EXHIBIT 10.35


 


FORM OF AMENDMENT NO. 3 TO
EMPLOYMENT AGREEMENT


 


AMENDMENT
NO. 3 TO THE EMPLOYMENT AGREEMENT (this “Amendment”) made as of the
    th day of November, 2010 by and between AEROFLEX
INCORPORATED, a Delaware corporation (hereinafter the “Company”) and CHARLES
BADLATO (hereinafter the “Executive” and together with the Company, the “Parties”).


 


WITNESSETH:


 


WHEREAS, the Parties entered into an Employment Agreement
dated November 6, 2003, as amended in July, 2008 and on December 31,
2008 (the “Agreement”) under which the Parties agreed upon the terms pursuant
to which the Executive would provide services to the Company as further
described therein, and


 


WHEREAS, the parties desire to amend the Agreement to
comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations and notices promulgated thereunder.


 


NOW,
THEREFORE, the parties hereto agree as follows, effective as of the date
hereof:


 


1.                                      The last
sentence of Section 6 of the Agreement is hereby amended and restated,
which shall read in its entirety as follows:


 


“In
addition, Employee shall be entitled to a car allowance in the amount of $600
per month, such amount to be paid monthly in accordance with the normal payroll
practices of the Company.”


 


2.                                      Section 8(e)(iii) is
hereby amended and restated, which shall read in its entirety as follows:


 


“(iii) 
In the event of Termination Without Cause, the Employee shall be entitled to
receive any Bonus awarded but not yet paid to him, and, for the greater of (x) remainder
of the Term of Employment at the time of termination or (y) one year:


 


(A) 
Base Salary at the rate in effect on the date of his termination paid in
accordance with the Company’s regular payroll practices, and


 


(B) benefits
under any employee benefit plans of the Company in which he participated or, as
to any plans in which his continued participation is precluded, a lump sum
payment of the after-tax cost to the Employee of equivalent benefits, such
payment to be 


 


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made
as soon as practical following the Employee’s termination of employment.”


 


3.                                      The second
sentence of Section 8(f) of the Agreement is hereby amended and
restated, which shall read in its entirety as follows:


 


“Upon
such termination, the Employee shall receive immediately in a lump sum an
amount equal to three times the sum of (i) his annual Base Salary and (ii) the
amount of any Bonus payable to him for the last completed fiscal year less
$100.  Notwithstanding the foregoing, if
all or any portion of the payments and/or benefits provided under this
Agreement, and/or any other payments and benefits that the Employee receives or
is entitled to receive from the Company, its subsidiaries or any of its
affiliates, constitutes an excess “parachute payment” within the meaning of Section 280G(b) of
the Internal Revenue Code of 1986, as amended, (the “Code”) (each such
parachute payment, a “Parachute Payment”) and will result in the imposition on
the Employee of an excise tax under Section 4999 of the Code, then, the
Parachute Payments shall instead be reduced to the aggregate amount of
Parachute Payments that may be made to the Employee without incurring such
excise tax, as determined by the Company’s independent auditors.  Any such reduction in the preceding sentence
shall be done first by reducing any cash payments with the last payment reduced
first; next any equity or equity derivatives that are included under Section 280G
of the Code at full value rather than accelerated value; next any equity or
equity derivatives based on acceleration value shall be reduced with the
highest value reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24); finally any other non-cash
benefits will be reduced.”


 


4.                                      A new Section 8(k) of
the Agreement is hereby added, which shall read in its entirety as follows:


 


“(k) Payments;
Compliance with Section 409A of the Code. 
Notwithstanding anything herein to the contrary, if (i) the
Employee is to receive payments or benefits under Section 8 by reason of
his separation from service (as such term is defined in Section 409A of
the Code) other than as a result of his death, (ii) the Employee is a “specified
employee” within the meaning of Code Section 409A for the period in which
the payment or benefits would otherwise commence, and (iii) such payment
or benefit would otherwise subject the Employee to any tax, interest or penalty
imposed under Section 409A of the Code (or any regulation promulgated
thereunder) if the payment or benefit 


 


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would
commence within six months of a termination of the Employee’s employment, then
such payment or benefit required under Section 8 shall not commence until
the first day which is at least six months after the termination of the
Employee’s employment.  Such payments or
benefits, which would have otherwise been required to be made over such six
month period, shall be paid to the Employee in one lump sum payment or
otherwise provided to the Employee as soon as administratively feasible after
the first day which is at least six months after the termination of the
Employee’s employment.  Thereafter, the
payments and benefits shall continue, if applicable, for the relevant period
set forth in Section 8.  For
purposes of this Agreement, all references to “termination of employment” and
other similar language shall be deemed to refer to the Employee’s “separation
from service” as defined in Treasury Regulation Section 1.409A-1(h).”


 


5.             Except as specifically
provided in and modified by this Amendment, the Agreement is in all other
respects hereby ratified and confirmed and references to the Agreement shall be
deemed to refer to the Agreement as modified by this Amendment.


 


6.             This Amendment may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.


 


IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and
year first above written.


 


	
   

  	
  AEROFLEX INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Charles
  Badlato

  



 


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