsidiaries and affiliated companies of the Company in which he
holds office however, until the Termination Date, Xx. Xxxxxxxx will continue to
perform the duties reasonably assigned to him by the Company in connection with
the Company's business and such other matters as the Company may reasonably
request. The Company shall provide to Xx. Xxxxxxxx one personal computer and
peripherals, including one palm pilot. The Company will not provide a printer
for the computer.
2 Consideration. Xx. Xxxxxxxx shall be paid by Company the amount of Two
Million Seventy-Six Thousand Seven Hundred Twelve Dollars ($2,076,712.00) on
February 29, 2000. Further, Xx. Xxxxxxxx agrees that any amounts due Company for
personal items charged by Xx. Xxxxxxxx to the Company's American Express Card
shall be deducted by Company from the Consideration.
3. Severance Pay. Xx. Xxxxxxxx waives and the Company shall not be required to
pay, any severance pay or severance benefits, that otherwise would be payable
under the Company's Severance Pay Plan, except as provided for in this
Agreement, in connection with the termination of Xx. Xxxxxxxx'x employment. The
consideration and remuneration provided for under this Agreement are in lieu of
and take the place of any severance or the Employment Agreement pay or
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severance benefit that otherwise would be payable under the Company's
Severance Pay Plan, which Xx. Xxxxxxxx forfeits.
4. Employee Benefits. Xx. Xxxxxxxx shall be entitled to receive benefits
earned by and payable to him under all employee benefit plans in which he
participated or was covered by during his employment with Company, according to
the terms and provisions thereof. Specifically, and without limiting the
generality of the foregoing, Xx. Xxxxxxxx shall continue his rights under any
stock option agreement(s) as if he were involuntarily terminated on the
Termination Date as provided by each of the plan documents and said rights shall
be governed by the terms and provisions of each of the plan documents. Further,
Xx. Xxxxxxxx shall be entitled to receive payment for all accrued and unused
vacation through the Termination Date with payment scheduled on February 29,
2000.
5 Post-Employment Non-Competition Obligations.
5.1 As part of the consideration for the compensation and benefits to be paid
to Xx. Xxxxxxxx hereunder, in keeping with Xx. Xxxxxxxx'x duties as a fiduciary
and in order to protect the Company's interests in the confidential information
of the Company and the business relationships developed by Xx. Xxxxxxxx with the
clients and potential clients of the Company; and as an additional incentive for
Company to enter into this Agreement, Company and Xx. Xxxxxxxx agree to the
non-competition provisions of this Article 5. Xx. Xxxxxxxx agrees that during
the period of Xx. Xxxxxxxx'x non-competition obligations hereunder, Xx. Xxxxxxxx
will not, directly or indirectly for Xx. Xxxxxxxx or for others, in any
geographic area or market where Company or Enron or any of their affiliated
companies are conducting the water business as of the date of termination of the
employment relationship or have during the previous twelve months conducted any
business:
(i) engage in any business competitive with the water business
conducted by Company;
(ii) render advice or services to, or otherwise assist, any other
person, associations, or entity who is engaged, directly or
indirectly , in any business competitively with the water
business conducted by the Company; or
(iii) induce any employee of Company or Enron or their affiliates to
terminate his or her employment with Company, or their
affiliates, or hire or assist in the hiring of any such employee
by person, association, or entity not affiliated with Enron or
Company.
These non-competition obligations shall extend until November 9, 2004.
5.2 Remedy for Breach of Contract. The parties agree that in the event there is
any breach or asserted breach of the terms, covenants or conditions of this
Agreement, the remedy of the parties hereto shall be in law and in equity and
injunctive relief shall lie for the enforcement of or relief
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from any provisions of this Agreement. If any remedy or relief is sought and
obtained by any party against one of the other parties pursuant to this Section
5.2, the other party shall, in addition to the remedy of relief so obtained, be
liable to the party seeking such remedy or relief for the expenses incurred by
such party in successfully obtaining such remedy or relief, including the fees
and expenses of such successful party's counsel.
5.3 It is expressly understood and agreed that Company and Xx. Xxxxxxxx consider
the restrictions contained in this Article 5 to be reasonable and necessary to
protect the proprietary information of Company. Nevertheless, if any of the
aforesaid restrictions are found by a court having jurisdiction to be
unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by such courts so as to be reasonable and enforceable and, as so
modified by the court, to be fully enforced.
6. Confidential Information.
6.1 Confidential Information.
A. Xx. Xxxxxxxx acknowledges that Company's business is highly competitive
and that Company's methods, strategies, books, records and documents,
Company's technical information concerning its products, equipment,
services and processes, procurement procedures and pricing and marketing
techniques, including but not limited to the names of and other information
(such as credit and financial data) concerning Company's customers and
business affiliates, all comprise confidential business information and
trade secrets of Company which are valuable, special, and unique assets of
Company, which Company uses in its business to obtain a competitive
advantage over Company's competitors which do not know or use this
information. Xx. Xxxxxxxx further acknowledges that protection of Company's
confidential business information and trade secrets against unauthorized
disclosure and use, is of critical importance to Company in maintaining its
competitive position. Accordingly, Xx. Xxxxxxxx hereby agrees that
notwithstanding any other provision of this Agreement other than contained
in the following paragraph "B", he will not, at any time, make any
unauthorized disclosure of any of the information referred to in the first
sentence of this Section 6.1A ("Confidential Information") or make any
unauthorized use thereof which, in any manner, would have, or is likely to
have, an adverse effect upon the Company or any affiliate.
B. However, Xx. Xxxxxxxx obligations under this Section 6 shall not extend
to:
1) Confidential Information which is or becomes part of the public domain
or is available to the public by publication or otherwise without
disclosure by Xx. Xxxxxxxx; or
2) Confidential Information which was within Xx. Xxxxxxxx'x knowledge or
in his possession prior to his employment by the Company; or
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3) Confidential Information which, either prior to or subsequent to the
Company's disclosure to Xx. Xxxxxxxx with an obligation of
confidentiality, was disclosed to Xx. Xxxxxxxx, without obligation of
confidentiality, by a third party who did not acquire such
information, directly or indirectly, from Xx. Xxxxxxxx, or from any
third party who is under an obligation of confidentiality; or
4) any disclosure of Confidential Information by Xx. Xxxxxxxx which is
required by law, including deposition or trial testimony by Xx.
Xxxxxxxx pursuant to subpoena. If Xx. Xxxxxxxx is requested or
required (by oral question, interrogatories, request for information
or documents, subpoena, civil investigative demand or similar process)
to disclose any Confidential Information, if reasonably possible under
the circumstances as determined in good faith by Xx. Xxxxxxxx, Xx.
Xxxxxxxx will promptly notify the Company of such request or
requirement so that the Company may seek an appropriate protective
order or waive compliance with provisions of this Agreement. In the
absence of a protective order or the receipt of a waiver hereunder, or
in the good faith determination of Xx. Xxxxxxxx that time is of the
essence, Xx. Xxxxxxxx may obtain legal counsel, and if Xx. Xxxxxxxx
and/or his counsel in good faith believe that Xx. Xxxxxxxx is
compelled to disclose the Confidential Information or be exposed to
liability for contempt or suffer other censure or penalty, Xx.
Xxxxxxxx may disclose only such Confidential Information to the party
compelling disclosure as is required by law, as determined by Xx.
Xxxxxxxx on advice of counsel. Xx. Xxxxxxxx further agrees that he
will cooperate with the Company in its efforts to obtain a protective
order or other reliable assurance that confidential treatment will be
accorded the Confidential Information. All legal fees, costs and
expenses incurred by Xx. Xxxxxxxx in obtaining legal representation
pursuant to his obligations under this Section 6.1B shall be paid by
the Company. The Company further agrees that it will indemnify Xx.
Xxxxxxxx for any other costs and expenses incurred by Xx. Xxxxxxxx in
connection with his obligations under this Section 6.1B, including but
not limited to legal damages and penalties assessed against Xx.
Xxxxxxxx for compliance with his obligations hereunder.
6.2 Definition of Company. For purposes of this Agreement, "Company" shall
include Enron Corp. ("Enron"), Azurix Corp., and all of their subsidiaries and
affiliated companies.
6.3 Non-Disparagement. Xx. Xxxxxxxx and Company agree that they will not
knowingly make any comments with the intent to impugn, castigate or otherwise
damage the reputation of the other, including Company's subsidiaries and
affiliated companies, and the executives and managers thereof, unless legally
compelled to do so in any legal or administrative proceeding.
7. Miscellaneous.
7.1 Notices. For purposes of this Agreement, notices and all other
communications shall be in writing and shall have been duly given when
personally delivered or when mailed by United States certified or registered
mail, addressed as follows:
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If to Company:
Azurix Corp.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
If to Xx. Xxxxxxxx:
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
or to any other address which either party may furnish to the other in writing.
Any such notice shall be effective when so delivered or three business days
after it is so mailed, except that notices of changes of address shall be
effective only upon receipt.
7.2 Applicable Law. THIS CONTRACT IS ENTERED INTO UNDER, AND SHALL BE GOVERNED
FOR ALL PURPOSES BY, THE LAWS OF THE STATE OF TEXAS.
7.3 No Waiver. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
7.4 Remedy for Breach of Contract.
A. The parties agree that in the event there is any breach or asserted
breach of the terms, covenants or conditions of this Agreement, the
remedies of the parties hereto shall be in both law and in equity,
including injunctive relief for the enforcement of or relief from any
provisions of this Agreement.
B. In the event either party has a reasonable basis for claiming that the
other party has violated the provisions of Section 5 of this Agreement and
that such violation is material, the aggrieved party shall give the other
party written notice of the specific facts of such violation. If such
violation is material and has not been cured within ten (10) days after
such notice is given, the aggrieved party may seek any relief provided in
this Agreement.
C. Of Sections 5 or 6.1: In the event either party has a reasonable basis
for claiming that the other party has violated the provisions of Sections 5
or 6.1, and such violation is material, such party shall give written
notice of specific facts of such violation to the other party. If, after
ten (10) days of giving such notice, the alleged violation has occurred,
has not ceased, or reasonably may be expected to be repeated again, the
aggrieved party shall have the right to bring an action at law or in
equity. In any action brought for an alleged breach of Section 5 or 6.1,
the complaining party may seek whatever damages and redress it
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deems appropriate, including but not limited to injunctive relief
pertaining to the alleged violation complained of.
D. Money damages would not be sufficient remedy for any breach of Section
6.1 by either party, and either party shall be entitled to seek specific
performance and injunctive relief as remedies for such breach or threatened
breach, subsequent to the ten (10) day period after the notice provided for
in Section 7.4C. Such remedies shall not be deemed the exclusive remedies
for a breach of Section 6.1 by either party, but shall be in addition to
all remedies available at law or in equity to the non-breaching party
including the recovery of damages from the breaching party, as provided for
in Section 7.4C.
7.5 Severability. It is a desire and intent of the parties that the terms,
provisions, covenants and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law. If any such term, provision,
covenant or remedy of this Agreement or the application thereof to any person or
circumstances shall, to any extent, be construed to be invalid or unenforceable
in whole or in part, then such term, provision, covenant or remedy shall be
construed in a manner so as to permit its enforceability under the applicable
law to the fullest extent permitted by law. In any case, the remaining
provisions of this Agreement or the application thereof to any person or
circumstances other than those to which they have been held invalid or
unenforceable, shall remain in full force and effect. It is further the desire
and intent of the parties that in the event of any breach of any portion of this
Agreement, the remainder of this Agreement shall remain in effect as written and
enforceable to the fullest extent permitted by law.
7.6 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.
7.7 Withholding of Taxes. Company may withhold from any benefits or
remuneration payable under this Agreement all federal, state, city, or other
taxes as may be required pursuant to this Agreement, any law, or governmental
regulation or ruling.
7.8 Headings. The paragraph headings have been inserted for purposes of
convenience and shall not be used for interpretive purposes.
7.9 Assignability.
A. By the Company:
The Company's obligations under this Agreement are not
transferable or assignable by the Company and shall be considered a
liability of the Company in any sale or transfer of substantially all
of the business or assets of the Company by any means whether direct
or indirect, by purchase, merger, consolidation or otherwise.
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B. By Xx. Xxxxxxxx:
With respect to Xx. Xxxxxxxx'x rights and obligations, his rights
and obligations hereunder are personal and neither this Agreement, nor
any right, benefit or obligation of Xx. Xxxxxxxx, shall be subject to
voluntary or involuntary assignment, alienation or transfer, whether
by operation of law or otherwise, without the prior written consent of
Company; provided, the Company agrees that it will not withhold its
consent to an assignment by Xx. Xxxxxxxx to a financial institution of
his rights to receive payments under this Agreement. In the event of
Xx. Xxxxxxxx'x breach of any of the terms, covenants, or conditions of
this Agreement, any such assignment shall be subject to the provisions
of Section 7.4 of this Agreement. This Agreement and all payments
hereunder, including Consulting Payments, shall inure to the benefit
of and be enforceable by and against Xx. Xxxxxxxx'x personal or legal
representatives, executors, administrators, heirs, distributees,
devisees and legatees.
7.10 Release.
A. By execution of this Agreement, Xx. Xxxxxxxx for himself, his legal and
other representatives, claimants, heirs and beneficiaries, forever waives
and releases Company and its affiliated companies from all rights,
benefits, payments and claims (including but not limited to statutory, tort
or contractual claims) of any kind and nature to which Xx. Xxxxxxxx is now
or in the future may be entitled, and arising out of or in connection with
Xx. Xxxxxxxx'x employment with Company or any affiliated company, and Xx.
Xxxxxxxx'x termination of employment, including but not limited to claims
pursuant to the Age Discrimination In Employment Act ("ADEA"), except as
may be specifically provided for under this Agreement or contained in the
plan documents or grants of benefits to which Xx. Xxxxxxxx is entitled
according to the provisions hereof. It is specifically agreed that this
Agreement and the consideration Xx. Xxxxxxxx will receive hereunder,
constitute a complete settlement and release, and an absolute bar to any
and all claims Xx. Xxxxxxxx has or may have against the Company, its
subsidiaries, divisions, any affiliated company, or its directors,
officers, and employees, whether or not the same be presently known or
suspected to be arising out of or in any manner connected with Xx.
Xxxxxxxx' employment thereby or termination of employment with Company,
except as may be specifically provided for under this Agreement or
contained in the plan documents or grants of benefits to which Xx. Xxxxxxxx
is entitled according to the provisions hereof. This Section of the
Agreement applies to rights or claims pursuant to the ADEA only in
existence on or before the date of payment of consideration and
remuneration provided for herein. XX. XXXXXXXX ACKNOWLEDGES AND AGREES, AND
REPRESENTS TO COMPANY THAT (I) HE UNDERSTANDS THE EFFECT OF THE PROVISIONS
OF THIS PARAGRAPH, (II) HE HAS HAD A REASONABLE TIME OF NOT LESS THAN 21
DAYS IN WHICH TO CONSIDER THE EFFECT OF THE PROVISIONS OF THIS PARAGRAPH,
AND (III) HE WAS ADVISED AND ENCOURAGED TO CONSULT AN ATTORNEY PRIOR TO
EXECUTING THIS AGREEMENT WITH RESPECT TO THE EFFECT OF THE PROVISIONS OF
THIS PARAGRAPH AND HIS EXECUTION OF THIS AGREEMENT. XX. XXXXXXXX MAY REVOKE
THIS AGREEMENT DURING THE SEVEN-DAY PERIOD FOLLOWING THE DATE OF EXECUTION,
WHEREUPON THIS AGREEMENT SHALL BE RESCINDED IN ITS ENTIRETY AND BECOME NULL
AND VOID.
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B. Xx. Xxxxxxxx'x execution of the negotiable instrument tendered to him by
the Company in payment of the Consideration provided for in Section 2 of
this Agreement shall be considered ratification and a separate execution of
this Agreement by Xx. Xxxxxxxx.
7.11 Entire Agreement: Modification. This Agreement constitutes the entire
agreement of the parties with regard to the termination of employment of Xx.
Xxxxxxxx, supersedes any and all prior written agreements between the parties,
(with the exception of those plans, agreements and other documents identified or
referred to in Section 4), and this Agreement contains all of the covenants,
promises, representations and agreements between the parties with respect to the
termination of employment of Xx. Xxxxxxxx with Company. Each party to this
Agreement acknowledges that no representation, inducement, promise or agreement,
oral or written, has been made by either party, which is not embodied herein, or
referred to hereby and that no agreement, statement or promise relating to the
employment or termination of employment of Xx. Xxxxxxxx with Company, which is
not contained or provided for, identified or referred to in this Agreement,
shall be valid or binding. Any modification of this Agreement will be effective
only if it is in writing and signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
AZURIX CORP.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Director Human Resources
And Administration
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
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