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EXHIBIT 10.12
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), including the attached Exhibit
"A," is entered into between Azurix Corp., a Delaware corporation, ("Employer")
and subsidiary of ENRON CORP., an Oregon corporation, having offices at 0000
Xxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 ("Enron"), and XXXX XXXXXXX, an individual
currently residing at 0 Xxxxxxxx Xxxxx Xxxxxxx, Xxxxxx XXXXXX XXXXXXX XX00 0XX
("Employee"), to be effective as of September 15, 1998 (the "Effective Date").
WITNESSETH:
WHEREAS, Employer is desirous of employing Employee pursuant to the
terms and conditions and for the consideration set forth in this Agreement, and
Employee is desirous of entering the employ of Employer pursuant to such terms
and conditions and for such consideration.
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein, Employer and Employee agree as
follows:
ARTICLE 1: EMPLOYMENT AND DUTIES:
1.1 Employer agrees to employ Employee, and Employee agrees to be
employed by Employer, beginning as of the Effective Date and continuing until
the date set forth on Exhibit "A" (the "Term"), subject to the terms and
conditions of this Agreement.
1.2 Employee initially shall be employed in the position set forth on
Exhibit A. Employer may subsequently assign Employee to a different position or
modify Employee's duties and responsibilities. Moreover, Employer may assign
this Agreement and Employee's employment to Enron or any affiliates of Enron.
Employee agrees to serve in the assigned position and to perform diligently and
to the best of Employee's abilities the duties and services appertaining to such
position as determined by Employer, as well as such additional or different
duties and services appropriate to such position which Employee from time to
time may be reasonably directed to perform by Employer. Employee shall at all
times comply with and be subject to such policies and procedures as Employer may
establish from time to time.
1.3 Employee shall, during the period of Employee's employment by
Employer, devote Employee's full business time, energy, and best efforts to the
business and affairs of Employer. Employee may not engage, directly or
indirectly, in any other business, investment, or activity that interferes with
Employee's performance of Employee's duties hereunder, is contrary to the
interests of Employer or Enron, or requires any significant portion of
Employee's business time.
1.4 In connection with Employee's employment by Employer, Employer
shall endeavor to provide Employee access to such confidential information
pertaining to the business and services of Employer as is appropriate for
Employee's employment responsibilities.
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Employer also shall endeavor to provide to Employee the opportunity to develop
business relationships with those of Employer's clients and potential clients
that are appropriate for Employee's employment responsibilities.
1.5 Employee acknowledges and agrees that, at all times during the
employment relationship Employee owes fiduciary duties to Employer, including
but not limited to the fiduciary duties of the highest loyalty, fidelity and
allegiance to act at all times in the best interests of the Employer, to make
full disclosure to Employer of all information that pertains to Employer's
business and interests, to do no act which would injure Employer's business, its
interests, or its reputation, and to refrain from using for Employee's own
benefit or for the benefit of others any information or opportunities pertaining
to Employer's business or interests that are entrusted to Employee or that he
learned while employed by Employer. Employee acknowledges and agrees that upon
termination of the employment relationship, Employee shall continue to refrain
from using for his own benefit or the benefit of others any information or
opportunities pertaining to Employer's business or interests that were entrusted
to Employee during the employment relationship or that he learned while employed
by Employer. Employee agrees that while employed by Employer and thereafter he
shall not knowingly take any action which interferes with the internal
relationships between Employer and its employees or representatives or
interferes with the external relationships between Employer and third parties.
1.6 It is agreed that any direct or indirect interest in, connection
with, or benefit from any outside activities, particularly commercial
activities, which interest might in any way adversely affect Employer or any of
its affiliates, involves a possible conflict of interest. In keeping with
Employee's fiduciary duties to Employer, Employee agrees that during the
employment relationship Employee shall not knowingly become involved in a
conflict of interest with Employer or its affiliates, or upon discovery thereof,
allow such a conflict to continue. Moreover, Employee agrees that Employee shall
disclose to Employer's President any facts which might involve such a conflict
of interest that has not been approved by Employer's President. Employer and
Employee recognize that it is impossible to provide an exhaustive list of
actions or interests which constitute a "conflict of interest." Moreover,
Employer and Employee recognize there are many borderline situations. In some
instances, full disclosure of facts by the Employee to Employer's President may
be all that is necessary to enable Employer or its affiliates to protect its
interests. In others, if no improper motivation appears to exist and the
interests of Employer or its affiliates have not suffered, prompt elimination of
the outside interest will suffice. In still others, it may be necessary for
Employer to terminate the employment relationship. Employer and Employee agree
that Employer's determination as to whether a conflict of interest exists shall
be conclusive. Employer reserves the right to take such action as, in its
judgment, will end the conflict.
1.7 Employee understands and acknowledges that the terms and
conditions of this Agreement constitute confidential information. Employee shall
keep confidential the terms of this Agreement and shall not disclose this
confidential information to anyone other than Employee's attorneys, tax
advisors, or as required by law. Employee acknowledges and understands that
disclosure of the terms of this Agreement constitutes a material breach of this
Agreement and could subject Employee to disciplinary action, including without
limitation, termination of employment.
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ARTICLE 2: COMPENSATION AND BENEFITS:
2.1 Employee's monthly base salary during the Term shall be not less
than the amount set forth under the heading "Monthly Base Salary" on Exhibit A,
subject to increase at the sole discretion of the Employer, which shall be paid
in semimonthly installments in accordance with Employer's standard payroll
practice. Any calculation to be made under this Agreement with respect to
Employee's Monthly Base Salary shall be made using the then current Monthly Base
Salary in effect at the time of the event for which such calculation is made.
2.2 While employed by Employer (both during the Term and thereafter),
Employee shall be allowed to participate, on the same basis generally as other
employees of Employer, in all general employee benefit plans and programs,
including improvements or modifications of the same, which on the effective date
or thereafter are made available by Employer to all or substantially all of
Employer's employees. Such benefits, plans, and programs may include, without
limitation, medical, health, and dental care, life insurance, disability
protection, and pension plans. Nothing in this Agreement is to be construed or
interpreted to provide greater rights, participation, coverage, or benefits
under such benefit plans or programs than provided to similarly situated
employees pursuant to the terms and conditions of such benefit plans and
programs.
2.3 Employer shall not by reason of this Article 2 be obligated to
institute, maintain, or refrain from changing, amending, or discontinuing, any
such incentive compensation or employee benefit program or plan, so long as such
actions are similarly applicable to covered employees generally. Moreover,
unless specifically provided for in a written plan document adopted by the Board
of Directors of either Employer or Enron, none of the benefits or arrangements
described in this Article 2 shall be secured or funded in any way, and each
shall instead constitute an unfunded and unsecured promise to pay money in the
future exclusively from the general assets of Employer.
2.4 Employer may withhold from any compensation, benefits, or amounts
payable under this Agreement all federal, state, city, or other taxes as may be
required pursuant to any law or governmental regulation or ruling.
2.5 In addition to all other compensation payable under this
Agreement to Employee, Employer shall also cause Employee to receive:
(i) an option to purchase 100,000 shares of Enron Corp. Common
Stock. The grant shall be effective and the xxxxx xxxxx shall
be equal to the closing price of Enron Corp. Common Stock on
the date on which Employee commences employment under this
Agreement; the grant shall have an exercise term of ten years
from date of grant and shall be evidenced by an award
agreement in the form attached as Exhibit "B"; such option to
vest at the rate of 33 1/3% annually beginning on the first
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anniversary of the date of grant; if Employee and Employer
mutually agree, this option may be converted in whole or in
part into an option to purchase a comparable value of stock in
Employer;
(ii) a lump sum signing bonus of $250,000.00, fully earned by
Employee upon payment thereof, payable in full on a fully
tax-protected basis for both U.S. and U.K. purposes on or
before the expiration of 30 days following the date on which
Employee commences employment under this Agreement;
(iii) an option to purchase 30,000 shares of Enron Corp. Common
Stock. The grant shall be effective and the xxxxx xxxxx shall
be equal to the closing price of Enron Corp. Common Stock on
the date on which Employee commences employment under this
Agreement; such option to be 100% vested upon date of grant;
(iv) a performance bonus under the Enron Corp. Annual Incentive
Bonus Plan (or, a replacement Employer performance bonus
plan), with a target bonus for 1999 and future years equal to
100% of Monthly Base Salary multiplied times 12 ("Annual Base
Salary"). For 1998, Employee's target bonus shall be 50% of
his Annual Base Salary if employment begins in September 1998,
based upon Enron Corp.'s achievement of net income relative to
its target and Employee's achievement of his Performance
Objectives; for 1999 and future years, participation shall be
based on Employer's achievement of net income and/or other
financial measures relative to pre-established targets and
Employee's achievement of his Performance Objectives;
provided, however, Employer's Chairman and Employee shall
negotiate specific Employer and Employee performance targets
and specific relationships of Employee's bonuses to the
Employer's and Employee's actual performance with respect to
such targets; and
(v) the other items of compensation listed on Exhibit "A".
ARTICLE 3: TERMINATION PRIOR TO EXPIRATION OF TERM AND EFFECTS OF SUCH
TERMINATION:
3.1. Notwithstanding any other provisions of this Agreement, Employer
shall have the right to terminate Employee's employment under this Agreement at
any time prior to the expiration of the Term for any of the following reasons:
(i) For "cause" upon the determination by the Employer's
management committee (or, if there is no management committee,
the highest applicable level of management) that "cause"
exists for the termination of the employment relationship. As
used in this Section 3.1(i), the term "cause" shall mean [a]
Employee's gross negligence or willful misconduct in the
performance of the duties and services required of Employee
pursuant to this Agreement; [b] Employee has been convicted of
a felony; [c] Employee has willfully refused without proper
legal reason to perform the duties and responsibilities
required of
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Employee under this Agreement which remains uncorrected for
thirty (30) days following written notice to Employee by
Employer of such breach; [d] Employee's involvement in a
conflict of interest as referenced in Section 1.6 for which
Employer makes a determination to terminate the employment of
Employee which remains uncorrected for thirty (30) days
following written notice to Employee by Employer of such
breach; [e] Employee has willfully engaged in conduct that
Employee knows or should know is materially injurious to
Employer, Enron, or any of their respective subsidiaries; [f]
Employee's material breach of any material provision of this
Agreement or corporate code or policy which remains
uncorrected for thirty (30) days following written notice to
Employee by Employer of such breach; or [g] Employee violates
the Foreign Corrupt Practices Act or other applicable United
States law as proscribed by Section 5.1. It is expressly
acknowledged and agreed that the decision as to whether
"cause" exists for termination of the employment relationship
by Employer is delegated to the Employer's management
committee (or, if there is no management committee, the
highest applicable level of Employer's management) for
determination. If Employee disagrees with the decision reached
by Employer's management committee (or, if there is no
management committee, the highest applicable level of
Employer's management), the dispute will be limited to whether
Employer's management committee (or, if there is no Enron
management committee, the highest applicable level of
Employer's management) reached its decision in good faith;
(ii) [a] for any other reason whatsoever, with or without cause, in
the sole discretion of the management committee (or, if there
is no management committee, the highest applicable level of
management) of Employer; or [b] Employee's failure to meet his
material specific Performance Objectives as established from
time to time by Employer, as reasonably determined by the
Chairman of Employer;
(iii) upon Employee's death; or
(iv) upon Employee's becoming disabled so as to entitle Employee to
benefits under Enron's long-term disability plan or, if
Employee is not eligible to participate in such plan, then
Employee is permanently and totally unable to perform
Employee's duties for Employer as a result of any medically
determinable physical or mental impairment as supported by a
written medical opinion to the foregoing effect by a physician
selected by Employer.
The termination of Employee's employment by Employer prior to the expiration of
the Term shall constitute a "Termination for Cause" if made pursuant to Section
3.1(i); the effect of such termination is specified in Section 3.4. The
termination of Employee's employment by Employer prior to the expiration of the
Term shall constitute an "Involuntary Termination" if made pursuant to Section
3.1(ii); the effect of such termination is specified in Section 3.5. The effect
of the employment relationship being terminated pursuant to Section 3.1(iii) as
a result of Employee's death is specified in Section 3.6. The effect of the
employment relationship being terminated pursuant to Section 3.1(iv) as a result
of the Employee becoming incapacitated is specified in Section 3.7.
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3.2 Notwithstanding any other provisions of this Agreement except
Section 8.6, Employee shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term of employment for any of the following reasons:
(i) a material breach by Employer of any material provision of
this Agreement which remains uncorrected for 30 days following
written notice of such breach by Employee to Employer;
(ii) within sixty (60) days of and in connection with or based upon
any of the following:
[a] a transfer of assignment from Employee's present
position to a position which involves an overall
reduction in the nature or scope of Employee's duties
and responsibilities which is not performance
related;
[b] a relocation of Employee from the city in which
Employee was serving at the time of such change to a
place which is more than 50 miles away from such
location;
[c] sale or other disposition of Employer by Enron Corp.
or the sale or other disposition of a material amount
of Employer's assets, such that Employer is no longer
affiliated with Enron Corp., except when Employer
becomes a separate publicly traded company;
[d] the decision by Enron Corp. to discontinue the
development and/or expansion of the Employer's
business or the failure, irrespective of any such
decision, of Employer to continue the development and
or expansion; or
(iii) for any other reason whatsoever, in the sole discretion of
Employee.
The termination of Employee's employment by Employee prior to the expiration of
the Term shall constitute an "Involuntary Termination" if made pursuant to
Section 3.2(i) or 3.2(ii); the effect of such termination is specified in
Section 3.5. The termination of Employee's employment by Employee prior to the
expiration of the Term shall constitute a "Voluntary Termination" if made
pursuant to Section 3.2(iii); the effect of such termination is specified in
Section 3.3.
3.3 Upon a "Voluntary Termination" of the employment relationship by
Employee prior to expiration of the Term, all future compensation to which
Employee is entitled and all future benefits for which Employee is eligible
shall cease and terminate as of the date of termination. Employee shall be
entitled to pro rata salary through the date of such termination, but Employee
shall not be entitled to any individual bonuses or individual incentive
compensation not yet paid at the date of such termination.
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3.4 If Employee's employment hereunder shall be terminated by
Employer for Cause prior to expiration of the Term, all future compensation to
which Employee is entitled and all future benefits for which Employee is
eligible shall cease and terminate as of the date of termination. Employee shall
be entitled to pro rata salary through the date of such termination, but
Employee shall not be entitled to any individual bonuses or individual incentive
compensation not yet paid at the date of such termination.
3.5 Upon an Involuntary Termination of the employment relationship by
either Employer or Employee under Section 3.2(i) or (ii) prior to the expiration
of the Term, Employee shall be entitled, in consideration of Employee's
continuing obligations hereunder after such termination (including, without
limitation, Employee's non-competition obligations, except as expressly provided
to the contrary), to the compensation specified in Section 2.1, as if Employee's
employment (which shall cease on the date of such Involuntary Termination) had
continued for the full Term of this Agreement; housing allowance and educational
assistance for Employee's children at assignment to continue through higher
education as specified in the September 9, 1998 Employment Offer Letter and
Exhibit 1 attached thereto through the end of the Term; and 100% of the bonus
provided in Section 2.5(iv) prorated through the end of the calendar year in
which such termination occurs. In addition, Employee shall receive One Million
Dollars minus the value of equity described at Section 2.5(i) which includes
potential future grants of stock or stock options by Employer or Enron Corp.,
such value to be determined in accordance with the applicable stock equity
plan(s) document(s) and shall include a reduction for broker fees to sell the
shares; provided however, if the Involuntary Termination is due to Employee's
failure to meet his material specific Performance Objectives under Section
3.1(ii)[b] as determined by Employer's Chairman, Employee shall only receive the
remainder of the Monthly Base Pay due under the Term of the Agreement, plus
housing allowance and educational assistance for Employee's children at
assignment shall continue through higher education as specified in the September
9, 1998 Employment Offer Letter and Exhibit 1 thereto through the end of the
Term, and 100% of the bonus provided in Section 2.5(iv) prorated through the end
of the calendar year in which such termination occurs. Employee shall not be
under any duty or obligation to seek or accept other employment following
Involuntary Termination and the amounts due Employee hereunder shall not be
reduced or suspended if Employee accepts subsequent employment. Employee's
rights under this Section 3.5 are Employee's sole and exclusive rights against
Employer, Enron, or their affiliates, and Employer's sole and exclusive
liability to Employee under this Agreement, in contract, tort, or otherwise, for
any Involuntary Termination of the employment relationship. Employee covenants
not to xxx or lodge any claim, demand or cause of action against Employer for
any sums for Involuntary Termination other than those sums specified in this
Section 3.5. If Employee breaches this covenant, Employer shall be entitled to
recover from Employee all sums expended by Employer (including costs and
attorneys fees) in connection with such suit, claim, demand or cause of action.
3.6 Upon termination of the employment relationship as a result of
Employee's death, Employee's heirs, administrators, or legatees shall be
entitled to Employee's pro rata salary through the date of such termination, but
Employee's heirs, administrators, or legatees shall not be entitled to any
individual bonuses or individual incentive compensation not yet paid to Employee
at the date of such termination.
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3.7 Upon termination of the employment relationship as a result of
Employee's incapacity, Employee shall be entitled to his or her pro rata salary
through the date of such termination, but Employee shall not be entitled to any
individual bonuses or individual incentive compensation not yet paid to Employee
at the date of such termination.
3.8 In all cases, the compensation and benefits payable to Employee
under this Agreement upon termination of the employment relationship shall be
offset against any amounts to which Employee may otherwise be entitled under any
and all severance plans, and policies of Employer, Enron, or its affiliates.
3.9 Termination of the employment relationship does not terminate
those obligations imposed by this Agreement which are continuing obligations,
including, without limitation, Employee's obligations under Articles 6 and 7.
ARTICLE 4: CONTINUATION OF EMPLOYMENT BEYOND TERM; TERMINATION AND EFFECTS OF
TERMINATION:
4.1 Should Employee remain employed by Employer beyond the expiration
of the Term specified on Exhibit "A," such employment shall convert to a
month-to-month relationship terminable at any time by either Employer or
Employee for any reason whatsoever, with or without cause. Upon such termination
of the employment relationship by either Employer or Employee for any reason
whatsoever, all future compensation to which Employee is entitled and all future
benefits for which Employee is eligible shall cease and terminate. Employee
shall be entitled to pro rata salary through the date of such termination, but
Employee shall not be entitled to any individual bonuses or individual incentive
compensation not yet paid at the date of such termination.
ARTICLE 5: UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND OTHER LAWS:
5.1. Employee shall at all times comply with United States laws
applicable to Employee's actions on behalf of Employer, including specifically,
without limitation, the United States Foreign Corrupt Practices Act, generally
codified in 15 USC 78 (FCPA), as the FCPA may hereafter be amended, and/or its
successor statutes. If Employee pleads guilty to or nolo contendere or admits
civil or criminal liability under the FCPA or other applicable United States
law, or if a court finds that Employee has personal civil or criminal liability
under the FCPA or other applicable United States law, or if a court finds that
Employee committed an action resulting in any Enron entity having civil or
criminal liability or responsibility under the FCPA or other applicable United
States law with knowledge of the activities giving rise to such liability or
knowledge of facts from which Employee should have reasonably inferred the
activities giving rise to liability had occurred or were likely to occur, such
action or finding shall constitute "cause" for termination under this Agreement
unless Employer's management committee (or, if there is no management committee,
the highest applicable level of Employer's management) determines that the
actions found to be in violation of the FCPA or other applicable United States
law were taken in good faith and in compliance with all applicable policies of
Employer and Enron.
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ARTICLE 6: OWNERSHIP AND PROTECTION OF INFORMATION; COPYRIGHTS:
6.1 All information, ideas, concepts, improvements, discoveries, and
inventions, whether patentable or not, which are conceived, made, developed or
acquired by Employee, individually or in conjunction with others, during
Employee's employment by Employer (whether during business hours or otherwise
and whether on Employer's premises or otherwise) which relate to Employer's
business, products or services (including, without limitation, all such
information relating to corporate opportunities, research, financial and sales
data, pricing and trading terms, evaluations, opinions, interpretations,
acquisition prospects, the identity of customers or their requirements, the
identity of key contacts within the customer's organizations or within the
organization of acquisition prospects, or marketing and merchandising
techniques, prospective names, and marks) shall be disclosed to Employer and are
and shall be the sole and exclusive property of Employer. Moreover, all
drawings, memoranda, notes, records, files, correspondence, drawings, manuals,
models, specifications, computer programs, maps and all other writings or
materials of any type embodying any of such information, ideas, concepts,
improvements, discoveries, and inventions are and shall be the sole and
exclusive property of Employer.
6.2 Employee acknowledges that the business of Employer, Enron, and
their affiliates is highly competitive and that their strategies, methods,
books, records, and documents, their technical information concerning their
products, equipment, services, and processes, procurement procedures and pricing
techniques, the names of and other information (such as credit and financial
data) concerning their customers and business affiliates, all comprise
confidential business information and trade secrets which are valuable, special,
and unique assets which Employer, Enron, or their affiliates use in their
business to obtain a competitive advantage over their competitors. Employee
further acknowledges that protection of such confidential business information
and trade secrets against unauthorized disclosure and use is of critical
importance to Employer, Enron, and their affiliates in maintaining their
competitive position. Employee hereby agrees that Employee will not, at any time
during or after his or her employment by Employer, make any unauthorized
disclosure of any confidential business information or trade secrets of
Employer, Enron, or their affiliates, or make any use thereof, except in the
carrying out of his or her employment responsibilities hereunder. Enron and its
affiliates shall be third party beneficiaries of Employee's obligations under
this Section. As a result of Employee's employment by Employer, Employee may
also from time to time have access to, or knowledge of, confidential business
information or trade secrets of third parties, such as customers, suppliers,
partners, joint venturers, and the like, of Employer, Enron, and their
affiliates. Employee also agrees to preserve and protect the confidentiality of
such third party confidential information and trade secrets to the same extent,
and on the same basis, as Employer's confidential business information and trade
secrets. Employee acknowledges that money damages would not be sufficient remedy
for any breach of this Article 6 by Employee, and Employer shall be entitled to
enforce the provisions of this Article 6 by terminating any payments then owing
to Employee under this Agreement and/or to specific performance and injunctive
relief as remedies for such
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breach or any threatened breach. Such remedies shall not be deemed the exclusive
remedies for a breach of this Article 6, but shall be in addition to all
remedies available at law or in equity to Employer, including the recovery of
damages from Employee and his or her agents involved in such breach.
6.3 All written materials, records, and other documents made by, or
coming into the possession of, Employee during the period of Employee's
employment by Employer which contain or disclose confidential business
information or trade secrets of Employer, Enron, or their affiliates shall be
and remain the property of Employer, Enron, or their affiliates, as the case may
be. Upon termination of Employee's employment by Employer, for any reason,
Employee promptly shall deliver the same, and all copies thereof, to Employer.
6.4 If, during Employee's employment by Employer, Employee creates
any original work of authorship fixed in any tangible medium of expression which
is the subject matter of copyright (such as videotapes, written presentations on
acquisitions, computer programs, drawings, maps, architectural renditions,
models, manuals, brochures, or the like) relating to Employer's business,
products, or services, whether such work is created solely by Employee or
jointly with others (whether during business hours or otherwise and whether on
Employer's premises or otherwise), Employee shall disclose such work to
Employer. Employer shall be deemed the author of such work if the work is
prepared by Employee in the scope of his or her employment; or, if the work is
not prepared by Employee within the scope of his or her employment but is
specially ordered by Employer as a contribution to a collective work, as a part
of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation, or as an instructional text, then the work
shall be considered to be work made for hire and Employer shall be the author of
the work. If such work is neither prepared by the Employee within the scope of
his or her employment nor a work specially ordered and is deemed to be a work
made for hire, then Employee hereby agrees to assign, and by these presents does
assign, to Employer all of Employee's worldwide right, title, and interest in
and to such work and all rights of copyright therein.
6.5 Both during the period of Employee's employment by Employer and
thereafter, Employee shall assist Employer and its nominee, at any time, in the
protection of Employer's worldwide right, title, and interest in and to
information, ideas, concepts, improvements, discoveries, and inventions, and its
copyrighted works, including without limitation, the execution of all formal
assignment documents requested by Employer or its nominee and the execution of
all lawful oaths and applications for applications for patents and registration
of copyright in the United States and foreign countries.
ARTICLE 7: POST-EMPLOYMENT NON-COMPETITION OBLIGATIONS:
7.1 As part of the consideration for the compensation and benefits to
be paid to Employee hereunder, in keeping with Employee's duties as a fiduciary
and in order to protect Employer's interests in the confidential information of
Employer and the business relationships developed by Employee with the clients
and potential clients of Employer, and as an additional incentive for Employer
to enter into this Agreement, Employer and Employee agree to the non-
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competition provisions of this Article 7. Employee agrees that during the period
of Employee's non-competition obligations hereunder, Employee will not, directly
or indirectly for Employee or for others, in any geographic area or market where
Employer or Enron or any of their affiliated companies are conducting any
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 Employer;
(ii) render advice or services to, or otherwise assist, any other
person, association, or entity who is engaged, directly or
indirectly, in any business competitive with the water
business conducted by Employer;
(iii) induce any employee of Employer or Enron or any of their
affiliates to terminate his or her employment with Employer,
Enron, or their affiliates, or hire or assist in the hiring of
any such employee by person, association, or entity not
affiliated with Enron.
These non-competition obligations shall extend until the latter of (a)
expiration of the Term or (b) one year after termination of the employment
relationship.
7.2 Employee understands that the foregoing restrictions may limit
his or her ability to engage in certain businesses anywhere in the world during
the period provided for above, but acknowledges that Employee will receive
sufficiently high remuneration and other benefits (e.g., the right to receive
compensation under Section 3.5 for the remainder of the Term upon Involuntary
Termination) under this Agreement to justify such restriction. Employee
acknowledges that money damages would not be sufficient remedy for any breach of
this Article 7 by Employee, and Employer shall be entitled to enforce the
provisions of this Article 7 by terminating any payments then owing to Employee
under this Agreement and/or to specific performance and injunctive relief as
remedies for such breach or any threatened breach. Such remedies shall not be
deemed the exclusive remedies for a breach of this Article 7, but shall be in
addition to all remedies available at law or in equity to Employer, including,
without limitation, the recovery of damages from Employee and his or her agents
involved in such breach.
7.3 It is expressly understood and agreed that Employer and Employee
consider the restrictions contained in this Article 7 to be reasonable and
necessary to protect the proprietary information of Employer. 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.
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ARTICLE 8: MISCELLANEOUS:
8.1 For purposes of this Agreement the terms "affiliates" or
"affiliated" means an entity who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with
Enron or Employer.
8.2 Except as otherwise required by law or court order or in response
to any litigation or other dispute resolution initiated against Employee,
Employee shall refrain, both during the employment relationship and after the
employment relationship terminates, from publishing any oral or written
statements about Employer, Enron, any of their respective subsidiaries or
affiliates, or any of such entities' officers, employees, agents or
representatives that are slanderous, libelous, or defamatory; or that disclose
private or confidential information about Employer, Enron, any of their
respective subsidiaries or affiliates, or any of such entities' business
affairs, officers, employees, agents, or representatives; or that constitute an
intrusion into the seclusion or private lives of Employer, Enron, any of their
respective subsidiaries or affiliates, or such entities' officers, employees,
agents, or representatives; or that give rise to unreasonable publicity about
the private lives of Employer, Enron, any of their respective subsidiaries or
affiliates, or any of such entities' officers, employees, agents, or
representatives; or that place Employer, Enron, any of their respective
subsidiaries or affiliates, or any of such entities' or its officers, employees,
agents, or representatives in a false light before the public; or that
constitute a misappropriation of the name or likeness of Employer, Enron, any of
their respective subsidiaries or affiliates, or any of such entities' or its
officers, employees, agents, or representatives. A violation or threatened
violation of this prohibition may be enjoined by the courts. The rights afforded
the Enron entities and affiliates under this provision are in addition to any
and all rights and remedies otherwise afforded by law.
8.3 For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when personally delivered or when mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Employer:
Azurix Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
If to Employee, to the address shown on the first page hereof.
Either Employer or Employee may furnish a change of address to the
other in writing in accordance herewith, except that notices of changes of
address shall be effective only upon receipt.
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8.4 This Agreement shall be governed in all respects by the laws of
the State of Texas, excluding any conflict-of-law rule or principle that might
refer the construction of the Agreement to the laws of another State or country.
8.5 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.
8.6 If a dispute arises out of or related to this Agreement, other
than a dispute regarding Employee's obligations under Article 6, or Article 7,
and if the dispute cannot be settled through direct discussions, then Employer
and Employee agree to first endeavor to settle the dispute in an amicable manner
by mediation, before having recourse to any other proceeding or forum.
8.7 Each of Employer and Employee is a citizen of the State of
Texas. Employer's principal place of business is in Houston, Xxxxxx County,
Texas. Employee resides in the United Kingdom. This Agreement was negotiated and
signed in Houston, Texas. This Agreement shall be performed in Houston, Texas.
Any litigation that may be brought by either Employer or Employee involving the
enforcement of this Agreement or the rights, duties, or obligations of this
Agreement, shall be brought exclusively in the State or federal courts sitting
in Houston, Xxxxxx County, Texas. In the event that service of process cannot be
effected upon a party, each party hereby irrevocably appoints the Secretary of
State for the State of Texas as its or his agent for service of process to
receive the summons and other pleadings in connection with any such litigation.
8.8 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,
association, or entity 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, association, or entity or circumstances other than those
to which they have been held invalid or unenforceable, shall remain in full
force and effect.
8.9 Enron hereby warrants and represents that it shall guarantee all
contractual obligations under this Agreement and this Agreement shall be binding
upon and inure to the benefit of Employer and any other person, association, or
entity which may hereafter acquire or succeed to all or substantially all of the
business or assets of Employer by any means whether direct or indirect, by
purchase, merger, consolidation, or otherwise. Employee's rights and obligations
under Agreement hereof are personal and such rights, benefits, and obligations
of Employee shall not be voluntarily or involuntarily assigned, alienated, or
transferred, whether by operation of law or otherwise, without the prior written
consent of Employer.
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8.10 There exist other agreements between Employer and Employee
relating to the employment relationship between them, e.g., the agreement with
respect to company policies contained in Employer's Conduct of Business Affairs
booklet and agreements with respect to benefit plans, including but not limited
to the expatriate assignment letter assigning this Agreement to Enron Expat
Services, Inc. This Agreement replaces and merges previous agreements and
discussions pertaining to the following subject matters covered herein: the
nature of Employee's employment relationship with Employer and the term and
termination of such relationship. This Agreement constitutes the entire
agreement of the parties with regard to such subject matters, and contains all
of the covenants, promises, representations, warranties, and agreements between
the parties with respect such subject matters. Each party to this Agreement
acknowledges that no representation, inducement, promise, or agreement, oral or
written, has been made by either party with respect to such subject matters,
which is not embodied herein, and that no agreement, statement, or promise
relating to the employment of Employee by Employer that is not contained 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 each party whose rights
hereunder are affected thereby, provided that any such modification must be
authorized or approved by the Board of Directors of Employer.
IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement in multiple originals to be effective on the date first stated above.
AZURIX CORP.
By: /s/ XXXXXXX X. XXXX
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman
This 12th day of October, 1998
XXXX XXXXXXX
/s/ XXXX XXXXXXX
------------------------------
This 7th day of October, 1998
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EXHIBIT "A" TO
EXECUTIVE EMPLOYMENT AGREEMENT
BETWEEN AZURIX CORP. AND XXXX XXXXXXX
Employee Name: Xxxx Xxxxxxx
Term: September 15, 1998 through September 14, 2001
Position: Executive Director/Europe/Middle East/Africa/CIS
Location: London, England
Monthly Base Salary: $41,000.00 U.S. Currency
Bonus: As described at Section 2.5(iv) of this Agreement.
AZURIX CORP.
By: /s/ XXXXXXX X. XXXX
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman
This 12th day of October, 1998
XXXX XXXXXXX
/s/ XXXX XXXXXXX
------------------------------
This 7th day of October, 1998
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FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement, entered into on this 11 of March, 1999, and made effective
as of 11 March, 1999, by and between AZURIX CORP., a Delaware corporation having
its headquarters at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, ("Employer") and XXXX
XXXXXXX ("Employee"), an individual residing in the UNITED KINGDOM, is an
amendment to that certain Executive Employment Agreement between the Employer
and Employee entered into the 7th day of October, 1998, and made effective as of
September 15, 1998 (the "Employment Agreement").
WHEREAS, the parties desire to amend the Employment Agreement to provide
for further description of target bonuses, and to make other amendments to the
Employment Agreement as provided herein;
NOW, THEREFORE, in consideration thereof and of the mutual covenants
contained herein, the parties agree as follows:
1. Article 2, Section 2.5 (iv) is are hereby deleted and the
following inserted in its place:
o "(iv) a performance bonus under the Enron Corp. Annual Incentive
Bonus Plan (or, a replacement Employer performance bonus plan), with
a target bonus for 1999 and future years equal to 100% of Monthly
Base Salary multiplied times 12 ("Annual Base Salary"). For 1998,
Employee's target bonus shall be 50% of his Annual Base Salary if
employment begins in September 1998, based upon Enron Corp.'s
achievement of net income relative to its target and Employee's
achievement of his Performance Objectives; for 1999 and future
years, participation shall be based on Employer's achievement of
net income and/or other financial measures relative to
pre-established targets and Employee's achievement of his
Performance Objectives; provided, however, Employer's Chairman
and Employee shall negotiate specific Employer and Employee
performance targets and specific relationships of Employee's
bonuses to the Employer's and Employee's actual performance with
respect to such targets; the 1999, 2000, and 2001 bonus payments
will be offset by the increased vested value of 50,000 of the
100,000 Enron Corp. Stock Options described herein above at
Section 2.5(i) and such offset to be determined as follows:
o 1999 bonus target minus the December 31, 1999 value of 16,666
options vested September 15, 1999
o 2000 bonus target minus the December 31, 2000 value of 16,667
options vested September 15, 2000
o 2001 bonus target minus the December 31, 2001 value of 16,667
options vested September 15, 2001
For example, if the 2000 bonus target equaled $500,000.00 and the
December 31, 2000 vested value of the 16,666 options vested September
15, 2000 equaled $249,990.00 ($15.00 increase from exercise prior to
12/31/00 closing price), then the 2000 bonus target would equal
$250,010.00 ($500,000.00 minus(-) $249,990.00); and"
This Amendment is a First Amendment to the Employment Agreement, and the
parties agree that all other terms, conditions and stipulations contained in
the Employment Agreement, and any amendments thereto, shall remain in full
force and effect and without any change or modification, except as provided
herein.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AZURIX CORP.
By: /s/ XXXXXXX X. XXXX
---------------------------
Name: Xxxxxxx X. Xxxx
Title: Chairman
This 11th day of March, 1999
XXXX XXXXXXX
/s/ XXXX XXXXXXX
------------------------------
This 11th day of March, 1999
