Exhibit 10.41


 


FORM OF DIRECTOR DESIGNATION AGREEMENT


 


DIRECTOR
DESIGNATION AGREEMENT, dated as of November  [  ], 2010 (this “Agreement”),
between Aeroflex Holding Corp., a Delaware corporation (the “Company”), and VGG Holding LLC, a Delaware limited liability
company (“VGG”).


 


WHEREAS,
the Company has determined that it is in its best interests to effect an
initial public offering (“IPO”) of shares
of common stock, par value $0.01 per share, of the Company (the “Common Stock”);


 


WHEREAS,
it is in the best interests of the Company to attract and retain highly
qualified persons to serve on the Board of Directors;


 


WHEREAS,
VGG is expected to designate highly qualified persons for nomination to the
Board of Directors; and


 


WHEREAS,
in connection with the IPO, the Company and VGG desire to enter into this
Agreement setting forth certain rights of VGG to designate persons for
nomination to the Board of Directors.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:


 


1.             Definitions. 
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:


 


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


 


“Bylaws” means the Amended and Restated Bylaws of the
Company, as may be amended from time to time.


 


“Certificate of Incorporation” means the Amended and Restated
Certificate of Incorporation of the Company, as may be amended from time to time.


 


“Person” means an individual, corporation, partnership,
limited liability company, joint venture, association, trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.


 


“VGG Operating Agreement” means the Amended and Restated
Limited Liability Company Operating Agreement of VGG, initially dated as of August 15,
2007, between VGG and the other parties thereto, as amended to date.


 

















 


2.             Board Representation.


 


(a)           At all times commencing upon the consummation of the IPO
and continuing until such time as the Company is required to comply with Rule 303A.01
of the New York Stock Exchange Listed Company Manual or any successor rule thereto
(the “NYSE Majority Independent Board Rule”),  the Company and the Board of Directors shall, acting
through the Corporate Governance and Nominating Committee of the Board of
Directors, include in the slate of nominees recommended to stockholders of the
Company (the “Stockholders”) for election as
directors at any annual or special meeting of the Stockholders at which
directors of the Company are to be elected, such individuals as are designated
by VGG (the “VGG Nominees”).  At such time as the Company is first required
to comply with the NYSE Majority Independent Board Rule, to the extent then
required for compliance by the Company with such rule, VGG shall cause one or
more of the VGG Nominees to resign from the Board of Directors; provided, that,
VGG shall not be required to cause the resignation of a number of directors
that would result in it maintaining on the Board of Directors less than the
number of directors that it is then permitted to nominate pursuant to Section 2(b).


 


(b)           During such time as (i) VGG owns less than a majority
(but at least one) of the then outstanding shares of the capital stock of the
Company that are entitled to vote generally in the election of directors (the “Voting Shares”) and (ii) the Company is required to
comply with the NYSE Majority Independent Board Rule, the Company and the Board
of Directors shall include, acting through the Corporate Governance and
Nominating Committee of the Board of Directors, in the slate of nominees
recommended to Stockholders for election as directors at any annual or special
meeting of the Stockholders at which directors of the Company are to be
elected, not less than four VGG Nominees.


 


(c)           Vacancies arising through the death, resignation,
disqualification or removal of a VGG Nominee may be filled by the Board of
Directors only with a person designated by VGG (and such person shall be deemed
to be a VGG Nominee).


 


(d)           Notwithstanding the provisions of this Section 2, VGG
shall not be entitled to designate a particular person as a nominee to the
Board of Directors or to designate a particular person to fill a vacancy on the
Board of Directors upon a written determination by the Board of Directors or
the Corporate Governance and Nominating Committee of the Company (which
determination shall set forth in writing the grounds for such determination) that
(A) such person would not be qualified under any applicable law, rule or
regulation to serve as a director of the Company or (B) the inclusion of
such person as a nominee for election as a director or the appointment of such
person to the Board of Directors would violate the fiduciary duties of the
members of the Board of Directors or the Corporate Governance and Nominating
Committee under applicable law.  Except
as set forth in the preceding sentence, neither the Company nor any other
Stockholder shall have the right to object to any VGG Nominee.


 


(e)           The Company shall notify VGG in writing of the date on
which proxy materials are expected to be mailed by the Company in connection
with an election of directors at an annual or special meeting of the Stockholders
(and such notice shall be delivered to VGG at least 120 days prior to such
expected mailing date with respect to any annual meeting of the Stockholders
and at least 30 days prior to such expected mailing date with respect to any


 


2

















 


special meeting of the Stockholders).  The Company shall provide VGG with a
reasonable opportunity to review and provide comments on any portion of the
proxy materials relating to the VGG Nominees or the rights and obligations
provided under this Agreement and to discuss any such comments with the
Company.  The Company shall notify VGG of
any opposition to a VGG Nominee designated pursuant to Section 2(a) or
(b) sufficiently in advance of the date on which such proxy materials are
to be mailed by the Company in connection with such election of directors so as
to enable VGG to propose a replacement VGG Nominee, if necessary, in accordance
with the terms of this Agreement, and VGG shall have not less than 10 business
days to designate another nominee.  The
Company shall notify VGG of any opposition to a VGG Nominee designated to fill
a vacancy on the Board of Directors pursuant to Section 2(c) no later
than 2 business days following any determination made in accordance with Section 2(d) and
VGG shall have the right to designate another person to fill such vacancy.


 


(f)            Without the prior written consent of VGG, the Company
shall not take any action, including making or recommending any amendment to
the Certificate of Incorporation or Bylaws, that would decrease the size of the
Board of Directors if such decrease would cause the Company to fail to satisfy
the NYSE Majority Independent Board Rule, to the extent then applicable,
without the resignation of a VGG Nominee from the Board of Directors, or that
otherwise could reasonably be expected to adversely effect VGG’s rights under
this Agreement.


 


(g)           Without limiting the foregoing, the Company agrees that it
will not enter into any agreement or understanding or make any commitment to
any Person or otherwise take any action that would violate or be inconsistent
with any provision or agreement contained in this Agreement or that reduces or
eliminates the rights of VGG set forth in this Agreement.


 


3.             Miscellaneous.


 


(a)           Governing Law. 
This Agreement and the rights and obligations of the parties hereunder
and the Persons subject hereto shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware, without
giving effect to the choice of law principles thereof.


 


(b)           Certain Adjustments.  The provisions of this Agreement shall apply
to the full extent set forth herein with respect to any and all shares of
capital stock of the Company or any successor or assign of the Company (whether
by merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for, or in substitution for the shares of Common Stock,
by combination, recapitalization, reclassification, merger, consolidation or
otherwise and the term “Common Stock” shall include all such other securities.


 


(c)           Enforcement. 
Each of the parties agrees that in the event of a breach of any
provision of this Agreement, the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce
specific performance or to enjoin the continuing breach of this Agreement.  Such remedies shall, however, be cumulative
and not exclusive, and shall be in addition to any other remedy which any party
hereto may have.  Each party hereto
hereby irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts in New York and Delaware for the purposes of any suit, action or
other proceeding


 


3

















 


arising out of or based upon this Agreement or the
subject matter hereof.  To the fullest
extent permitted by law, each party hereto hereby consents to service of
process made in accordance with Section 3(f).


 


(d)           Successors and Assigns.  Except as otherwise provided herein, the provisions
of this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and
assigns.


 


(e)           Entire Agreement; Termination.  This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and supersedes all prior oral or written (and all
contemporaneous oral) agreements or understandings with respect to the subject
matter hereof.  This Agreement shall terminate
and be of no further force and effect at such time as VGG ceases to
beneficially own any Voting Shares.


 


(f)            Notices. 
All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed,
certified or registered mail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by fax, as follows (or to such
other address as the party entitled to notice shall hereafter designate in
accordance with the terms hereof):


 


If
to the Company:


 


Aeroflex
Holding Corp.


35
South Service Road


P.O. Box
6022


Plainview,
NY  11803


Attention:  Leonard Borow


Facsimile
No.:  (516) 694-0658


Telephone
No.:  (516) 694-6700


 


If
to VGG:


 


VGG
Holding Corp.


c/o
Veritas Capital Fund Management, L.L.C.


590
Madison Avenue


New
York, New York  10022


Attention:  Robert B. McKeon


Facsimile
No.:  (212) 688-0020


Telephone
No.:  (212) 415-6700


 


With
a copy (which shall not constitute notice) to:


 


Schulte
Roth & Zabel LLP


919
Third Avenue


New
York, New York  10022


Attention: 
Benjamin M. Polk, Esq.


Michael R. Littenberg, Esq.


 


4

















 


Facsimile
No.:  (212) 593-5955


Telephone
No.:  (212) 756-2000


 


All
such notices, requests, demands, waivers and other communications shall be
deemed to have been received by (w) if by personal delivery, on the day
delivered, (x) if by certified or registered mail, on the fifth business
day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, or (z) if by fax, on the day delivered,
provided that such delivery is confirmed.


 


(g)           Waiver. 
Waiver by any party hereto of any breach or default by the other party
of any of the terms of this Agreement shall not operate as a waiver of any
other breach or default, whether similar to or different from the breach or
default waived.  No waiver of any
provision of this Agreement shall be implied from any course of dealing between
the parties hereto or from any failure by either party to assert its or his or
her rights hereunder on any occasion or series of occasions.


 


(h)           Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.


 


(i)            Headings. 
The headings to sections in this Agreement are for the convenience of
the parties only and shall not control or affect the meaning or construction of
any provision hereof.


 


(j)            Invalidity of Provision.  The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.


 


(k)           Amendments and Waivers.  The provisions of this Agreement may be
amended at any time and from time to time, and particular provisions of this
Agreement may be waived or modified, with and only with an agreement or consent
in writing signed by each of the parties hereto.


 


(l)            Further Assurances.  Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto or Person subject hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement.


 


(m)          Third Party Beneficiaries.  This Agreement is not intended to, and does
not, confer upon any Person other than the parties hereto any rights or
remedies.


 


[Remainder of Page Intentionally
Left Blank]


 


5

















 


IN
WITNESS WHEREOF this Agreement has been signed by each of the parties hereto,
and shall be effective as of the date first above written.


 


 


	
   

  	
  AEROFLEX
  HOLDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VGG
  HOLDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


6