EXHIBIT 10.37


 


FORM OF AMENDMENT NO. 2 TO
EMPLOYMENT AGREEMENT


 


AMENDMENT
NO. 2 TO THE EMPLOYMENT AGREEMENT (this “Amendment”) made as of the
    day of November 2010 by and between AEROFLEX
INCORPORATED, a Delaware corporation (hereinafter “Aeroflex” or the “Company”)
and JOHN BUYKO (hereinafter “Buyko” or the “Executive” and together with the
Company, the “Parties”).


 


WITNESSETH:


 


WHEREAS, the Parties entered into an Employment Agreement
dated August 15, 2007, as amended 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
extend the term thereof and otherwise 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.             Section 2(b) of the
Employment Agreement shall be deleted and replaced in its entirety with the
following:


 


“Employment Term. The Employment Term shall commence on the
Effective Date and shall terminate on August 15, 2015. In addition, the
Employment Term shall automatically terminate upon any termination of Buyko’s
employment pursuant Section 5.”


 


2.             Section 3(c)(ii)  of the Employment Agreement shall be deleted
and replaced in its entirety with the following:


 


“For
each Fiscal Year ending during the Employment Term, Buyko shall be eligible to
receive an annual bonus of between 50% and 150% of Salary based upon the
achievement of EBITDA targets for such Fiscal Year as established by the
Board.  More particularly, (i) 50% of
Salary will be awarded to Buyko as a bonus if Aeroflex’s EBITDA is equal to the
minimum EBITDA target established by the Board (the “Threshold EBITDA”); (ii)
100% of Salary will be awarded as a bonus if Aeroflex’s EBITDA is equal to the
FY EBITDA Target established by the Board (the “FY EBITDA Target”); and (iii)
150% of Salary will be awarded as a bonus if Aeroflex’s EBITDA is equal to or
greater than the 


 

















 


maximum
EBITDA Target established by the Board (the “Maximum EBITDA”). Buyko’s bonus
shall be determined by linear interpolation if Aeroflex’s EBITDA is between the
Threshold EBITDA and the FY EBITDA Target or between the FY EBITDA Target and
the Maximum EBITDA, as the case may be. If the Board fails to establish the
Threshold EBITDA or the Maximum EBITDA for any fiscal year, such targets shall
be presumed to be, respectively, $10,000,000 less and $10,000,000 more than the
FY EBITDA Target. No annual bonus will be paid if Aeroflex’s EBITDA is below
the Threshold EBITDA for any Fiscal Year. The FY EBITDA Target shall be
equitably adjusted by the Board in the event of any divestiture, acquisition or
other extraordinary event. Any annual bonus payable hereunder shall be paid on
or prior to March 15 of the year following the year such bonus is earned.


 


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


 


“In
addition, during the Employment Term, Buyko shall be entitled to a car
allowance of $750.00 per month, such amount to be paid monthly in accordance
with the normal payroll practices of the Company.”


 


4.             The first phrase of Section
5(f)(ii) of the Agreement is hereby amended and restated, which shall read as
follows:


 


“(ii)
In the event of termination by Aeroflex of Buyko’s employment without Cause or
of termination by Buyko of his employment for Good Reason, subject to Buyko’s
execution and nonrevocation of a general release in favor of Aeroflex, its
affiliates and their current and former officers, directors and employees, in
substantially the form attached hereto as Exhibit A within 30 days following
the date of such termination, Buyko shall be entitled, commencing,
notwithstanding any provision to the contrary in Sections 5(f)(ii)(A)-(C), on
the 30th day following such termination of employment
(provided that, payments or benefits that would otherwise have been owed to
Buyko prior to the 30th day after termination of employment shall be
made to or on behalf of Buyko on the 30th day after his
termination of employment), in addition to the compensation and benefits
specified in Section 8(b), to the following payments and benefits:”


 


5.             A new Section 5(g) of the
Agreement is hereby added, which shall read in its entirety as follows:


 


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“(g)  Payments; Compliance with Section 409A of
the Code.  Notwithstanding anything
herein to the contrary, if (i) Buyko is to receive payments or benefits under
Section 5 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) Buyko 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 Buyko to any tax, interest or penalty imposed under
Section 409A of the Code (or any regulation promulgated thereunder) if the
payment or benefit would commence within six months of a termination of Buyko’s
employment, then such payment or benefit required under Section 5 shall not
commence until the first day which is at least six months after the termination
of Buyko’s employment.  Such payments or
benefits, which would have otherwise been required to be made over such six
month period, shall be paid to Buyko in one lump sum payment or otherwise
provided to Buyko as soon as administratively feasible after the first day
which is at least six months after the termination of Buyko’s employment.  Thereafter, the payments and benefits shall
continue, if applicable, for the relevant period set forth in Section 5.  For purposes of this Agreement, all references
to “termination of employment” and other similar language shall be deemed to
refer to Buyko’s “separation from service” as defined in Treasury Regulation
Section 1.409A-1(h).”


 


6.             The second sentence of
Section 7(b) of the Agreement is hereby amended and restated, which shall read
in its entirety as follows:


 


“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.”


 


7.             The third and fourth
sentences of Section 7(b) of the Agreement are hereby amended and restated,
which shall read in their entirety as follows:


 


“Notwithstanding
the foregoing, if immediately before such Change in Control or other
transaction, no stock of Aeroflex or any 


 


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member
of its affiliated group (as defined in Q&A 46 of Treas. Reg. Section 1.280
G)  is “readily tradable on an
established securities market or otherwise” (within the meaning of Q&A
6(a)(2)(i) of Treas. Reg. Section 1.280G), Aeroflex shall use reasonable
efforts to obtain the approval of the Cutback Benefits by Aeroflex’s shareholders
in the manner contemplated by Q&A 7 of Treas. Reg. Section 1.280G, it being
understood and agreed that Aeroflex does not guarantee that such approval will
be obtained.  If, and only if, Aeroflex
determines that such approval is applicable and is actually obtained, Buyko
shall be entitled to receive the Cutback Benefits without regard to the first
sentence of this paragraph.”


 


8.             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.


 


9.             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:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John
  Buyko

  



 


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