EXHIBIT 10.6
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, made and executed by and between GK Intelligent Systems,
Inc., a Delaware Corporation, with its principal place of business in Houston,
Xxxxxx County, Texas (hereinafter called the "Corporation" or "GKIS"), and Xxxx
X. Xxxxxx, of Houston, Texas (hereinafter called "Xxxxxx" or "Professional").
Collectively, the Corporation and Xxxxxx shall be referred to as "the parties."
W I T N E S S E T H:
WHEREAS, Xxxxxx desires to perform training services, develop training
products and provide SAP and Microsoft product implementation and network
development services on behalf of the Corporation and act as Technical Manager,
Smart One and Smart Enterprise, as an employee of the Corporation, including the
performance personally of such services as he and/or the Corporation's Board of
Directors deem necessary; and
WHEREAS, the Board of Directors of the Corporation desires to employ Xxxxxx
in such capacities under the terms of this Agreement;
THEREFORE, the parties mutually agree as follows:
ARTICLE I
EMPLOYMENT
1.1 CONDITIONS OF EMPLOYMENT: The Corporation hereby employs Xxxxxx and
Xxxxxx accepts such employment as Technical Manager, Smart One and Smart
Enterprise, to render professional services on behalf of the Corporation,
subject to the supervision and direction of the Corporation's officers and Board
of Directors and subject to the law of the Corporation as given in the Articles
of Incorporation and the Bylaws.
1.2 TERM OF EMPLOYMENT: The term of employment shall commence on or after
the execution of this Agreement but not later than June 1, 1998, to be set out
in Xxxxxx'x notice to the Board, and shall continue until termination by either
party as provided in Article IV.
ARTICLE II
DUTIES
2.1 DEVOTION OF EFFORT: Xxxxxx agrees to devote sufficient time,
attention, and skill to the performance of his duties as an employee of the
Corporation as set out and authorized by the Board of Directors. During the
term of this Agreement, he shall not render services on his own or on behalf of
any party other than the Corporation unless otherwise authorized by the Board of
Directors. For purposes of this Article II the Board specifically authorizes
Xxxxxx to conclude working on behalf of his existing consulting clients on a
limited basis prior to commencement of
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employment hereunder or at such time or times as will not interfere with his
duties to GKIS, and such work is deemed not to be in competition with GKIS for
purposes of Article XII of this Agreement.
2.2 DESCRIPTION OF DUTIES. Xxxxxx will provide training services, develop
training products and provide SAP and Microsoft product implementation and
network development services and provide assistance to GKIS management in the
implementation of SAP R3 software in the ongoing administration of the
Corporation's accounting system, books and records, and infrastructure including
the personnel engaged in the various accounting and related clerical functions
of such record keeping tasks, all as directed by the management of GKIS.
ARTICLE III
COMPENSATION
3.1 COMPENSATION AND BENEFITS.
a. MONTHLY SALARY. As compensation for the services to be rendered
hereunder, GKIS will pay to Xxxxxx a monthly salary in an amount equal to
Twelve Thousand Dollars ($12,000.00). The monthly salary shall be paid in
semi-monthly payments of one-half the monthly amount each on the first and
fifteenth day of each month with respect to the immediately preceding
month, commencing on the fifteenth day of, or the first day of the first
month after, the month in which employment commences hereunder, whichever
comes first after the employment date.
b. BONUS OPTIONS FOR SHARES OF CORPORATION COMMON STOCK. In addition
to the monthly salary and any other benefits available to all employees,
including standard incentive qualified stock options, GKIS will grant to
Xxxxxx incentive stock options for one hundred thousand (100,000) shares of
GKIS restricted common stock (the "Bonus Options"), with one-fourth of such
grant vesting annually for four years so long as Xxxxxx remains an employee
of the Corporation, an affiliate or subsidiary. Contingent upon the
Agreement remaining in force as a result of such continued employment,
Bonus Options for twenty-five thousand (25,000) restricted shares will vest
and be exercisable on the thirtieth day following the close of each of the
first, second, third and fourth years following the month in which this
agreement is executed. Except for the delayed vesting of their
exercisability, this grant of stock options shall be governed by and
subject to the GK INTELLIGENT SYSTEMS, INC. 1995 INCENTIVE STOCK OPTION
PLAN, as set out in a separate incentive stock option agreement executed
concurrently with this agreement by the parties . The number of shares
shall also be adjusted as provided in Section 7.1 of such Plan. For all
purposes related to the Grant of these options, the Board of Directors of
GKIS has determined that the date of such grant is March 13, 1998 and the
Fair Market Value per share as of the date of such grant is Thirty One and
25/100 Cents ($.3125). Except as set out in paragraph 4.2 below,
termination of this agreement will not cause the forfeiture of the Bonus
Options for those months prior to termination in which the vesting
requirements were met.
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c. INITIAL GRANT OF SHARES. As additional compensation for the
services to be rendered hereunder, GKIS will Grant to Xxxxxx Ten Thousand
(10,000) shares of GKIS common restricted stock (the "Initial Shares"),
issued immediately upon execution of this agreement or as soon thereafter
as is practicable. The effective date of this grant will be March 13,
1998, the date of the agreement between the parties as to compensation.
The agreed value of the Initial Shares shall be $.3125 per share, the
closing price for freely trading shares as of that date.
d. EMPLOYEE BENEFIT PLANS. Xxxxxx shall be entitled to participate
in all employee benefit plans to be established by the Board of Directors
on the same terms and conditions as all other employees similarly situated,
including reimbursement of reasonable moving expenses as approved by GKIS
management.
3.2 DISALLOWED COMPENSATION. If the Internal Revenue Service shall
find that Xxxxxx'x salary constitutes unreasonable or excessive
compensation, Xxxxxx agrees to repay to GKIS any amount disallowed to it as
deductions that results in an increase in its tax liability for such year.
ARTICLE IV
TERMINATION OF AGREEMENT
4.1 ILLNESS OR OTHER INCAPACITY. If Xxxxxx, during the term of this
Agreement, shall fail to perform his duties hereunder as a result of
illness or other incapacity shall continue for a period of more than six
months, the Corporation shall have the right to terminate this Agreement
and the employment hereunder as of a date to be specified in a written
notice of termination sent to Xxxxxx, such date to be not less than thirty
(30) days following receipt of said notice.
4.2 CONDUCT: If Xxxxxx shall willfully violate any law; embezzle or
otherwise steal from the Corporation; use liquor or drugs to an extent
which has a visible detrimental effect on his or her services; conduct
herself publicly or privately in a manner which offends against decency or
causes him to be held in public ridicule or causes public scandal, the
Corporation shall have the right to terminate this contract and employment
hereunder upon notice given in the manner specified in 4.1. In the event
of termination under this Article 4.2, Xxxxxx shall not be eligible to
receive unexercised stock option compensation for the year in which
termination occurs, nor shall he be entitled to receive any deferred
compensation credited to his account but not yet paid.
4.3 UNILATERAL TERMINATION: Either party hereto may terminate this
Agreement and employment hereunder effective as of a date to be specified
in a written notice of termination, such date to be not less than thirty
(30) days after delivery of the notice.
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ARTICLE V
DEATH OF EMPLOYEE
5.1 DEATH. If Xxxxxx shall die during the term of this Agreement,
his legal representative shall be entitled to receive his compensation as
provided in Article III hereof.
ARTICLE VI
ILLNESS OR INCAPACITY
6.1 INABILITY TO PERFORM DUTIES. If Xxxxxx is unable to perform his
duties hereunder by reason of illness or incapacity of any kind for a
period of more than six months, his salary payments may be reduced or
terminated by the Corporation at its absolute discretion. Xxxxxx'x full
salary shall be reinstated upon his return to full-time employment and the
full discharge of his duties hereunder. This section shall in no way limit
the rights of the Corporation under Article IV hereof.
ARTICLE VII
LEAVES OF ABSENCE
7.1 PAID LEAVE. Leaves of absence with full payment of salary may be
granted to Xxxxxx for attendance at professional conventions, continuing
education institutes in his profession and other professional or business
activities, as approved by the Corporation, with full or partial payment
of expenses at its sole discretion.
7.2 UNPAID LEAVE. Unpaid leave of absence may be granted at the sole
discretion of the Corporation for any other reasons upon request by Xxxxxx.
ARTICLE VIII
VACATIONS
8.1 PAID VACATION. Xxxxxx shall be entitled to a vacation, the
length of which as determined by the Board of Directors or the President of
the Corporation, during which time his salary shall be paid in full.
Xxxxxx shall take his vacation at such time or times as shall be approved
by the corporation.
ARTICLE IX
EXPENSES
9.1 EXPENSES REIMBURSED. During the period of his employment, Xxxxxx
will be reimbursed for his reasonable expenses in accordance with general
policy of the Corporation as adopted by the Board of Directors from time to
time. In addition to such reimbursement expenses, Xxxxxx shall incur and
pay in the course of his employment by the Corporation certain other
necessary expenses as Technical Manager, Smart One and Smart Enterprise,
for which he will be required personally to pay but for which the
Corporation shall reimburse or otherwise compensate him, including, but not
limited to
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the following: automobile and transportation expenses; educational expenses
incurred for the purpose of maintaining or improving Xxxxxx'x professional
skills, club dues, and the expenses of membership in civic groups,
professional societies, and fraternal organizations, and all other items of
reasonable and necessary professional expenses incurred by Xxxxxx in the
performance of the services in which Xxxxxx has been engaged on behalf of
the Corporation.
ARTICLE X
SUCCESSION
10.1 ASSUMPTION BY SUCCESSOR TO CORPORATION. The Corporation will
not consolidate or merge into or with another corporation, or transfer all
or substantially all of its assets to another corporation, unless such
corporation (hereinafter referred to as "Successor Corporation") shall
assume this Agreement. Upon such assumption Xxxxxx and the Successor
Corporation shall become obligated to perform the terms and conditions
hereof, and the term "Corporation" as used in this Agreement shall be
deemed to refer to such Successor Corporation; provided, however, Xxxxxx'x
duties shall be such as prescribed by the Board of Directors of the
Successor Corporation.
ARTICLE XI
PROPERTY RIGHTS OF PARTIES
11.1 TRADE SECRETS. During the term of employment, Xxxxxx will have
access to and become familiar with various trade secrets, consisting of
formulas, devices, secret inventions, processes, and compilation of
information, records, and specifications, owned by the Corporation and
regularly used in the operation of the business of the Corporation. Xxxxxx
shall not disclose any such trade secrets, directly or indirectly, nor use
them in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of his or her employment. All
files, records, documents, drawings, specifications, equipment, and similar
times relating to the business of the Corporation, whether or not prepared
by Xxxxxx shall remain the exclusive property of the Corporation and shall
not be removed from the premises of the Corporation under any circumstances
without the prior written consent of the Corporation.
11.2 RETURN OF CORPORATION'S PROPERTY. On the termination of
employment or whenever requested by the Corporation, Xxxxxx shall
immediately deliver to the Corporation all property in Xxxxxx'x possession
or under Xxxxxx'x control belonging to the Corporation in good condition,
ordinary wear and tear excepted.
11.3 OWNERSHIP OF WORK PRODUCT. The parties agree as follows:
A. PROPERTY OF GKIS. Xxxxxx agrees that all intellectual
property including but not limited to all ideas and concepts
contained in computer programs and software, documentation or other
literature or illustrations that are
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conceived, developed, written, or contributed by Xxxxxx pursuant to
this Agreement, either individually or in collaboration with others,
shall belong to and be the sole property of GKIS.
B. WORKS MADE FOR HIRE. Xxxxxx agrees that all rights in all
works prepared or performed by Xxxxxx pursuant to this Agreement,
including patent rights and copyrights applicable to any of the
intellectual property described in Subparagraph (a) above, shall
belong exclusively to GKIS and shall constitute "works made for hire"
for purposes of copyright law.
C. PROPERTY OF XXXXXX. The provisions of this Paragraph XI
shall not be construed to assign to GKIS any of Xxxxxx'x rights in any
invention for which no equipment, supplies, facilities, or trade
secret information of GKIS was used, or that was developed entirely
prior to this Agreement, or that does not result from any work
performed by Xxxxxx for GKIS.
ARTICLE XII
NO COMPETITION BY PROFESSIONAL
12.1 NO COMPETING ACTIVITIES. During the term of this Agreement and
for a period of three years (six months if following termination by GKIS
for any cause other than as set out in 4.2 above) following termination of
same, Xxxxxx shall not, directly or indirectly, either as an employee,
employer, consultant, agent, Principal, Partner, Stockholder, corporate
officer, director, or in any other individual or representative capacity,
engage or participate in any business whatsoever that is in direct
competition in any manner whatsoever with the core products and
technologies (Smart One Trainer and its derivatives, Smart Enterprise,
Doorways, Smart Support, Smart Perform or other Carnot derived products,
and their successors and any other subsequent core businesses) of this
Corporation within North America, unless a Court of competent Jurisdiction
shall determine that the scope and/or time of this agreement renders it
unenforceable, in which case the scope and/or time shall be reduced to that
which the Court deems reasonable and enforceable. This provision shall not
be construed to prevent Xxxxxx from accepting employment in the areas of
SAP consulting, administrative or information technology functions which do
not utilize any of the Corporation's core technologies or products.
ARTICLE XIII
NOTICES
13.1 NOTICES: Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and sent by mail to his
residence, in the case of Xxxxxx, or to its principal office, in the case
of the Corporation.
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ARTICLE XIV
WAIVER OF BREACH
14.1 NONWAIVER OF SUBSEQUENT BREACH. The waiver by any party hereto
of a breach of any provision of this agreement shall not operate or be
construed as a waiver of any subsequent breach by an party.
ARTICLE XV
AMENDMENT
15.1 WRITTEN AMENDMENT. No amendment or modification of this
Agreement shall be deemed effective unless or until executed in writing by
the parties hereto with the same formality attending execution of this
Agreement.
ARTICLE XVI
CHOICE OF LAW
16.1 TEXAS LAW. This Agreement, having been executed and delivered
in the State of Texas, its validity, interpretation, performance and
enforcement will be governed by the laws of that state.
EXECUTED in counterparts, each of which shall be deemed an original,
effective the 13th day of March, 1998.
/s/ Xxxx X. Xxxxxx
___________________________________
Xxxx X. Xxxxxx
GK INTELLIGENT SYSTEMS, INC.:
By: /s/ Xxxx X. Xxxxxxx
________________________________
Xxxx X. Xxxxxxx, CEO and Chairman
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