Exhibit 10.1

 

Mikros Systems Corporation

220 Commerce Dr., Suite 300

Fort Washington, PA 19034

 

July 29, 2020

 

Mark J. Malone

 

Re: Severance Payments

 

Dear Mr. Malone:

 

Following up on our recent discussions, this letter shall set forth our
agreement regarding certain terms of your employment with Mikros Systems
Corporation, a Delaware corporation (the “Company”). For good and valuable
consideration, the receipt and sufficient of which are hereby acknowledge, the
undersigned agree as follows:

 

In the event that your employment with the Company is terminated by the Company
without Cause (as defined below), the Company shall pay to you (i) the Accrued
Amount (as defined below) in a single lump sum within thirty (30) days after the
date of termination, and (ii) an amount equal to your annual base salary in
effect on the date of termination of your employment, less applicable deductions
(the “Severance Amount”), in a single lump sum within thirty (30) days after the
date of termination. Payment of the Severance Amount shall be conditioned upon
your execution and non-revocation of a general release waiving any and all
claims you have or may have against the Company, in a form to be provided by the
Company, which general release has become effective in accordance with its
terms.

 

In the event that a Change of Control occurs during the time you are employed by
the Company, the Company shall pay to you an amount equal to the Severance
Amount. Payment of the Severance Amount shall be conditioned upon your execution
and non-revocation of a general release waiving any and all claims you have or
may have against the Company, in a form to be provided by the Company, which
general release has become effective in accordance with its terms.

 

In no event shall you be entitled to receive payment of the Severance Amount
more than one time. By way of example, if there is a Change of Control, the
Company pays the Severance Amount to you, your employment with the Company
continues, and thereafter, the Company terminates your employment without Cause,
you will not be entitled to payment of the Severance Amount upon such
termination.

 

For purpose of this letter agreement:

 

“Accrued Amount” means any base salary, less applicable deductions, and
reimbursable expenses, in each case, accrued but unpaid as of the date of
termination, and any bonus earned and declared payable by the Board of Directors
of the Company that remains unpaid as of the date of termination, less
applicable deductions

 

“Cause” means (i) willful misconduct by you in the performance of any of your
material executive employment duties which is likely to materially damage the
financial position or reputation of the Company, which is not cured within
thirty (30) days following receipt by you of written notice from the Company,
(ii) conviction (or a plea of nolo contendere) by you of a felony, (iii) conduct
by you which constitutes moral turpitude which is directly and materially
injurious to the Company, or (iv) acts of fraud, dishonesty or misappropriation
committed by you and intended to result in personal enrichment at the expense of
the Company. For purposes of this definition, no act or failure to act on your
part shall be considered "willful" unless done or omitted not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company.

 

 

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Mark J. Malone

July 29, 2020

Page 2

 

 

“Change of Control” means the occurrence of any of the following events:

 

(a)     Any transaction or event resulting in the beneficial ownership of voting
securities, directly or indirectly, by any “person” or “group” (as those terms
are defined in Sections 3(a)(9), 13(d), and 14(d) of the Securities Exchange Act
of 1934 (the “Exchange Act”) and the rules thereunder) having “beneficial
ownership” (as determined pursuant to Rule 13d-3 under the Exchange Act) of
securities entitled to vote generally in the election of directors (“voting
securities”) of the Company that represent greater than 50% of the combined
voting power of the Company’s then outstanding voting securities, other than any
transaction or event resulting in the beneficial ownership of securities:

 

(i)     by the Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of the stock of the Company, or

 

(ii)     pursuant to a transaction described in clause (b) below that would not
be a Change in Control under clause (b);

 

(b)     The consummation by the Company (whether directly involving the Company
or indirectly involving the Company through one or more intermediaries) of (i) a
merger, consolidation, reorganization, or business combination, (ii) a sale or
other disposition of all or substantially all of the Company’s assets, or (iii)
the acquisition of assets or stock of another entity, in each case, other than a
transaction which results in the Company’s voting securities outstanding
immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the
person that, as a result of the transaction, controls, directly or indirectly,
the Company or owns, directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of the Company (the
Company or such person, the “Successor Entity”)) directly or indirectly, greater
than 50% of the combined voting power of the Company’s or Successor Entity’s, as
applicable, outstanding voting securities immediately after the transaction,
other than a transaction:

 

(i)     which results in the Company’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding
or by being converted into voting securities of the Company or the person that,
as a result of the transaction, controls, directly or indirectly, the Company or
owns, directly or indirectly, all or substantially all of the Company’s assets
or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, greater than 50% of the
combined voting power of the Company’s or the Successor Entity’s, as applicable,
outstanding voting securities immediately after the transaction; or

 

 

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Mark J. Malone

July 29, 2020

Page 3

 

 

(c)     The approval by the Company’s stockholders of a liquidation or
dissolution of the Company other than pursuant to bankruptcy or insolvency laws.

 

For purposes of clause (a) above, the calculation of voting power shall be made
as if the date of the acquisition were a record date for a vote of the Company’s
stockholders, and for purposes of clause (b) above, the calculation of voting
power shall be made as if the date of the consummation of the transaction were a
record date for a vote of the Company’s stockholders.

 

Each of the Company and you hereby represent and warrant that this letter
agreement and the transactions contemplated hereby have been duly and validly
authorized, and that this letter agreement constitutes the entire agreement
between us and supersedes any and all prior or contemporaneous arrangements,
understandings, written or oral, between us relating to the subject matter
hereof. This letter agreement may not be amended or modified except by written
agreement signed by you and the Company. This letter agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Pennsylvania. This letter agreement may be executed in counterparts and
delivered via facsimile or pdf, each of which shall be deemed an original and
both of which, together, shall constitute one and the same instrument.

 

Intending to be legally bound hereby, the undersigned have executed this letter
on and as of the date set forth above.

 

Very truly yours,

 

Mikros Systems Corporation

 

 

 

By:___/s/________________

 Paul Casner

     Chairman of the Board of Directors

 

 

Accepted and Agreed to on and as of the date set forth above.

 

 

 

____/s/_________________

Mark J. Malone