Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement, dated as of November 12, 2020 (this “Agreement”), is
made and entered into by and between Mikros Systems Corporation, a Delaware
corporation, (“Company”) and Walter T. Bristow (“Executive”). Terms used herein
and not otherwise defined shall have the meanings set forth in Section 11.

 

RECITALS

 

WHEREAS, contemporaneously herewith, the Company is entering into an Agreement
and Plan of Merger, dated as of November 12, 2020, by and among McKean Defense
Group, Inc., a Delaware corporation (“McKean”), Gyro Merger Sub Inc., a Delaware
corporation and wholly-owned subsidiary of McKean (“Merger Sub”), and the
Company (the “Merger Agreement”) pursuant to which the Company will be merged
with and into Merger Sub, with the Company as the surviving corporation and
becoming a wholly-owned subsidiary of McKean (the “Merger”); and

 

WHEREAS, subject to the terms and conditions hereinafter set forth, the Company
wishes to continue to employ the Executive as the President and the Executive
wishes to continue to be employed as the President of the Company.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, terms, provisions and conditions set forth in this Agreement, the
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

 

AGREEMENT

 

1.     Employment. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts continued
employment with the Company, as of the date set forth in Section 2 below.

 

2.     Effective Time of Agreement; Term.

 

(a)     Effective Date of Agreement: Except with respect to Sections 7, 8, 9,
and 10 hereof, which shall be effective as of the date hereof, this Agreement
shall become effective as of the Effective Time (as defined in the Merger
Agreement) (the “Start Date”). If the Merger Agreement terminates in accordance
with its terms, this Agreement shall thereupon immediately terminate and be of
no force or effect.

 

(b)     Term. Subject to Section 5, the Executive’s employment under the terms
of this Agreement be for a period (the “Term”) commencing on the Start Date and
continuing until the first (1st) anniversary of the Start Date, provided,
however, that unless a party has given the other party written notice at least
sixty (60) days prior to current last day of the Term that such party does not
agree to renew this Agreement, the Term shall be deemed renewed for a term
ending one (1) year subsequent to end date. The parties may terminate this
Agreement and the Executive’s employment hereunder during the Term in accordance
with, and subject to the provisions of, Section 5.

 

 

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3.     Capacity and Performance.

 

(a)      During the Term, the Executive shall be employed by the Company on a
full-time basis as the President. The Executive shall perform such duties and
responsibilities consistent with his position on behalf of the Company. The
Company reserves the right to change the Executive’s title at its discretion,
including, but not limited to, reporting to a chief executive officer of the
Company.

 

(b)      The Executive’s employment with the Company shall be exclusive with
respect to the Business of the Company. Accordingly, during the Term, the
Executive shall devote his full business time and his best efforts, business
judgment, skill and knowledge to the advancement of the business and interests
of the Company and to the discharge of his duties and responsibilities
hereunder, except for permitted vacation (and other paid time off) periods,
reasonable periods of illness or incapacity, and reasonable and customary time
spent on civic, charitable and religious activities, in each case such
activities shall not interfere in any material respect with his duties and
responsibilities hereunder.

 

(c)      During the Term, Executive will report directly to the Chief Executive
Officer of McKean and the Company’s board of directors.

 

4.     Compensation and Benefits.

 

(a)      Base Salary. For services performed by Executive under this Agreement,
the Company shall pay Executive an annual base salary during the Term at the
rate of $225,000 per year, minus applicable withholdings and deductions, payable
at the same times as salaries are payable to other executive employees of the
Company (the “Base Salary”). During the Term hereof, the Executive’s Base Salary
will be reviewed for adjustment during the Company’s annual review and may be
adjusted accordingly.

 

(b)      Signing Bonus. If the Executive is continuously employed by the Company
through the period ending six (6) months after the Start Date, Executive shall
be paid a lump sum bonus amount equal to $12,000, to be paid within fifteen (15)
days after the end of such six (6) month period.

 

(c)      Annual Bonus or Short Term Incentives. The Executive will not be
eligible for a bonus during fiscal year 2020. During fiscal year 2021, the
Executive will be entitled to a bonus in accordance with the terms of the
McKean’s Executive Incentive Plan in effect at that time (with a target bonus
under such plan equal to 25% of his Base Salary).

 

(d)      Other Executive Benefits. During the Term, the Executive shall be
entitled to participate in any and all employee benefit plans from time to time
generally in effect for the Company’s employees (collectively, “Benefit Plans”).
Such participation and receipt of benefits under any such Benefit Plans shall be
on the same terms (including cost-sharing between the Company and Executive) as
are applicable to other Company employees and shall be subject to the terms of
the applicable plan documents and generally applicable Company policies. The
Company may alter, modify, add to or delete the Benefit Plans in a manner
nondiscriminatory to the Executive at any time in accordance with applicable
plan rules.

 

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(e)      Business and Travel Expenses. The Company shall pay or reimburse the
Executive for all reasonable, customary and necessary business expenses
(including cell phone, travel, lodging and entertainment expenses) which are
properly documented and incurred or paid by the Executive in the performance of
his duties and responsibilities hereunder, subject to the rules, regulations and
procedures of the Company and in effect from time to time.

 

(f)      Paid Time Off. During the Term hereof, the Executive shall be entitled
to four (4) weeks of paid time off per calendar year.

 

5.     Termination of Employment; Severance Benefits. Notwithstanding the
provisions of Section 2, the Executive’s employment hereunder shall terminate
under the following circumstances:

 

(a)      Death. In the event of the Executive’s death during the Term hereof,
the Executive’s employment hereunder shall immediately and automatically
terminate. In such event, the Company shall pay to the Executive’s designated
beneficiary or, if no beneficiary has been designated by the Executive, to his
estate, the Final Compensation. The Company shall have no further obligation
hereunder to the Executive upon termination of Executive’s employment under this
Section 5(a).

 

(b)      Disability.

 

(i)      The Company may terminate the Executive’s employment hereunder due to
the Executive’s Disability during the Term. The Company may terminate the
Executive’s employment due to Disability by giving the Executive thirty (30)
days’ written notice of its intention to terminate, but in no event shall such
termination be effective prior to the expiration of the time periods in the
definition of “Disability.” Notwithstanding the foregoing, the Company must
offer the Executive reasonable accommodation to the extent required by the ADA
and the PHRA prior to terminating the Executive’s employment hereunder. The
Executive may decline such reasonable accommodation, in which case the
Executive’s employment hereunder will terminate as provided in this subsection.

 

(ii)      In the event of such termination for Disability, the Executive will
receive his Final Compensation. The Company shall have no further obligation
hereunder to the Executive upon termination of Executive’s employment under this
Section 5(b).

 

(iii)      Subject to the Executive’s rights under the FMLA and ADA, the Company
may designate another employee to act in the Executive’s place during any period
of the Executive’s disability. Notwithstanding any such designation, the
Executive shall continue to receive the Base Salary in accordance with
Section 4(a) and coverage under the Benefit Plans in accordance with
Section 4(b), to the extent permitted by the then-current terms of the
applicable benefit plans and as provided under the FMLA, if applicable, until
the earliest to occur of (A) the end of the Term, (B) the Executive becomes
eligible for disability income benefits under the Company’s disability income
plan or (C) the termination of Executive’s employment.

 

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(iv)      While receiving disability income payments under the Company’s
disability income plan (if applicable), the Company will continue to pay to the
Executive his Base Salary under Section 4(a), but may offset any such disability
income payments Executive receives against the Base Salary payments. The
Executive will also continue to participate in the Benefit Plans in accordance
with Section 4(b) and the terms of such Benefit Plans, until the end of the Term
or until the termination of his employment, whichever occurs first.

 

(v)      If any question arises as to whether during any period the Executive
has a Disability as defined herein, the Executive may, and at the request of the
Company shall, submit to a medical examination by a qualified, unbiased
physician selected by the Company and reasonably acceptable to the Executive or
his duly appointed guardian, if any, to determine whether the Executive has a
Disability and such determination shall for the purposes of this Agreement be
conclusive of the issue.

 

(c)      By the Company for Cause. The Company may terminate the Executive’s
employment hereunder for Cause, as defined in Section 11, at any time upon
notice to the Executive setting forth in reasonable detail the nature of such
Cause. Upon the giving of notice of termination of the Executive’s employment
hereunder for Cause, the Executive will receive his Final Compensation. Except
as provided herein, the Company will have no further obligation to Executive
upon termination of Executive’s employment under this Section 5(c). Any notice
of termination of the Executive’s employment hereunder for Cause, or any notice
to the Executive regarding any event, condition or circumstance that, if not
cured, if applicable, in accordance with the above, could give rise to a
termination of the Executive’s employment hereunder for Cause, shall set forth
in detail the applicable event(s), condition(s) or circumstance(s) constituting
reason(s) or potential reason(s) for such termination hereunder.

 

(d)      By the Company Other than for Cause or by the Executive for Good
Reason. The Company may terminate the Executive’s employment hereunder during
the Term other than for Cause at any time upon thirty (30) days’ written notice
to the Executive and the Executive may terminate his employment hereunder for
Good Reason at any time upon thirty (30) days’ written notice to the Company.
For the avoidance of doubt, this Section 5(d) shall apply to an applicable
termination of employment during the Term even after notice of nonrenewal has
been provided under Section 2(b).

 

(i)      In the event of a termination of the Executive’s employment under this
Section 5(d) during the Term, the Executive will receive (A) the Final
Compensation, and (B) the Executive’s Base Salary as of the date of termination
for a period (the “Severance Period”) equal to six (6) months.

 

(ii)      In addition, during the Severance Period, Executive shall be permitted
to continue participation in, and the Company shall maintain the same level of
contribution for, Executive’s participation in the Company’s medical/health
benefits, or, if the Company cannot provide such benefits because Executive is
no longer an employee, a dollar amount equal to the after-tax cost to Executive
of obtaining such benefits (or substantially similar benefits) (at the same
level of contribution as active employees).

 

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(iii)      Any obligation of the Company to the Executive under this
Section 5(d) (other than for the Final Compensation or for benefits required by
law) is conditioned upon the Executive’s execution and delivery to the Company
and the expiration of all applicable statutory revocation periods of a release
of claims in the form attached hereto as Exhibit A (the “Executive Release”),
provided, that the terms of such Executive Release shall be subject to
modification to the extent necessary to comply with changes in applicable law,
if any, occurring after the date hereof and prior to the date such Executive
Release is executed.

 

(iv)      Continued Base Salary to which the Executive is entitled pursuant to
this Section 5(d) shall be payable in accordance with the normal payroll
practices of the Company and will begin at the Company’s next regular payroll
period which is at least five (5) business days following the effective date of
the Executive Release. The Company shall have no further obligation hereunder to
the Executive upon termination of the Executive’s employment under this
Section 5(d).

 

(e)      By the Executive Other than for Good Reason. The Executive may
terminate his employment hereunder other than for Good Reason upon thirty (30)
days’ written notice to the Company; provided, that the Company may, in its sole
and absolute discretion, by written notice accelerate such date of termination.
In the event of a termination of the Executive’s employment under this
Section 5(e), the Executive will receive the Final Compensation. The Company
shall have no further obligation hereunder to the Executive upon termination of
the Executive’s employment under this Section 5(e).

 

(f)      No Mitigation or Offset. In the event of termination of the Executive’s
employment, the Executive will be under no obligation to seek other employment
and there will be no offset against any payment or benefit provided for in this
Agreement on account of any remuneration or benefits from any subsequent
employment that he may obtain.

 

6.     Effect of Termination.

 

(a)      Upon termination of the Executive’s employment hereunder and subject to
the provisions of Section 5 and Section 6(b), the Company’s entire obligation to
the Executive shall be payment of Final Compensation.

 

(b)      Except as otherwise required by Consolidated Omnibus Budget
Reconciliation Act or any similar federal or state law, benefits shall continue
or terminate pursuant to the terms of the applicable benefit plan or agreement,
without regard to any continuation of Base Salary or other payment to the
Executive following such date of termination.

 

(c)      The provisions of this Section 6 shall apply to any termination of
employment. Provisions of this Agreement will survive any termination if so
provided herein or if necessary or desirable to accomplish the purposes of other
surviving provisions, including, without limitation, the obligations of the
Executive under Sections 7, 9 and 10.

 

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(d)      Any termination of the Executive’s employment with the Company under
this Agreement shall automatically be deemed to be simultaneous resignation of
all other positions and titles the Executive holds with the Company and any
affiliate or subsidiary thereof. This Section 6(d) shall constitute a
resignation notice for such purposes.

 

7.     Confidential Information.

 

(a)      The Executive acknowledges that the Company continually develops
Confidential Information, that the Executive may develop Confidential
Information for the Company and that the Executive may learn of Confidential
Information during the course of employment with the Company. The Executive will
comply with the policies and procedures of the Company for protecting
Confidential Information and shall not disclose to any Person or use, other than
as required by applicable law, regulation or process or for the proper
performance of his duties and responsibilities to the Company, any Confidential
Information obtained by the Executive incident to his employment or other
association with the Company. The Executive understands that this restriction
shall continue to apply after his employment terminates, regardless of the
reason for such termination.

 

(b)      Notwithstanding anything contained in this Section 7 to the contrary,
nothing contained herein shall prevent the Executive from disclosing any
Confidential Information required by law, subpoena, court order or other legal
process to be disclosed; provided, that, the Executive shall give prompt written
notice to the Company of such requirement, disclose no more information than is
so required and cooperate, at the Company’s cost and expense, with any attempt
by the Company to obtain a protective order or similar treatment with respect to
such information.

 

8.     Assignment of Rights to Intellectual Property. The Executive shall
promptly and fully disclose to the Company all Intellectual Property developed
for the benefit of the Company in the course of Executive’s employment by the
Company. The Executive hereby assigns and agrees to assign to the Company (or as
otherwise directed by the Company) the Executive’s full right, title and
interest in and to all such Intellectual Property. The Executive agrees to
execute any and all applications for domestic and foreign patents, copyrights or
other proprietary rights and to do such other acts (including without limitation
the execution and delivery of instruments of further assurance or confirmation)
requested by the Company (at the Company’s expense) to assign to the Company the
Intellectual Property developed for the benefit of the Company in the course of
Executive’s employment by the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to the Intellectual Property.
The Executive will not charge the Company for time spent in complying with these
obligations. All copyrightable works that the Executive creates developed for
the benefit of the Company in the course of Executive’s employment by the
Company shall be considered “work made for hire.”

 

9.     Restricted Activities. The Executive agrees that the restrictions on his
activities during and after his employment set forth below are necessary to
protect the goodwill, Confidential Information and other legitimate interests of
the Company and its successors and assigns:

 

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(a)      During the term of this Agreement and for the Restricted Period
(defined below), Executive will not, without the prior written consent of the
Company, directly or indirectly, and whether as principal or investor or as an
employee, officer, director, manager, partner, consultant, agent, or otherwise,
alone or in association with any other person, firm, corporation, or other
business organization, engage or otherwise become involved in a Competing
Business (as defined below) in the United States; provided, however, that the
provisions of this Section 9 shall apply solely to those activities of a
Competing Business. This Section 9 will not be violated, however, by the
Executive’s investment of up to $100,000 in the aggregate in one or more
publicly-traded companies that engage in a Competing Business. “Competing
Business” means a business or enterprise (other than the Company or its
subsidiaries) that provides naval life cycle management, engineering, enterprise
transformation, and program management services to the Department of Defense
(DoD) and other federal organizations as well as general services administration
professional engineering services, including strategic planning for technology
programs/activities, concept development and requirements analysis, test and
evaluation, integrated logistics support, and acquisition and life cycle
management, as well as system design, engineering, and integration services.
“Restricted Period” means the Severance Period as set forth under Section 5(d),
provided, however, that in the event of a termination of employment other than
under Section 5(d), the Restricted Period shall be the longer of (A) number of
months remaining in the Term as of such termination of employment and (B) six
(6) months following termination of employment.

 

(b)      During the Term of this Agreement and during the Restricted Period (as
defined above), the Executive will not engage in any Wrongful Solicitation (as
defined below). A “Wrongful Solicitation” shall be deemed to occur when the
Executive directly or indirectly (except in the course of the Executive’s
employment with the Company), for the purpose of conducting or engaging in a
Competing Business, calls upon, solicits, advises or otherwise does, or attempts
to do, business with any Person who is, or was, during the then most recent
12-month period, a customer of the Company or any of its subsidiaries, or takes
away or interferes or attempts to take away or interfere with any custom, trade,
business, patronage or affairs of the Company or any of its subsidiaries, or
hires or attempts to hire any Person who is, or was during the most recent
12-month period, an employee, officer, representative or agent of the Company or
any of its subsidiaries, or solicits, induces, or attempts to solicit or induce
any person who is an employee, officer, representative or agent of the Company
or any of its subsidiaries to leave the employ of the Company or any of its
subsidiaries, or violate the terms of their contract, or any employment
agreement, with it.

 

(c)      It is expressly understood and agreed that although the Executive and
the Company consider the restrictions contained in this Section 9 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against the Executive, the
provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as the court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.

 

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(d)      It is expressly understood by the Executive that in the event of a
violation of any period specified in Section 9, such period shall be extended by
a period of time equal to that period beginning with the commencement of any
such violation and ending when such violation shall have been finally terminated
in good faith.

 

(e)      For purposes of this Section 9, Company shall refer to the Company and
McKean and their respective Affiliates.

 

10.   Enforcement of Covenants. The Executive acknowledges that he has carefully
read and considered all the terms and conditions of this Agreement, including
the restraints imposed upon him pursuant to Sections 7, 8 and 9. The Executive
agrees that these restraints are necessary for the reasonable and proper
protection of the Company and its successors and assigns and that each and every
one of the restraints is reasonable in respect to subject matter, length of time
and geographic area. The Executive further acknowledges that, were he to breach
any of the covenants contained in Sections 7, 8 and 9, the damage to the Company
would be irreparable. The Executive therefore agrees that the Company, in
addition to any other remedies available to it, shall be entitled to preliminary
and permanent injunctive relief against any breach or threatened breach by the
Executive of any of the covenants herein, without any requirement to post a bond
or similar security. The parties further agree that, in the event that any
provision of Sections 7, 8 or 9 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of its being extended over too great
a time, too large a geographic area or too great a range of activities, such
provision shall be deemed to be modified to permit its enforcement to the
maximum extent permitted by law.

 

11.    Definitions. Words or phrases which are initially capitalized or are
within quotation marks shall have the meanings provided in this Section and as
provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:

 

(a)      “Affiliate” means, with respect to any specified Person, any other
Person which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person (for
the purposes of this definition, “control” (including, with correlative
meanings, the terms “controlling,” “controlled by” and “under common control
with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to either (i) direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise or (ii) vote at least fifty percent (50%)
or more of the securities having voting power for the election of a majority of
the directors (or Persons performing similar functions) of such Person.

 

(b)      “Cause” means if the Executive is discharged by the Company on account
of the occurrence of one or more of the following events:

 

(i)      the Executive’s continued refusal or failure to perform (other than by
reason of Disability) his material duties and responsibilities to the Company if
such refusal or failure is not cured within thirty (30) days following written
notice of such refusal or failure by the Company to the Executive, or
Executive’s continued refusal or failure to follow any reasonable lawful
direction of the Company if such refusal or failure is not cured within thirty
(30) days following written notice of such refusal or failure by the Company to
the Executive;

 

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(ii)      a material breach of this Agreement (other than Sections 7, 8 and 9)
by the Executive that, if capable of being cured, is not cured within thirty
(30) days following written notice of such breach by the Company to the
Executive;

 

(iii)      an intentional and material breach of Sections 7, 8 and 9 hereof by
the Executive;

 

(iv)      willful, grossly negligent or unlawful misconduct by the Executive
which causes material harm to the Company or its reputation;

 

(v)      any conduct engaged in by the Executive that is materially detrimental
to the business or reputation of the Company as determined by the Company in
good faith using its reasonable business judgment that is not cured within
thirty (30) days following written notice from the Company to the Executive;

 

(vi)      the Company is directed in writing by regulatory or governmental
authorities to terminate the employment of the Executive or the Executive
engages in activities that (i) are not approved or authorized by the Company,
and (ii) cause actions to be taken by regulatory or governmental authorities
that have a material adverse effect on the Company; or

 

(vii)      a conviction, plea of guilty, or plea of nolo contendere by the
Executive, of or with respect to a criminal offense which is a felony or other
crime involving dishonesty, disloyalty, fraud, embezzlement, theft or similar
action(s) (including, without limitation, acceptance of bribes, kick-backs or
self-dealing), or the material breach of the Executive’s fiduciary duties with
respect to the Company.

 

(c)      “Code” means the Internal Revenue Code of 1986, as amended.

 

(d)      “Company” has the meaning ascribed to it in the preamble of this
Agreement.

 

(e)      “Confidential Information” means any and all non-public information of
the Company. Confidential Information includes, without limitation, such
information relating to (i) the development, research, testing, manufacturing,
marketing and financial activities of the Company, (ii) the Services, (iii) the
costs, sources of supply, financial performance and strategic and/or business
plans of the Company, (iv) the identity and special needs of the customers and
prospective customers of the Company, and (v) the people and organizations with
whom the Company has business relationships and those relationships.
Confidential Information also includes any information that the Company has
received, or may receive hereafter, belonging to customers or others with any
understanding, express or implied, that the information would not be disclosed.
Notwithstanding the foregoing, “Confidential Information” does not include
(x) any information that is or becomes generally known to the industry or the
public through no wrongful act of the Executive or any representative of the
Executive and (y) any information that is made legitimately available to the
Executive by a third party without breach of any confidentiality obligation.

 

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(f)      “Disability” means the Executive’s inability, due to any illness,
injury, accident or condition of either a physical or psychological nature, to
substantially perform his duties and responsibilities hereunder for a period of
one hundred twenty (120) consecutive days, or for any one hundred and eighty
(180) days during any period of three hundred and sixty-five (365) consecutive
calendar days, exclusive of any leave Executive may take under the Family and
Medical Leave Act, 29 U.S.C. § 12101 et seq. (“FMLA”) or as a reasonable
accommodation under the Americans with Disabilities Act, 29 U.S.C. § 2601 et
seq. (“ADA”) or the Pennsylvania Human Rights Act (“PHRA”).

 

(g)      “Final Compensation” means the amount equal to the sum of (i) the Base
Salary earned but not paid through the date of termination of employment,
payable not later than the next scheduled payroll date, (ii) any business and
related expenses and allowances incurred by the Executive or to which Executive
is entitled under Section 4(e) but unreimbursed on the date of termination of
employment; provided that with respect to business expenses unreimbursed under
Section 4(e), such expenses and required substantiation and documentation are
submitted within one hundred eighty (180) days of termination in the case of
termination on account of the Executive’s death, or thirty (30) days on account
of termination for any reason other than death, and that such expenses are
reimbursable under the Company’s applicable reimbursement policy, and (iii) any
other supplemental compensation, insurance, retirement or other benefits due and
payable or otherwise required to be provided under Section 4 in accordance with
the terms and conditions of the applicable plan or agreement.

 

(h)      “Good Reason” means, without the Executive’s express written consent,
(i) a reduction in the Base Salary, then in effect, or (ii) a relocation of the
Executive’s principal worksite that is more than fifty (50) miles from the
Executive’s principal worksite as of the Start Date. However, none of the
foregoing events or conditions will constitute “Good Reason” unless (i) the
Executive provides the Company with written notice of the existence of Good
Reason within ninety (90) days following the occurrence thereof, (ii) the
Company does not reverse or otherwise cure the event or condition within thirty
(30) days of receiving that written notice, and (iii) the Executive resigns his
employment within thirty (30) days following the expiration of that cure period.

 

(i)      “Intellectual Property” means inventions, discoveries, developments,
methods, processes, compositions, works, concepts and ideas (whether or not
patentable or copyrightable or constituting trade secrets) conceived, made,
created, developed or reduced to practice by the Executive (whether alone or
with others, whether or not during normal business hours or on or off Company
premises) during the Executive’s employment that relate to either the Services
or any prospective activity of the Company or that make use of Confidential
Information or any of the equipment or facilities of the Company.

 

(j)      “Person” means an individual, a corporation, a limited liability
company, an association, a partnership, an estate, a trust and any other entity
or organization, other than the Company.

 

(k)      “Sale of McKean” means the sale of McKean to an independent third party
or group of independent third parties pursuant to which such party or parties
acquire (i) equity interests possessing the voting power under normal
circumstances to elect a majority of the Board of Directors or similar governing
body of McKean (whether by merger, consolidation or sale or transfer of such
equity interests), or (ii) all or substantially all of McKean’s assets
determined on a consolidated basis.

 

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(l)      “Services” means all services planned, researched, developed, tested,
manufactured, sold, licensed, leased or otherwise distributed or put into use by
the Company, together with all products provided or planned by the Company,
during the Executive’s employment.

 

12.    Withholding. All payments made by the Company under this Agreement may be
reduced by any tax or other amounts required to be withheld by the Company under
applicable law or by any amounts authorized in writing by Executive.

 

13.   Assignment. Neither the Company nor the Executive may make any assignment
of this Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however, that the
Company may assign its rights and obligations under this Agreement without the
consent of the Executive in the event of a Sale of McKean. This Agreement shall
inure to the benefit of and be binding upon the Company and the Executive, their
respective successors, executors, administrators, heirs and permitted assigns.

 

14.    Compliance with Code Section 409A.

 

(a)      Notwithstanding any provision of this Agreement to the contrary, the
Executive’s employment will be deemed to have terminated on the date of the
Executive “separation from service” (within the meaning of Treas. Reg.
Section 1.409A-1(h)) with the Company.

 

(b)      It is intended that this Agreement will comply with Section 409A of the
Code, and any regulations and guideline issued thereunder (“Section 409A”) to
the extent that any compensation and benefits provided hereunder constitute
deferred compensation subject to Section 409A. This Agreement shall be
interpreted on a basis consistent with this intent. The parties will negotiate
in good faith to amend this Agreement as necessary to comply with Section 409A
in a manner that preserves the original intent of the parties to the extent
reasonably possible. No action or failure to act, pursuant to this Section 14
shall subject the Company to any claim, liability, or expense, and the Company
shall not have any obligation to indemnify or otherwise protect the Executive
from the obligation to pay any taxes pursuant to Section 409A of the Code.

 

(c)      For purposes of the application of Treas. Reg. § 1.409A-1(b)(4)(or any
successor provision), each payment in a series of payments will be deemed a
separate payment.

 

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(d)      Notwithstanding anything in this Agreement to the contrary, if any
amount or benefit that would constitute non-exempt “deferred compensation” for
purposes of Section 409A of the Code would otherwise be payable or distributable
under this Agreement by reason of the Executive’s separation from service during
a period in which he is a “specified employee” (as defined under Code
Section 409A and the final regulations thereunder), then, subject to any
permissible acceleration of payment by the Company under Treas. Reg.
Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of
interest), or (j)(4)(vi) (payment of employment taxes):

 

(i)      if the payment or distribution is payable in a lump sum, the
Executive’s right to receive payment or distribution of such non-exempt deferred
compensation will be delayed until the earlier of the Executive’s death or the
first day of the seventh month following the Executive’s separation from
service; and

 

(ii)      if the payment or distribution is payable over time, the amount of
such non-exempt deferred compensation that would otherwise be payable during the
six-month period immediately following the Executive’s separation from service
will be accumulated and the Executive’s right to receive payment or distribution
of such accumulated amount will be delayed until the earlier of the Executive’s
death or the first day of the seventh month following the Executive’s separation
from service, whereupon the accumulated amount will be paid or distributed to
the Executive and the normal payment or distribution schedule for any remaining
payments or distributions will resume.

 

This Section 14(d) should not be construed to prevent the application of Treas.
Reg. § 1.409A-1(b)(9)(iii)(or any successor provision) to amounts payable
hereunder (or any portion thereof).

 

15.   Indemnification. The Company will indemnify Executive to the fullest
extent permitted by law, for all amounts (including, without limitation,
judgments, fines, settlement payments, expenses and reasonable out-of-pocket
attorneys’ fees) incurred or paid by Executive in connection with any action,
suit, investigation or proceeding, or threatened action, suit, investigation or
proceeding, arising out of or relating to the performance by Executive of
services for, or the acting by Executive as a director, officer or employee of,
the Company, or any subsidiary of the Company. Any fees or other necessary
expenses incurred by Executive in defending any such action, suit, investigation
or proceeding shall be paid by the Company in advance, subject to the Company’s
right to seek repayment from Executive if a determination is made that Executive
was not entitled to indemnification.

 

16.   Severability. If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

 

17.   Waiver. No waiver of any provision hereof shall be effective unless made
in writing and signed by the waiving party. The failure of either party to
require the performance of any term or obligation of this Agreement, or the
waiver by either party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.

 

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18.    Survival. Sections 7 through 29 shall survive and continue in full force
in accordance with their terms notwithstanding the termination of the
Executive’s employment (and hence the Term of this Agreement) for any reason.

 

19.    Notices. Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person, with respect to notices delivered personally, or upon
confirmed receipt when delivered by facsimile or deposited with a reputable,
nationally recognized overnight courier service and addressed or faxed to the
Executive at his last known address on the books of the Company or, in the case
of the Company, at its principal place of business, attention: Secretary, Board
of Directors.

 

20.    Entire Agreement. This Agreement constitutes the entire agreement between
the parties (including with respect to the Company, its successors and assigns)
with respect to the Executive’s employment and supersedes all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of the Executive’s employment.

 

21.    Amendment. This Agreement may be amended or modified only by a written
instrument signed by the Executive and by an expressly authorized representative
of the Company.

 

22.    Headings. The headings and captions in this Agreement are for convenience
only and in no way define or describe the scope or content of any provision of
this Agreement.

 

23.   Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument. Furthermore, the delivery of a copy of such
signature by facsimile transmission or other electronic exchange methodology
shall constitute a valid and binding execution and delivery of this Agreement by
such party, and such electronic copy shall constitute an enforceable original
document. Counterpart signatures need not be on the same page and shall be
deemed effective upon receipt.

 

24.    Additional Obligations. Without implication that the contrary would
otherwise be true, the Executive’s obligations under Sections 7 through 10 are
in addition to, and not in limitation of, any obligations that the Executive may
have under applicable law (including any law regarding trade secrets, duty of
loyalty, fiduciary duty, unfair competition, unjust enrichment, slander, libel,
conversion, misappropriation and fraud).

 

25.    Attorneys’ Fees. In any action or proceeding brought to enforce any
provision of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys’ fees, costs and expenses from the other party to the
action or proceeding. For purposes of this Agreement, the “prevailing party”
shall be deemed to be that party who obtains substantially the result sought,
whether by settlement, mediation, judgment or otherwise, and “attorneys’ fees”
shall include, without limitation, the reasonable out-of-pocket attorneys’ fees
incurred in retaining counsel for advice, negotiations, suit, appeal or other
legal proceeding, including mediation and arbitration.

 

26.    Confidentiality. The parties acknowledge and agree that this Agreement
and each of its provisions are and shall be treated strictly confidential.
During the Term and thereafter, the Executive shall not disclose any terms of
this Agreement to any person or entity without the prior written consent of the
Company, with the exception of the Executive’s tax, legal or accounting advisors
or for legitimate business purposes of the Executive, or as otherwise required
by law.

 

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27.    No Rule of Construction. This Agreement shall be construed to be neither
against nor in favor of any party hereto based upon any party’s role in drafting
this Agreement, but rather in accordance with the fair meaning hereof.

 

28.    Governing Law. This Agreement, the rights of the parties and all claims,
actions, causes of action, suits, litigation, controversies, hearings, charges,
complaints or proceedings arising in whole or in part under or in connection
herewith, will be governed by and construed in accordance with the domestic
substantive laws of the Commonwealth of Pennsylvania, without giving effect to
any choice or conflict of law provision or rule that would cause the application
of the laws of any other jurisdiction.

 

29.    WAIVER OF JURY TRIAL. THE EMPLOYEE AND THE COMPANY EXPRESSLY WAIVE ANY
RIGHT EITHER MAY HAVE TO A JURY TRIAL CONCERNING ANY CIVIL ACTION THAT MAY ARISE
FROM THIS AGREEMENT, OR THE RELATIONSHIP OF THE PARTIES HERETO.

 

 

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, this Agreement has been executed by the Company (by its duly
authorized representative) and by the Executive, as of the date first above
written.

 

 

 

THE COMPANY: 

 

        MIKROS SYSTEMS CORPORATION  

 

 

 

 

 

By:

 

 

 

 

 

 

 

Title: 

 

 

          Date:                       EXECUTIVE:                            
Walter T. Bristow             Date:    

 

 

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EXHIBIT A

 

Release of Claims

 

FOR AND IN CONSIDERATION OF the benefits to be provided me in connection with
the termination of my employment, as set forth in that certain Employment
Agreement, dated as of ____________, 2020 (the “Agreement”), between me and
Mikros Systems Corporation, a Delaware corporation (the “Company”), or under any
severance pay plan applicable to me, which benefits are conditioned on my
signing this Release of Claims and to which I am not otherwise entitled, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, I, on my own behalf and on behalf of my heirs, executors,
administrators, beneficiaries, representatives and assigns, and all others
connected with me, hereby release and forever discharge the Company and any of
its subsidiaries and Affiliates (as that term is defined in Section 11 of the
Agreement) and all of their respective past, present and future officers,
directors, trustees, equity holders, employees, agents, managers, joint
venturers, representatives, successors and assigns, and all others connected
with any of them (collectively, the “Released Parties”), both individually and
in their official capacities, from any and all causes of action, rights and
claims of any type or description, known or unknown, which I have had in the
past, now have, or might now have, through the date of my signing of this
Release of Claims, in any way resulting from, arising out of or connected with
my employment by the Company or any of its Affiliates or the termination of that
employment, including, but not limited to, any allegation, claim or violation
arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Worker Benefit Protection Act); the Equal Pay Act of 1963,
as amended; the Americans with Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the
Executive Retirement Income Security Act of 1974; the Fair Labor Standards Act;
any applicable Executive Orders; or their state or local counterparts; or under
any other federal, state or local civil or human rights law, or under any other
federal, state or local law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under any policies,
practices or procedures of the Company; or any claim for wrongful discharge,
breach of contract, intentional infliction of emotional distress or defamation;
or any claim for costs, fees or other expenses, including attorneys’ fees
incurred in these matters (all of the foregoing collectively referred to herein
as “Claims”), other than (i) the right to payment of any vested or accrued
benefits under any supplemental compensation, insurance, retirement and/or other
benefit plan or agreement applicable to Executive, (ii) the right to payment of
any amounts owed to me by the Company pursuant to Section 5 of the Agreement,
(iii) any rights under applicable workers compensation or unemployment
compensation laws, (iv) any rights that survive termination of my employment
pursuant to an option grant agreement or certificate to purchase the Company’s
(or an Affiliate’s) capital stock, (v) any rights with respect to the Company’s
(or an Affiliate’s) capital stock owned by Executive or (vi) any rights to
indemnification under the Agreement, the Company’s by-laws or any other
applicable law.

 

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In signing this Release of Claims, I acknowledge my understanding that I may not
sign it prior to the termination of my employment, but that I may consider the
terms of this Release of Claims for up to twenty-one (21) days (or such longer
period as the Company may specify) from the later of the date my employment with
the Company terminates or the date I receive this Release of Claims. I also
acknowledge that I am advised by the Company and its Affiliates to seek the
advice of an attorney prior to signing this Release of Claims; that I have had
sufficient time to consider this Release of Claims and to consult with an
attorney, if I wished to do so, or to consult with any other person of my
choosing before signing; and that I am signing this Release of Claims
voluntarily and with a full understanding of its terms.

 

I represent that I have not filed against the Released Parties any complaints,
charges, or lawsuits arising out of my employment, or any other matter arising
on or prior to the date of this Release of Claims, and covenant and agree that I
will never individually or with any person file, or commence the filing of, any
charges, lawsuits, complaints or proceedings with any governmental agency, or
against the Released Parties with respect to any of the matters released by me
pursuant to this Release of Claims.

 

I further acknowledge that, in signing this Release of Claims, I have not relied
on any promises or representations, express or implied, that are not set forth
expressly in the Agreement. I understand that I may revoke this Release of
Claims at any time within seven (7) days of the date of my signing by written
notice to the Secretary, Board of Directors of the Company (or such other person
as the Company may specify by notice to me given in accordance with the
Agreement) and that this Release of Claims will take effect only upon the
expiration of such seven-day revocation period and only if I have not timely
revoked it.

 

Intending to be legally bound, I have signed this Release of Claims as of the
date written below.

 

 

Signature:                                                                 

 

Name:                                                                       

 

Date Signed:                                                             

 

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