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EXHIBIT 10.20
[NOVISTAR LETTERHEAD]
August 29, 2000
Mr. John Sobchak
Novistar, Inc.
1331 Lamar, Suite 1650
Houston, Texas 77010
Dear John:
When executed by you, this letter shall set forth certain terms and
conditions relating to your employment at Novistar. Novistar has previously
granted you 50,000 stock options in the Company, and has agreed, on an "at will"
basis, to pay you a base salary of $140,000 per year. As an inducement to secure
your employment, the Company has also agreed to the payment of Severance
Benefits (defined below) if, in the event of the sale, merger, or transfer of
the Company's assets resulting in a Change of Control of the Company, within
twelve months of the date of such Change of Control, (a) your employment is
terminated (other than for cause) or (b) there has been a Material Reduction in
your employment responsibilities or benefits.
Change of Control means or shall be deemed to have occurred if
and when the acquisition, by whatever means (including without
limitation, amalgamation, consolidation, liquidation,
arrangement or merger), by a person (or two or more persons who
in such acquisition have acted jointly or in concert or intend
to exercise jointly or in concert any voting rights attaching to
the securities acquired), directly or indirectly, of the
beneficial ownership of such number of voting securities or
rights to voting securities of the Company, which together with
such person's then owned voting securities and rights to voting
securities, if any, represent (assuming the full exercise of
such rights to voting securities) more than 25% of the combined
voting power of the Company's then outstanding voting
securities, together with the voting securities that would be
outstanding on the full exercise of the rights to voting
securities acquired and such person's previously owned rights to
voting securities.
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Mr. John Sobchak
August 29, 2000
Page 2
A Material Reduction in Sobchak's employment responsibilities
means or shall be deemed to have occurred if and when he is
assigned responsibilities or duties inconsistent with the duties
of Chief Financial Officer, or his duties, responsibilities and
status within the Company are significantly reduced. A material
reduction in Sobchak's employment benefits shall be deemed to
have occurred if and when there is a material reduction in the
salary payable to Sobchak or any material failure by the Company
to continue to provide Sobchak with the employment benefits to
which he is currently entitled to participate in as of the date
of this Agreement. In the event of a Material Reduction in
Sobchak's responsibilities or employment benefits, Sobchak
shall, at his election, give the Company at least eight weeks
notice of his election to terminate his employment with the
Company. The Company may at its election choose to waive or
shorten this eight week notice requirement.
Termination for Cause shall mean or shall be deemed to have
occurred in the event of termination following (i) the willful
failure or refusal of Sobchak to render services to the Company
in accordance with the direction of the Board of Directors; such
failure or refusal to be uncured and continuing for a period of
not less than fifteen (15) days after notice outlining the
situation is given by the Company to Sobchak; (ii) the
commission by Sobchak of an act of fraud or embezzlement against
the Company or the commission by Sobchak or any other action
with the intent to injure the Company or (iii) Sobchak having
been convicted of a felony.
Upon the occurrence and satisfaction of such conditions, Sobchak shall
be entitled to the following Severance Benefits:
a. A cash lump sum payment equal to two times the highest
annualized base salary in effect for Sobchak after the
Effective Date, payable within 10 working days of
termination.
b. A twelve month extension on the termination of any vested
Novistar stock options held by Sobchak.
c. The payment of the items described in items "a" and "b" above
shall have no effect on other employment benefits to which
Sobchak is entitled, other than severance payments currently
payable under the Torch Energy Advisors Incorporated
Severance Pay Plan or successor plans, which
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Mr. John Sobchak
August 29, 2000
Page 3
are not payable in the event of a payment under item "a"
above.
The rights duties and obligations of the parties hereunder shall
terminate four (4) years from the date hereof. At that point, Novistar and
Sobchak shall either negotiate a new agreement governing his employment or the
severance benefits, if any, payable to Sobchak will be governed by severance
plans or agreements which may then be in existence at that time.
If the foregoing is agreeable to you, please so indicate by executing
this agreement in the space provided for below.
NOVISTAR, INC.
/s/ THOMAS M. RAY III
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Thomas M. Ray III
President and Chief Executive Officer
Agreed and accepted this 29 day of August, 2000.
/s/ JOHN V. SOBCHAK
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John V. Sobchak
