CEO Employment Agreement - Roman G. Ptakowski

Exhibit 10.1


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of the 29th day of March, 2003 (the "Effective Date") between INNOVATIVE SOLUTIONS AND SUPPORT, INCORPORATED, a Pennsylvania corporation (the "Company") and ROMAN G. PTAKOWSKI, a resident of Florida ("Employee").

RECITALS A. Employee has served in various managerial 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. The Company desires Employee to serve as an employee of the Company and Employee wishes to serve as employee 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. Employee's Position . Subject to the terms and conditions of this Agreement, during the term of this Agreement the Company agrees to employ Employee, and the Employee agrees to be employed by the Company and to serve the Company as the President of the Company.


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 the Employee's duties may be changed by the Board and that Employee will cooperate with the Board and 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 the 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 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 and/or the Board.

(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 the Employee's employment with the Company.


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(c) Employee will be generally available and readily accessible by telephone, e-mail and facsimile at all reasonable times.


(d) Employee will not: (i) engage in any unethical, dishonest, or other fraudulent 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. Representation 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 other 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 . During the term of the Agreement, The Company will pay Employee a gross base salary at a rate of $250,000 per year payable bi-weekly. The Company will review the Employees Salary at least once each year and may, at its discretion, increase the Employees Salary.

4.2. Additional Benefits . Employee and eligible family members 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 3 weeks vacation.


4.3. Moving Expenses . To assist the Employee with relocation, Company shall reimburse Employee for approved, reasonable moving expenses associated with Employee's relocation to Pennsylvania up to a maximum of $75,000 Reasonable expenses include closing costs related to the sale of Employee's present residence, 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 Initial Term of this agreement.


4.4. Stock Options . Employee shall be granted stock options for 180,000 shares of the Company's common stock. The option price will equal the closing price of the Company's stock as of the grant date in accord with the 1998 incentive Stock Option Plan. These options shall vest at the rate of 60,000 shares at the end of each 12 months from the date of the grant. 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 contain 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 in accordance with the Company's policies, as determined from time to time by the Board, and properly documented and accounted for.


4.6. Bonus : A bonus opportunity of up to 30% of annual salary is provided to the employee based on performance of the business. In accordance with the following formula: A percent of annual salary per the weighted average of the percent the following annual budgets are exceeded: Earnings: 45% weight, Cash flow: 30% weight, Annual Revenue growth: 25% weight. Bonus is payable as soon as practicable after close of the fiscal year and the issuance of the company's 10K.


5. Term and Termination

5.1. Term of Agreement . Unless this Agreement is terminated in accordance with the provision of this Section 5, the term of this Agreement will commence on the Effective Date and end on the two year anniversary of such date (the "Initial

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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 prior to the end of the then current term of the Agreement. If this written notification of termination is issued less than 6 months prior to the Expiration Date, the Salary and Additional Benefits in effect will be continued for 6 months from the date of notification. The expiration of this Agreement at the end of the Initial Term or the then current Renewal Term is hereafter 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) conduct in violation of Section 2.2(d), (iii) a material breach by Employee of this Agreement, or (iv) gross negligence or malfeasance by Employee in the performance of the Services and duties hereunder.


5.4. "Disabled " Defined . For purposes of this Agreement, Employee will be deemed to be "Disabled" if Employee is unable to perform the Services and duties hereunder for more than 90 days during any consecutive 120 day pe ...