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EXHIBIT 10.1
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT, dated as of the 17th day of September, 1998,
is by and between ITEQ, Inc., a Delaware corporation (the "Company"), and Xxxx
Xxxxxxxxxx ("Employee").
In consideration of the payments described below, the agreements set
forth in this Agreement and other good and valuable consideration, the adequacy,
mutuality, receipt and sufficiency of which are hereby acknowledged, the Company
and Employee hereby agree as follows:
1. Employment Agreement. The employment agreement, dated as of April
28, 1998, between ITEQ, Inc. and Employee ("Employment Agreement") is hereby
terminated in its entirety, and neither party shall have any further rights,
duties or obligations arising thereunder or any way attributable thereto except
as otherwise specifically provided herein.
2. Obligations of Employee.
a. Transition Services. Employee shall continue to be an
employee of the Company through September 20, 1998 (the "Termination Date").
Until the Termination Date, Employee, while not full time, shall assist, as
required by the Company, in effecting an orderly management transition of the
Company.
b. Company Property. Immediately upon the Termination Date,
Employee shall turn over to the Company any and all Company property which (i)
is then in his possession or under his custody or control and (ii) has not
otherwise been provided for in this Agreement.
c. No Raid. In consideration of the payments and other
benefits to be received by Employee pursuant to Section 3 hereof, until
September 20, 1999, (i) Employee shall not either in the Employee's individual
capacity or as agent for another, hire or offer to hire or entice away any
person who has been an officer, employee, or agent of the Company at any
time during the
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immediately preceding year or in any other manner persuade or attempt
to persuade any of such persons to discontinue their relationship with the
Company or any of its affiliates, nor divert or attempt to divert from the
Company or any of its affiliates any business whatsoever by influencing or
attempting to influence any customer or supplier of the Company or any of its
affiliates to diminish or discontinue its business with the Company or such
affiliate.
d. Resignation; Releases. Contemporaneously with execution of this
Agreement, Employee has executed and delivers to the Company the resignation in
the form attached hereto as Exhibit A; and the Company and the Employee have
executed and delivered to each other at the Termination Date the Releases in the
forms attached hereto as Exhibits B and C.
e. Confidentiality. From and after the date hereof, Employee agrees not
to disclose to any third person or use for any purpose any of the Company's
Proprietary Information (as hereinafter defined). For purposes of this
Agreement, "Proprietary Information" shall mean any information, data, records,
reports, documents and agreements relating to the Company, its subsidiaries, its
and their respective businesses or any Company representative disclosed to or
received by Employee (including, without limitation, customer lists, price
discounts, sales information, Company methods of doing business, accounting
procedures, production methods, engineering designs and any other items that are
not published for general distribution to the public); provided that
"Proprietary Information" shall not include (i) information which is or becomes
generally available to the public other than as a result of a disclosure in
violation of this Agreement and (ii) information disclosed pursuant to any
applicable law, rule, regulation or order. Employee agrees to keep the terms and
conditions of this Agreement confidential; provided that Employee may disclose
the terms of this
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agreement to his spouse, attorney and/or accountant if he obtains the prior
agreement of such person to hold such information in confidence.
f. Disparaging Remarks. The Company and the Employee agree not
to make any statements, written or oral, intended to in any way injure the
reputation, goodwill or other business interests of the other.
3. Obligations of the Company.
x. Xxxxxxxxx Payment. Subject to the last sentence of the
paragraph 3(a), within ten days after the Termination Date, the Company shall
deliver to Employee the amount of $300,000 (the "Payment") by check, or by wire
transfer to an account designated by Employee in writing. The Payment shall be
in full satisfaction of, and Employee hereby waives any and all rights to
receive any and all amounts otherwise owed by the Company to Employee including,
without limitation, any unpaid salary, bonus or severance payments. Employee
acknowledges and agrees that all applicable withholding deduction, including
those for benefits, FICA and income taxes, shall be withheld from the Payment.
b. Other Benefits. Employee shall be entitled to participate
in the Company's stock purchase, stock option, 401(k) and any other incentive
compensation plans through the Termination Date. Thereafter, Employee's rights
with respect to each such plan shall be as specified in the plan, and by
applicable law. The Company will provide copies of such plans, or summaries of
their economic terms, to Employee at Employee's request.
4. Bridge Loan. Company and Employee agree that, anything else in this
Agreement to the contrary notwithstanding, Employee acknowledges the outstanding
$215,000 unsecured bridge loan (the "Bridge Loan") extended by the Company to
Employee to purchase the real estate on
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which his Houston residence (the "Home," which is presently under construction
in Fort Bend County, Texas) is situated. Employee recognizes that Employer has
reimbursed Employee $48,750.00 for moving expenses plus the tax gross-up thereon
of $18,662.00. Employer is hereby released from any additional obligation
related to Employee's moving expenses or tax gross-up thereon. Employer hereby
forgives $150,000.00 of the bridge loan. The $65,000 balance of the bridge loan
shall be deducted from the $300,000 payable to Employee under paragraph 3(a),
thereby making the amount due Employee $235,000 subject to the deductions
described in the last sentence of paragraph 3(a).
5. Severability. If any provision of this Agreement shall be adjudged
by a court of competent jurisdiction to be void or unenforceable, that finding
shall in no way effect any other provision of this Agreement or the validity or
enforceability of this Agreement.
6. Further Assurances; Future Cooperation. Each party to this Agreement
agrees to do such things as may be reasonably requested by the other party to
this Agreement in order more effectively to consummate or document the
transactions contemplated by this Agreement.
7. Binding Agreement; Captions. This Agreement is binding upon, and
shall inure to the benefit of, the parties to this Agreement and their
respective legal representatives, heirs, devisees, legatees, successors and
assigns. Titles and captions of or in this Agreement are inserted only as a
matter of convenience and for reference and in no way effect the scope of this
Agreement or the intent of its provisions.
8. Entire Agreement. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, supersedes all
prior agreements of any of the parties
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to this Agreement with respect to its subject matter, including, without
limitation, the Employment Agreement, and may not be amended except in writing
signed by both parties.
9. Binding Arbitration. Should any dispute arise between the parties
with respect to this Agreement or the rights, duties and obligations of the
parties hereunder, each of the parties irrevocably agrees that the exclusive
remedy of each of them shall be to commence binding arbitration proceedings
under the rules of the American Arbitration Association, with any such
arbitration proceeding to be conducted in Houston, Texas, applying the
substantive law of the State of Texas. Each party agrees to deposit with the
neutral arbitrator an amount equal to 50% of the arbitrator's preliminary
estimate of the costs of arbitration (excluding counsel fees) as security for
costs. Actual costs of arbitration (including counsel fees of both parties)
shall be apportioned by the arbitrator in such a manner as he shall deem
equitable in light of any financial award.
10. Miscellaneous. Failure of any party to this Agreement at any time
or times to require the performance of any provision of this Agreement shall in
no manner affect the right to enforce the same; and the waiver by any party to
this Agreement of any provision (or a breach of any provision) of this
Agreement, whether by conduct or otherwise, shall not be deemed or construed
either as a further or continuing waiver of any such provision or breach or as a
waiver of any other provision (or a breach of any other provision) of this
Agreement. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Texas.
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IN WITNESS WHEREOF, this Severance Agreement is executed as of the 17th
day of September, 1998.
ITEQ, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx,
Chairman of the Board and
Chief Executive Officer
XXXX XXXXXXXXXX
/s/ XXXX XXXXXXXXXX
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EXHIBIT A
RESIGNATION
September 20, 1998
ITEQ, Inc.
0000 Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chairman of the Board
Gentlemen:
I hereby resign as the President and a director of ITEQ, Inc. and from
any office, directorship or other position that I hold with any subsidiary or
affiliate of ITEQ, Inc., in each case effective immediately.
Very truly yours,
/s/ XXXX XXXXXXXXXX
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Xxxx Xxxxxxxxxx
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EXHIBIT B
RELEASE
For and in consideration of the sum of One Dollar and other good and
valuable consideration in hand paid to Xxxx Xxxxxxxxxx ("Employee") by ITEQ,
Inc. ("Company"), the receipt of which is hereby acknowledged, and the
sufficiency of which is hereby confessed, Employee has remised, released, and
forever discharged and by these presents does remise, release and forever
discharge the said Company and each of its subsidiaries and affiliates and the
directors, officers, agents, representatives, and employees of each of them, and
its and their successors and assigns (collectively, the "Released Parties") of
and from all, and all manner of action, and actions, cause and causes of action,
suits, dues, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands whatsoever, in law or in equity,
against the Released Parties which Employee ever had, now have or which his
assigns, hereafter can, shall or may have, for, upon or by reason of any matter,
cause or thing whatsoever from the beginning of the world to the date of these
presents.
This release shall not, however, affect the obligations of the Company
(i) under that certain Severance Agreement dated as of September 17, 1998, by
and between Employee and the Company or (ii) under the Company's charter, bylaws
or any preexisting contractual indemnity agreement between the Company and
Employee.
Executed and Effective as of the 20th day of September, 1998.
/s/ XXXX XXXXXXXXXX
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Xxxx Xxxxxxxxxx
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EXHIBIT C
RELEASE
For and in consideration of the sum of One Dollar and other good and
valuable consideration in hand paid to ITEQ, Inc. (the "Company) by Xxxx
Xxxxxxxxxx (the "Employee"), the receipt of which is hereby acknowledged, and
the sufficiency of which is hereby confessed, Employee has remised, released,
and forever discharged and by these presents does remise, release and forever
discharge Employee, his personal representatives and heirs and their successors
and assigns (collectively, the "Released Parties") of and from all, and all
manner of action, and actions, cause and causes of action, suits, dues,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever, in law or in equity, against the
Released Parties which the Company ever had, now have or which its assigns,
hereafter can, shall or may have, for, upon or by reason of any matter, cause or
thing whatsoever from the beginning of the world to the date of these presents.
This release shall not, however, affect the obligations of the Employee
under that certain Severance Agreement dated as of September 17, 1998, by and
between Employee and the Company.
Executed and Effective as of the 20th day of September, 1998.
ITEQ, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Chairman and Chief Executive Officer
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