Exhibit 10.1

 

 

CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (“Agreement”) is made and entered into on and as of
March 2, 2020 by and between Mikros Systems Corporation, a Delaware corporation
(the “Company“), and Mark Malone (“Consultant”).

 

In consideration of the mutual premises herein contained and intending to be
legally bound hereby, the parties agree as follows:

 

1.       Consulting Services.

 

1.1.     Services. During the term of this Agreement, Consultant shall provide
consulting services to the Company as set forth on Schedule 1 hereto (the
“Consulting Services”). The Consultant will perform the Consulting Services
faithfully, diligently and to the best of the Consultant’s skill and ability.
The Consultant shall report to the Board of Directors of the Company. The
Consulting Services shall be performed at the offices of the Company or remotely
as reasonably determined by the Company. Unless agreed by the Company and
Consultant in writing, Consultant shall not be required to provide more than
thirty (30) hours of Consulting Services per week during the Initial Term (as
defined below). During any Subsequent Term (as defined below), the number of
hours of Consulting Services per month shall be determined by mutual written
agreement of the Company and Consultant.

 

1.2     Consulting Term. The initial term (the “Initial Term”) of this Agreement
shall begin on the date hereof and shall continue until May 31, 2020 unless
earlier terminated pursuant to Section 3 below. Thereafter, this Agreement may
extended for any number of subsequent one (1) month terms (each a “Subsequent
Term” and together with the Initial Term, the “Term”) as the Company and
Consultant shall agree in writing.

 

1.3     Independent Contractor. Consultant and Company acknowledge and agree
that the relationship hereunder created is one of an independent contractor and
not one of employment. Consultant shall at all times during the Consulting Term
act as an independent contractor and nothing hereunder shall be construed to be
inconsistent with this relationship or status or create or imply a relationship
of employer-employee between the Company and Consultant or any agent of
Consultant. Neither Consultant nor any agent of Consultant shall hold themselves
out to third parties as an employee of Company, and shall have no authority to
bind or commit Company, legally or otherwise. Neither Consultant nor any agent
of Consultant shall be entitled to any benefits paid by the Company to its
employees. The Consultant shall be solely responsible for any tax consequences
applicable to it by reason of this Agreement and the relationship established
hereunder, and the Company shall not be responsible for the payment of any
federal, state or local taxes or contributions imposed under any employment
insurance, social security, income tax or other tax law or regulation with
respect to the Consultant’s performance of consulting services hereunder.
Company and Consultant shall report any and all payments made by Company
pursuant to this Agreement to the appropriate governmental agencies in a manner
consistent with Consultant's status as an independent contractor.

 

1

--------------------------------------------------------------------------------

 

 

2.     Compensation; Expenses. The Company shall pay Consultant a fee as set
forth in Schedule 2 hereto. The Consultant shall be entitled to reimbursement
for any and all travel related expenses and reasonable out of pocket expenses
related to the fulfillment of Consulting Services hereunder upon delivery to the
Company of supporting documentation evidencing such expenses.

 

3.     Termination. Consultant may terminate this Agreement at any time by
delivering written notice to the Company. The Company may terminate this
Agreement at anytime for “Cause” by delivering written notice to Consultant. In
the event of termination pursuant to this Section 3: the Company shall not be
responsible to make any further payment of any kind to Consultant except for an
amount equal to (a) any expenses incurred by Consultant prior to the date of
termination in accordance with the terms of this Agreement which remain unpaid
as of the date of termination plus (b) any fees earned prior to the date of
termination and which remain unpaid as of the date of termination. For the
purpose of this Agreement, “Cause” shall mean: (i) a documented and repeated
failure by Consultant to perform the Consulting Services, (ii) Consultant’s
conviction or entry of a plea of nolo contendere for fraud, misappropriation or
embezzlement, or any felony or crime of moral turpitude, (iii) intentional acts
of dishonesty by Consultant including any intentional act or intentional
omission that subjects the Company to public scandal or that causes the Company
to be sanctioned by a governmental authority as a result of a violation of
governmental regulations, or (iv) Consultant’s material breach of this
Agreement. With respect to subsections 3(a) (i), (iii) and (iv) above, Cause
shall exist only after written notice of such failure, act or breach is
delivered to Consultant and Consultant shall have failed to cure such violation
or breach within 30 days after such notice, if curable.

 

4.      Confidentiality. Consultant understands that Consultant's work as a
consultant of the Company creates a relationship of trust and confidence between
Consultant and the Company. During and after the Term of this Agreement,
Consultant will not use or disclose or allow anyone else to use or disclose any
"Confidential Information" (as defined below) relating to the Company, its
products, services, suppliers or customers except (i) as may be necessary in the
performance of Consultant's work for the Company which use or disclosure shall
be solely for the benefit of the Company in connection with the Company’s
business and in accordance with the Company’s business practices and employee
policies or (ii) as may be specifically authorized in advance by appropriate
officers of the Company. "Confidential Information" shall include, but shall not
be limited to, information consisting of research and development, patents,
trademarks and copyrights and applications thereto, technical information,
computer programs, software, methodologies, innovations, software tools,
know-how, knowledge, designs, drawings, specifications, concepts, data, reports,
processes, techniques, documentation, pricing, marketing plans, customer and
prospect lists, trade secrets, financial information, salaries, business
affairs, suppliers, profits, markets, sales strategies, forecasts, employee
information and any other information not available to the general public,
whether written or oral, which Consultant knows or has reason to know the
Company would like to treat as confidential for any purpose, such as maintaining
a competitive advantage or avoiding undesirable publicity. Consultant will keep
Confidential Information secret and will not allow any unauthorized use of the
same, whether or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of Consultant's
or that the Company regularly gives to third parties without restriction on use
or disclosure. Consultant further understands and acknowledges that (a) the
Confidential Information is the property of the Company, constitutes a major
asset of the Company and is crucial to the successful operation of the Company's
business; (b) the use, misappropriation or disclosure of the Confidential
Information would constitute a breach of trust and could cause irreparable
injury to the Company; and (c) it is essential to the protection of the
Company's goodwill and to the maintenance of the Company's competitive position
that the Confidential Information be kept secret.

 

2

--------------------------------------------------------------------------------

 

 

5.     Equitable Relief. Consultant acknowledges that the restrictions contained
in Section 4 hereof are reasonable and necessary to protect the legitimate
interests of the Company that such restrictions are deemed to be material, that
the Company would not have entered into this Agreement in the absence of such
restrictions, that it would be impossible or inadequate to measure and calculate
the Company’s damages from any violation of any provision those Sections, and
that any violation of any provision of those Sections may result in irreparable
injury to the Company. Consultant agrees that the Company shall, whether or not
it is pursuing any potential remedies at law, be entitled to seek in any court
of competent jurisdiction, preliminary and permanent injunctive relief and to
specific performance of any such provision of this Agreement, without the
necessity of proving actual damages or an equitable accounting of all earnings,
profits and other benefits arising from any actual or threatened breach of
Section 4 hereof, which rights shall be cumulative and in addition to any other
rights or remedies to which the Company may be entitled. Consultant further
agrees that no bond or other security shall be required in obtaining such
equitable relief and Consultant hereby consents to the issuance of such
injunction and to the ordering of specific performance.

 

6.     Governing Law. The validity, interpretation and performance of this
Agreement shall be controlled by and construed under the laws of the
Commonwealth of Pennsylvania without regard to principles of conflicts of law or
choice of law. Any action, suit or proceeding between the parties relating to or
arising out of this Agreement shall be commenced and maintained exclusively in
the Court of Common Please of Pennsylvania sitting in Montgomery County,
Pennsylvania. Each party hereby irrevocably and unconditionally consents to the
exclusive jurisdiction and venue of such court and waives any objection it may
have to the laying of venue of any such action, suit or proceeding in such
court.

 

7.     Notices. All notices and other communications hereunder or in connection
herewith shall be in writing and shall be deemed to have been given when
delivered by hand, reputable express delivery service, mailed by certified or
registered mail, return receipt requested, or sent via facsimile and followed up
by hand delivery, reputable express delivery service or mailed by certified or
registered mail, return receipt requested to the party as follows (provided that
notice of change of address shall be deemed given only when received):

 

If to the Company, to:

 

Mikros Systems Corporation

220 Commerce Drive

Suite 300

Fort Washington, PA 19034-24116065

Attention: Paul Casner

                 Chairman of the Board of Directors

 

3

--------------------------------------------------------------------------------

 

 

If to Consultant, to:          

 

Mark Malone

c/o Mikros Systems Corporation

220 Commerce Drive

Suite 300

Fort Washington, PA 19034-24116065

 

or to such other names or addresses as Company or Consultant, as the case may
be, shall designate by notice to the other person in the manner specified in
this Section.

 

8.     Restricted Stock Awards. The Consultant and Company hereby acknowledge
and agree that notwithstanding the transition by Consultant from employee to
consultant pursuant to the terms of this Agreement (i) Consultant shall be
deemed have remained in continuous employment or service with the Company and
the shares covered by that certain Restricted Stock Award Agreement dated
October 22, 2018 by and between the Company and the Consultant (the “2018
Restricted Stock Agreement”) shall continue to vest in accordance with terms
therof, and (ii) Consultant’s employment shall not be deemed to have terminated
and the shares covered by that certain Restricted Stock Award Agreement dated
May 1, 2017 by and between the Company and the Consultant (the “2017 Restricted
Stock Agreement” and together with the 2018 Restricted Stock Agreement, the
“Restricted Stock Award Agreements”) shall continue to vest in accordance with
terms therof. In the event that this Agreement is not terminated prior to May
31, 2020, all restrictions and vesting provisions applicable to all shares of
restricted stock covered by the Restricted Stock Award Agreements shall lapse or
accelerate in full, as applicable, such that all shares of restricted stock
covered by the Restricted Stock Award Agreements shall no longer be subject to
any forfeiture or vesting provisions.

 

9.     Miscellaneous. This Agreement: (a) constitutes the entire agreement and
supersedes any prior or contemporaneously-made written or oral agreements
between the parties relating to the subject matter hereof; (b) may be modified
only in a writing duly executed by the parties hereto; (c) shall be binding upon
and inure to the benefit of and be enforceable by the successors and permitted
assigns of the Company and Consultant; and (d) shall not be assignable or
delegable in whole or in part by Consultant or Company without the prior written
consent of the other party.

 

10.     Severability. The covenants in this Agreement are severable, and if any
covenant or portion hereof is held to be invalid, illegal or unenforceable for
any reason, such covenant or portion thereof shall be modified or adjusted by a
court exercising its equitable powers to the extent necessary to cure such
invalidity or unenforceability, and all other covenants and provisions shall
remain valid and enforceable to the fullest extent permitted by applicable law.

 

11.     Counterparts.     This Agreement may be executed in counterparts, each
of which shall be deemed an original, and both of which together shall
constitute one and the same instrument. The Agreement may be delivered by
facsimile or electronic transmission, and the facsimile or electronic signatures
shall be deemed original signatures for all purposes.

 

4

--------------------------------------------------------------------------------

 

 

12.     Survival. Notwithstanding any termination or expiration of this
Agreement, Sections 4, 5, 6, 7, 8, 9 and 10 of this Agreement shall survive and
remain in full force and effect in accordance with their respective terms.

 

[remainder of page intentionally blank; signatures on next page]

 

 

 

 

 

 

 

 

 

5

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.

                                  

 

MIKROS SYSTEMS CORPORATION   

 

 

 

 

 

       

 

 

 

 

 

By:

/s/ Paul Casner

 

 

Name: Paul Casner

 

  Title: Chairman of the Board of Directors                 MARK MALONE        
        /s/Mark Malone     Signature  

                            

6

--------------------------------------------------------------------------------

 

 

SCHEDULE 1 - CONSULTING SERVICES

 

Consultant shall provide executive management, financial advisory, strategic
planning and corporate governance consulting services consisting of: (i)
assisting and advising the Company with respect to its strategic planning
process and business plans; (ii) advising the Company on matters relating to
corporate governance and policies and procedures regarding financial management
and business practices; (iii) assisting the Company with strategic introductions
and negotiations, and (iv) assisting in management transition issues.

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE 2 - FEES

 

Consultant shall be compensated for the Consulting Services in accordance with
the following schedule:

 

During the Initial Term, the Company shall pay Consultant a fee in the amount of
$20,000 per month which shall be paid on the 15th day of each month.

 

During any Subsequent Term, the Company shall pay Consultant a monthly fee equal
to the product of (i) $20,000 and (ii) and a fraction the numerator of which is
the maxim number of hours of Consulting Services to be provided during such
Subsequent Term and the denominator of which is 120 which shall be paid in on
the 15th day of each month.

 

Consultant shall be entitled to receive a discretionary bonus as determined by
the Board of Directors of the Company in its sole and absolute discretion in the
event that the Company closes a material transaction in which the Consultant
provided material assistance to the Company during the Term.