Exhibit 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of August 19,2004,
and is by and between Texas Source Group, Inc., a Texas corporation, with its
principal place of business 000 Xxxxxxxxx, Xxxxxxx, XX 00000, hereinafter
referred to as (the "Employer" or the "Corporation"), and Xxxxx Xxxxxxx,
hereinafter referred to as (the "Employee").
ARTICLE 1.
TERM OF EMPLOYMENT
1.1 Term. The Employer hereby employs the Employee and the Employee hereby
accepts employment with the Employer from August 19, 2004 until August 18,
2006.
1.2 Renewal. This Agreement shall continue for successive one (1) year terms,
unless either party gives notice of termination in writing to the other party
at least ninety (90) days prior to the expiration date.
ARTICLE 2.
DUTIES OF EMPLOYEE
2.1 General Duties. The Employee agrees to serve as President of Texas Source
Group, Inc. ("TSG") and to perform diligently and to the best of her abilities
the duties and services pertaining to such office as set forth in the Bylaws
of TSG that are currently in effect or as amended from time to time, as well
as such additional duties and services appropriate to such office as the Board
of Directors of TSG ("Board of Directors") may reasonably assign to Employee
from time to time. Any action undertaken on behalf of the Employer shall be
done prudently and in good faith in furtherance of the Employer's business and
the business of TSG.
2.2 Change in Duties. The duties of the Employee may be changed from time to
time by the mutual consent of the Employer and the Employee without resulting
in a rescission of this Agreement. Notwithstanding any such change, the
employment of the Employee shall be construed as continuing under this
Agreement as modified.
2.3 Devotion of Time to Employer's Business. The Employee shall use her best
efforts and shall devote her time and effort as required to competently
perform her duties.
ARTICLE 3.
COMPENSATION AND BENEFITS
3.1 Compensation. During the term of this Agreement, the Corporation shall
provide compensation to Employee in the following forms:
(a) Base Salary. Employee shall receive an annual base salary of one hundred
twenty thousand dollars ($120,000), which amount shall be subject to annual
review by the Employer's Board of Directors and/or the Compensation Committee
of the Employer's Corporation for possible increases.
(b) Bonus. During the Term of this Agreement, Employee, at the end of each
fiscal
year, shall receive fifty percent (50%) of the increase over the base fiscal
year, 2003, of the audited earnings before tax.
(c) Stock Option. In addition to the Base Salary and Bonus set forth above,
and any other benefits available to all employees, the Employer's parent
company, GK Intelligent Systems, Inc. has granted to Employee an Incentive
Stock Option (ISO) pursuant to le GK Intelligent Systems, Inc. 2004 Employee
Stock Option Plan, to purchase five-hundred thousand (500,000) shares of GK
Intelligent Systems, Inc. common stock (the "Stock Options"). Provided that
Employee remains an employee of the Employer, its parent company, an affiliate
or subsidiary, and contingent upon the Agreement remaining in force as a
result of such continued employment, said Stock Options will vest over the two
year period of time immediately following the date of this Agreement. Fifty
percent of the options will be vested at the end of the first twelve months
and fifty percent (50%) of the options will be vested at the end of the second
twelve months. This grant of the Stock Options shall be governed by and
subject to the GK Intelligent Systems, Inc., 2004 Stock Option Plan and the
Separate Incentive Stock Option Agreement executed concurrently herewith. The
number of shares shall also be adjusted as provided in such Plan. For all
purposes related to the grant of these Stock Options, the Board of Directors
of GK Intelligent Systems, Inc. has determined that the date of such grant is
August 19, 2004 and the exercise price shall be the average Closing Price of
the Employer's common stock as quoted on the Nasdaq OTCBB for August 17,2004
and August 18, 2004.
(d) Employee Benefit Plans. Employee shall be entitled to participate in all
Employee benefit plans to be established by the Employer's Board of Directors
on the same terms and conditions as all other employees similarly situated,
including reimbursement of reasonable expenses as approved by Employer's Board
of Directors.
3.2 Benefits. During the term of this Agreement, Employee shall be afforded
the following is incidences of her employment:
(a) Health and Other. Employee and, to the extent applicable, Employee's
family, dependents and beneficiaries, shall be allowed to participate in all
benefits, plans and programs, including improvements or modifications of the
same, which are now, or may hereafter be, available to employees of the
Employer generally. Such benefits, plans and programs, including Employer and
Employee contributions, are determined by the President and may include,
without imitation, a profit sharing plan, a thrift plan, a health insurance or
health care plan, life insurance, disability insurance or a pension plan.
(b)Business and Entertainment Expenses. Subject to the Employer's standard
policies and procedures with respect to expense reimbursement as applied to
its executive employees generally, the Employer will reimburse Employee for,
or pay on behalf of Employee, reasonable and appropriate expenses incurred by
Employee for business related purposes including dues and fees to approved
industry and professional organizations, automobile purchase or lease expenses
as well as all other associated automobile expenses and reasonable costs of
entertainment incurred in connection with business development. With regard to
such expenses, the Employee shall:
(i) Keep an account book in which the Employee shall record at or near the
time that each expenditure is made:
(1) amount of the expenditure;
(2) the time, place and designation of the type of the entertainment and
travel, or other expense, or the date and description of the gift (gifts made
to one individual are not to exceed a total of twenty-five dollars ($25.00) in
any taxable year;
(3) the business reason for the expenditure and the nature of the business
benefit derived or expected to be derived as a result of the expenditure; and
(4) the names, occupations, addresses, and other information concerning each
person who was entertained or given a gift sufficient to establish a business
relationship to the Employer;
(ii) Obtain documentary evidence (such as a receipt for paid xxxx), which
states sufficient information to establish the amount, date, place and the
essential character of the expenditure, for each expenditure:
(1) Seventy-five dollars ($75.00) or more (except for transportation
charges if not readily available); and
(2)or lodging while traveling away from home. The foregoing
account book and documentary evidence shall be delivered to the Employer
whenever requested by the Employer and shall thereafter be retained by the
Employee.
3.3 Payroll and Deduction for Taxes. Employee shall receive all compensation
pursuant to this Agreement in accordance with the Employer's customary payroll
practices with respect to time and manner of payment. The Employer shall have
the right to deduct from the compensation due to the Employee hereunder any
and all sums required for social security and withholding taxes and for any
other federal, state or local tax or charges which may not be in effect or
hereafter enacted or required as a charge on the compensation of the Employee.
ARTICLE 4.
PROPERTY RIGHTS OF THE PARTIES
4.1 Inventions, Copyrights, Patents and Trademarks. The Employee agrees that
she will promptly from time to time fully inform and disclose to the Employer
all inventions, designs, improvements, and discoveries which she now has or
may hereafter have during the term of this Agreement which pertain or relate
to the business of the Employer or to any experimental work carried on by the
Employer, whether conceived by the Employee alone or with others and whether
or not conceived during regular working hours. All such inventions, designs,
improvements and discoveries shall be the exclusive property of the Employer.
The Employee shall assist the Employer to obtain patents on all such
inventions, designs, improvements, and discoveries deemed patentable by things
necessary to obtain patent letters, vest the Employer with full and exclusive
title thereto, and protect the same against infringement by others.
4.2 Trade Secrets. The Employee during the term of employment under this
Agreement will have access to and become acquainted with various trade
secrets, consisting of devices, secret inventions, customer lists, customer
requirements and compilations of information, records and specifications,
which are owned by the Employer and which are regularly used in the operation
of the business of the Employer except as already in the public domain or as
previously known to employee. The Employee shall not disclose any of the
aforesaid trade secrets, directly or indirectly or use them in any way, either
during the term of this Agreement or at any time hereafter, except as required
in the course of her employment. All files records, documents, drawings,
specifications, equipment, and similar items relating to the business of the
Employer, whether prepared by the Employee or otherwise coming into her
possession, shall remain the exclusive property of the Employer and shall not
be removed from the premises of the Employer under any circumstances
whatsoever without the prior written consent of the Employer.
4.3 Non Solicitation of Customers After Termination of Employment. The
Employee shall not, for a period of one year, following the termination of
this Agreement, for whatever reason, either directly or indirectly:
(a) Make known to any person, firm or corporation the names or addresses of
any of the customers of the Employer or any other information pertaining to
them; or
(b) Call on, solicit, or take away, or attempt to call on, solicit, or take
away any of the current customer projects of the Employer. In the event
Employee is terminated, this prohibition will immediately terminate.
4.4 Ownership of Employer and Customer Records. All Records of the Employer
and the accounts of customers and any other records and books relating in any
manner whatsoever to the customers of the Employer, whether prepared by the
Employee or otherwise coming into her possession, shall be the exclusive
property of the Employer regardless of who actually purchased the original
book or record. All such books and records shall be immediately returned to
the Employer by the Employee on any termination of her employment. If the
Employee purchases any such original book or record, she shall immediately
notify the Employer, who then shall immediately reimburse her.
4.5 Return of Employer's Property. On termination of employment or whenever
requested by the Employer, the Employee shall in a timely manner deliver at
Employer's expense to the Employer all property in her possession or under her
control belonging to the Employer including, but not limited to the equipment,
supplies, records, and other personal property under Employee's control, which
is the Employer's, in good condition, with ordinary wear and tear and damage
by any cause beyond the reasonable control of the Employee excepted.
ARTICLE 5
NON-COMPETITION
Non-Competition Agreement. In connection with this Employment Agreement,
Employee agrees that she shall not, either directly or indirectly, either as
an employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director, or in any other individual or representative
capacity, engage or participate in any business that is in competition in any
manner whatsoever with the business of the Employer within the area, herein
called "designated area" consisting of the State of Texas, for so long as
Employee is employed by Employer. It is expressly understood that Employee has
a relationship with Aventine Solutions LLC and this relationship is exempt
from the Non-Competition provisions of this Agreement.
5.1 Employee agrees not to solicit the customers of the Employer for her
personal account or the account of any other person or entity other than the
Employer so long as Employee is employed by Employer. The parties hereto agree
that notwithstanding any provisions of the Texas Codes that this covenant not
to compete is enforceable and necessary to protect the Employer's trade
secrets including, but not limited to, patent and trademark designs, suppliers
and customer lists of the Employer.
ARTICLE 6.
TERMINATION OF EMPLOYMENT
6.1 Termination. Subject to the notice and other provisions of this Section
6.1, the Employer shall have the right to terminate the Executive's employment
with the Employer, and the Executive shall have the right to resign from such
employment, at any time and for no stated reason.
(a) Disability. The Employer shall have the right to terminate the employment
of the Executive under this Agreement for disability in the event Executive
suffers an injury, illness or incapacity lasting for a period of more than six
(6) months provided that after such six (6) month period the Employer shall
have given at least ten (10) days written notice of termination; provided
further, however, that if the Executive is eligible to receive disability
payments pursuant to a disability policy paid for by the Employer, the
Executive shall assign such benefits to the Employer for all periods as to
which she is receiving full payment under this agreement.
(b) Death. This Agreement shall terminate upon the death of Executive.
(c) With Cause. The Employer may terminate this Agreement effective upon
delivery of written notice to Executive given at any time (without any
necessity for prior notice) if any of the following shall occur:
(1) Any material breach of Executive's obligations under this Agreement not
cured after ten (10) days notice from the Employer's Board of Directors:
(2) Executive's gross negligence in the performance of her duties hereunder;
(3) Executive has committed any of the following: (i) a felony criminal
conviction; (ii) any other criminal conviction involving Executive's lack of
honesty or moral turpitude; (iii) drug or alcohol abuse; or (iv) acts of
dishonesty, gross carelessness or gross misconduct.
In the event executive's employment with the Employer is terminated pursuant
to items 6.1(a), (b), or (c), Executive or her beneficiary shall be entitled
to receive all base compensation earned by Executive up to the date of
termination and all un-reimbursed expenses. For a termination by the Employer
without good cause, Executive shall be entitled to receive the base salary
rate for the remaining Employment Term and all un-reimbursed expenses.
6.2 Effect of Employer's Merger, Transfer of Assets or Dissolution. This
Agreement shall not be terminated by any merger or consolidation where the
Employer is not the consolidated or surviving corporation but shall be
terminated in the event of voluntary or involuntary dissolution of the
Employer. In the event of a merger, consolidation or sale the Employer shall
take all actions necessary to insure that such corporation or transferee is
bound by the provisions of this Agreement.
ARTICLE 7.
GENERAL PROVISIONS
7.1 Damages for Breach of Contract. In the event of a breach of this Agreement
by either the Employer or Employee resulting in damages to the other party,
the damaged party may recover from the breaching party, any and all damages
that may be sustained.
7.2 Governing Law, Jurisdiction and Venue. This Agreement is entered into
under, and shall be governed for all purposes by, the laws of the State of
Texas. Any suit by the Employer to enforce any right hereunder or to obtain a
declaration of any right or obligation hereunder may, at the sole option of
the Employer, be brought (i) in any court of competent jurisdiction in the
State of Texas or (ii) in any court of competent jurisdiction where
jurisdiction may be had over Employee. Employee hereby expressly consents to
the jurisdiction of the foregoing courts for such purposes and to the
appointment of the Secretary of State for the State of Texas as her agent for
service of process.
7.3 Notices. Any notices to be given hereunder by either party to the other
may be effected by personal delivery in writing by either registered or
certified mail, postage prepaid with return receipt requested. Mailed notices
shall be addressed to the parties at their last known address. Notices
delivered personally shall be deemed communicated as of five (5) days after
mailing.
7.4 No Waiver. No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall (i) be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time or (ii) preclude insistence upon strict compliance in the future.
7.5 Partial Invalidity and Severability. If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or unenforceable,
then the invalidity or unenforceability of that provision shall not affect the
validity or enforceability of any other provision of this Agreement, and all
other provisions shall remain in full force and effect.
7.6 Assignment. This Agreement, and the rights and obligations of the parties
hereunder, are personal and neither this Agreement, nor any right, benefit or
obligation of either party hereto, shall be subject to voluntary or
involuntary assignment, alienation or transfer, whether by operation of law or
otherwise, without the prior written consent of the other party except that
vested rights to payment shall be subject to devise, and shall descend in
accordance with applicable laws of inheritance.
7.7 Attorney's Fees and Costs. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party
shall be entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which she may be entitled.
7.8 Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the rules of the American Arbitration Association, and
judgment on the award rendered may be entered in any court having jurisdiction
hereof.
7.9 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which together
will constitute one and the same Agreement.
7.10 Entire Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
employment of the Employee by the Employer and contains all of the covenants
and agreements between the parties with respect to such employment in any
manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise,
have been made by any party, or anyone acting on behalf of any party, which
are not embodied herein, and that no other agreement, statement, or promise
not contained in this Agreement shall be valid and binding. Any modification
of this Agreement will be effective only if it is in writing signed by the
party to be charged.
*** SIGNATURE PAGE FOLLOWS***
IN WITNESS WHEREOF, this Agreement is executed on the day and year first above
written.
EMPLOYER
TEXAS SOURCE GROUP, INC.
___________________________________
Xxxx X. Xxxxxxx, Vice President
EMPLOYEE
___________________________________
Xxxxx Xxxxxxx
GK INTELLIGENT SYSTEMS, INC.
____________________________________
By: Xxxx X. Xxxxxxx
Its President and CEO
