Exhibit 10.6


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (this “Agreement”),
signed on January     , 2008 and effective as of the
date hereof (the “Commencement Date”) is made by and between Innovative
Solutions and Support, Inc., a Pennsylvania corporation, having its
principal offices at 720 Pennsylvania Drive, Exton, PA 19341 (the “Company”),
and Mr. Raymond J. Wilson (the “Executive”).


 


Recitals


 


1.                                       The Company
desires to employ Executive as the Chief Executive Officer of the Company, and
to enter into this Agreement embodying the terms of employment.


 


2.                                       The Executive is
willing to serve as Chief Executive Officer of the Company on the terms set
forth herein.


 


Agreement


 


NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained,
and other good and valuable consideration, and intending to be legally bound
hereby, the Company and the Executive hereby agree as follows:


 


1.                                      Definitions.


 


1.1.                            “Affiliate”
means any person or entity controlling, controlled by or under common control
with the Company.


 


1.2.                            “Board”  means the Board of Directors of the Company.


 


1.3.                            “Cause”
means (a) the Executive, in carrying out his duties under this Agreement,
engages in intentional and continued gross misconduct or gross negligence
directly resulting in demonstrable and material financial injury to the
Company, (b) the Executive willfully embezzles the Company’s assets, (c) the
Executive is convicted (including a plea of guilty or nolo
contendere) of a felony or a misdemeanor involving moral turpitude, (d) any
willful acts of fraud or misappropriation, (e) Executive’s material breach
of Section 4 or Section 11 of this Agreement; or (f) any failure
to adhere or to carry out lawful duties, directives or policies of the Board,
consistent with Executive’s position and duties described in Section 4
below, except for any such failure to carry out a direction which Executive in
believes, in good faith, would violate his fiduciary obligations to the Company
or any of its Affiliates.


 


1.4.                            “Change
of Control” shall have the meaning ascribed thereto in the Company’s 1998
Stock Option Plan, as amended from time to time.


 


1.5.                            “Code”
means the Internal Revenue Code of 1986, as amended.


 


1.6.                            “Disability”
means that Executive 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.


 


1.7.                            “Good Reason” means and shall be
deemed to exist if, without the prior express written consent of the Executive,
(a) the Executive suffers a material reduction in the duties, responsibilities
or effective authority associated with his titles and positions, as set forth
and described in Section 4 of this Agreement; (b) the Executive’s
Base Salary or target bonus opportunity (as contemplated by Section 5.2)
is decreased by the Company; (c) the Company fails to pay the Executive’s
compensation or to provide for the Executive’s benefits when due, other than as
a result of a mistake in processing payroll or other inadvertent error; (d) the
Company materially breaches the terms of this Agreement; (e) the Executive’s
office location is moved to a location more than 25 miles outside of Exton,
Pennsylvania; and/or (f) the Executive’s employment is terminated for any
reason following a Change of Control of the Company; provided, however,
that Good Reason shall not be deemed to exist unless the Executive provides
written notice to the Company, indicating the circumstances that constitute
Good Reason, within 90 days following the occurrence of such circumstances, and
the Company fails to remedy such circumstances within thirty (30) days after
the receipt of such notice.


 


2.                                      Employment.  Subject to the terms and provisions set forth
in this Agreement, the Company hereby agrees that the Executive shall be
employed as the Chief Executive Officer of the Company as well as certain
Affiliates as set forth in Annex 1, and
the Executive hereby accepts such employment.


 


3.                                      Term
of Employment.  The term of
employment under this Agreement shall commence on the Commencement Date and
shall continue until December 31, 2009 unless earlier terminated pursuant
to Section 6 of this Agreement (the “Term of Employment”).


 


4.                                      Positions,
Responsibilities and Duties.


 


4.1.                            Positions.  During the Term of Employment, the Executive
shall be employed and serve as Chief Executive Officer of the Company as well
as certain Affiliates as set forth in Annex 1.  In such position, the Executive shall have
the duties, responsibilities and authority normally associated with the office
and position of Chief Executive Officer of a corporation, and shall have such
duties as the Board, in its discretion, designates, consistent with those of a
Chief Executive Officer.  In addition,
during the Term of Employment, the Executive shall be nominated for election as
a member of the Board and agrees to serve if so elected.


 


4.2.                            Duties.  During the Term of Employment, the Executive
shall devote substantially all of his business time, during normal business
hours, to the business and affairs of the Company and the Executive shall use
his reasonable best efforts to perform the duties and responsibilities
contemplated by this Agreement; provided, however, that the
Executive shall be allowed, to the extent such activities do not substantially
interfere with the performance by the Executive of his duties and
responsibilities hereunder, to (a) manage the Executive’s personal,
financial and legal affairs, and (b) serve on civic or charitable boards
or committees.


 


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5.                                      Compensation
and Other Benefits.


 


5.1.                            Annual
Base Salary.  During the Term of
Employment, the Executive shall receive an annual base salary (“Base Salary”)
payable in accordance with the Company’s normal payroll practices of no less
than US$400,000.  The Board shall review
the Executive’s Base Salary annually, for the first time effective from October 1,
2008, and may, at its sole discretion, increase (but not decrease) the
Executive’s Base Salary.


 


5.2.                            Annual
Bonus.  In respect of each fiscal
year during the Term of Employment, the Executive shall be eligible to receive
an annual bonus (the “Bonus”), depending on the extent to which Company
financial goals established by the Company’s management and approved by the
Company’s Compensation Committee of the Board of Directors (the “Committee”)
in consultation with Company management (the “Annual Budget”) are
attained.  The Committee may, in its
discretion, increase the Bonus payable to Executive hereunder; provided,
that the following shall apply:


 


5.2.1.                  if
the Company achieves 90% or less of the Annual Budget, no Bonus shall be
required to be paid to Executive hereunder;


 


5.2.2.                  if
the Company achieves 100% of the Annual Budget, Executive shall be entitled to
a Bonus of $300,000;


 


5.2.3.                  if
the Company achieves 120% of the Annual Budget, Executive shall be entitled to
a Bonus of $600,000;


 


5.2.4.                  if
the Company achieves more than 90% but less than 100% of the Annual Budget,
Executive shall be entitled to a pro rated Bonus such that, for example, if the
Company achieves 95% of the Annual Budget, Executive shall be entitled to a
Bonus of $150,000; and


 


5.2.5.                  if
the Company achieves more than 100% but less than 120% of the Annual Budget,
Executive shall be entitled to a pro rated Bonus such that, for example, if the
Company achieves 110% of the Annual Budget, Executive shall be entitled to a
Bonus of $450,000.


 


The
Bonus, if any, shall be paid as soon as practicable after the end of each
fiscal year (but not later than December 31), provided Executive remains
continuously employed hereunder by the Company through the date such Bonus is
paid to Executive.


 


5.3.                            Retirement
and Savings Plans.  During the
Term of Employment, the Executive shall be eligible – subject to the terms and
conditions of the applicable plans – to participate, not later than the Commencement
Date, in all incentive, pension, retirement, savings, 401(k) and other
employee pension benefit plans, policies and programs (the “Retirement Plans”)
established or maintained by the Company from time to time for the benefit of
senior executives and/or other employees.


 


5.4.                            Welfare
Benefit Plans.  During the Term
of Employment, the Executive, the Executive’s spouse, if any, and their
dependents, if any, shall be eligible – subject to the terms and conditions of
the applicable plans – to participate, not later than the Commencement Date, in
and be covered on the same basis as other senior executive officers of the
Company 


 


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under all the welfare benefit plans, policies and/or
programs maintained by the Company from time to time including, without
limitation, all medical, hospitalization, dental, disability, life, accidental
death and dismemberment and travel accident insurance plans, policies and/or
programs (the “Welfare Plans”).


 


5.5.                            Expense
Reimbursement.


 


5.5.1.                       General.  During and in respect of the Term of
Employment, the Executive shall be entitled to receive prompt reimbursement for
expenses incurred by the Executive in performing his duties and
responsibilities hereunder in accordance with the Company’s expense
reimbursement policy for senior executives of the Company.


 


5.5.2.                       Moving
Expenses.


 


5.5.2.1.            The Executive shall be entitled to
reimbursement for moving expenses incurred by the Executive in relocating from
the United Kingdom to the vicinity of Exton, Pennsylvania in connection with
his employment hereunder to the extent such expenses are incurred and
appropriate receipts submitted to the Company for reimbursement prior to February 15,
2008.  Such reimbursement shall be paid
to Executive as soon as practicable following receipt of appropriate
documentation from Executive, but in no event later than March 15, 2008.


 


5.5.2.2.            In addition, the Executive shall be
entitled to reimbursement for moving expenses incurred by the Executive in relocating
from the vicinity of Exton, Pennsylvania to the United Kingdom upon the
termination of his employment hereunder; provided, that the Executive shall not
be entitled to reimbursement for moving expenses hereunder in the event that (i) the
Executive voluntarily terminates his employment without Good Reason, or (ii) the
Executive’s employment is terminated for Cause. 
Notwithstanding anything herein or in the Company’s expense
reimbursement policy for senior executives, expenses incurred by Executive following
termination of his employment by the Company or its Affiliates shall only be
eligible for reimbursement to the extent they are:  (A) incurred on or before the last day
of the second calendar year following the calendar year during which the Executive’s
employment terminates, and (B) reimbursed on or before the last day of the
third calendar year following the calendar year during which the Executive’s
employment terminates.


 


5.5.2.3.            The maximum amount of aggregate expenses to
be reimbursed under this Section 5.5.2 shall in no event exceed US$75,000.


 


5.5.3.                       Legal Fees.  The Executive shall be entitled to receive
prompt reimbursement for legal fees and expenses incurred by the Executive in
negotiating this Agreement; provided that the aggregate amount of expenses
eligible to be reimbursed under this Section 5.5.3 shall not exceed
US$15,000.


 


5.6.                            Vacation.  During the Term of Employment, the
Executive shall be entitled to six weeks paid vacation each calendar year.  If the Term of Employment commences or
terminates during a calendar year, the vacation shall be adjusted pro rata for
such calendar year.


 


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5.7.                            Automobile
Allowance.  During the Term of
Employment, the Company shall provide Executive with a suitable leased
automobile, or, in the Company’s discretion, an automobile allowance of
US$2,000 per month (payable on or before the last day of the month), in
accordance with the Company’s standard practice for the administration of
Company automobile allowances.


 


6.                                      Termination.


 


6.1.                            Termination
Due to Death.  In the event of
the Executive’s death, the Executive’s beneficiary (designated in writing to
the Company) or estate, as the case may be, shall be entitled to: (a) any
Base Salary accrued but unpaid as of the date of the Executive’s death, (b) continued
payment of the Executive’s Base Salary for an additional period of six months
after the date of the Executive’s death; (c) an amount equal to Executive’s
Bonus for the year of such death, multiplied by a fraction, the numerator of
which is the number of days transpired in the fiscal year up to and including
the date of the death of the Executive, and the denominator of which is 365,
which amount shall be determined and payable pursuant to the terms of Section 5.2;
(d) payment, on the tenth day following such termination, of any unpaid
expense reimbursements and unused accrued vacation days through the date of the
Executive’s death; and (e) any other benefits which the Executive, the
Executive’s estate or the Executive’s executor is entitled to receive under any
of the Retirement Plans or Welfare Plans


 


6.2.                            Termination
Due to the Executive’s Disability. 
Upon thirty (30) days prior written notice to the Executive, the Company
may terminate the Executive’s employment hereunder due to Disability.  In such event, the Executive or his executor,
as the case may be, shall be entitled to: (a) any Base Salary accrued but
unpaid as of the date of the Executive’s termination due to Disability; (b) continued
payment of the Executive’s Base Salary for an additional period of six (6) months
after the date of the Executive’s Disability, provided that each month’s
continued Base Salary shall be reduced, dollar-for-dollar, by any amounts
received by Executive during such month under the Company’s short-term
disability plan, if applicable; (c) an amount equal to Executive’s Bonus
for the year of such Disability, multiplied by a fraction, the numerator of
which is the number of days transpired in the fiscal year up to and including
the date of the Executive’s Disability, and the denominator of which is 365,
which amount shall be determined and payable pursuant to the terms of Section 5.2;
(d) payment, on the tenth day following such termination, of any unpaid
expense reimbursements and unused accrued vacation days through the date of
termination; and (e) any other payments and/or benefits which the
Executive or the Executive’s estate is entitled to receive under any of the
Retirement Plans or Welfare Plans.


 


6.3.                            Termination
Without Cause or by the Executive for Good Reason.  Upon thirty (30) days prior written notice to
the Executive, the Company may terminate the Executive’s employment hereunder
without Cause.  Upon thirty (30) days
prior written notice to the Company, the Executive may terminate his employment
hereunder with the Company for Good Reason. 
In either such event, the Executive shall be entitled to: (a) any
Base Salary accrued but unpaid through the date of termination; (b) Executive’s
Base Salary for the remainder of the Term of Employment; (c) an amount
equal to Executive’s Bonus for the year of such termination, multiplied by a
fraction, the numerator of which is the number of days transpired in the fiscal
year up to and including the date of the Executive’s termination, and the 


 


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denominator of which is 365, which amount shall be
determined and payable pursuant to the terms of Section 5.2; (d) payment,
on the tenth day following such termination, of any unpaid expense
reimbursements and unused accrued vacation days through the date of
termination; and (e) any other payments and/or benefits which the
Executive is entitled to receive under any of the Retirement Plans or Welfare
Plans.  The Company may terminate the
Executive with immediate effect pursuant to this Section, without providing
thirty (30) days prior written notice, in which case it will pay the Executive
thirty (30) days’ Base Salary in addition to the amounts set forth in clauses (a) through
(e) above.  For the purposes of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), each
monthly payment described in 6.3(b) shall be considered a separate
payment.   Notwithstanding anything to
the contrary herein, if any of the payments provided for in this Section 6.3
would be subject to an additional 20% tax pursuant to Section 409A of the
Code by reason of Executive’s status as a “specified employee” as that term is
defined for purposes of Section 409A of the Code, such payments shall be
delayed for the shortest period practicable (no less than 6 months following
Executive’s termination of employment without Cause or for Good Reason) in
order to avoid such additional tax.  The
payments made pursuant to this Section 6.3 are in consideration of
Executive’s covenants set forth in Section 11.3.


 


6.4.                            Termination
For Cause.  Upon written notice
to the Executive, the Company may terminate the Executive’s employment for
Cause.  In such event, the Executive
shall be entitled to:  (a) any Base
Salary accrued but unpaid through the date of termination; (b) payment, on
the tenth day following such termination, of any unpaid expense reimbursements
and unused accrued vacation days through the date of termination; and (c) any
other payments and/or benefits which the Executive is entitled to receive under
any of the Retirement Plans or Welfare Plans. 
The Executive shall be given the opportunity within thirty (30) calendar
days of the receipt of such notice to cure such act or failure to act which
constitutes Cause, but only if the Board deems such act or failure to act
amenable to cure; otherwise, the termination for Cause is with immediate
effect.  Upon failure of the Executive to
correct such act or failure to act within such thirty (30) day cure period, if
applicable, the Company may proceed to terminate the Executive for Cause with
immediate effect.


 


6.5.                            Termination
Without Good Reason.  Upon thirty
(30) days prior written notice to the Company, the Executive shall have the
right to terminate his employment hereunder without Good Reason.  In such event, the Executive shall be
entitled to:  (a) any Base Salary
accrued but unpaid through the date of termination; (b) payment of any
unpaid expense reimbursements and unused accrued vacation days through the date
of termination; and (c) any other payments and/or benefits which the
Executive is entitled to receive under any of the Retirement Plans or Welfare
Plans.


 


6.6.                            Effect
of Notice.  Upon either party’s
delivery of a notice of termination of Executive’s employment to the other, the
Board, in its absolute discretion, may relieve Executive of all his duties,
responsibilities and authority with respect to the Company and restrict
Executive’s access to Company property.


 


6.7.                            Payment.  Except as otherwise provided in this
Agreement, any payments to which the Executive shall be entitled under this Section 6
shall be made as promptly as possible following the date of termination.


 


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6.8.                            General Release.  The
Executive’s receipt of the payments under Section 6.3(b) is
contingent upon his timely execution, delivery and non-revocation of a general
release in a form satisfactory to the Company, which, among other things, shall
include a general release of the Company from all liability and other terms
deemed reasonably necessary by the Company for its protection.


 


6.9.                            Excise
Tax Limitation.  Notwithstanding any other provisions of this
Agreement to the contrary, in the event that any payments or benefits received
or to be received by the Executive in connection with the Executive’s
employment with the Company (or termination thereof) would subject the
Executive to the excise tax imposed under Sections 280G or 4999 of the Code
(the “Excise Tax”), and if the net-after tax amount (taking into account all
applicable taxes payable by the Executive, including any Excise Tax) that the
Executive would receive with respect to such payments or benefits does not
exceed the net-after tax amount the Executive would receive if the amount of
such payment and benefits were reduced to the maximum amount which could
otherwise be payable to the Executive without the imposition of the Excise Tax,
then, to the extent necessary to eliminate the imposition of the Excise Tax, (i) such
cash payments and benefits shall first be reduced (if necessary, to zero) and (ii) all
other non-cash payments and benefits shall next be reduced.


 


7.                                      Non-exclusivity
of Rights.  Nothing in this
Agreement shall prevent or limit the Executive’s continuing or future
participation in any benefit, bonus, incentive or other plan, policy or program
provided or maintained by the Company and/or any Affiliate and for which the
Executive may qualify, nor shall anything herein limit or otherwise prejudice
such rights as the Executive may have under any other existing or future
agreements with the Company and/or any Affiliate, including, without
limitation, any equity agreements or plans. 
Amounts which are vested benefits or which the Executive is otherwise
entitled to receive under any plans or programs of the Company and/or any
Affiliate at or subsequent to the date of termination shall be payable in
accordance with such plans or programs.


 


8.                                      Full
Settlement.  The Company’s
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense
or other right which the Company may have against the Executive or others.


 


9.                                      Successors.


 


9.1.                            The
Executive.  This Agreement is
personal to the Executive and, without the prior express written consent of the
Company, shall not be assignable by the Executive, except that the Executive’s
rights to receive any compensation or benefits under this Agreement may be
transferred or disposed of pursuant to testamentary disposition, intestate
succession or pursuant to a domestic relations order.  This Agreement shall inure to the benefit of
and be enforceable by the Executive’s heirs, beneficiaries and/or executors.


 


9.2.                            The
Company.  This Agreement shall
inure to the benefit of and be binding upon the Company and its respective
successors and assigns.


 


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10.                               Indemnification.  The Company agrees that if the Executive is
made a party or is threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”),
by reason of the fact that he is or was a director or officer of the Company
and/or any Affiliate or is or was serving at the request of the Company and/or
any Affiliate as a director, officer, member, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a director, officer, member, employee or agent while serving as a
director, officer, member, employee or agent, he shall be indemnified and held
harmless by the Company to the fullest extent authorized by Pennsylvania law,
as the same exists or may hereafter be amended, against all expenses or losses
incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if the Executive has
ceased to be an officer, director or agent, or is no longer employed by the
Company and shall inure to the benefit of his heirs, executors and
administrators.  Any reimbursement in any
taxable year pursuant to indemnification under this Section 10 shall not
affect the expenses eligible for reimbursement in any other taxable year.


 


11.                               Restrictive
Covenants.


 


11.1.                     Protection
of the Company’s Interests.  To
the fullest extent permitted by law, all rights worldwide with respect to any
intellectual or other property of any nature conceived, developed, produced,
created, suggested or acquired by Executive as a result of Executive’s
employment with the Company or any Affiliate, or through the use of the Company’s
or such Affiliate’s equipment, facilities, trade secrets or confidential
information during the period commencing on the date of Executive’s employment
with the Company and ending upon termination of the Term of Employment shall be
the sole and exclusive property of the Company and any such intellectual or
other property shall be deemed to be works made for hire.  Executive agrees to execute, acknowledge and
deliver to the Company at the Company’s request, such further documents as the
Company finds appropriate to evidence the Company’s rights in such
property.  In addition to the above, you
agree that upon signing this Agreement you will execute an Intellectual
Property Agreement in the form supplied by the Company.


 


11.2.                     Confidentiality.  Executive shall keep confidential and not
disclose to any other person or entity or use for his own benefit or the
benefit of any other person or entity any confidential information, proprietary
information, technology, know-how, trade secrets (including all results of
research and development), product formulas, industrial designs, customer
lists, franchises, inventions or other intellectual property regarding the
Company and/or its affiliates or the business and operation of the Company
and/or its affiliates (“Confidential Information”) in his possession or
control.  The obligations of Executive
under this Section 11.2 shall not apply to Confidential Information which (i) is
or becomes generally available to the public without breach of the commitment
provided for in this Section; or (ii) is required to be disclosed by law,
order or regulation of a court or tribunal or governmental authority; provided,
however, that, in any such case, Executive shall notify the Board as early as
reasonably practicable prior to disclosure to allow the Board to take
appropriate measures to preserve the confidentiality of such Confidential
Information.


 


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11.3.                     Non-Compete.


 


11.3.1.           During the period beginning on the Effective
Date and ending 12 months following termination of the Executive’s employment
(the “Non-Compete Period”), the Executive covenants and agrees not to,
and shall cause his controlled affiliates not to, directly or indirectly and anywhere
in the United States or the world, conduct, manage, operate, be employed by or
otherwise connected in any manner with, or engage in, or have an ownership
interest in any business or enterprise engaged in, whether as principal,
manager, employee, agent, consultant, officer, equity holder, partner,
investor, lender or member or in any other capacity, any business or enterprise
(or subsidiary or division thereof) which at any relevant time during the
Non-Compete Period directly or indirectly competes with the Business of the
Company or its Affiliates (collectively, the “Protected Companies”), in
any geographic location in which the Protected Companies are conducting
business.  For purposes of this
Agreement, “Business” shall mean any business or enterprise engaged
in  (i) the development, design,
engineering, manufacture, sale and provision of flat panel display systems,
flight information computers and advanced monitoring systems to the U.S.
Department of Defense, government agencies, defense contractors, commercial air
transport carriers, original equipment manufacturers, and the corporate/general
aviation markets, and the integration of any such systems or computers with
other flight information systems (ii) any business that uses any
trademark, tradenames or slogan similar to the “Innovative Solutions and
Support, Inc.” or “IS&S” trademarks, tradenames or slogans, or (iii) any
activities that are otherwise competitive with the business of the Company
and/or its affiliates, including any products or services that are being
created, developed or modified or any new end market entries that are being
planned with respect to existing products or services, at any relevant time
during the Term of Employment.


 


11.3.2.           During the Non-Compete Period, the Executive
shall not, directly or indirectly, call-on, solicit or induce, or attempt to
solicit or induce, any customer or other business relationship of any of the
Protected Companies for the provision of products or services, related to the
Business engaged in by any of the Protected Companies prior to the termination
of the Term of Employment, or in any other manner that would interfere with the
business relationship between any such Protected Company and its customers and
other business relationships.


 


11.3.3.           During the Non-Compete Period, the Executive
shall not, directly or indirectly, call-on, solicit or induce, or attempt to
solicit or induce, any employee, staff, independent contractor or consultant of
any of the Protected Companies to leave his or her employ or service with the
Company or any of its Affiliates for any reason whatsoever, nor shall the
Executive offer or provide employment (whether such employment is for the
Executive or any other business or enterprise), either on a full-time,
part-time or consulting basis, to any person who then currently is, or who
within six months immediately prior thereto was, an employee of or staffed with
any of the Protected Companies; provided, however, that the Executive
shall not be restricted from conducting any general solicitation for employees
or public advertising of employment opportunities (including through the use of
employment agencies) not specifically directed at any such persons, provided
further, however, that the Executive shall not, and shall cause his
affiliates not to, hire any such person who responds to any such general
solicitation or public advertising.


 


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11.3.4.           During the Term of
Employment and thereafter, Executive, on the one hand, and the Company, on the
other hand, shall not directly (or through any other person or entity) make any
public or private statements (whether orally or in writing) that disparage,
denigrate or malign the other, their respective businesses, activities,
operations, affairs, reputations or prospects or any of their respective affiliates
(including, in the case of the Company, its Affiliates, officers, employees, directors, partners (limited
and general), agents, members or shareholders); provided that Executive may comment
generally on industry matters in response to inquiries from the press and in
other public speaking engagements.  For
purposes of clarification, and not limitation, a statement shall be deemed to
disparage, denigrate or malign the Executive, the Company or any of its Affiliates,
as applicable, if
such statement could be reasonably construed to adversely affect the opinion
any other person may have or form of such person.


 


11.3.5.           The
Executive acknowledges and agrees that the provisions of this Section 11
are reasonable and necessary to protect the legitimate business interests of
the Protected Companies.  The Executive
shall not contest that the Protected Companies’ remedies at law for any breach
or threat of breach by the Executive or any of his affiliates of the provisions
of this Section 11 will be inadequate, and that the Protected Companies
shall be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Section 11 and to enforce specifically such terms and
provisions, in addition to any other remedy to which they may be entitled at
law or equity.  The restrictive covenants
contained in this Section 11 are covenants independent of any other
provision of this Agreement or any other agreement among the parties hereunder
and the existence of any claim which the Executive may allege against any of
the Protected Companies under any other provision of the Agreement or any other
agreement will not prevent the enforcement of these covenants.


 


11.3.6.           If
any of the provisions contained in this Section 11 shall for any reason be
held to be excessively broad as to duration, scope, activity or subject, then
such provision shall be construed by limiting and reducing it, so as to be
valid and enforceable to the extent compatible with the applicable law or the
determination by a court of competent jurisdiction.


 


12.                               Miscellaneous.


 


12.1.                     Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania, applied without reference to principles of conflict of laws.


 


12.2.                     Amendments.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.


 


12.3.                     Notices.  All notices and other communications
hereunder shall be in writing and shall be given by hand-delivery to the other
parties or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:


 


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  To the Executive:

  	
   

  	
   

  
	
   

  	
   

  	
  Mr. Raymond J. Wilson

  
	
   

  	
   

  	
  1431 Hampton Drive

  
	
   

  	
   

  	
  Downingtown, PA 19335

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
  Drinker Biddle and Reath LLP

  
	
   

  	
   

  	
  One Logan Square 

  
	
   

  	
   

  	
  18th and Cherry Streets 

  
	
   

  	
   

  	
  Philadelphia, PA 19103-6996

  
	
   

  	
   

  	
  Attn: F. Douglas Raymond, III

  
	
   

  	
   

  	
   

  
	
  To the Company:

  	
   

  	
   

  
	
   

  	
   

  	
  Innovative Solutions and Support, Inc.

  
	
   

  	
   

  	
  720 Pennsylvania Drive

  
	
   

  	
   

  	
  Exton, PA 19341

  
	
   

  	
   

  	
  Attn: Chairman of the Board of Directors

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
  Dechert LLP

  
	
   

  	
   

  	
  Cira Centre

  
	
   

  	
   

  	
  2929 Arch Street

  
	
   

  	
   

  	
  Philadelphia, PA 19104

  
	
   

  	
   

  	
  Attn: Henry N. Nassau, Esq. & John D.
  LaRocca, Esq.

  



 


or to such other address as any party shall have furnished to the
others in writing in accordance herewith. 
Notices and communications shall be effective when actually received by
the addressee.


 


12.4.                     Withholding.  The Company may withhold from any amounts
payable under this Agreement such federal, state or local income taxes to the
extent the same is required to be withheld pursuant to any applicable law or
regulation.


 


12.5.                     Severability.
 The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.


 


12.6.                     Captions.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.


 


12.7.                     Beneficiaries/References.  The Executive shall be entitled to select
(and change) a beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive’s death, and may change such
election, in either case by giving the Company written notice thereof.  In the event of the Executive’s death or a
judicial determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his beneficiary(ies),
estate or other executor(s).


 


12.8.                     Entire
Agreement.  This Agreement
contains, except as expressly stated otherwise herein, the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior agreements, understandings, discussions, negotiations and undertakings, 


 


11

















 


whether written or oral, between the parties with
respect thereto.  The Company has made no
promises to the Executive regarding the subject matter hereof other than those
set forth in this Agreement.  .


 


12.9.                     Representations.  The Company represents and warrants that it
is fully authorized and empowered to enter into this Agreement.


 


12.10.              Survivorship.  The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement or the
Executive’s term of employment hereunder for any reason to the extent necessary
to the intended provision of such rights and the intended performance of such
obligations.


 


12.11.              Arbitration
of Disputes.  In the event that
any disputes of any kind arise under or with respect to this Agreement, the
Executive and the Company agree to submit any such dispute to confidential and
final binding arbitration in Philadelphia, Pennsylvania in accordance with the rules of
the American Arbitration Association then in effect.  In the event that Executive prevails in any
such final arbitration, the Company shall reimburse Executive for his
reasonable costs incurred in such arbitration, including reasonable attorneys’
fees.  Notwithstanding the foregoing or
anything to the contrary herein, the Company shall be entitled to bring an
action in any court of competent jurisdiction in order to enforce or prevent
the breach of any of the covenants of Section 11 hereof.


 


IN WITNESS WHEREOF,
the Executive has hereunto set the Executive’s hand and the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.


 


 


	
  INNOVATIVE SOLUTIONS

  	
   

  	
   

  
	
   AND SUPPORT,
  INC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  RAYMOND J. WILSON

  
	
   

  	
  Title:

  	
   

  	
   

  



 


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