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EXHIBIT 10.20
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement"), made and entered into the 1st
day of March, 2000 ("Date of Execution") and effective as of November 30, 1999,
is between AZURIX CORP. ("Company"), a Delaware corporation, having its offices
in Houston, Texas, and XXXXXX X. XXXX ("Xx. Xxxx"), an individual, residing in
Houston, Texas.
WITNESSETH:
WHEREAS, Xx. Xxxx and the Company are parties to that certain Executive
Employment Agreement dated as of February 16, 1999 (the "Employment Agreement");
WHEREAS, the Company and Xx. Xxxx have agreed that Xx. Xxxx'x
employment with the Company will terminate;
WHEREAS, the Company and Xx. Xxxx have agreed upon the terms and
conditions under which Xx. Xxxx'x employment with the Company will terminate,
the consideration payable to Xx. Xxxx as consideration for cancellation of the
Employment Agreement, and the surrender by Xx. Xxxx of all rights he had under
the Employment Agreement; and
NOW, THEREFORE, for and in consideration of the recitals and covenants
herein set forth, the parties agree as follows:
1. Employment. Xx. Xxxx'x termination of employment with the Company shall be
effective on December 31, 1999 ("Termination Date"). Xx. Xxxx shall resign as an
officer and director of the various subsidiaries and affiliated companies of the
Company in which he holds office on November 30, 1999.
2. Consideration. Xx. Xxxx shall be paid by Company the following:
a. The monthly amount of $71,666.66, in semi-monthly payments of
$35,833.33 for the period beginning January 1, 2000 and ending
January 31, 2004, and the amount of $35,833.33 for the period
beginning February 1, 2004 and ending February 15, 2004; and
b. 200,000 (20%) of Xx. Xxxx'x Azurix Corp. Stock options shall
vest on November 30, 1999 and Xx. Xxxx shall have until
November 30, 2002 to exercise.
3. Severance Pay. Xx. Xxxx 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. Xxxx'x employment. The consideration and
remuneration provided for under Section 2(a) of this Agreement are in lieu of
and take the place of any severance pay or severance benefit that otherwise
would be payable under the Company's Severance Pay Plan, which Xx. Xxxx
forfeits.
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4. Employee Benefits. Except as otherwise provided in Section 3, Xx. Xxxx shall
be entitled to receive benefits earned by and payable to him under all employee
benefit plans and compensation 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.
Xxxx shall continue his rights under any stock option agreements and the Enron
Corp. Deferral Plan 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. Xxxx'x
rights under the Enron Corp. Executive Compensation Program with respect to
Performance Units granted to him shall be governed by the terms and provisions
of the Program.
5 Post-Employment Non-Competition Obligations.
5.1 As part of the consideration for the compensation and benefits to be paid to
Xx. Xxxx hereunder, in keeping with Xx. Xxxx'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. Xxxx with the clients
and potential clients of the Company; and as an additional incentive for Company
to enter into this Agreement, Company and Xx. Xxxx agree to the non-competition
provisions of this Article 5. Xx. Xxxx agrees that during the period of Xx.
Xxxx'x non-competition obligations hereunder, Xx. Xxxx will not, directly or
indirectly for Xx. Xxxx or for others, in any geographic area or market where
Company or any of its 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 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 Corp. 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 Corp.
These non-competition obligations shall extend until February 15, 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 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
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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. Xxxx 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. Xxxx 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. Xxxx 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. Xxxx 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. Xxxx 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. Xxxx; or
2) Confidential Information which was within Xx. Xxxx'x knowledge
or in his possession prior to his employment by the Company;
or
3) Confidential Information which, either prior to or subsequent
to the Company's disclosure to Xx. Xxxx with an obligation of
confidentiality, was disclosed to Xx. Xxxx, without obligation
of confidentiality, by a third party who did not acquire such
information, directly or indirectly, from Xx. Xxxx, or from
any third party who is under an obligation of confidentiality;
or
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4) any disclosure of Confidential Information by Xx. Xxxx which
is required by law, including deposition or trial testimony by
Xx. Xxxx pursuant to subpoena. If Xx. Xxxx 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. Xxxx, Xx. Xxxx 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. Xxxx that time is of the essence,
Xx. Xxxx may obtain legal counsel, and if Xx. Xxxx and/or his
counsel in good faith believe that Xx. Xxxx is compelled to
disclose the Confidential Information or be exposed to
liability for contempt or suffer other censure or penalty, Xx.
Xxxx may disclose only such Confidential Information to the
party compelling disclosure as is required by law, as
determined by Xx. Xxxx on advice of counsel. Xx. Xxxx 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. Xxxx 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.
Xxxx for any other costs and expenses incurred by Xx. Xxxx in
connection with his obligations under this Section 6.1B,
including but not limited to legal damages and penalties
assessed against Xx. Xxxx for compliance with his obligations
hereunder.
6.2 Definition of Company. For purposes of this Agreement, "Company" shall
include Azurix Corp., and all of its subsidiaries and affiliated companies.
6.3 Non-Disparagement. Xx. Xxxx 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:
If to Company:
Azurix Corp.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
If to Xx. Xxxx:
Xx. Xxxxxx X. Xxxx
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
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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
three (03) days after such notice is given, the aggrieved party may
seek any relief provided in this Agreement.
C. Of Sections 5, 6.1, or 6.3: In the event either party has a
reasonable basis for claiming that the other party has violated the
provisions of Sections 5, 6.1, or 6.3 and such violation is material,
such party shall give written notice of specific facts of such
violation to the other party. If, after three (03) 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 Sections 5, 6.1, or 6.3, the
complaining party may seek whatever damages and redress it 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 6.1
or 6.3 by either party, and either party shall be entitled to seek
specific performance and injunctive relief as
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remedies for such breach or threatened breach, subsequent to the three
(03) 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 or 6.3 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 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.
B. By Xx. Xxxx:
With respect to Xx. Xxxx'x rights and obligations, his rights
and obligations hereunder are personal and neither this
Agreement, nor any right, benefit or obligation of Xx. Xxxx,
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 except
as authorized in Section 2; provided, the
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Company agrees that it will not withhold its consent to an
assignment by Xx. Xxxx to a financial institution of his
rights to receive payments under this Agreement. In the event
of Xx. Xxxx'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, shall inure to the
benefit of and be enforceable by and against Xx. Xxxx'x
personal or legal representatives, executors, administrators,
heirs, distributees, devisees and legatees. In the event of
Xx. Xxxx'x death prior to receipt of all payments and benefits
to which he is entitled under Section 2 of this Agreement, the
remaining semi-monthly payments provided in subsection 2.a.
shall be payable to Xx. Xxxx'x estate, and the options
described in subsection 2.b. shall remain exercisable by Xx.
Xxxx'x beneficiary, or if no beneficiary has been designated
for that purpose, by his estate in accordance with the terms
and provisions of the 1999 Azurix Corp. Stock Plan and Xx.
Xxxx'x related grant agreement.
7.10 Release.
A. By execution of this Agreement, Xx. Xxxx 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. Xxxx is now or in the future may be entitled, and arising out of or
in connection with Xx. Xxxx'x employment with Company or any affiliated
company, and Xx. Xxxx'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. Xxxx is entitled according to the provisions hereof. It is
specifically agreed that this Agreement and the consideration Xx. Xxxx
will receive hereunder, constitute a complete settlement and release,
and an absolute bar to any and all claims Xx. Xxxx 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. Xxxx'x 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. Xxxx 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. XXXX
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. XXXX 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. Xxxx'x execution of the negotiable instruments 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. Xxxx.
7.11 Entire Agreement: Modification. This Agreement constitutes the entire
agreement of the parties with regard to the termination of employment of Xx.
Xxxx, 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. Xxxx 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. Xxxx 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. XXXX
/s/ Xxxxxx X. Xxxx
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