EXHIBIT 10.13
SEVERANCE AGREEMENT AND GENERAL RELEASE
This Severance Agreement and General Release ("Agreement") is made and
entered into by and between Xxxxxx X. Xxxxxxxx ("Employee") and GK
Intelligent Systems, Inc. ("the Company").
WHEREAS, Employee was employed by the Company in the capacity of Vice
President of Administrative Affairs and General Counsel pursuant to an
Employment Agreement executed in December 1993, extended in December 1996, and
amended and restated on March 13, 1998, and an Addendum to the Amended and
Restated Employment Agreement, executed on March 13, 1998 (collectively referred
to as the "Employment Agreement");
WHEREAS, Employee desires to terminate the employment relationship
pursuant to Article 4.3 of the Addendum to the Amended and Restated Employment
Agreement, and the Company desires to accept Employee's resignation and waive
the notice required therein;
NOW THEREFORE, Employee and the Company (collectively referred to as the
"Parties") do hereby agree as follows:
1. TERMINATION OF EMPLOYMENT. The employment of Employee with the Company,
is terminated as of September 14, 1998 (the "termination date"). This Agreement
supersedes the terms of the Employment Agreement. By executing this Agreement,
the Parties hereby terminate the Employment Agreement, SAVE AND EXCEPT (i)
Employee's ongoing and continuing obligations of confidentiality and
non-disclosure; (ii) Employee's covenant not to compete; and (iii) all other
provisions which by their terms survive termination of the Employment Agreement.
2. CONSIDERATION. In consideration of the release of all claims, disputes
and causes of action which Employee, Employee's heirs, executors, administrators
or assigns have or may have against the Company, as well as the other agreements
contained in this Agreement, the Company shall pay Employee compensation and
benefits (collectively referred to as the "Severance Payment") as follows:
(i) MONTHLY INSTALLMENT PAYMENTS. The Company shall pay Employee,
subject to the provisions hereof, the gross amount of $360,000, less
applicable withholding taxes, to be paid to Employee at the gross
rate of (a) $7,500 per month for a period of twelve (12) months,
commencing on October 15, 1998, and continuing through September 15,
1999, and (b) $15,000 per month for a period of eighteen (18) months
commencing on September 15, 1999 and continuing through March 15,
2001.
(ii) BONUS WARRANTS. The Company agrees that Employee is entitled to
retain warrants for 1,200,000 shares of the Company's restricted
common stock (the "Bonus Warrants"), in accordance with the terms of
the Warrant Agreement, dated March 13, 1998, a copy of which is
attached hereto as "Exhibit A."
(iii) GROUP HEALTH INSURANCE. The Company shall pay the Employee's premium
payment to continue the group health insurance benefits for Employee
and his dependents under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") through March 15, 2001.
The Company further acknowledges that incentive stock options to purchase
320,000 shares of the Company's restricted stock and warrants to purchase
180,000 shares of the Company's restricted stock, both at $0.3125 per share,
have already vested, pursuant to paragraph 3.1(b) of the Addendum to the Amended
and Restated Employment Agreement.
3. RELEASE OF THE COMPANY . In consideration of receipt by Employee of the
Severance Payment set forth in paragraph 2 above, Employee, on behalf of
Employee's heirs, executors, successors, administrators, and assigns does hereby
IRREVOCABLY AND UNCONDITIONALLY RELEASE, ACQUIT AND FOREVER DISCHARGE the
Company, its parents, subsidiaries, and affiliates as well as all of their
respective present and former directors, officers, affiliates, agents,
representatives, employees, successors, and assigns from any and all
liabilities, damages, actions, causes of action and claims of any nature, kind
or description whatsoever, whether accrued or to accrue, which Employee ever
had, now has or hereafter may have against any of them through the date of this
Agreement arising out of any act, omission, transaction, agreement or
occurrence, including, but not limited to, all acts, omissions, transactions,
occurrences, and claims related to or arising out of Employee's relationship and
dealings with the Company, its parents, subsidiaries and/or affiliates and/or
Employee's employment or the termination thereof, which may be the basis of any
claims of any kind, whether sounding in contract or tort or arising out of
statute or common law as well as any, complaint, charge, or proceeding in any
federal, state or local court or administrative proceeding of any kind, or any
other statute or regulation or independent tort claim, including claims under
the AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. SS. 621 ET SEQ., as amended
by the Older Workers' Benefit Protection Act. Employee further covenants not to
xxx the Company, or any of its parents, subsidiaries, affiliates, former or
present officers, agents, representatives, employees, successors, or assigns in
their individual capacities on any such claim, action, or cause of action.
4. ASSIGNMENT OF CLAIMS. Any claims, actions, and/or causes of action
which Employee may have against the Company that are not released in paragraph 3
above, are hereby ASSIGNED, SOLD, TRANSFERRED AND CONVEYED to the Company.
5. BREACH OF AGREEMENT. In the event Employee breaches Sections 6, 7, or 8
of this Agreement or any of the provisions of the Employment Agreement that
survive termination (including any of the foregoing provisions of Section 11 of
the Amended and Restated Employment Agreement and Articles XI and XII of the
Addendum to Amended and Restated Employment Agreement, dated March 13, 1998),
the Company shall have no further obligation to make monthly installment
payments to Employee under Section 2(i) of this Agreement. Employee agrees that
violation of any of the foregoing provisions shall constitute a material breach
of this Agreement.
-2-
6. REAFFIRMATION OF NON-COMPETE AND NON-DISCLOSURE COVENANTS AND THE
COMPANY'S OWNERSHIP OF WORK PRODUCT. Employee acknowledges and reaffirms the
non-compete and non-disclosure covenants contained in the Employment Agreement.
Employee also acknowledges the Company's ownership of intellectual property
conceived, developed, written or contributed by Employee pursuant to his
Employment Agreement, and all rights in works prepared or performed by Employee
pursuant to his Employment Agreement. Employee recognizes and agrees that such
provisions (contained in Section 11 of the Amended and Restated Employment
Agreement and Articles XI and XII of the Addendum to Amended and Restated
Employment Agreement, dated March 13, 1998) continue in full force and effect
beyond the date of termination of employment with the Company and the
termination of the Employment Agreement. In view of the nature of Employee's
employment and the proprietary and other information and trade secrets that
Employee has received during the course of Employee's employment with the
Company, Employee agrees that the Company would be irreparably harmed by any
violation or threatened violation of the foregoing provisions of the Employment
Agreement or this Agreement, and that the Company shall be entitled to
injunctive relief prohibiting Employee from any such violation or threatened
violation.
7. NON-DISCLOSURE OF PRIVILEGED INFORMATION AND OTHER INFORMATION HELD IN
FIDUCIARY CAPACITY. Inasmuch as Employee has been employed as an officer of the
Company and as General Counsel for the Company, he holds attorney-client
privileged information as well as other confidential information of the Company
in a fiduciary capacity. Employee acknowledges and affirms his ongoing fiduciary
and ethical obligations to maintain all such information absolutely confidential
and secret. Employee further acknowledges and agrees that he shall not, without
the prior written consent of the Company, divulge or disclose, directly or
indirectly, any such information, knowledge or data to anyone other than the
Company and counsel designated by the Company.
8. COOPERATION IN LITIGATION AND INVESTIGATIONS. Employee agrees to
cooperate in any investigations conducted by the Company for which the Company
believes Employee to be a holder of information or to have knowledge of relevant
facts. Employee agrees to participate in interviews and cooperate in the
Company's efforts to gather information concerning any allegations of improper
or unlawful conduct or occurrences or other matters investigated by the Company.
Employee also agrees to cooperate with the Company and its counsel in any
litigation or anticipated litigation involving the Company, by making himself
available for interviews, fact gathering, and questioning, and for appearing at
depositions and/or trial without the necessity of being served with a subpoena.
Employee shall not assist or facilitate in the prosecution of any civil claims
or litigation against the Company, and if requested to do so, shall promptly
notify the Company.
9. ASSIGNABILITY. Except as expressly indicated herein, this Agreement is
intended to bind and inure to the benefit of, and be enforceable by the Company
and Employee and their respective heirs, legal representatives, successors, and
assigns.
10. ACKNOWLEDGMENTS. Employee represents and acknowledges that in
executing this Agreement, he does not rely, and has not relied, upon any
representation or statement made by the Company, or its agents, representatives,
or attorneys with regard to the subject matter, basis or effect of this
Agreement or otherwise.
-3-
11. GOVERNING LAW AND ARBITRATION PROVISION. This Agreement and General
Release is made and entered into in the State of Texas and shall in all respects
be interpreted, enforced, and governed under the laws of the State of Texas. The
parties agree that any disputes arising under this Agreement shall be submitted
to resolution in accordance with the applicable rules of the American
Arbitration Association ("AAA"). The parties agree that mediation and/or
arbitration will take place in Xxxxxx County, Texas.
12. CONSTRUCTION. The language of all parts of this Agreement shall in all
cases be construed as a whole according to its fair meaning, and not strictly
for or against either of the Parties. The Parties further agree that there will
be no presumption that any ambiguity in the Agreement shall be construed against
the drafter of the Agreement.
13. SAVINGS CLAUSE. Should any provision of this Agreement be declared to
be determined by any court to be illegal or invalid, the validity of the
remaining parts, terms, or provisions shall not be affected thereby and said
illegal or invalid part, term, or provision shall be deemed not to be a part of
this Agreement.
14. SURVIVABILITY. The Parties acknowledge and agree that all provisions
of the Employment Agreement that contemplate continuing performance by Employee
after termination of Employee's employment with the Company shall survive such
termination, including Employee's obligations pursuant to Section 11 of the
Amended and Restated Employment Agreement and Articles XI and XII of the
Addendum to Amended and Restated Employment Agreement, dated March 13, 1998.
15. ENTIRETY OF AGREEMENT. This Agreement sets forth the entire Agreement
between the Parties respecting termination of Employee's employment
relationship, and fully supersedes any and all prior agreements or
understandings between the Parties pertaining to the subject matter hereof.
16. TIME PERIOD FOR ENFORCEABILITY/REVOCATION OF AGREEMENT. Payment of the
above-described Severance Payment is contingent upon the Employee executing and
returning this Severance Agreement and General Release to the Company.
Furthermore, Employee has a seven (7) day period after executing this Agreement
during which time Employee may revoke Employee's consent to the Agreement by
returning any Severance Payments received with written notification of the
decision to revoke the release to the Company, no later than seven (7) days
after signing the Agreement below. This Agreement will not become effective or
enforceable until such revocation period has expired.
-4-
This Severance Agreement and General Release may not be revoked, but shall
became valid, in effect, and enforceable unless the Company, physically receives
such written notification of revocation of this Severance Agreement and General
Release and refund of the consideration paid herein no later than seven (7) days
after the date signed below. The Employee's acceptance and any revocation and
refund are to be delivered to Xxxx Xxxxxxx, President and Chief Executive
Officer, GK Intelligent Systems, Inc., Marathon Oil Tower, 0000 Xxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxx 00000.
PLEASE READ CAREFULLY. THIS SEVERANCE AGREEMENT AND GENERAL RELEASE
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS ARISING PRIOR TO ITS
EXECUTION. YOU MAY CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT.
GK INTELLIGENT SYSTEMS, INC.
By:___________________________________
Xxxx X. Xxxxxxx
President
Date:___________________________
________________________________
Xxxxxx X. Xxxxxxxx
Date:___________________________
-0-
XXX XXXXX XX XXXXX ss.
ss.
COUNTY OF XXXXXX xx.
On this day, before me, a notary public in and for said state, personally
appeared Xxxx X. Xxxxxxx, President of GK Intelligent Systems, Inc., known to me
to be the person who executed the within Severance Agreement and General Release
and acknowledged to me that he executed the same for the purposes therein stated
on behalf of said corporation.
________________________________________
Notary Public, State of Texas
________________________________________
Printed Name of Notary
My Commission Expires:__________________
-0-
XXX XXXXX XX XXXXX ss.
ss.
COUNTY OF XXXXXX xx.
On this day, before me, a notary public in and for said state, personally
appeared Xxxxxx X. Xxxxxxxx, known to me to be the person who executed the
within Severance Agreement and General Release and acknowledged to me that he
executed the same for the purposes therein stated.
_________________________________________
Notary Public, State of Texas
_________________________________________
Printed Name of Notary
My Commission Expires:___________________
-7-
