EXHIBIT 10.1
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. Xxxxxxxxx, of Houston, Texas (hereinafter called "Alexander" or
"Professional"). Collectively, the Corporation and Alexander shall be referred
to as "the parties."
W I T N E S S E T H:
WHEREAS, Alexander desires to perform software design and management
services on behalf of the Corporation and act as Director of Financial Services,
Sales Division as an employee of the Corporation, including the performance
personally of such services as she and/or the Corporation's Board of Directors
deem necessary; and
WHEREAS, the Board of Directors of the Corporation desires to employ
Alexander 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 Alexander
and Alexander accepts such employment, as Director of Financial Services, Sales
Division, 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 May 1, 1998 and shall
continue until termination by either party as provided in Article IV.
ARTICLE II
DUTIES
2.1 DEVOTION OF EFFORT. Alexander agrees to devote sufficient time,
attention, and skill to the performance of her duties as an employee of the
Corporation as set out and authorized by the Board of Directors. During the
term of this Agreement, she shall not render services on her own or on behalf of
any party other than the Corporation unless otherwise authorized by the Board of
Directors.
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ARTICLE III
COMPENSATION
3.1 COMPENSATION AND BENEFITS.
a. MONTHLY SALARY. As compensation for the services to be rendered
hereunder, GKIS will pay to Alexander a monthly salary in an amount equal
to Eleven Thousand Two Hundred Fifty Dollars ($11,250.00). The monthly
salary shall be paid in semi-monthly payments of one-half the monthly
amount each on the first and fifteenth day of each month with respect to
the immediately preceding month, commencing on the first day of the first
month after the month in which this agreement is executed.
b. BONUS OPTIONS FOR SHARES OF CORPORATION COMMON STOCK. In addition
to the monthly salary and any other benefits available to all employees,
including standard incentive qualified stock options, GKIS will grant to
Alexander incentive stock options for One Hundred Thousand (100,000) shares
of GKIS common stock (the "Bonus Options"). Contingent upon the Agreement
remaining in force, options for Twenty-Five Thousand (25,000) shares will
vest and be exercisable on the thirtieth day following the close of each of
the third, six, ninth and twelfth months following the month in which this
agreement is executed. Except for the delayed vesting of their
exercisability, this grant of stock options shall be governed by and
subject to the GK INTELLIGENT SYSTEMS, INC. 1995 INCENTIVE STOCK OPTION
PLAN, as set out in a separate Incentive Stock Option Agreement executed by
the parties concurrently with the execution of this Employment Agreement.
The number of shares shall also be adjusted as provided in Section 7.1 of
such Plan. For all purposes related to the Grant of these options, the
Board of Directors of GKIS has determined that the date of such grant is
March 13, 1998 and the Fair Market Value per share as of the date of such
grant is Thirty-One and 25/100 Cents ($.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. In the event of Alexander's death,
termination upon disability as described in paragraph 4.1 below or other
involuntary termination other than as set out in paragraph 4.2 below, all
unvested options shall immediately vest and be exercisable by Alexander,
her representative or her executor, as applicable.
c. BONUS SHARES. In addition to the monthly salary and Bonus Options
granted above, and effective with the date of this agreement, GKIS will
issue to Alexander Two Hundred Thousand (200,000) shares of the
Corporation's restricted Common Stock (the "Shares"). Alexander is aware
that the Shares have not been registered nor is registration contemplated
under the Securities Act of 1933, and accordingly, that the Shares must be
held indefinitely unless they are subsequently registered under said Act or
unless, in the
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opinion of counsel for the Corporation, a sale or transfer may be made
without registration thereunder. Alexander acknowledges and agrees that she
has no preemptive rights with respect to the Shares to be conveyed
hereunder and further agrees that any certificates evidencing the Shares
may bear a legend restricting the transfer thereof consistent with the
foregoing and that a notation may be made in the records of the Corporation
restricting the transfer of the Shares in a manner consistent with the
foregoing. As soon as practicable after the date of this agreement, GKIS
shall tender the Shares to Alexander, provided that if any law or
regulation requires the Corporation to take any action with respect to the
Shares before the issuance thereof, then the date of delivery for such
shares shall be extended for the period necessary to take such action.
d. EMPLOYEE BENEFIT PLANS. Alexander 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.
3.2 DISALLOWED COMPENSATION. If the Internal Revenue Service shall find
that Alexander's salary constitutes unreasonable or excessive compensation,
Alexander 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 Alexander, during the term of this
Agreement, shall fail to perform her 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 Alexander, such date to be not less than thirty (30) days following receipt
of said notice.
4.2 CONDUCT. If Alexander 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 her or her services; conduct herself publicly or
privately in a manner which offends against decency or causes her 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,
Alexander shall not be eligible to receive unexercised stock option compensation
for the year in which termination occurs, nor shall she be entitled to receive
any deferred compensation credited to her 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 Alexander shall die during the term of this Agreement, her
legal representative shall be entitled to receive her compensation as provided
in Article III hereof.
ARTICLE VI
ILLNESS OR INCAPACITY
6.1 INABILITY TO PERFORM DUTIES. If Alexander is unable to perform her
duties hereunder by reason of illness or incapacity of any kind for a period of
more than six months, her salary payments may be reduced or terminated by the
Corporation at its absolute discretion. Alexander's full salary shall be
reinstated upon her return to full-time employment and the full discharge of her
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 Alexander for attendance at professional conventions, continuing
education institutes in her 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 Alexander.
ARTICLE VIII
VACATIONS
8.1 PAID VACATION. Alexander 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 her salary shall be paid in full. Alexander
shall take her vacation at such time or times as shall be approved by the
corporation.
ARTICLE IX
EXPENSES
9.1 EXPENSES REIMBURSED. During the period of her employment, Alexander
will be reimbursed for her 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, Alexander shall incur and pay in the
course of her employment by the Corporation
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certain other necessary expenses as Director of Financial Services, Sales
Division, for which she will be required personally to pay but for which the
Corporation shall reimburse or otherwise compensate her, including, but not
limited to the following: automobile and transportation expenses; educational
expenses incurred for the purpose of maintaining or improving Alexander's
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 Alexander in the
performance of the services in which Alexander 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 Alexander 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, Alexander's 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, Alexander 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. Alexander 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 her 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 Alexander 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, Alexander shall immediately deliver to
the Corporation all property in Alexander's possession or under Alexander's
control belonging to the Corporation in good condition, ordinary wear and tear
excepted.
11.3 OWNERSHIP OF WORK PRODUCT. Alexander agrees that:
(a) 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 Alexander pursuant to this
Agreement, either individually or in collaboration with others, shall belong to
and be the sole property of GKIS.
(b) Alexander agrees that all rights in all works prepared or performed by
Alexander 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) The provisions of this Paragraph XI shall not be construed to assign to
GKIS any of Alexander's 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 Alexander 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 following termination of same Alexander 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, 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 Alexander from
accepting employment in the area of Microsoft Access programming, system
analysis and administration or information technology functions considered
generic to the industry, not utilizing 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 her residence,
in the case of Alexander, or to its principal office, in the case of the
Corporation.
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.
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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. Xxxxxxxxx
______________________________________
Xxxx X. Xxxxxxxxx
XX INTELLIGENT SYSTEMS, INC.:
By: /s/ Xxxx X. Xxxxxxx
___________________________________
Xxxx X. Xxxxxxx, CEO and Chairman
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