EXHIBIT 10.3(b)
ADDENDUM TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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. XXXXXXX, of Houston, Texas (hereinafter called "Xxxxxxx" or "Professional").
Collectively, the Corporation and Xxxxxxx shall be referred to as "the parties."
W I T N E S S E T H:
WHEREAS, Xxxxxxx desires to (i) reaffirm his existing contract of
employment, enumerating the following terms and conditions which are in effect
prior to the "Effective Date" set out in the "Amended and Restated Employment
Agreement" to which this Addendum is attached, and (ii) continue to perform
services on behalf of the Corporation as President and Chief Executive Officer
("CEO") and Chairman of the Corporation's Board of Directors, all 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 (i) reaffirm
the existing contract of employment, enumerating the following terms and
conditions which are in effect prior to the "Effective Date" set out in the
"Amended and Restated Employment Agreement"to which this Addendum is attached,
and (ii) continue the employment of Kimmons 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 continues the
employment of Xxxxxxx and Kimmons accepts such continued employment as President
and CEO and Chairman of the Board of Directors, continuing to render
professional services on behalf of the Corporation, subject to the supervision
and direction of the Corporation's Board of Directors, and subject to the law of
the Corporation as given in the Articles of Incorporation and the Bylaws. This
agreement does not supersede the terms of that agreement executed in December,
1993, extended in December, 1996 and amended and restated on March 13, 1998.
Other than any terms which may be more favorable to Professional than the
"Amended and Restated Employment Agreement" to which this Agreement is an
addendum, this Agreement is intended to augment and add to the original
agreement and not to supersede it. This addendum is intended to enumerate the
present terms of employment in effect prior to the "Effective Date" set out in
the "Amended and Restated Employment Agreement"to which this Addendum is
attached.
1.2 TERM OF EMPLOYMENT: The term of employment shall continue until
termination by either party as provided in Article IV, subject further to the
terms of the original agreement.
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ARTICLE II
DUTIES
2.1 DEVOTION OF EFFORT: Xxxxxxx 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.
2.2 DESCRIPTION OF DUTIES. Xxxxxxx shall act as CEO and President of the
Corporation.
ARTICLE III
COMPENSATION
3.1 COMPENSATION AND BENEFITS.
a. MONTHLY SALARY. As compensation for the services to be rendered
hereunder, GKIS will continue to pay to Kimmons a monthly salary in an
amount equal to Twenty Thousand Dollars ($20,000.00). 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, continuing at this or a greater amount as set
by the Board until this agreement is terminated.
b. BONUS WARRANTS 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 Xxxxxxx warrants for four million (4,000,000) shares of GKIS
restricted common stock (the "Bonus Warrants"), with one-fourth vesting
annually each year for four years. Contingent upon the Agreement remaining
in force, Bonus Warrants for one million (1,000,000) 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 as set out in this agreement,
this grant of Bonus Warrants shall be governed by and subject to the
separate Warrant Agreement contemporaneously executed by the parties. For
all purposes related to the Grant of these warrants, 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 $
.3125. Except as set out in paragraph 4.2 below, termination of this
agreement will not cause the forfeiture of the Bonus Warrants for those
months prior to termination in which the vesting requirements were met. In
the event of Xxxxxxx' 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 warrants and options, however
acquired, shall immediately vest and be exercisable by Kimmons, his
representative or his executor, as applicable.
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c. EMPLOYEE BENEFIT PLANS. Xxxxxxx 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.
ARTICLE IV
TERMINATION OF AGREEMENT
4.1 ILLNESS OR OTHER INCAPACITY. If Kimmons, during the term of this
Agreement, shall fail to perform his duties hereunder as a result of
illness or other incapacity which 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 Kimmons, such date to be not less
than thirty (30) days following receipt of said notice.
4.2 CONDUCT: If Xxxxxxx shall be convicted of a felony or a crime
involving moral turpitude; embezzle or otherwise steal from the
Corporation; use liquor or drugs to an extent which has a visible
detrimental effect on his services; conduct himself publicly 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 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 Kimmons is given an opportunity to be heard (with
counsel). In the event of termination under this Article 4.2, Kimmons
shall not be eligible to receive any remaining unvested stock option
compensation subsequent to the act for which termination occurs, nor shall
he be entitled to receive any deferred compensation credited to his
account but not yet paid, if any.
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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 Kimmons 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
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6.1 INABILITY TO PERFORM DUTIES. If Xxxxxxx 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. Xxxxxxx'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 Xxxxxxx 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
Kimmons.
ARTICLE VIII
VACATIONS
8.1 PAID VACATION. Xxxxxxx 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.
Xxxxxxx 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,
Kimmons 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, Xxxxxxx
shall incur and pay in the course of his employment by the Corporation
certain other necessary expenses as Chief Executive Officer, 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 Xxxxxxx'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
Kimmons in the performance of the services in which Kimmons has been
engaged on behalf of the Corporation.
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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 Xxxxxxx 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,
Xxxxxxx'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, Xxxxxxx 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.
Xxxxxxx 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 Kimmons 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, Kimmons shall
immediately deliver to the Corporation all property in Xxxxxxx'x
possession or under Xxxxxxx'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. Xxxxxxx 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 conceived, developed, written,
or contributed by Xxxxxxx 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. Xxxxxxx agrees that all rights in all
works prepared or performed by Xxxxxxx 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.
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C. PROPERTY OF KIMMONS. The provisions of this Paragraph XI
shall not be construed to assign to GKIS any of Xxxxxxx'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 Kimmons 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, Xxxxxxx 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 Xxxxxxx from accepting employment in the areas of industry standard
programming, operating systems or computer manufacturing and sales, standard
corporate training systems and administration or other information technology
functions considered generic to the computer or training industry, and 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 Xxxxxxx, 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.
________________________________________
Xxxx X. Xxxxxxx
XX INTELLIGENT SYSTEMS, INC.:
By:______________________________________
Xxx Xxxxxxxx, V.P. and General Counsel
