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Innovative Solutions - President Employment Agreement - Robert J. Ewy
Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of the 3rd day of May, 1999 (the "Effective Date") between INNOVATIVE SOLUTIONS AND SUPPORT, INCORPORATED, a Pennsylvania corporation (the "Company"), and ROBERT J. EWY a resident of the State of Kansas ("Employee").
RECITALS
A. Employee has served in various executive capacities with other companies over the past several years and has extensive managerial and administrative experience and possesses skills vital to the Company's continued growth and prosperity.
B. Company desires Employee to serve as an employee of the Company in order to ensure the continued growth and success of the business of the Company.
C. The parties wish to set forth herein the terms and conditions on which Employee will serve as an employee of the Company.
The parties agree as follows:
1. Agreement: Position. Subject to the terms and conditions of this Agreement, during the term of this Agreement the Company agrees to employ Employee, and Employee agrees to be employed by the Company and to serve the Company as the President of the Company. Employee's title may not be changed during the term of this Agreement without his prior written consent.
2. Duties of Employee
2.1 General Duties. As President of the Company, Employee will have day-to-day responsibility for management of the Company as its chief operating officer and will be responsible to the Company's CEO and Board of Directors (the "Board"). Employee will report to the CEO. Employee agrees that Employee's duties may be changed by the Board and that Employee will cooperate with the Board and will serve the Company in such other capacities and with such other duties and responsibilities as are typically accorded to the position of President subject to the Company's Bylaws. The duties and services to be performed by Employee under this Agreement are collectively referred to herein as the "Services".
2.2 Other Duties and Obligations. In addition to performing the duties and the Services described in Section 2.1, Employee further agrees with the Company that, during the term of this Agreement:
(a) Employee will perform the Services and his duties hereunder, and will manage and operate the business of the Company, subject to, and in accordance with, the directions of the CEO.
(b) Employee will comply with and be bound by the operating policies, procedures, standards, regulations and practices of the Company that are in effect from time to time during Employee's employment with the Company.
(c) Employee will be generally available and readily accessible to Company personnel by telephone, e-mail and facsimile at all reasonable times.
(d) Employee will not: (i) engage in any unethical, dishonest, fraudulent or felonious criminal behavior; (ii) intentionally or deliberately cause or attempt to cause an injury to the Company; or (iii) steal, convert, misappropriate or wrongfully and willfully use or disclose any proprietary information, technology or trade secret of the Company.
2.3 Working Facilities. Employee shall have a private office, stenographic help, a personal computer and other facilities and services that are suitable for his position and appropriate for the performance of his duties.
2.4 Representations of Employee. Employee represents and warrants to the Company that he is free to enter into and fully perform this Agreement and the agreements referred to herein without breach of any agreement or contract to which Employee is a party or by which Employee is bound.
3. Exclusive Service. Employee will devote his full working time, energy, skill and efforts exclusively to the performance of the Services for the Company and will apply all his skill and experience to the performance of the Services and advancing the Company's interests and will do nothing inconsistent with the performance of the Services hereunder.
4. Compensation and Benefits
4.1 Salary and Bonus. During the term of the Agreement, the Company will pay Employee a gross base salary at the rate of Two Hundred Twenty Five Thousand Dollars ($225,000) per year payable bi-weekly.
4.2 Additional Benefits. Employee will be eligible to participate in the Company's employee benefit plans of general application, including without limitation any pension plans and any life, health, and dental insurance plans in accordance with the rules established for individual participation in any such plan and applicable law, including health and dental for spouse. In addition, Employee will be entitled to three weeks vacation.
4.3 Moving Expenses. To assist Employee with relocation, Company shall reimburse Employee for approved, reasonable moving expenses associated with Employee's relocation to Pennsylvania. Reasonable expenses include closing costs, moving expenses, and temporary living costs. Employee agrees that relocation expenses are fully repayable to the Company if the Employee resigns or is terminated for cause during the term of this Agreement.
4.4 Stock Options. Employee shall be granted stock options for 300,000 shares of the Company's common stock at an option price of $3.60 per share under the 1998 Incentive Stock Option Plan. These options shall vest at the rate of 100,000 at the end of each 12 months
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throughout the term of this agreement. Employee expressly acknowledges and agrees that, to the extent of any inconsistency between the terms of this Agreement and the 1998 Incentive Stock Option Plan, the terms of the 1998 Incentive Stock Option Plan shall govern and control; provided, however, that to the extent that the terms of the stock option agreement issued to Employee on account of the foregoing options contains terms and conditions which, by the terms of the 1998 Incentive Stock Option Plan, may be included therein, the terms set forth in such stock option agreement shall govern and control.
4.5 Expenses. All reasonable and necessary expenses incurred by Employee in connection with Employee's performance of the Services shall be reimbursed provided that such expenses are; (a) in accordance with the Company's policies, as determined from time to time by the Board; and (b) properly documented and accounted for.
5. Term and Termination.
5.1 Term of Agreement. Unless this Agreement is earlier terminated in accordance with the provision of this Section 5, the term of this Agreement will commence on the Effective Date, and will continue until the date that is three (3) years after the Effective Date (the "Initial Term".) Thereafter, this Agreement shall be renewed yearly for one-year periods(each, a "Renewal Term") unless either party provides the other party with written notice of termination of this Agreement not later than ninety (90) days from the end of the then current term of the Agreement. The expiration of this Agreement at the end of the Initial Term or the then current Renewal term is hereinafter called the "Expiration Date".
5.2 Events of Termination. Employee's employment with the Company will terminate immediately upon any one of the following occurrences:
(a) the giving of a written notice by the Company to Employee other than pursuant to Section 5.1 stating that Employee's employment with the Company is being terminated without Cause, which notice may be given by the Company at any time at the sole discretion of the Company ("Termination Without Cause");
(b) the Company's termination of Employee's employment hereunder due to Employee's death or Employee's becoming "Disabled" as defined in Section 5.4 below ("Termination for Death or Disability");
(c) any resignation by Employee of his employment with the Company or any other voluntary termination or abandonment by Employee of his employment with the Company other than as provided in Section 5.1 ("Voluntary Termination"); or
(d) the Company's termination of Employee's employment hereunder for "Cause" as defined in Section 5.3 below ("Termination for Cause").
5.3 "Cause" Defined. For purposes of this Agreement, the term "Cause" means (i) the conviction of Employee of any misdemeanor (other than traffic or similar offenses) or felony, (ii) any material breach by Employee of this Agreement, or (iii) gross negligence or malfeasance by Employee in the performance of his duties hereunder.
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5.4 "Disabled" Defined. For purposes of this Agreement, Employee will be deemed to be "Disabled" if Employee is unable to perform the Services hereunder for more than 90 days during any consecutive 120 day period because of Employee's illness or physical or mental disability, or incapacity, as determined by the Board, in consultation with a licensed physician mutually agreeable to the Board and Employee.
5.5 Date of Termination. the effective date of Employee's termination pursuance to Section 5.2 (a), (b), (c) or (d), is referred to herein as the "Termination Date."
6. Effect of Termination.
6.1 Termination Without Cause. In the event of the termination of Employee's employment pursuant to Section 5.2(a) prior to the end of the then current term of this Agreement , Company will pay Employee the compensation and benefits otherwise payable to Employee under Section 4 until the Expiration Date. To the extent Employee receives compensation from any source for services rendered during the period following the Termination Date during which Company is obligated to continue payments to Employee hereunder, whether for full-time or part-time employment or for consulting or similar services, such compensation shall be offset against payments otherwise due Employee under this Section 6.1.
6.2 Termination for Death or Disability. In the event of any termination of Employee's employment pursuant to Sections 5.2(b), the Company will pay Employee the compensation and benefits otherwise payable to Employee under Section 4 through the Termination Date. Employee's rights under the Company's benefit plans for general application in which Employee then participates, will be determined under the provision of such plans. All options vested as of the Termination Date shall be exercisable to the extent set forth in the option agreement. Employee will be entitled to no other payment or compensation upon any such termination.
6.3 Voluntary Termination. In the event of the termination of Employee's employment pursuant to Section 5.2(c), company will pay Employee no additional compensation or benefits and Employee shall forfeit all unexercised stock options.
6.4 Termination for Cause. In the event of termination of Employee's employment pursuance to Section 5.2(d), the Company will pay the Employee compensation and benefits otherwise payable to Employee through the date of termination and Employee shall forfeit all unexercised stock opt...
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