Exhibit 10.5


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of the 4th
day of January, 2008 (the “Effective Date”) between INNOVATIVE SOLUTIONS AND
SUPPORT, INCORPORATED, a Pennsylvania corporation (the “Company”) and JOHN C.
LONG, a resident of Pennsylvania (“Employee”).


 


RECITALS


 


A.                                   Employee
has served in various financial capacities with other companies over the past
several years and has extensive managerial and administrative experience and
possesses skills vital to the Company’s continued growth and prosperity.


 


B.                                     The
Company desires Employee to serve as an employee of the Company and Employee
wishes to serve as employee of the Company.


 


C.                                     The
parties wish to set forth herein the terms and conditions on which Employee
will serve as an employee of the Company.


 


The parties
agree as follows:


 


1.                                       Employee’s
Position.  Subject to the terms and
conditions of this Agreement, during the term of this Agreement the Company
agrees to employ Employee, and the Employee agrees to be employed by the
Company and to serve the Company as the Chief Financial Officer of the Company.


 


2.                                       Duties
of Employee


 


2.1.                              General
Duties.  As Chief Financial Officer
of the Company, Employee will direct the organization’s financial planning and
accounting practices as well as its relationship with lending institutions,
shareholders, and the financial community. 
Employee  will report to the CEO.
Employee agrees that the Employee’s duties may be changed by the Board and that
Employee will cooperate with the Board and serve the Company in such other
capacities and with such other duties and responsibilities as are typically
accorded to the position of Chief Financial Officer subject to the Company’s
Bylaws. The duties and services to be performed by the Employee under this
agreement are collectively referred to herein as the “Services.”


 


2.2.                              Other
Duties and Obligations.  In addition
to performing the duties and Services described in Section 2.1, Employee
further agrees with the Company that, during the term of this Agreement:


 


(a)                                  Employee
will perform the Services and his duties hereunder, and will manage and operate
the business of the Company, subject to, and in accordance with, the directions
of the CEO and/or the Board.


 


(b)                                 Employee
will comply with and be bound by the operating policies, procedures, standards,
regulations and practices of the Company that are generally 


 

















 


(c)                                  applicable
to executives of the Company and in effect from time to time during the
Employee’s employment with the Company.


 


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


 


(e)                                  Employee
will not: (i) engage in any unethical, dishonest, or other fraudulent
behavior  that could be expected to
result in harm to the Company; (ii) intentionally or deliberately cause or
attempt to cause an injury to the Company; or (iii) steal, convert,
misappropriate or wrongfully and willfully use or disclose any proprietary
information, technology or trade secret of the Company.


 


2.3.                              Working
Facilities.  Employee shall have a
private office, secretarial help, a personal computer and other facilities and
services that are suitable for his position and appropriate for the performance
of his duties.


 


2.4.                              Representation
of Employee.  Employee represents and
warrants to the Company that he is free to enter into and fully perform this
Agreement and the agreements referred to herein without breach of any other
agreement or contract to which Employee is a party or by which Employee is
bound.


 


3.                                       Exclusive
Service.  Employee will devote his
full working time, energy, skill and efforts exclusively to the performance of
the Services for the Company and will apply all his skill and experience to the
performance of the Services and advancing the Company’s interests and will do
nothing inconsistent with the performance of the Services hereunder.  Notwithstanding the foregoing, Company agrees
that Employee may continue his service as director to D&E Communications, Inc.
and engage in other, noncompetitive activities that do not otherwise interfere
with Employee’s obligation to provide services hereunder.


 


4.                                       Compensation
and Benefits


 


4.1.                              Salary.  During the term of the Agreement, The Company
will pay Employee a gross base salary at a rate of $250,000 (“Employee’s Salary”)
per year payable bi-weekly.  The Company
will review the Employee’s Salary at least once each year and may, at its
discretion, increase the Employee’s Salary.


 


4.2.                              Additional
Benefits.  Employee and eligible
family members will be eligible to participate in the Company’s employee
benefit plans of general application, including without limitation any pension
plans, 401(k), and any life, health and dental insurance plans in accordance
with the rules established for individual participation in any such plan
and applicable law, including health and dental for spouse. Medical benefits
will begin upon start date. In addition, Employee will be entitled to 4 weeks
vacation.


 


4.3.                              Stock
Options.  Employee has been granted
stock options (the “Options”) for 120,000 shares of the Company’s common stock
at an option price to be fixed at NASDAQ market close on the first day of
employment.  The Options shall vest at
the rate of 40,000 shares at the end of each 12 month period provided Employee
is in accordance with the Company’s 1998 Stock Option Plan.   Employee expressly acknowledges and agrees
that, to the extent of 


 

















 


any inconsistency between the
terms of this Agreement and the 1998 Incentive Stock Option Plan, the terms of
the 1998 Incentive Stock Option Plan shall govern and control; provided
however, that to the extent that the terms of the stock option agreement issued
to Employee on account of the Options contain terms and conditions which, by
the terms of the 1998 Incentive Stock Option Plan, may be included therein, the
terms set forth in such stock option agreement shall govern and control.


 


4.4.                              Expenses.  All reasonable and necessary expenses
incurred by Employee in connection with Employee’s performance of the Services
shall be reimbursed provided that such expenses are in accordance with the
Company’s policies, as determined from time to time by the Board, and properly
documented and accounted for.


 


5.                                       Term
and Termination


 


5.1.                              Term
of Agreement.  Unless this Agreement
is terminated in accordance with the provision of this Section 5, the term
of this Agreement will commence on the Effective Date and end on the two year
anniversary of such date (the “Initial Term”). 
Thereafter, this Agreement shall be renewed yearly for one-year periods
(each, a “Renewal Term”) unless either party provides the other party with
written notice of termination of this agreement not later than ninety (90) days
prior to the end of the then current term of the Agreement.   If this written notification of termination
is issued by the Company less than 6 months prior to the Expiration Date, the
Salary and Additional Benefits in effect will be continued for 6 months from
the date of notification. The expiration of this Agreement at the end of the
Initial Term or the then current Renewal Term is hereafter called the “Expiration
Date”.


 


5.2.                              Events
of Termination.  Employee’s
employment with the Company will terminate immediately upon any one of the
following occurrences:


 


(a)                                  the
giving of a written notice by the Company to Employee other than pursuant to Section 5.1
stating that Employee’s employment with the Company is being terminated without
Cause, which notice may be given by the Company at any time at the sole
discretion of the Company (“Termination without Cause”).


 


(b)                                 the
Company’s termination of Employee’s employment hereunder due to Employee’s
death or Employee’s becoming “Disabled” as defined in Section 5.4 below (“Termination
for Death or Disability”);


 


(c)                                  any
resignation by Employee of his employment with the Company or any other
voluntary termination or abandonment by Employee of his employment with the
Company other than as provided in Section 5.1 (“Voluntary Termination”);
or


 


(d)                                 the
Company’s termination of Employee’s employment hereunder for “Cause” as defined
in Section 5.3 below (“Termination for Cause”).


 


5.3.                              “Cause”
Defined.  For purposes of this
Agreement, the term “Cause” means (i) the conviction of Employee of any
felony or other crime of moral turpitude, (ii) conduct in violation of Section 2.2(d),
(iii) a material breach by Employee of this Agreement, or 


 

















 


(iv) gross negligence or
malfeasance by Employee in the performance of the Services and duties
hereunder.


 


5.4.                              “Disabled”
Defined.  For purposes of this Agreement,
Employee will be deemed to be “Disabled” if Employee is unable to engage in any
substantial gainful activity or is receiving income replacement benefits for a
period of not less than 3 months under the Company’s accident and health plan
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or last for a continuous period of not less than
12 months.


 


5.5.                              Date
of Termination.  The effective date
of Employee’s termination pursuant to Section 5.2 (a), (b), (c) or (d) is
referred to herein as the “Termination Date.”


 


5.6.                              Successorship
Provision. If a Change of Control (defined in Section 5.7 below)
occurs during the Term of Agreement and, as a result of such Change of Control,
this Agreement or the Employee’s employment is terminated without Cause, or the
Employee resigns his employment because any of the Employee’s position, powers,
duties or responsibilities under Sections 1 and 2 are changed without his
agreement, or any Compensation and Benefits payable or otherwise extended under
Section 4 are eliminated or reduced, the Company or its successor shall:


 


(a)   give prompt notice to the Employee of any
such termination, change, elimination or reduction;


 


(b)   within thirty (30) days after the Termination
Date (provided that, if immediately prior to the Termination Date, Employee is
a “Specified Employee,” as defined in Section 409A of the Code, such
thirty (30) day period shall not commence until the date that is six months
following Employee’s Termination Date), pay to the Employee (or in the event of
the Employee’s subsequent death, such person as the Employee shall have
designated in a notice filed with the Company, or, if no such person shall have
been designated, to his estate) a lump sum amount equal to the Employee’s
Salary in effect as of the Termination Date, which lump sum amount shall not be
pro-rated and shall be paid in addition to the Salary due and payable under (c) below;


 


(c)   until the Termination Date, continue to pay
to the Employee (or in the event of the Employee’s subsequent death, such
person as the Employee shall have designated in a notice filed with the
Company, or, if no such person shall have been designated, to his estate) his
Compensation and Benefits payable or otherwise extended under Section 4;
and (d) all Options shall vest as of the date of such termination or
resignation.


 


5.7                                                                                 For
purposes of this Agreement, “Change of Control” shall mean the occurrence of
any of the following events after the date of this Agreement:


 


(a)          The acquisition after
the Effective Date by an individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”)) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of more than 30% of the combined voting power of the voting
securities of the Company entitled to vote generally in the election of
directors (the “Voting Securities”); provided, however, that the 


 

















 


following acquisitions shall
not constitute a Change in Control: (a) any acquisition, directly or
indirectly by or from the Company or any subsidiary of the Company, or by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any subsidiary of the Company, (b) any acquisition by any underwriter
in connection with any firm commitment underwriting of securities to be issued
by the Company, or (c) any acquisition by any corporation if, immediately
following such acquisition, 70% or more of the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation (entitled to vote generally
in the election of directors), are beneficially owned, directly or indirectly,
by all or substantially all of the individuals and entities who, immediately
prior to such acquisition, were the beneficial owners of the then outstanding
common stock of the Company (“Common Stock”) and the Voting Securities in
substantially the same proportions, respectively, as their ownership,
immediately prior to such acquisition, of the Common Stock and Voting
Securities; or


 


(b)         The occurrence after the
Effective Date of a reorganization, merger or consolidation, other than a
reorganization, merger or consolidation with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners, immediately prior to such reorganization, merger or consolidation, of
the Common Stock and Voting Securities, beneficially own, directly or
indirectly, immediately after such reorganization, merger or consolidation, 70%
or more of the then outstanding common stock and voting securities (entitled to
vote generally in the election of directors) of the corporation resulting from
such reorganization, merger or consolidation in substantially the same
proportions as their respective ownership, immediately prior to such
reorganization, merger or consolidation, of the Common Stock and Voting
Securities; or


 


(c)          The occurrence after the
Effective Date of (a) a complete liquidation or substantial dissolution of
the Company, or (b) the sale or other disposition of all or substantially
all of the assets of the Company, in each case other than to a subsidiary,
wholly-owned, directly or indirectly, by the Company or to a holding company of
which the Company is a direct or indirect wholly owned subsidiary prior to such
transaction; or


 


(d)         During any period of
twelve (12) consecutive months commencing upon the Effective Date, the
individuals at the beginning of any such period who constitute the Board and
any new director (other than a director designated by a person or entity who
has entered into an agreement with the Company or other person or entity to
effect a transaction described in Sections 5.7(a), (b) or (c)  above)
whose election by the Board or nomination for election by the Company’s
stockholders was approved by a vote of at least a majority of the directors
then still in office who either were directors at the beginning of any such
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board.


 

















 


Notwithstanding the above, a “Change
in Control” shall not include any event, circumstance or transaction which
results from the action of any entity or group which includes, is affiliated
with or is wholly or partially controlled by one or more executive officers of
the Company and in which the Employee actively and materially participates.


 


6.                                       Effect
of Termination.


 


6.1.                              Termination
Without Cause.  In the event of the
termination of Employee’s employment pursuant to Section 5.2(a) prior
to the end of the then current term of this Agreement, Company will pay
Employee the compensation and benefits otherwise payable to Employee under Section 4
until the Expiration Date.  In all cases
of Termination without Cause, the Employee shall be entitled to a minimum of 6
months of current Salary and Additional Benefits in effect at the time of
termination.  To the extent Employee receives
compensation from any source for services rendered during the period following
the Termination Date during which the Company is obligated to continue payments
to Employee hereunder, whether for full-time or part-time employment or for
consulting or similar services, such compensation shall be offset against
payments otherwise due Employee under this Section 6.1. All of the Options
will be considered vested and the Employee will have exercise rights to all
Options in accordance with the Company’s 1998 Stock Option Plan.  Employee will be entitled to no other payment
or compensation upon any such termination.


 


6.2.                              Termination
for Death or Disability.  In the
event of any termination of Employee’s employment pursuant to Section 5.2(b),
the Company will pay Employee, or to such person as the Employee shall have
designated in a notice filed with the Company, or, if no such person shall have
been designated, to the Employee’s estate, the compensation and benefits
otherwise payable to Employee under Section 4 through the Termination
Date. Employee’s rights under the Company’s benefit plans for general
application in which Employee then participates, will be determined under the
provision of such plans. All Options vested as of the Termination Date shall be
exercisable to the extent set forth in the option agreement.  Employee will be entitled to no other payment
or compensation upon any such termination.


 


6.3.                              Voluntary
Termination.  In the event of the
termination of Employee’s employment pursuant to Section 5.2 (c), Company
will pay the Employee compensation and benefits otherwise payable to Employee
through the Termination Date and all of Employee’s unexercised stock options
shall be cancelled.  Employee will be
entitled to no other payment or compensation upon any such termination.


 


6.4.                              Termination
for Cause.  In the event of the
termination of Employee’s employment pursuant to Section 5.2 (d), the
Company will pay the Employee compensation and benefits otherwise payable to
Employee through the Termination Date and all of Employee’s unexercised stock
options shall be cancelled.  Employee
will be entitled to no other payment or compensation upon any such termination.


 


6.5.          Certain
Delays in Payment.    Notwithstanding
anything to the contrary in Section 6 hereof, to the extent Employee is, immediately prior to the Termination Date, a
Specified Employee, and to the extent necessary to avoid imposition of a 20%
penalty tax on 


 

















 


payments to Employee under this Section 6, such payments shall
commence no earlier than the date that is six months following the Employee’s
Termination Date.


 


7.                                       Noncompetition, Trade Secrets, Etc.  Employee
hereby acknowledges that during his employment by the Company, Employee will
have access to confidential information and business and professional contacts.
In consideration of Employee’s employment and the special and unique
opportunities afforded by the Company to Employee as a result of Employee’s
employment, the Employee hereby agrees as follows:


 


7.1.                              Non-Competition.  For so long as Employee remains an
employee of the Company and for the Restricted Period (as defined in subsection
7.3 below) after the termination of employment with Company, as such period may
be extended as hereinafter set forth, Employee shall not directly or indirectly
engage in (as a principal, shareholder, partner, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any
enterprise which competes with the Business of the Company.  “Business” shall mean: (i) the design, manufacture
and sale of flight information computers, large flat panel displays and
advanced monitoring systems to the Department of Defense, defense contractors,
commercial air transport and corporate/general aviation markets; and (ii) any
other line of business disclosed in Note 1 of any financial statements publicly
filed by the Company during Employee’s employment by the Company.  Nothing contained in this subsection 7.1
shall prevent Employee from holding for investment up to three percent (3%) of
any class of equity securities of a company whose securities are publicly
traded on a national securities exchange or in a national market system.


 


7.2.                              Non-Solicitation.  For so long as the Employee
remains an employee of the Company and for a period of twelve months after the
termination of employment with Company for any reason, Employee shall not
directly or indirectly (as a principal, shareholder, partner, director,
officer, agent, employee, consultant or otherwise) induce or attempt to
influence any employee, customer, independent contractor or supplier of Company
to terminate employment or any other relationship with Company.


 


7.3.                              Restricted Period Defined; Extension of Restricted
Period.  For purposes of this Agreement, the term “Restricted
Period” shall mean (A) the period during which the Company continues to
pay Employee upon termination of employment pursuant to Section 5.2(a); (B) three
(3) months following termination of Employee’s employment pursuant to Section 5.2
(b); or (C) six (6) months following termination of Employee’s
employment pursuant to Section 5.2 (c) or Section 5.2 (d). In
addition to the foregoing, Company shall have the option, by delivering written
notice to Employee within sixty (60) days from the Termination Date, to extend
the Restricted Period to a total of twelve (12) months under clause (C) above
by paying Employee an amount equal to the monthly portion of the Employee’s
annual salary as of the Termination Date for the additional months by which the
Restricted Period is extended, which payments shall be made bi-weekly during
the extended period.


 


7.4.                              Non-Disclosure.  Employee shall not use for
Employee’s personal benefit, or disclose, communicate or divulge to, or use for
the direct or indirect benefit of any person, firm, association or company
other than Company, any “Confidential Information,” which term shall mean any
information regarding the business methods, business policies, policies,
procedures, techniques, research or development projects or results, historical
or projected 


 

















 


financial
information, budgets, trade secrets, or other knowledge or processes of, or
developed by, Company or any other confidential information relating to or
dealing with the business operations of Company, made known to Employee or
learned or acquired by Employee while in the employ of Company, but
Confidential Information shall not include information otherwise lawfully known
generally by or readily accessible to the general public. The foregoing
provisions of this subsection 7.4 shall apply during and after the period when
the Employee is an employee of the Company and shall be in addition to (and not
a limitation of) any legally applicable protections of Company interest in
confidential information, trade secrets, and the like. At the termination of
Employee’s employment with Company, Employee shall return to the Company all
copies of Confidential Information in any medium, including computer tapes and
other forms of data storage.


 


7.5.                              Intellectual Property & Company Creations.


 


(a)                                  Employee shall execute the IS&S Intellectual
Property Agreement at signing of this employment agreement.


 


(b)                                 Ownership.  All right, title and interest in and to any
and all ideas, inventions, designs, technologies, formulas, methods, processes,
development techniques, discoveries, computer programs or instructions (whether
in source code, object code, or any other form), computer hardware, algorithms,
plans, customer lists, memoranda, tests, research, designs, specifications,
models, data, diagrams, flow charts, techniques (whether reduced to written
form or otherwise), patents, patent applications, formats, test results,
marketing and business ideas, trademarks, trade secrets, service marks, trade
dress, logos, trade names, fictitious names, brand names, corporate names,
original works of authorship, copyrights, copyrightable works, mask works,
computer software, all other similar intangible personal property, and all
improvements, derivative works, know-how, data, rights and claims related to
the foregoing that have been or are conceived, developed or created in whole or
in part by the Employee (a) during the course of his employment hereunder
or while otherwise performing services for the Company that relates directly or
indirectly to the Business or (b) as a result of tasks assigned to
Employee by the Company (collectively, “Company Creations”), shall be and
become and remain the sole and exclusive property of the Company and shall be
considered “works made for hire” as that term is defined pursuant to applicable
statutes and law.


 


(c)                                  Assignment.  To the
extent that any of the Company Creations may not by law be considered a work
made for hire, or to the extent that, notwithstanding the foregoing, Employee
retains any interest in or to the Company Creations, Employee hereby
irrevocably assigns and transfers to the Company any and all right, title, or
interest that Employee has or may have, either now or in the future, in and to
the Company Creations, and any derivatives thereof, without the necessity of
further consideration.  Employee shall
promptly and fully disclose all Company Creations to the Company and shall have
no claim for additional compensation for Company Creations.  The Company shall be entitled to obtain and
hold in its own name all copyrights, patents, trade secrets, trademarks, and
service marks with respect to such Company Creations.


 


(d)                                 Disclosure & Cooperation.  Employee
shall keep and maintain adequate and current written records of all Company
Creations and their development by 


 

















 


Employee
(solely or jointly with others), which records shall be available at all times
to and remain the sole property of the Company. 
Employee shall communicate promptly and disclose to the Company, in such
form as the Company may reasonably request, all information, details and data
pertaining to any Company Creations. 
Employee further agrees to execute and deliver to the Company or its
designee(s) any and all formal transfers and assignments and other
documents and to provide any further cooperation or assistance reasonably
required by the Company to perfect, maintain or otherwise protect its rights in
the Company Creations.  Employee hereby
designates and appoints the Company or its designee as Employee’s agent and
attorney-in-fact to execute on Employee’s behalf any assignments or other
documents deemed necessary by the Company to perfect, maintain or otherwise
protect the Company’s rights in any Company Creations.


 


7.6.                              Remedies.


 


(a)                                  Employee acknowledges that the restrictions contained
in the foregoing Subsections 7.1 through 7.5, are reasonable and necessary to
protect the legitimate interests of the Company, that their enforcement will
not impose a hardship on the Employee or significantly impair Employee’s
ability to earn a livelihood, and that any violation thereof would result in
irreparable injuries to the Company. Employee therefore acknowledges that, in
the event of Employee’s violation of any of these restrictions, Company shall
be entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief, as well as damages and an equitable accounting of
all earnings, profits, and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled.


 


(b)                                 If any of the restrictions specified in Subsections
7.1 or 7.2 above should be adjudged unreasonable in any proceeding, then such
restrictions shall be modified so that they may be enforced for such time and
in such are as is adjudged to be reasonable.


 


(c)                                  If Employee violates any of the restrictions
contained in Subsection 7.1, the Restricted Period shall be extended by a
period equal to the length of time from the commencement of any such violation
until such time as such violation shall be cured by Employee to the
satisfaction of Company.


 


8.                                       Miscellaneous.


 


8.1.                              Arbitration.  Employee and the Company will
submit to mandatory binding arbitration any controversy or claim arising out
of, or relating to, this Agreement or any breach hereof as well as all claims
under federal, state or local anti-discrimination laws, provided, however, that
each party will retain its right to, and will not be prohibited, limited or in
any other way restricted from, seeking or obtaining equitable relief (such as
injunctive relief) from a court having jurisdiction over the parties. Such
arbitration will be conducted in accordance with the commercial arbitration rules of
the American Arbitration Association in effect at that time, and judgment upon
the determination or award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.


 

















 


8.2.                              Severability.  If any provision of this Agreement
is found by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable. Such provision will, to the extent
allowable by law and the preceding sentence, not be voided or cancelled but
will instead be enforced as any other provision hereof, all the other provision
continuing in full force and effect.


 


8.3.                              No Waiver.  The failure by either party at any time to
require performance or compliance by the other of any of its obligation or
agreements will in no way affect the right to require such performance or
compliance at any time thereafter. The waiver of either party of a breach of
any provision hereof will not be taken or held to be a waiver of any preceding
or succeeding breach of such provision or as a waiver of the provision itself.
No waiver of any kind will be effective or binding, unless it is in writing and
is signed by the party against whom such waiver is sought to be enforced.


 


8.4.                              Assignment.  This Agreement and all rights
hereunder are personal to Employee and may not be transferred or assigned by
Employee at any time.


 


8.5.                              Entire Agreement.  This Agreement constitutes the
entire and only agreement between the parties relating to employment of
Employee with the Company, and this Agreement supersedes and cancels all
previous contracts, arrangements or understandings with respect thereto.


 


8.6.                              Amendment; Waiver.  No provision of this agreement may
be modified, waived, terminated or amended except by a written instrument
executed by the parties hereto. No waiver of a breach of any provision of this
Agreement shall constitute a waiver of any subsequent breach of the same or
other provisions hereof.


 


8.7.                              Notices.  All notices and other communications required
or permitted under this Agreement will be in writing and hand delivered, sent
by telecopier, sent by certified first class mail, postage prepaid, or sent by
nationally recognized express courier service. Such notices and other
communications will be effective upon receipt of hand delivery five (5) days
after mailing – if sent by mail, or by express courier, to the following
addresses, or such other addresses as any party may notify the other parties in
accordance with this Section:


 


	
  Employee:

  	
   

  	
  Company:

  
	
   

  	
   

  	
   

  
	
  John C. Long

  	
   

  	
  Chief Executive Officer 

  
	
  5222 Wagonwheel Drive

  	
   

  	
  Innovative Solutions and Support,
  Inc

  
	
  Schnecksville, PA 18078

  	
   

  	
  720 Pennsylvania Drive 

  
	
   

  	
   

  	
  Exton, PA 19341

  



 


8.8.                              Successors and Assigns.  This
Agreement will be binding upon, and inure to the benefit of, the successors and
personal representatives of the respective parties hereto.


 


8.9.                              Waiver of Personal Liability.  To the
extent permitted by applicable law, Employee hereby agrees that he shall have
recourse only to the Company (and its successors in 


 

















 


interest)
with respect to any claims he may have for compensation or benefits arising in
connection with his employment, whether or not under this Agreement or any
other plan, program, or arrangement, including, but not limited to, any
agreements related to the grant or exercise of equity options or other equity
rights in the Company.  To the extent
permitted by applicable law, the Employee hereby waives any such claims for
compensation, benefits and equity rights against officers, directors, managers,
members, stockholders, or other representatives in their personal or separate
capacities.


 


8.10.                        Headings.  The headings contained in this Agreement are
for reference purposes only and will in no way affect the meaning or
interpretation of this agreement.  In
this agreement, the singular includes the plural, the plural includes the
singular, and the masculine gender includes both male and female referents, and
the word “or” is used in the inclusive sense.


 


8.11.                        Counterparts.  This Agreement may be executed in
counterparts, each of which will be deemed an original but all of which, taken
together, constitute one and the same agreement.


 


8.12.                        Survival.  The provision of Sections 4, 5, 6 and 7 will
survive the termination or expiration of this Agreement.


 


8.13.                        Governing Law.  The provisions of this Agreement
shall be interpreted and construed in accordance with the laws of the
Commonwealth of Pennsylvania.


 


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


 


	
  JOHN C. LONG

  	
  RAY WILSON

  
	
   

  	
  CHIEF EXECUTIVE OFFICER