EXHIBIT 10.3(a)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement ("Agreement") is dated as
of March _, 1998 and is entered into by and between Xxxx X. Xxxxxxx
("Executive") and GK Intelligent Systems, Inc., a Texas corporation ("GKIS")as
an amendment and restatement of the Employment Agreement executed by the same
parties on December, 1993.
RECITALS
GKIS considers it essential to the best interest of GKIS and its
shareholders that Executive be encouraged to remain with GKIS and continue to
devote full attention to GKIS's business notwithstanding the possibility, threat
or occurrence of a change in Control (as defined below) of GKIS. GKIS believes
that it is the best interest of GKIS and its shareholders to reinforce and
encourage the continued attention and dedication of Executive and to diminish
inevitable distractions arising from the possibility of a Change in Control of
GKIS. Accordingly, to assure GKIS that it will have Executive's undivided
attention and services notwithstanding the possibility, threat or occurrence of
a Change in Control of GKIS, and to induce Executive to remain in the employ of
GKIS, and for other good and valuable consideration, the Board of Directors of
GKIS has caused GKIS to enter into this Agreement.
TERMS AND CONDITIONS
Executive and GKIS hereby agree to the following terms and conditions:
1. TERM OF AGREEMENT. This Agreement shall be effective as of the date
first indicated above and shall expire on the third anniversary of such date;
provided however that on such third anniversary and on the anniversary of such
date in each year thereafter, such expiration date shall be extended for one
additional year, unless, at least 60 days prior to such expiration date, GKIS
shall have delivered to Executive or Executive shall have delivered to GKIS
written notice that such expiration date shall not be so extended.
2. EFFECTIVE DATE. The "Effective Date" shall mean the first date during
the term of this Agreement on which a Change of Control (as defined in Section
3) occurs; provided, however, that if a Change of Control occurs and if
Executive's employment with GKIS is terminated prior to the date on which the
Change of Control occurs, and if it is reasonably demonstrated by Executive that
such termination of employment (a) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (b) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the date immediately
prior to the date of such termination of employment.
3. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" of GKIS shall mean and shall be deemed to have occurred if:
(a) any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, its founder, Xxxx X. Xxxxxxx, any
trustee or other fiduciary holding securities under any employee benefit plan of
the Company, or any company owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their ownership of Stock
of the Company), is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% of more of the combined voting power of the Company's then
outstanding securities, or the beneficial ownership, including voting rights of
non-owned shares, of the Company's founder, Xxxx X. Xxxxxxx, is reduced to less
than 30% of the combined voting power of the Company's then outstanding
securities;
(b) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors, and any new
director (other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause (a), (c)
or (d)of this Paragraph) whose election by the Board of Directors or nomination
for election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation; provided, however, that a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person acquires more than 30% of the combined voting power of the Company's then
outstanding securities shall not constitute a Change in Control of the Company;
or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
4. EMPLOYMENT PERIOD. GKIS hereby agrees to continue Executive in its
employ, and Executive hereby agrees to remain in
the employ of GKIS subject to the terms and conditions of this Agreement, for
the period commencing on the Effective Date and ending on the date which is the
latest of the following:
(a) The date which is 15 days after the first anniversary of a
Change in Control;
(b) The date which is 15 days after the first anniversary of the
effective date of any merger, the approval of which constituted a Change in
Control; and
(c) March 15, 2001;
Such period shall hereinafter be referred to as the "Employment
Period."
5. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES. During the Employment Period, (i)
Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day waiting period immediately
preceding the Effective Date; and (ii) Executive's services shall be performed
at the location where Executive was employed immediately preceding the Effective
Date or any office or location which is less than 35 miles further away from
Executive's place of residence.
(b) COMPENSATION AND BENEFITS. During the Employment Period, GKIS
shall pay Executive an annual base salary ("Annual Base Salary"), payable in
semi-monthly installments, which shall initially be at least equal to twelve
times the highest monthly base salary paid or payable, including any base salary
which has been earned but deferred, to Executive by GKIS during the twelve-month
period immediately preceding the month in which the Effective Date occurs. GKIS
may, in its discretion, periodically increase Executives base salary. The term
"Annual Base Salary" as used in this Agreement shall refer to Annual Base Salary
as so increased. GKIS may not, however, reduce Executive's base salary during
the Employment Period. Executive shall be provided with incentives (annual and
long-term), retirement benefits, welfare benefits and fringe benefits no less
favorable in the aggregate than those on effect for Executive at any time during
the 120-day waiting period immediately preceding the Effective Date, except for
any reductions in benefits which apply generally to all executives of GKIS.
6. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. Executive's employment shall
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terminate automatically upon Executive's death during the Employment Period. If
GKIS determines in good faith that the Disability of Executive has occurred
during the employment period (pursuant to the definition of Disability set forth
below), it may give to Executive written notice in accordance with Section 17 of
this Agreement of its intention to terminate Executive's employment with GKIS.
Executive's employment with GKIS shall terminate effective on the 30th day after
receipt of such notice by Executive (the "Disability Effective Date"), provided
that, within the 30 days after such receipt, Executive shall not have returned
to full-time performance of Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of Executive from Executive's duties with
GKIS on a full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness which is determined to be total and
permanent by a physician selected by GKIS or its insurers and acceptable to
Executive or Executive's legal representative.
(b) CAUSE. GKIS may terminate Executive's employment during the
Employment Period for cause. For purposes of this Agreement, "Cause" shall mean:
(i) Executive's conviction of a felony or any
other criminal act involving moral turpitude;
(ii) Executive's deliberate and intentional continuing refusal
to substantially perform his duties and obligations under this
agreement (except by reason of incapacity due to illness or
accident) if Executive (a) shall have either failed to remedy such
alleged breach within fifteen days from the date written notice is
given by the Chairman of the Company demanding that he remedy such
alleged breach, or (b) shall have failed to take reasonable steps in
good faith to that end during such fifteen day period, provided,
with respect to (b) that, after the end of such fifteen day period,
there shall have been delivered to Executive a certified copy of a
resolution of the Board of Directors of the Company, adopted by the
affirmative vote of not less than two-thirds of the members of the
Board of Directors who are not employees of the Company taken at a
meeting of the Board of Directors at which Executive is given an
opportunity to be heard (with counsel), finding that Executive was
guilty of conduct set forth in clause (2) and specifying the
particulars thereof in detail, and that Executive has failed to take
reasonable steps in good faith to remedy such alleged breach; or (3)
upon a finding by the affirmative vote of not less than two-thirds
of the members of the Board of Directors who are not employees of
the Company taken at a meeting of the Board of Directors at which
Executive is given an opportunity to
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be heard (with counsel) that Executive had engaged in willful fraud
or defalcation either of which involved material funds or other
assets of the Company.
(c) GOOD REASON. Executive's employment may be terminated by
Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(i) The assignment to Executive of any duties inconsistent in
any respect with Executive's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 5(a) of this Agreement,
or any other action by GKIS which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken
in bad faith and which is remedied by GKIS after receipt of notice
thereof given by Executive;
(ii) Any failure by GKIS to comply with any of the provisions
of Section 5(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by GKIS promptly after receipt of notice thereof
given by Executive;
(iii) GKIS's requiring Executive to be based at any office or
location other than as provided in Section 5(a) hereof;
(iv) Any purported termination by GKIS of Executive's
employment otherwise than as expressly permitted by this Agreement;
or
(v) Any failure by GKIS to comply with and satisfy Section
12(c) of this Agreement.
For purposes of this Section 6(c), any good faith determination of "Good Reason"
made by Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by Executive for any reason pursuant to
a Notice of Termination delivered during the 15-day period immediately following
the latest of (i) the first anniversary of a Change in Control, (ii) the first
anniversary of the effective date of any merger the approval of which
constituted a Change in Control, or (iii) March 31, 2001 shall be deemed to be a
termination for Good Reason for all purposes of this Agreement, provided that
Executive has given notice to GKIS pursuant to Section 17 hereof at least 30
days prior to such termination.
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(d) NOTICE OF TERMINATION. Any termination by GKIS for Cause, or by
Executive for Good Reason, shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 17 of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) subject to Section 6(c)
(iii) and the last sentence of Section 6(c), if the Date of Termination (as
defined below) is other than the date of receipt of such notice, specifies the
termination date (which date shall be not more than thirty days after the giving
of such notice). The failure by Executive or GKIS to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or GKIS, respectively,
hereunder or preclude Executive or GKIS, respectively, from asserting such fact
or circumstance in enforcing Executive's or GKIS's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means (i) if
Executive's employment is terminated by GKIS for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if Executive's employment is
terminated by GKIS other than for Cause or Disability, the Date of Termination
shall be the date on which GKIS notifies Executive of such termination and (iii)
if Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of Executive or the Disability
Effective Date, as the case may be.
7. OBLIGATIONS OF GKIS UPON TERMINATION.
(a) GOOD REASON; OTHER THAN FOR CAUSE OR DISABILITY. If GKIS shall
terminate Executive's employment other than for Cause or Disability during the
Employment Period or Executive shall terminate employment for Good Reason
pursuant to a Notice of Termination delivered during the Employment Period, GKIS
agrees to make the payments and provide the benefits described below.
(i) GKIS shall pay to Executive in a lump sum in cash
within 10 days after the Date of Termination an amount equal
to the product of (1) and (2), where (1) is three and (2) is
the sum of Executive's Annual Base Salary and the average of
the last three annual incentive bonuses actually paid to
Executive by GKIS for any calendar year before the Date of
Termination (the "Average Annual Bonus"); and
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(ii) Upon Executive's Date of Termination, Executive
shall be 100% vested in the amounts credited to any Qualified
Plan in which he is a participant.
(iii) Upon Executive's Date of Termination, Executive's
awards under any stock-based plan under which the Executive
has been granted stock or options to purchase such shall be
accelerated as follows:
(A) Each option and each related stock
appreciation right shall become immediately exercisable
to the extent theretofore not exercisable;
(B) Restricted stock shall immediately vest free
of restrictions; and
(C) The number of shares covered by each
performance share award shall be issued to Executive;
provided, however, that acceleration of awards shall comply with applicable
regulatory requirements, including without limitation, Section 422 of the Code
and Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934.
(iv) For one year after Executive's Date of Termination,
or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, GKIS shall
continue to provide welfare benefits and fringe benefits and
other perquisites to Executive and/or Executive's family at
least equal to those which would have been provided to them if
Executive's employment had not been terminated in accordance
with the most favorable plans, practices, programs or policies
of GKIS and its affiliated companies applicable generally to
other peer executives and their families immediately preceding
the Date of Termination; provided, however that if Executive
becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another
employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility.
For purposes of determining eligibility (but not the time of
commencement of benefits) of Executive for retiree benefits
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pursuant to such plans, practices, programs and policies,
Executive shall be considered to have remained employed until
one year after the Date of Termination and to have retired on
the last day of such period.
(v) The sum of (A) the Executive's Annual Base Salary
through the Date of Termination to the extent due for services
rendered but not theretofore paid, (B) with respect to any
Performance Period under the GK Intelligent Systems, Inc.
Long-Term Incentive Plan which has not been completed as of
the Date of Termination, an amount equal to (1) multiplied by
(2), where (1) is 150% of the Value (as defined in such plan)
of the Participant's accrued benefits on the Participant's
Date of Termination, and (2) is a fraction, the numerator of
which is the number of full months between the beginning of
such Performance Period and the Participant's Date of
Termination and the denominator of which is the total number
of months in the Performance Period, and (C) any compensation
previously deferred by the Executive (together with any
accrued earnings or interest thereon) and any accrued vacation
pay, in each case to the extent not theretofore paid (the
amount referred to in clauses (A), (B) and (C) above being
referred to as "Accrued Obligations").
(vi) To the extent not theretofore paid or provided,
GKIS shall timely pay or provide Executive any other amounts
or benefits required to be paid or provided or which Executive
is eligible to receive under any plan, program, policy,
practice, contract or agreement of GKIS and its affiliated
companies (such other amounts and benefits being hereinafter
referred to as "Other Benefits") in accordance with the terms
of such plan, program, policy, practice, contract or
agreement.
(b) DEATH. If the Executive's employment is terminated by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 10 days of the Date of Termination.
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(c) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.
(d) CAUSE; OTHER THAN FOR GOOD REASON. If Executive's employment
shall be terminated for Cause during the Employment Period or, if Executive
voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further
obligations to Executive (other than the obligation to pay to Executive his
Annual Base Salary earned through the Date of Termination and any benefits
payable to Executive under a plan policy, practice, etc., referred to in Section
8 below).
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any plan, program,
policy or practice provided by GKIS or any of its affiliated companies and for
which Executive may qualify, nor, subject to Section 21, shall anything herein
limit or otherwise affect such rights as Executive may have under any contract
or agreement with GKIS or any of its affiliated companies. Amounts which are
vested benefits or which Executive is otherwise entitled to receive under any
plan, policy, practice or program of or any contract or agreement with GKIS or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
9. FULL SETTLEMENT. GKIS's obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which GKIS may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take any other action by way
of litigation of the amount payable to Executive under any of the provisions of
this Agreement and, except as provided in Section 7(a)(v), such amounts shall
not be reduced whether or not Executive obtains other employment. GKIS agrees to
pay, to the full extent permitted by law, all legal fees and expenses which
Executive may reasonably incur as a result of any contest (regardless of the
outcome thereof) by GKIS, Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Section
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7872 (f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
Notwithstanding the foregoing, GKIS shall not be obligated to pay any legal fees
or expenses of Executive in any contest by Executive about the amount of any
payment under this Agreement if it is determined that GKIS did not breach this
Agreement and Executive's claim was not made in good faith.
10. CERTAIN ADDITIONAL PAYMENTS BY GKIS.
(a) In the event that any payment or distribution by GKIS to or for
the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
10(a)) ("Payment") is determined to be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then GKIS shall pay to Executive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes and Excise Tax (including any
interest and penalties imposed with respect thereto) imposed upon the Payments,
Executive shall be restored to his position prior to the imposition of the
Excise Tax.
(b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, including whether and when a Gross-Up
payment is required and the amount of such Gross-Up payment and the assumptions
to be utilized in arriving at such determination, shall be made by GKIS's
Certified Public Accountant or such other certified public accounting firm as
may be designated by Executive and which is satisfactory to GKIS (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
GKIS and Executive within 15 business days of the receipt of request from
Executive or GKIS. All fees and expenses of the Accounting Firm shall be borne
solely by GKIS. Any Gross-Up Payment, as determined pursuant to this Section
10(b), shall be paid by GKIS to Executive within five days of the receipt of the
Accounting Firm's determination. No such determination that a Gross-Up Payment
is required shall be made unless the Accounting Firm furnishes GKIS with a
written opinion that there is no reasonable basis for not paying the Excise Tax.
As a result of the uncertainty in the application of Section 4999 of the code at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by GKIS should
have been made ("Underpayment"), consistent with the calculations required to be
made hereunder. In the event that GKIS exhausts its remedies pursuant to Section
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10(c) and Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by GKIS to or for the
benefit of Executive.
(c) Executive shall notify GKIS in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by GKIS
of the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than ten business days after Executive is informed in writing of
such claim and shall apprise GKIS of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which it
gives such notice to GKIS (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If GKIS notifies Executive
in writing prior to the expiration of such period that it desires to contest
such claim, Executive shall:
(i) Give GKIS any information reasonably
requested by GKIS relating to such claim,
(ii) Take such action in connection with contesting such
claim as GKIS shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by GKIS,
(iii) Cooperate with GKIS in good faith in order to
contest such claim effectively, and
(iv) Permit GKIS to participate in any proceedings
relating to such claim;
provided, however, that GKIS shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 10(c),
GKIS shall control all proceedings taken in connection with such contest and ,
at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct Executive to pay the tax
claimed and xxx for a refund or contest the claim in any permissible manner, and
Executive agrees to prosecute such contest to a determination before any
administration tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as GKIS shall
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determine; provided, however, that if GKIS directs Executive to pay such claim
and xxx for a refund, GKIS shall advance the amount of such payment to
Executive, on an interest-free basis and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, GKIS's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by GKIS
pursuant to Section 10(c), Executive becomes entitled to receive any refund with
respect to such claim, Executive shall (subject to GKIS's complying with the
requirements of Section 10(c)) promptly pay to GKIS the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by GKIS
pursuant to Section 10(c), a determination is made that Executive shall not be
entitled to any refund with respect to such claim and GKIS does not notify
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
11. CONFIDENTIAL INFORMATION. Executive shall hold in fiduciary capacity
for the benefit of GKIS all secret or confidential information, knowledge or
data relating to GKIS or any of its affiliated companies, and their respective
businesses, which shall have been obtained by Executive during Executive's
employment by GKIS or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by Executive or representatives of
Executive in violation of this Agreement). After termination of Executive's
employment with GKIS, Executive shall not, without the prior written consent of
GKIS or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than GKIS and
those designated by it. In no event shall an asserted violation of the
provisions of this Section 11 constitute a basis for deferring or withholding
any amounts otherwise payable to Executive under this Agreement.
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12. SUCCESSORS.
(a) This Agreement is personal to Executive and without the prior
written consent of GKIS shall not be assignable by Executive otherwise than by
will or the laws of descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
GKIS and its successors and assigns.
(c) GKIS will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of GKIS to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that GKIS would be required
to perform it if no such succession had taken place. As used in this Agreement,
"GKIS" shall mean GKIS as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
13. ARBITRATION.
(a) The Executive Officers Compensation and Development Committee of
the Board of Directors of GKIS (the "Administrator") shall administer this
Agreement. The Administrator (either directly or through its designees) will
have power and authority to interpret, construe, and administer this Agreement;
provided that, the Administrator's authority to interpret this Agreement shall
not cause the Administrator's decisions in this regard to be entitled to a
deferential standard of review in the event that Executive seeks review of the
Administrator's decision as described below.
(b) Neither the Administrator nor its designee, shall be liable to
any person for any action taken or omitted in connection with the interpretation
and administration of this Agreement.
(c) Because it is agreed that time will be of the essence in
determining whether any payments are due to Executive under this Agreement,
Executive may, if he desires, submit any claim for payment under this Agreement
or dispute regarding the interpretation of this Agreement to arbitration. This
right to select arbitration shall be solely that of Executive, and Executive may
decide whether or not to arbitrate in his discretion. The "right to select
arbitration" is not mandatory on Executive, and Executive may choose in lieu
thereof to bring an action in an appropriate civil court. Once an arbitration is
commenced, however, it may not be discontinued without the mutual consent of
both parties to the arbitration procedure set forth in this section.
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(d) Any claim for arbitration may be submitted as follows: If
Executive disagrees with the Administrator regarding the interpretation of this
Agreement and the claim is finally denied by the Administrator in whole or in
part, such claim may be filed in writing with an arbitrator of Executive's
choice who is selected by the method described in the next three sentences. The
first step of the selection shall consist of Executive's submitting a list of
five potential arbitrators to the Administrator. Each of the five arbitrators
must be either (1) a member of the National Academy of Arbitrators located in
the State of Texas or (2) a retired Texas District Court or Appellate Court
judge. Within one week after receipt of the list, the Administrator shall select
one of the five arbitrators as the arbitrator for the dispute in question. If
the Administrator fails to select an arbitrator in a timely manner, Executive
shall then designate one of the five arbitrators as the arbitrator for the
dispute in question.
(e) The arbitration hearing shall be held within seven days (or as
soon thereafter as possible) after the picking of the arbitrator. No continuance
of said hearing shall be allowed without the mutual consent of Executive and
Administrator. Absence from or nonparticipation at the hearing by either party
shall not prevent the issuance of an award. Hearing procedures which will
expedite the hearing may be ordered at the arbitrator's discretion, and the
arbitrator may close the hearing in his or her sole discretion when he or she
decides he or she has heard sufficient evidence to satisfy issuance of an award.
(f) The arbitrator's award shall be rendered as expeditiously as
possible and in no event later than one week after the close of the hearing. In
the event the arbitrator finds that GKIS has breached this Agreement, he or she
shall order GKIS to immediately take the necessary steps to remedy the breach.
In addition, he or she shall order GKIS to pay Executive an additional amount
equal to 10% of the amount actually in dispute. This additional amount shall
constitute damages and not a penalty. The award of the arbitrator shall be final
and binding upon the parties. The award may be enforced in any appropriate court
as soon as possible after its rendition. If an action is brought to confirm the
award, both GKIS and Executive\e agree that no appeal shall be taken by either
party from any decision rendered in such action.
(g) The Administrator will be considered the prevailing party in a
dispute if the arbitrator determines (1) that GKIS has not breached this
Agreement and (2) the claim by Executive was not made in good faith. Otherwise,
Executive will be considered the prevailing party. In the event that GKIS is the
prevailing party, the fee of the arbitrator and all necessary expenses of the
hearing (excluding any attorney's fees incurred by GKIS) including stenographic
reporter, if employed, shall be
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paid by the Executive. In the event that Executive is the prevailing party, the
fee of the arbitrator and all necessary expenses of the hearing (INCLUDING all
attorneys' fees incurred by the Executive in pursuing his claim), including the
fees of a stenographic reporter if employed, shall be paid by GKIS.
14. GOVERNING LAW. The laws of Texas shall govern the validity and
interpretation of this Agreement, with regard to conflicts of laws.
15. CAPTIONS. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
16. AMENDMENT. This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
17. NOTICES. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive:
Xxxx Xxxxxxx
0000 Xxxxxx, #000
Xxxxxxx, Xxxxx 00000
If to GKIS:
GK Intelligent Systems, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
18. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
19. WITHHOLDING TAXES. GKIS may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
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20. NO WAIVER. Executive's or GKIS's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right Executive or GKIS may have hereunder, including, without limitation, the
right of Executive to terminate employment for Good Reason pursuant to Section
6(c) of this Agreement, shall not be deemed to be a waiver of such provision or
right of this Agreement.
21. AT-WILL EMPLOYMENT. Executive and GKIS acknowledge that, except as may
otherwise be provided under any other written agreement between Executive and
GKIS prior to the Effective Date is "at will" and, prior to the Effective Date,
Executive's employment may be terminated by either Executive or GKIS at any
time, in which case Executive shall have no further rights under this Agreement.
From and after the Effective Date this Agreement shall supersede any other
agreement between the parties with respect to the subject matter hereof, unless
such other agreement contains provisions more favorable to Executive than this
agreement, in which event such favorable provisions, at Executive's sole option,
shall apply.
22. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one and the same Agreement.
23. NO PROHIBITED PAYMENTS. Notwithstanding anything contained in this
Agreement to the contrary, GKIS shall not make any payment to Executive which,
according to the opinion of GKIS's outside counsel, would violate Section
2523(k) of the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer
Recovery Act of 1990 (codified at 12 U.S.C. 1828 (k)), or any rules or
regulations promulgated thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first written above in
Houston, Texas.
EXECUTED: ___________, 19__
GK INTELLIGENT SYSTEMS, INC.
By____________________________
EXECUTED: ___________, 19__
________________________________
Xxxx X. Xxxxxxx
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