Exhibit 10.01

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into on the 23rd of October,
2007, to be effective on and as of the 19th of November, 2007 (the “Effective
Date”), by and between Integral Systems, Inc., a Maryland corporation (the
“Company”), and Jeffrey A. Rosolio (the “Executive”).

NOW, THEREFORE, in consideration of the mutual promises made below, the parties
agree as follows:

 

  1. Employment, Duties and Acceptance.

1.1 Employment.

(a) Effective upon the Effective Date, the Company shall employ the Executive as
the Vice President, Human Resources. The Executive shall have such powers,
perform such duties and fulfill such responsibilities as may be determined by
the Chief Executive Officer of the Company from time to time. The Executive
accepts such employment and shall perform his duties faithfully and to the best
of his abilities.

(b) The Executive shall devote his full working time and creative energies to
the performance of his duties hereunder and will at all times devote such
additional time and efforts as are reasonably sufficient for fulfilling the
significant responsibilities entrusted to him. So long as such activities, in
the aggregate, do not interfere with the performance by the Executive of his
duties hereunder: (i) the Executive shall be permitted a reasonable amount of
time to supervise his personal, passive investments; and (ii) the Executive
shall be permitted a reasonable amount of time to participate (as board member,
officer or volunteer) in civic, political and charitable activities.

1.2 Place of Employment. The Executive’s principal place of employment shall be
in Lanham, Maryland, subject to such travel as may be reasonably required by his
employment pursuant to the terms hereof.

 

  2. Term of Employment.

2.1 Term of Employment. Executive agrees that the initial term of this Agreement
shall be for a period of three (3) years commencing on the date first written
above (the “Effective Date”) and will continue until the first anniversary of
the Effective Date (as may be extended, the “Term”). At the end of the initial
Term or at the end of any twelve (12) month renewal period (as described in
Section 2.2 below), the Term of this Agreement may automatically extend as
provided below in Section 2.2. Notwithstanding anything to the contrary
contained herein, the Company may terminate Executive’s employment with or
without Cause.

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2.2 Renewal Periods. If this Agreement has not been terminated earlier in
accordance with the provisions of this Agreement, at the end of the initial Term
or any twelve (12) month renewal period, the Term shall be extended
automatically for an additional twelve (12) month period unless either party
provides written notice of non-renewal to the other party at least one hundred
twenty (120) days prior to the last day of the Term or any renewal period, as
applicable.

 

  3. Compensation.

3.1 Salary. As compensation for all services to be rendered pursuant to this
Agreement, the Company shall pay to the Executive during the Term a salary of
$200,000 per annum (the “Base Salary”), which shall be pro-rated for calendar
year 2007, less such deductions as shall be required to be withheld by
applicable laws and regulations or as otherwise authorized by the Executive. The
Base Salary shall accrue from and after the Effective Date, and shall be payable
during the Term, in arrears in equal periodic installments and in accordance
with the practices of the Company in effect from time to time for the payment of
salaries to employees of the Company, but in any event not less frequently than
monthly. The Executive’s Base Salary shall be reviewed at least annually and may
be increased (but not decreased) based upon the evaluation of the Executive’s
performance and the compensation policies of the Company in effect at the time
of each such review.

3.2 Additional Compensation. During the Term, Executive shall be entitled to
participate, in accordance with the terms thereof and in a manner substantially
similar to other similarly situated executive officers, in any present or future
bonus, profit sharing, stock option (whether incentive or non qualified) or
other employee compensation or incentive plan adopted by the Company.

3.3 Participation in Executive Officer Benefit Plans; Vacation. The Executive
shall be permitted during the Term, if and to the extent eligible, to
participate in any group life, hospitalization or disability insurance plan,
health program, 401(k) pension or similar benefit plan of the Company which may
be available to other executive officers of the Company generally on the same
terms as such other executive officers. The Executive shall receive vacation in
accordance with the vacation policy of the Company.

3.4 Expenses. The Company shall pay or reimburse the Executive for all ordinary,
necessary and reasonable expenses (including, without limitation, travel,
meetings, dues, subscriptions, fees, educational expenses, computer equipment,
mobile telephones, professional insurance, and the like) actually incurred or
paid by the Executive during the Term in the performance of the Executive’s
services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as may be required by the policies
and procedures of the Company in effect from time to time.

3.5 Withholding. The Company is authorized to withhold from the amount of any
Base Salary and any other things of value paid to or for the benefit of the
Executive, all sums authorized by the Executive or required to be withheld by
law, court decree,

 

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or executive order, including (but not limited to) such things as income taxes,
employment taxes, and employee contributions to fringe benefit plans sponsored
by the Company.

 

  4. Termination.

4.1 General. The employment of the Executive hereunder shall terminate as
provided in Section 2, unless earlier terminated in accordance with the
provisions of this Section 4.

4.2 Termination Upon Mutual Agreement. The Company and the Executive may, by
mutual written agreement, terminate this Agreement and/or the employment of the
Executive at any time.

4.3 Death or Disability of Executive.

(a) The employment of the Executive hereunder shall terminate upon (i) the death
of the Executive, and (ii) at the option of the Company upon not less than
thirty (30) days’ prior written notice to the Executive or his personal
representative or guardian, if the Executive suffers a “Total Disability” (as
defined in Section 4.3(b) below).

(b) For purposes of this Agreement, “Total Disability” shall mean (i) if the
Executive is subject to a legal decree of incompetency (the date of such decree
being deemed the date on which such disability occurred), or (ii) the written
determination by a physician selected by the Company that, because of a
medically determinable disease, injury or other physical or mental disability,
the Executive is unable substantially to perform each of the material duties of
the Executive required hereby, and that such disability has lasted for the
immediately preceding ninety (90) days and is, as of the date of determination,
reasonably expected to last an additional ninety (90) days or longer after the
date of determination, in each case based upon medically available reliable
information, and the provision of clear and convincing evidence by the Company
of the Executive’s inability substantially to perform each material duty
hereunder in support of such determination by the physician.

(c) Any leave on account of illness or temporary disability which is short of
“Total Disability” shall not constitute a breach of this Agreement by the
Executive and in no event shall any party be entitled to terminate this
Agreement for “Cause” (as defined in Section 4.4 below) due to any such leave.
All physicians selected hereunder shall be Board certified in the specialty most
closely related to the nature of the disability alleged to exist.

4.4 Termination For Cause. The Company may, upon written notice to the Executive
specifying in reasonable detail the reason therefore, terminate the employment
of the Executive at any time for “Cause” (as defined below). For purposes of
this Agreement, “Cause” means (i) the material failure of the Executive to
perform his duties under this Agreement, or to follow the Company’s policies and
procedures applicable to executive officers of the Company in effect from time
to time, after notice and a reasonable opportunity to cure; (ii) willful
malfeasance by the Executive in connection with the performance of his duties
under this

 

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Agreement; (iii) the Executive being convicted of, or pleading guilty or nolo
contendere to, or being indicted for a felony or other crime involving theft,
fraud or moral turpitude; (iv) fraud or embezzlement against the Company;
(v) the failure of the Executive to obey in any material respects any proper
written direction of the Chief Executive Officer of the Company that is not
inconsistent with this Agreement; (vi) or the material violation by the
Executive of any of the provisions of Section 5 of this Agreement.

4.5 Payments Upon Termination.

(a) The Company may at any time during the Term terminate the Executive without
Cause. In the event the Executive’s employment is terminated by the Company
without Cause during the Term, then the Company shall pay (on the same schedule
used to pay Base Salary to the Executive during the Term) the Executive:

(1) the Base Salary to which the Executive would have been entitled pursuant to
Section 3.1 of this Agreement had the Executive remained in the employ of the
Company for a period commencing upon the date of such termination and ending on
the first anniversary of the date of termination (“Termination Coverage
Period”); provided, however, that in the event that during the Termination
Coverage Period such period Executive receives compensation from a third party
employer (“Third Party Employer Compensation”), then Executive shall promptly
provide written evidence of such compensation and any payments under this
Section 4.5(a) shall be net of such Third Party Employer Compensation, and

(2) The Executive’s COBRA Premiums for the Termination Coverage Period, or the
portion thereof, that Executive or Executive’s dependents are eligible for such
COBRA coverage.

(b) In the event the Executive’s employment is terminated (i) by the Company for
Cause, or (ii) voluntarily by the Executive, then the Company shall have no duty
to make any payments or provide any benefits to the Executive pursuant to this
Agreement other than payment of the amount of the Executive’s Base Salary
accrued through the date of termination of his employment and any other benefits
the Executive is then due pursuant to the employment benefit plans of the
Company.

(d) Upon termination of Executive’s employment for death or due to Total
Disability, the Company shall pay to the Executive, guardian, personal
representative or estate, as the case may be, in addition to any insurance or
disability benefits to which Executive may be entitled hereunder, all amounts
accrued or vested prior to such termination.

(e) Upon termination of Executive’s employment for death, due to Total
Disability or without Cause, the Executive, or the Executive’s guardian,
personal representative or estate, as the case may be, shall be entitled to a
bonus (consistent with the provisions of Section 3.2 of this Agreement) for the
fiscal year in which the date of termination of employment occurs, prorated for
the period of employment in such fiscal year; provided, however, that such bonus
will be withheld and not deemed earned only in the

 

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event that: (i) the Company reasonably determines that Executive had not
substantially met, to the extent reasonably obtainable, Executive’s bonus
related goals as of the date of termination of employment or (ii) no other
similarly situated executive actually receives a bonus for such fiscal year. Any
such bonus deemed earned, shall be payable at the time in which other similarly
situated Company executives receive their bonus payments.

(f) In the event that this Agreement is not renewed either after the initial
Term or after a renewal period, then the Company shall have no duty to make any
payments or provide any benefits to the Executive pursuant to this Agreement
other than payment of the amount of the Executive’s Base Salary accrued through
the date of termination of his employment and any other benefits the Executive
is then due pursuant to the employment benefit plans of the Company.

4.6 No Disparaging Comments Upon Termination.

Upon termination of this Agreement, the Company will refrain from making any
disparaging remarks about the Executive. Similarly, the Executive shall refrain
from making any disparaging remarks about the Company or the businesses,
services, products, stockholders, officers, directors or other personnel of the
Company or any of its affiliates.

 

  5. Certain Covenants of the Executive.

5.1 Restrictive Covenants.

(a) The parties hereto agree that as used herein “Confidential Information”
means all information which becomes known to the Executive as a consequence of
his employment by the Company and includes, but is not limited to, information
about the Company’s customers, methods of operation, prospective and executed
contracts, trade secrets, business contacts, customer lists, and all
technological, business, financial, accounting, statistical and personnel
information regarding the Company. The parties hereto further agree and
stipulate that this Confidential Information was developed by the Company at
considerable expense, that this information is a valuable asset and part of the
Company’s goodwill, that this information is vital to the Company’s success and
is the sole property of the Company.

(b) The Executive recognizes and acknowledges that during his employment by the
Company, the Executive has, or will, become familiar with the Company’s
Confidential Information.

(c) The Executive recognizes and acknowledges that the Company is engaged in the
business of, among other things, building satellite ground systems and equipment
for command and control, integration and test, data processing and simulation
(the “Business”). The Business is a highly competitive enterprise, so that any
unauthorized disclosure or unauthorized use by the Executive of the Confidential
Information protected under this Agreement, whether during his employment with
the Company or after its termination, would cause immediate, substantial and
irreparable injury to the Business and the goodwill of the Company.

 

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(d) The Executive agrees that upon termination of his employment with the
Company for any reason, whether voluntary or involuntary or with or without
Cause, he will surrender to the Company every item and every document which is
the Company’s property or will completely remove from the Executive’s personal
property such Confidential Information in whatever form (e.g. cell phones,
PDA’s, personal computers, etc.). All such documents and Confidential
Information are the sole and absolute property of the Company. At the written
request of the Company, the Executive shall provide the designated
representative of the Company a certificate containing the following statement:
“The Executive hereby certifies that he has notified the Company’s designated
representative of all Confidential Information residing on any personal property
of the Executive to which the Executive is aware of after due review and
inspection and has removed and destroyed (unless otherwise directed in writing
by the Company) all Confidential Information from all personal property of the
Executive.” Thereafter, in the event that the Executive becomes aware of any
further Confidential Information on the Executive’s personal property, the
Executive shall notify the Company in writing and again comply with the
immediately preceding sentence.

(e) The Executive agrees that during his employment and following the
termination of that employment for any reason, whether voluntary or involuntary
or with or without Cause, he will not, on his own behalf or as a partner,
officer, director, employee, agent, or consultant of any other person or entity,
directly or indirectly, disclose the Company’s Confidential Information to any
person or entity other than agents of the Company, and he will not use or aid
others in obtaining or using any such Confidential Information. The Executive’s
obligations under this Section 5.1(e) shall not be deemed violated in the event
that (i) the Executive discloses any Confidential Information pursuant to order
of a court of competent jurisdiction, provided the Executive has notified the
Company of such potential legal order and provided the Company with the
opportunity to challenge or limit the scope of the disclosure, or (ii) the
information becomes generally available from a source other than the Company,
any of its affiliates, or any of their employees when such source is not legally
prohibited, to the best of the Executive’s knowledge, from making such
information available.

(f) All inventions, prototypes, discoveries, improvements, innovations and the
like (“Inventions”) and all works of original authorship or images that are
fixed in any tangible medium of expression and all copies thereof (“Works”)
which are designed, created or developed by the Executive, solely or in
conjunction with others, in the course of performance of the Executive’s duties
which relate to the Business, shall be made or conceived for the exclusive
benefit of and shall be the exclusive property of the Company. The Executive
shall immediately notify the Company upon the design, creation or development of
all Inventions and Works. At any time thereafter, the Executive, at the request
and expense of the Company, shall execute and deliver to the Company all
documents or instruments which may be necessary to secure or perfect the
Company’s title to or interest in the Inventions and Works, including but not
limited to applications for letters of patent, and extensions, continuations or
reissues thereof, applications

 

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for copyrights and documents or instruments of assignment or transfer. All Works
are agreed and stipulated to be “works made for hire,” as that term is used and
understood within the Copyright Act of 1976, as amended or any successor
statute. To the extent any Works are not deemed to be works made for hire as
defined above, and to the extent that title to or ownership of any Invention or
Work and all other rights therein are not otherwise vested exclusively in the
Company, the Executive shall, without further consideration but at the expense
of the Company, assign and transfer to the Company the Executive’s entire right,
title and interest (including copyrights and patents) in or to those Inventions
and Works.

(g) The Executive agrees that during his employment with the Company and for a
period commencing on the termination of such employment and ending (i) in the
event the Executive’s employment is terminated in accordance with Section 2 by
the Company without Cause, at the end of the Termination Coverage Period, or
(ii) in the event the Executive’s employment terminates for any other reason
(whether voluntarily or involuntarily), on the date one (1) year following such
date of termination, he will not, on his own behalf or as a partner, officer,
director, employee, agent, or consultant of any other person or entity, directly
or indirectly, engage or attempt to engage in a business which competes against
the Business of the Company in any geographic area in which the Company engages
in the Business. This subsection shall not be construed as precluding the
Executive from working as an employee or consultant for a separate business unit
of a competitor of the Company, if the separate business unit is not in
competition with the Business.

(h) The Executive agrees that during his employment and for a period of twenty
four (24) months after the termination of such employment, whether voluntary or
involuntary or with or without Cause, he will not, on his own behalf or as a
partner, officer, director, employee, agent, or consultant of any other person
or entity, directly or indirectly, solicit or induce (or attempt to solicit or
induce) any employees of the Company to leave their employment with the Company
and/or consider employment with any other person or entity.

5.2 Rights and Remedies Upon Breach. If the Executive breaches, or threatens,
either in writing or as evidenced by a demonstrable course of conduct, to commit
a breach of, any of the provisions of Section 5.1 (the “Restrictive Covenants”),
the Company shall, in addition to its right immediately to terminate this
Agreement, have the right and remedy (which right and remedy shall be
independent of others and severally enforceable, and which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity) to have the Restrictive Covenants specifically enforced
by any court having equity jurisdiction, it being acknowledged and agreed that
any such breach or threatened breach could cause irreparable injury to the
Company or its affiliates and that money damages may not provide adequate remedy
to the Company.

5.3 Covenants Currently Binding the Executive. The Executive warrants that his
employment by the Company, and his execution, delivery and performance of this
Agreement, will not (a) violate any non-disclosure agreements, covenants against
competition, or other restrictive covenants made by the Executive to or for the
benefit of any previous employer or partner, or (b) violate or constitute a
breach or default under, any statute, law, judgment, order, decree, writ,
injunction, deed, instrument, contract, lease, license or permit to which the
Executive is a party or by which the Executive is bound.

 

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5.4 Litigation. There is no litigation, proceeding or investigation of any
nature (either civil or criminal) which is pending or, to the best of the
Executive’s knowledge, threatened against or affecting the Executive or which
would adversely affect his ability to substantially perform the duties herein.

5.5 Review. The Executive has received or been given the opportunity to review
the provisions of this Agreement, and the meaning and effect of each provision,
with independent legal counsel of the Executive’s choosing.

5.6 Severability of Covenants. The Executive acknowledges and agrees that the
Restrictive Covenants are reasonable and valid in geographical and temporal
scope and in all respects. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect, without regard to the invalid portions.

5.7 Blue-Penciling. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
geographic scope of such provision, such court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable and shall be enforced. If any
such court declines to so revise such covenant, the parties agree to negotiate
in good faith a modification that will make such duration or scope enforceable.

 

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  6. Dispute Resolution.

6.1 Costs of Arbitration. If either party brings an arbitration proceeding to
enforce its rights under this Agreement, the substantially prevailing party (as
determined by the arbitrator) shall be entitled to recover from the other party
all expenses incurred by it in preparing for and in trying the case, including,
but not limited to, investigative costs, court costs and reasonable attorneys’
fees.

6.2 No Jury Trial. NEITHER PARTY SHALL ELECT A TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED WITH A
BREACH OF THIS AGREEMENT.

6.3 Personal Jurisdiction. Both parties agree to submit to the jurisdiction and
venue of the state courts in the State of Maryland as to matters involving
enforcement of this Agreement including any award under an arbitration
proceeding.

6.4 Arbitration. SUBJECT TO THE COMPANY’S RIGHT TO SEEK INJUNCTIVE RELIEF AS
SPECIFIED IN THIS AGREEMENT, ANY DISPUTE BETWEEN THE PARTIES HERETO ARISING
UNDER OR RELATING TO THIS AGREEMENT (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT
OF DAMAGES, THE NATURE OF THE EXECUTIVE’S TERMINATION OR THE CALCULATION OF ANY
BONUS OR OTHER AMOUNT OR BENEFIT DUE) SHALL BE RESOLVED IN ACCORDANCE WITH THE
PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION. ANY RESULTING HEARING SHALL
BE HELD IN LANHAM, MARYLAND. THE RESOLUTION OF ANY DISPUTE ACHIEVED THROUGH SUCH
ARBITRATION SHALL BE BINDING AND ENFORCEABLE BY A COURT OF COMPETENT
JURISDICTION.

 

  7. Other Provisions.

7.1 Notices. Any notice or other communication required or which may be given
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage paid, and shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, four days after the date of mailing, as follows:

 

  (i) if to the Company, to:

Integral Systems, Inc.

5000 Philadelphia Way

Lanham, Maryland

Fax: 301-731-3183

Attention: Chief Executive Officer

 

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with copies to:

Gibson, Dunn & Crutcher LLP

1050 Connecticut Ave, NW

Washington, DC 20036

Fax: (202) 955-8589

Attention: Howard Adler

 

  (ii) if to the Executive, to:

Jeffrey A. Rosolio

16009 Daven Pine Court

Darnestown, MD 20878

FAX:

Any party may by notice given in accordance with this Section to the other party
designate another address or person for receipt of notices hereunder.

7.2 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, written or oral, with respect thereto, including
without limitation any severance benefits as described in the Company’s
employment manual as in effect from time to time and the Change in Control
Agreement and the Transition Bonus Agreement, both of which agreements are
hereby terminated and shall be of no further force and effect.

7.3 Waivers and Amendments. This Agreement may be amended, modified, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the Executive and a duly
authorized officer of the Company (each, in such capacity, a party) or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

7.4 Governing Law. This Agreement has been negotiated and is to be performed in
the State of Maryland, and shall be governed and construed in accordance with
the laws of the State of Maryland applicable to agreements made and to be
performed entirely within such State.

7.5 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.

 

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7.6 Confidentiality. Neither party shall disclose the contents of this Agreement
or of any other agreement they have simultaneously entered into to any person,
firm or entity, except the agents or representatives of the parties, or except
as required by law.

7.7 Word Forms. Whenever used herein, the singular shall include the plural and
the plural shall include the singular. The use of any gender or tense shall
include all genders and tenses.

7.8 Headings. The Section headings have been included for convenience only, are
not part of this Agreement, and are not to be used to interpret any provision
hereof.

7.9 Binding Effect and Benefit. This Agreement shall be binding upon and inure
to the benefit of the parties, their successors, heirs, personal representatives
and other legal representatives. This Agreement may be assigned by the Company
to any entity which buys substantially all of the Company’s assets. However, the
Executive may not assign this Agreement without the prior written consent of the
Company.

7.10 Separability. The covenants contained in this Agreement are separable, and
if any court of competent jurisdiction declares any of them to be invalid or
unenforceable, that declaration of invalidity or unenforceability shall not
affect the validity or enforceability of any of the other covenants, each of
which shall remain in full force and effect.

 

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IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed
this Agreement or caused it to be executed and attested by their duly authorized
officers as a document under seal on the day and year first above written.

 

INTEGRAL SYSTEMS, INC.

By:

 

/s/ Alan Baldwin

Name:   Alan Baldwin Title:  

Chief Executive Officer and President

EXECUTIVE:

/s/ Jeffrey Rosolio

  Jeffrey Rosolio

 

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