Exhibit 10.9

SEVERANCE PROTECTION AGREEMENT

THIS AGREEMENT made as of December 3, 2004 by and between Axsys
Technologies, Inc. (the “Company”) and Scott B. Conner (the “Executive”).

WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that the
possibility of a Change in Control (as hereinafter defined) exists and that the
threat or the occurrence of a Change in Control can result in significant
distraction of the Company’s key management personnel because of the
uncertainties inherent in such a situation;

WHEREAS, the Board has determined that it is essential and in the best interests
of the Company and its stockholders for the Company to retain the services of
the Executive in the event of a threat or occurrence of a Change in Control and
to ensure the Executive’s continued dedication and efforts in such event without
undue concern for the Executive’s personal financial and employment security;
and

WHEREAS, in order to induce the Executive to remain in the employ of the Company
and/or one of its Affiliates (the entity or entities employing the Executive,
the “Employing Affiliate”), particularly in the event of a threat or the
occurrence of a Change in Control, the Company desires to enter into this
Agreement with the Executive to provide the Executive with certain benefits in
the event the Executive’s employment is terminated as a result of, or in
connection with, a Change in Control.

NOW, THEREFORE, in consideration of the respective agreements of the parties
contained herein, it is agreed as follows:

1.     Term of Agreement.   This Agreement shall commence as of the date of this
agreement, and shall continue in effect until January 1, 2006 (the “Term”);
provided, however, that on January 1, 2006, and on each January 1 thereafter,
the Term shall automatically be extended for one year unless either the
Executive or the Company shall have given written notice to the other at least
ninety days prior thereto that the Term shall not be so extended; provided,
further, however, that following the occurrence of a Change in Control, the Term
shall not expire prior to the expiration of twenty-four months after such
occurrence.

2.     Termination of Employment.   If, during the Term, the Executive’s
employment with the Company or an Employing Affiliate shall be terminated within
twenty-four months following a Change in Control, the Executive shall be
entitled to the following compensation and benefits:

(a)    If the Executive’s employment with the Company or an Employing Affiliate
shall be terminated (1) by the Company for Cause or Disability, (2) by reason of
the Executive’s death, or (3) by the Executive other than for Good Reason or
pursuant to a Window Period Termination, the Company shall pay to the Executive
the Accrued Compensation.

(b)   If the Executive’s employment with the Company or an Employing Affiliate
shall be terminated for any reason other than as specified in Section 2(a), or
if the Executive terminates his employment with or without Good Reason during
the one month period commencing six months following a Change in Control (a
“Window Period Termination”), the Executive shall be entitled to the following:

(1)   the Company shall pay the Executive the Accrued Compensation;

(2)   the Company shall pay the Executive as severance pay an amount equal to
2.99 times the sum of (a) the highest annual base salary paid to the Executive
during the 12-month period immediately prior to the Termination Date and (b) the
average of the annual cash bonuses paid to the Executive during the 3 calendar
years prior to the year in which the Termination Date occurs (prorated for any
lesser period during which the Executive has been employed or for

 

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which bonuses have been determined, if applicable, and, in the case of each of
(a) and (b), determined without reduction for any portion thereof that has been
deferred by the Executive); provided, however, that, if the Executive has been
employed for less than a full year as of the Termination Date, the amount of
clause (b) hereof shall be equal to the Executive’s target bonus amount for such
year, prorated for the period during which the Executive has been employed; and

(3)   for twelve months following the Termination Date (the “Continuation
Period”), the Company shall continue on behalf of the Executive and his
dependents and beneficiaries the life insurance, disability, medical, dental,
prescription drug and hospitalization coverages and benefits provided to the
Executive immediately prior to a Change in Control (the “Benefits
Continuation”), or, if greater, the coverages and benefits provided at any time
thereafter; provided, however, that within five days following the Termination
Date, the Executive may elect to receive from the Company in cash, in lieu of
the Benefits Continuation, the value of the Benefits Continuation. The coverages
and benefits (including deductibles and costs to the Executive) provided in this
Section 2(b)(3) during the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries than the most favorable of such
coverages and benefits referred to above. The Company’s obligation hereunder
with respect to the foregoing coverages and benefits shall be reduced to the
extent that the Executive obtains any such coverages and benefits pursuant to a
subsequent employer’s benefit plans, in which case the Company may reduce any of
the coverages or benefits it is required to provide the Executive hereunder so
long as the aggregate coverages and benefits (including deductibles and costs to
the Executive) of the combined benefit plans are no less favorable to the
Executive than the coverages and benefits required to be provided hereunder.
This Section 2(b)(3) shall not be interpreted so as to limit any benefits to
which the Executive, his dependents or beneficiaries may be entitled under any
of the Company’s employee benefit plans, programs or practices following the
Executive’s termination of employment, including but not limited to retiree
medical and life insurance benefits.

(c)    The cash amounts provided for in Sections 2(a) and 2(b) shall be paid in
a single lump sum cash payment within ten days after the Termination Date (or
earlier, if required by applicable law).

(d)   The severance pay and benefits provided for in this Section 2 shall be in
lieu of any other severance pay to which the Executive may be entitled under any
severance or employment agreement with the Company or any other plan, agreement
or arrangement of the Company or any other Affiliate of the Company. The
Executive’s entitlement to any compensation or benefits other than as provided
herein shall be determined in accordance with the employee benefit plans of the
Company and any of its Affiliates and other applicable agreements, programs and
practices as in effect from time to time.

(e)    If the Executive’s employment is terminated by the Company or an
Employing Affiliate without Cause prior to the date of a Change in Control but
the Executive reasonably demonstrates that such termination (1) was at the
request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a “Third Party”) and who
effectuates a Change in Control or (2) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or proposed and
which actually occurs, such termination shall be deemed to have occurred after a
Change in Control, it being agreed that any such action taken following
shareholder approval of a transaction which if consummated would constitute a
Change in Control, shall be deemed to be in anticipation of a Change in Control
provided such transaction is actually consummated.

 

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3.     Effect of Section 280G of the Internal Revenue Code.

(a)    Notwithstanding anything contained in this Agreement to the contrary, to
the extent that the payments and benefits provided under this Agreement and
benefits provided to, or for the benefit of, the Executive under any other
Company plan or agreement (such payments or benefits collectively referred to
herein as the “Payments”) would be subject to the excise tax (the “Excise Tax”)
imposed under Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), the Payments shall be reduced (but not below zero) if and to the extent
necessary so that no Payment to be made or benefit to be provided to the
Executive shall be subject to the Excise Tax (such reduced amount is hereinafter
referred to as the “Limited Payment Amount”). Unless the Executive shall have
given prior written notice specifying a different order to the Company to
effectuate the foregoing, the Company shall reduce or eliminate the Payments by
first reducing or eliminating the portion of the Payments which are not payable
in cash and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid the
farthest in time from the Determination (as hereinafter defined). Any notice
given by the Executive pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Executive’s rights and entitlements to any benefits or compensation.

(b)   The determination of whether the Payments shall be reduced to the Limited
Payment Amount pursuant to this Agreement and the amount of such Limited Payment
Amount shall be made, at the Company’s expense, by an accounting firm selected
by the Company and reasonably acceptable to the Executive which is one of the
five largest accounting firms in the United States (the “Accounting Firm”). The
Accounting Firm shall provide its determination (the “Determination”), together
with detailed supporting calculations and documentation to the Company and the
Executive within ten days of the Termination Date, if applicable, or such other
time as requested by the Company or by the Executive (provided the Executive
reasonably believes that any of the Payments may be subject to the Excise Tax)
and if the Accounting Firm determines that no Excise Tax is payable by the
Executive with respect to the Payments, it shall furnish the Executive with an
opinion reasonably acceptable to the Executive that no Excise Tax will be
imposed with respect to any such Payments. The Determination shall be binding,
final and conclusive upon the Company and the Executive.

4.     Notice of Termination.   Following a Change in Control, any intended
termination of the Executive’s employment by the Company or an Employing
Affiliate shall be communicated by a Notice of Termination from the Company to
the Executive, and any intended termination of the Executive’s employment by the
Executive for Good Reason shall be communicated by a Notice of Termination from
the Executive to the Company.

5.     Fees and Expenses.   The Company shall pay, as incurred, all legal fees
and related expenses (including the costs of experts, evidence and counsel) that
the Executive may reasonably incur following a Change in Control as a result of
or in connection with (a) the Executive’s contesting, defending or disputing the
basis for the termination of the Executive’s employment, (b) the Executive’s
hearing before the Board of Directors of the Company as contemplated in
Section 16.4 or (c) the Executive’s seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company or one of its Affiliates under which the Executive is
or may be entitled to receive benefits.

6.     Unauthorized Disclosure.

(a)    The Executive agrees and understands that during the Executive’s
employment with the Company or an Employing Affiliate, the Executive has been
and will be exposed to and receive information relating to the affairs of the
Company considered by the Company to be confidential and in the nature of trade
secrets (including but not limited to procedures, memoranda, notes, records and

 

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customer lists, whether such information has been or is made, developed or
compiled by the Executive or otherwise has been or is made available to him)
(any and all such information, the “Confidential Information”). The Executive
agrees that, during the Term and thereafter, he shall keep such Confidential
Information confidential and will not disclose such Confidential Information,
either directly or indirectly, to any third person or entity without the prior
written consent of the Company; provided, however, that (i) the Executive shall
have no such obligation to the extent such Confidential Information is or
becomes publicly known other than as a result of the Executive’s breach of his
obligations hereunder or is received by the Executive following the Termination
Date and (ii) the Executive may, after giving prior notice to the Company to the
extent practicable under the circumstances, disclose such Confidential
Information to the extent required by applicable laws or governmental
regulations or judicial or regulatory process.

(b)   The Executive agrees that all Confidential Information is and will remain
the property of the Company. The Executive further agrees that, during the Term
and thereafter, he shall hold in the strictest confidence all Confidential
Information, and shall not, directly or indirectly, duplicate, sell, use, lease,
commercialize, disclose or otherwise divulge to any person or entity any portion
of the Confidential Information or use any Confidential Information for his own
benefit or profit or allow any person or entity, other than the Company and its
authorized employees, to use or otherwise gain access to any Confidential
Information.

(c)    All memoranda, notes, records, customer lists and other documents made or
compiled by the Executive or otherwise made available to him concerning the
business of the Company or its subsidiaries or Affiliates shall be the Company’s
property and shall be delivered to the Company upon the termination of the
Executive’s employment with the Company or an Employing Affiliate or at any
other time upon request by the Company, and the Executive shall retain no copies
of those documents. The Executive shall never at any time have or claim any
right, title or interest in any material, invention or matter of any sort
created, prepared or used in connection with the business of the Company or its
subsidiaries or Affiliates.

7.     Non-competition.

(a)    By and in consideration of the Company’s entering into this Agreement and
the payments to be made and benefits to be provided by the Company hereunder and
further in consideration of the Executive’s exposure to the proprietary
information of the Company, the Executive agrees that the Executive will not,
during the Term, and thereafter during the Non-competition Term (as hereinafter
defined), directly or indirectly, own, manage, operate, join, control, be
employed by, or participate in the ownership, management, operation or control
of, or be connected in any manner with, including but not limited to holding any
position as a shareholder, director, officer, consultant, independent
contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below); provided, however, that in no event shall ownership of less than
one percent of the outstanding equity securities of any issuer whose securities
are registered under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), standing alone, be prohibited by this Section 7. For purposes
of this paragraph, the term “Restricted Enterprise” shall mean any person,
corporation, partnership or other entity that is engaged in the precision
systems or industrial components business or otherwise competes, directly or
indirectly, with any business or activity conducted or proposed to be conducted
by the Company or any of its subsidiaries or Affiliates as of the date of the
Executive’s termination of employment. Following termination of employment, upon
request of the Company, the Executive shall notify the Company of the
Executive’s then current employment status. For purposes of this Agreement, the
“Non-competition Term” shall mean the period beginning on the Termination Date
and ending on the first anniversary of such date. Any material breach of the
terms of this paragraph shall be considered Cause under Section 16.4.

 

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(b)   The Executive agrees that any breach of the terms of this Section 7 would
result in irreparable injury and damage to the Company and/or its subsidiaries
or Affiliates for which the Company and/or its subsidiaries or Affiliates would
have no adequate remedy at law; the Executive therefore also agrees that in the
event of said breach or any threat of breach, the Company and/or its
subsidiaries or Affiliates, as applicable, shall be entitled to an immediate
injunction and restraining order to prevent such breach and/or threatened breach
and/or continued breach by the Executive and/or any and all persons and/or
entities acting for and/or with the Executive, without having to prove damages,
in addition to any other remedies to which the Company and/or its subsidiaries
or Affiliates may be entitled at law or in equity. The terms of this paragraph
shall not prevent the Company and/or its subsidiaries or Affiliates from
pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the Executive.
The Executive and the Company further agree that the provisions of the covenants
contained in this Section 7 are reasonable and necessary to protect the
businesses of the Company and its subsidiaries or Affiliates because of the
Executive’s access to Confidential Information and his material participation in
the operation of such businesses. Should a court or arbitrator determine,
however, that any provision of the covenants contained in this Section 7 is not
reasonable or valid, either in period of time, geographical area, or otherwise,
the parties hereto agree that such covenants should be interpreted and enforced
to the maximum extent which such court or arbitrator deems reasonable or valid.

The existence of any claim or cause of action by the Executive against the
Company and/or its subsidiaries or Affiliates, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the covenants contained in this Section 7.

8.     Notice.   For the purposes of this Agreement, notices and all other
communications provided for in this Agreement (including any Notice of
Termination) shall be in writing, shall be signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive, and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, addressed to the
respective addresses last given by each party to the other, provided that all
notices to the Company shall be directed to the attention of the Board with a
copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof (whichever is earlier), except that
notice of change of address shall be effective only upon receipt.

9.     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 or program provided by the Company or any other
Affiliate of the Company for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Company or any other Affiliate of the Company. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any other Affiliate of the Company
shall be payable in accordance with such plan or program, except as explicitly
modified by this Agreement.

10.   (a)   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 but not limited
to any set-off, counterclaim, defense, recoupment, or other claim, right or
action which the Company may have against the Executive or others.

(b)   No Mitigation.   The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
except as provided in Section 2(b)(3).

 

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11.   Miscellaneous.   No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and the Company. No waiver by any party hereto at
any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by any party which are not expressly set forth in this Agreement.

12.   Successors; Binding Agreement.

(a)    This Agreement shall be binding upon and shall inure to the benefit of
the Company and its Successors and Assigns. The Company shall require its
Successors and Assigns to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place.

(b)   Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal personal representative.

13.   Governing Law.   This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in the State of Delaware.

14.   Severability.   The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.

15.   Entire Agreement.   This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto,
with respect to the subject matter hereof.

16.   Definitions.

16.1.    Accrued Compensation.   For purposes of this Agreement, “Accrued
Compensation” shall mean all amounts of compensation for services rendered to
the Company or an Employing Affiliate that have been earned or accrued through
the Termination Date but that have not been paid as of the Termination Date,
including (a) base salary, (b) reimbursement for reasonable and necessary
business expenses incurred by the Executive on behalf of the Company or an
Employing Affiliate during the period ending on the Termination Date and
(c) vacation pay; provided, however, that Accrued Compensation shall not include
any amounts described in clause (a) that have been deferred pursuant to any
salary reduction or deferred compensation elections made by the Executive.

16.2.    Affiliate.   For purposes of this Agreement, “Affiliate,” means, with
respect to any Person, any entity, directly or indirectly, controlled by,
controlling or under common control with such Person.

16.3.    [Intentionally Omitted.]

16.4.    Cause.   For purposes of this Agreement, a termination of employment is
for “Cause” if the Executive

(a)    has been convicted of a felony (including a plea of nolo contendere);

(b)   intentionally and continually failed substantially to perform his
reasonably assigned duties with the Company or an Employing Affiliate (other
than a failure resulting from the

 

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Executive’s incapacity due to physical or mental illness or from the assignment
to the Executive of duties that would constitute Good Reason) which failure
continued for a period of at least thirty days after a written notice of demand
for substantial performance, signed by a duly authorized officer of the Company,
has been delivered to the Executive specifying the manner in which the Executive
has failed substantially to perform such duties; or

(c)    intentionally engaged in illegal conduct or willful misconduct, which is
demonstrably and materially injurious to the Company or an Employing Affiliate.

For purposes of this Agreement, no act, or failure to act, on the Executive’s
part shall be considered “intentional” unless the Executive has acted, or failed
to act, with a lack of good faith and with a lack of reasonable belief that the
Executive’s action or failure to act was in the best interest of the Company or
an Employing Affiliate. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Company’s Chairman of the Board, Chief Executive Officer or a senior officer
of the Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company or an Employing Affiliate.
The termination of employment of the Executive shall not be deemed to be for
Cause pursuant to subparagraph (b) or (c) above unless and until there shall
have been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-fourths of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described in subparagraph (b) or (c) above, and specifying the particulars
thereof in detail. Notwithstanding anything contained in this Agreement to the
contrary, no failure to perform by the Executive after a Notice of Termination
is given to the Company by the Executive shall constitute Cause for purposes of
this Agreement.

16.5.    Change in Control.   A “Change in Control” shall mean the occurrence
during the Term of:

(a)    An acquisition (other than directly from the Company) of any common stock
of the Company (“Common Stock”) or other voting securities of the Company
entitled to vote generally for the election of directors (the “Voting
Securities”) by any “Person” (as the term “person” is used for purposes of
Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person
has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of fifty percent or more of the then outstanding shares of
Common Stock or the combined voting power of the Company’s then outstanding
Voting Securities; provided, however, in determining whether a Change in Control
has occurred, Common Stock or Voting Securities which are acquired in a
Non-Control Acquisition (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A “Non-Control Acquisition”
shall mean an acquisition by (i) an employee benefit plan (or a trust forming a
part thereof) maintained by (A) the Company or (B) any corporation or other
Person of which a majority of its voting power or its voting equity securities
or equity interest is owned, directly or indirectly, by the Company (a
“Subsidiary”), (ii) the Company or its Subsidiaries, (iii) any Person in
connection with a Non-Control Transaction (as hereinafter defined) or (iv) an
Affiliate;

(b)   The individuals who, as of the date of this agreement, are members of the
Board (the “Incumbent Board”), cease for any reason to constitute at least a
majority of the members of the Board; provided, however, that if the election,
or nomination for election by the Company’s shareholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be considered a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of

 

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the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a
“Proxy Contest”) including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or

(c)    The consummation of:

(1)   A merger, consolidation, reorganization or other business combination with
or into the Company or in which securities of the Company are issued, unless
such merger, consolidation, reorganization or other business combination is a
“Non-Control Transaction.” A “Non-Control Transaction” shall mean a merger,
consolidation, reorganization or other business combination with or into the
Company or in which securities of the Company are issued where:

(A)  the shareholders of the Company, immediately before such merger,
consolidation, reorganization or other business combination own directly or
indirectly immediately following such merger, consolidation, reorganization or
other business combination, at least fifty percent of the combined voting power
of the outstanding voting securities of the corporation resulting from such
merger or consolidation, reorganization or other business combination (the
“Surviving Corporation”) in substantially the same proportion as their ownership
of the Voting Securities immediately before such merger, consolidation,
reorganization, or other business combination,

(B)  the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such merger, consolidation,
reorganization or other business combination constitute at least two-thirds of
the members of the board of directors of the Surviving Corporation, or a
corporation beneficially directly or indirectly owning a majority of the
combined voting power of the outstanding voting securities of the Surviving
Corporation, and

(C)  no Person other than (i) the Company, (ii) any Subsidiary, (iii) any
employee benefit plan (or any trust forming a part thereof) that, immediately
prior to such merger, consolidation, reorganization or other business
combination was maintained by the Company, the Surviving Corporation, or any
Subsidiary, or (iv) any Person who, immediately prior to such merger,
consolidation, reorganization or other business combination had Beneficial
Ownership of fifty percent or more of the then outstanding Voting Securities or
common stock of the Company, has Beneficial Ownership of fifty percent or more
of the combined voting power of the Surviving Corporation’s then outstanding
voting securities or its common stock.

(2)   A complete liquidation or dissolution of the Company; or

(3)   The sale or other disposition of all or substantially all of the assets of
the Company to any Person (other than (i) any such sale or disposition that
results in at least fifty percent of the Company’s assets being owned by a
Subsidiary or Subsidiaries or (ii) a distribution to the Company’s stockholders
of the stock of a Subsidiary or any other assets);

provided, however, that no transaction or series of transactions by which
Stephen W. Bershad, or any Person in which Stephen W. Bershad has Beneficial
Ownership, directly or indirectly, of 25 percent of the outstanding ownership
interests or voting power, acquires fifty percent or more of the then
outstanding shares of Common Stock or the combined voting power of the Company’s
then outstanding Voting

 

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Securities shall constitute a Change in Control for purposes of this Agreement
(regardless of the form of transaction or series of transactions by which such
acquisition occurs (including, without limitation, any acquisition described in
clause (a) hereof or any merger or other transaction described in clause (c)
hereof)).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Common Stock or Voting
Securities as a result of the acquisition of Common Stock or Voting Securities
by the Company which, by reducing the number of shares of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided that if a Change in Control
would occur (but for the operation of this sentence) as a result of the
acquisition of shares of Common Stock or Voting Securities by the Company, and
after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional shares of Common Stock or Voting Securities
which increase the percentage of the then outstanding shares of Common Stock or
Voting Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.

16.6.    Company.   For purposes of this Agreement, all references to the
Company shall include its Successors and Assigns.

16.7.    Disability.   For purposes of this Agreement, “Disability” shall mean a
physical or mental infirmity which impairs the Executive’s ability to
substantially perform his duties with the Company or an Employing Affiliate for
six consecutive months, and within the time period set forth in a Notice of
Termination given to the Executive (which time period shall not be less than
thirty days), the Executive shall not have returned to full-time performance of
his duties; provided, however, that if the Company’s Long Term Disability Plan,
or any successor plan (the “Disability Plan”), is then in effect, the Executive
shall not be deemed disabled for purposes of this Agreement unless the Executive
is also eligible for long-term disability benefits under the Disability Plan (or
similar benefits in the event of a successor plan).

16.8.    Good Reason.

(a)    For purposes of this Agreement, “Good Reason” shall mean the occurrence
after a Change in Control of any of the following events or conditions:

(1)   a material adverse change in the Executive’s duties or responsibilities
(including reporting responsibilities), except in connection with the
termination of his employment for Disability, Cause, as a result of his death or
by the Executive other than for Good Reason;

(2)   a reduction in the Executive’s annual base salary;

(3)   the relocation of the offices of the Company or an Employing Affiliate at
which the Executive is principally employed to a location more than 25 miles
from the location of such offices immediately prior to a Change in Control, or
the requirement that the Executive be based anywhere other than at such offices,
except to the extent the Executive was not previously assigned to a principal
location and except for required travel on the business of the Company or an
Employing Affiliate to an extent substantially consistent with the Executive’s
business travel obligations at the time of a Change in Control; or

(4)   the failure by the Company or an Employing Affiliate to pay to the
Executive any portion of the Executive’s current compensation or to pay to the
Executive any portion of an installment of deferred compensation under any
deferred compensation program of the

 

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Company or an Employing Affiliate in which the Executive participated, within
seven days of the date such compensation is due.

(b)   Any event or condition described in Section 16.8(a)(1) through (4) which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (i) was at the request of a Third Party who effectuates a Change in
Control or (ii) otherwise arose in connection with or in anticipation of a
Change in Control which has been threatened or proposed and which actually
occurs, shall constitute Good Reason for purposes of this Agreement
notwithstanding that it occurred prior to a Change in Control, it being agreed
that any such action taken following shareholder approval of a transaction which
if consummated would constitute a Change in Control, shall be deemed to be in
anticipation of a Change in Control provided such transaction is actually
consummated.

16.9.    Notice of Termination.   For purposes of this Agreement, following a
Change in Control, “Notice of Termination” shall mean a written notice of
termination of the Executive’s employment, signed by the Executive if to the
Company or by a duly authorized officer of the Company if to the Executive,
which indicates the specific termination provision in this Agreement, if any,
relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated. The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason, Disability or Cause shall not serve to
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive’s or the Company’s rights hereunder.

16.10.  Successors and Assigns.   For purposes of this Agreement, “Successors
and Assigns” shall mean, with respect to the Company, a corporation or other
entity acquiring all or substantially all the assets and business of the
Company, as the case may be, whether by operation of law or otherwise.

16.11.  Termination Date.   For purposes of this Agreement, “Termination Date”
shall mean (a) in the case of the Executive’s death, his date of death, (b) if
the Executive’s employment is terminated for Disability, thirty days after
Notice of Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such
thirty day period) and (c) if the Executive’s employment is terminated for any
other reason, the date specified in the Notice of Termination (which, in the
case of a termination for Cause shall not be less than thirty days, and in the
case of a termination for Good Reason shall not be more than sixty days, from
the date such Notice of Termination is given); provided, however, that if within
thirty days after any Notice of Termination is given the party receiving such
Notice of Termination in good faith notifies the other party that a dispute
exists concerning the basis for the termination, the Termination Date shall be
the date on which the dispute is finally determined, either by mutual written
agreement of the parties, or by the final judgment, order or decree of a court
of competent jurisdiction (the time for appeal therefrom having expired and no
appeal having been taken). Notwithstanding the pendency of any such dispute, the
Company or an Employing Affiliate shall continue to pay the Executive his base
salary and continue the Executive as a participant (at or above the level
provided prior to the date of such dispute) in all compensation, incentive,
bonus, pension, profit sharing, medical, hospitalization, prescription drug,
dental, life insurance and disability benefit plans in which he was
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved whether or not the dispute is resolved in favor of
the Company, and the Executive shall not be obligated to repay to the Company or
an Employing Affiliate any amounts paid or benefits provided pursuant to this
sentence.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officers and the Executive has executed this Agreement as of the
day and year first above written.

 

AXSYS TECHNOLOGIES, INC.

 

/s/ STEPHEN W. BERSHAD

 

By:

Stephen W. Bershad

 

Its:

Chief Executive Officer

 

EXECUTIVE

 

/s/ SCOTT B. CONNER

 

Scott B. Conner

 

17 Orchard Road

 

West Hartford, CT 06117

 

 

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