EXHIBIT 10.3
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"), and Xxxxxxx Xxxxx,
of Houston, Texas (hereinafter called "XXXXX"). Collectively, the Corporation
and XXXXX shall be referred to as "the parties."
W I T N E S S E T H:
WHEREAS, XXXXX desires to be the Director of and be responsible for the
marketing of Smart One trainer financial services products 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
XXXXX 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 XXXXX and
XXXXX accepts such employment as DIRECTOR OF FINANCIAL SERVICES MARKETING,
ENHANCED LEARNING 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 January 1,
1998 and shall continue until termination by either party as provided in Article
IV.
ARTICLE II
DUTIES
2.1 DEVOTION OF EFFORT. XXXXX agrees to devote sufficient time,
attention, and skill to the performance of his duties as DIRECTOR OF FINANCIAL
SERVICES MARKETING, ENHANCED LEARNING DIVISION 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
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the Corporation unless otherwise authorized by the Board of Directors.
ARTICLE III
COMPENSATION
3.1 COMPENSATION AND BENEFITS.
a. MONTHLY SALARY. As compensation for the services to be rendered
hereunder, GKIS will pay to XXXXX a monthly salary in an amount equal to
FIFTEEN THOUSAND DOLLARS ($15,000.00). 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 ("payday") with respect to the immediately
preceding month. Salary hereunder will commence on the first month after
the month this agreement is executed.
b. BONUS SHARES. In addition to the monthly salary and effective
with the date of this agreement, GKIS will issue to XXXXX One Hundred
Thousand (100,000) Shares of the Corporation's restricted Common Stock (the
"Shares"). XXXXX 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 opinion of counsel
for the Corporation, a sale or transfer may be made without registration
thereunder. XXXXX acknowledges and agrees that he 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 XXXXX,
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.
c. EMPLOYEE BENEFIT PLANS. XXXXX 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 XXXXX'x salary constitutes unreasonable or excessive compensation, XXXXX
agrees to repay to the Corporation any amount disallowed to the Corporation as
deductions that results in an increase in its tax liability for any tax year.
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ARTICLE IV
TERMINATION OF AGREEMENT
4.1 ILLNESS OR OTHER INCAPACITY. If XXXXX, 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 XXXXX, such date to be not less than thirty (30) days following receipt of
said notice.
4.2 CONDUCT. If XXXXX 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 him or his services; conduct himself 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 4.1,
XXXXX shall not be eligible to receive bonus 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.
ARTICLE V
DEATH OF EMPLOYEE
5.1 DEATH. If XXXXX 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 XXXXX 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. XXXXX'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 XXXXX for attendance at professional conventions, continuing
education institutes in his profession and other professional or business
activities, as approved by the Corporation, with
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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 XXXXX.
ARTICLE VIII
VACATIONS
8.1 PAID VACATION. XXXXX 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. XXXXX 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, XXXXX 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, XXXXX shall incur and pay in the course
of his employment by the Corporation certain other necessary expenses as
Director of Financial Services Marketing, Enhanced Learning Division 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 the
following: automobile and transportation expenses; educational expenses
incurred for the purpose of maintaining or improving XXXXX'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 XXXXX in the performance of the
services in which XXXXX 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 XXXXX 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, XXXXX'x duties shall be such as
prescribed by the Board of Directors of the Successor Corporation.
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ARTICLE XI
PROPERTY RIGHTS OF PARTIES
11.1 TRADE SECRETS. During the term of employment, XXXXX 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. XXXXX 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 XXXXX 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, XXXXX shall immediately deliver to the
Corporation all property in XXXXX'x possession or under XXXXX'x control
belonging to the Corporation in good condition, ordinary wear and tear excepted.
11.3 OWNERSHIP OF WORK PRODUCT. XXXXX 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 conceived, developed, written, or
contributed by XXXXX pursuant to this Agreement, either individually or in
collaboration with others, shall belong to and be the sole property of GKIS.
(b) XXXXX agrees that all rights in all works prepared or performed by
XXXXX 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 shall not be construed to assign to
GKIS any of XXXXX'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 XXXXX 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 XXXXX shall not, directly
or indirectly, either as an employee, employer, consultant, agent, Principal,
Partner, Stockholder, corporate officer,
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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,
Carnot and InfoSleuth 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 Starrat form accepting employment in the area
of network and enterprise connectivity, Internet service provider, system
analysis and administration or information technology functions considered
generic to the industry, not utilizing any of the Corporations 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 XXXXX, 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.
ARTICLE XV
AMENDMENT
15.1 WRITTEN AMENDMENT. 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.
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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/ XXXXXXX XXXXX
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XXXXXXX XXXXX
GK INTELLIGENT SYSTEMS, INC.:
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, CEO and Chairman
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