Exhibit 10.1

 

AEROFLEX INCORPORATED

35 South Service Road

Plainview, New York 11803

 

May 25, 2007

 

 

 

Re: Addendum to March 2, 2007 Letter Agreement

 

Dear Mr. Blau:

 

This Letter Agreement is entered into, effective as of the date hereof, between
you and Aeroflex Incorporated ("Aeroflex" or the "Company"). Reference is made
to that certain letter agreement between you and Aeroflex dated March 2, 2007
(the "March 2 Letter Agreement"). Capitalized terms used but not defined herein
shall have the meaning ascribed to such terms in the March 2 Letter Agreement.

 

For purposes of determining the 2007 Bonus amount, the Company agrees that (i)
Aeroflex's results of operations for the 2007 Fiscal Year will be determined
based on the accounting principles and procedures used to determine Aeroflex's
results of operations for the fiscal year ended June 30, 2006, subject only to
those changes mandated by GAAP, and (ii) in addition to the amounts described in
the March 2 Letter Agreement as not being considered and not reducing the
Company's consolidated pre-tax earnings in computing your 2007 Bonus, to the
extent the Company's consolidated pre-tax earnings for the fiscal year ended
June 30, 2007 are reduced by the direct out-of-pocket fees and expenses actually
accrued or paid by the Company to the Company's financial advisors identified in
Section 3.24 of the Agreement and Plan of Merger by and among AX Holding Corp.,
AX Acquisition Corp., and the Company (the "AX Merger Agreement"), or the
payment or accrual of the fees and expenses of the Company's outside legal
advisors or other out-of-pocket fees and expenses actually accrued or paid by
the Company in connection with the transactions contemplated by the AX Merger
Agreement (including, without limitation, fees and expenses related to any
stockholder litigation (including any settlement thereof) with respect to the
transactions contemplated by either the Merger Agreement or the AX Merger
Agreement), such fees and expenses shall not be considered and shall not reduce
the Company's consolidated pre-tax earnings in computing your 2007 Bonus.

 

Further, the 2007 Bonus amount that you are paid pursuant to the preceding
paragraph shall be considered as part of your compensation for purposes of
calculating any severance, retirement, or other benefits to which you are
entitled (including, without limitation, severance benefits under Section 10(h)
of your Employment Agreement and amounts payable under the Aeroflex Supplemental
Executive Retirement Plan, as amended). If your employment with Aeroflex
terminates prior to the Bonus Payment Date, Aeroflex shall pay to you any
additional payment attributable to the inclusion of the 2007 Bonus in such
calculations promptly after the Bonus Payment Date.

 

 

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Please indicate your agreement and acceptance of the terms of this Letter
Agreement by executing both copies in the space indicated and returning one copy
to Aeroflex.

 

 

 

AEROFLEX INCORPORATED

 

 

 

 

By:

/s/ John Adamovich, Jr.

 

 

Name:

John Adamovich, Jr.

 

 

Title:

Senior Vice President and Chief

 

 

 

Financial Officer

 

 

ACCEPTED AND AGREED TO:

 

 

 

 

/s/ Harvey R. Blau

 

 

Harvey R. Blau