EXHIBIT 10.34


 


FORM OF AMENDMENT NO. 5 TO
EMPLOYMENT AGREEMENT


 


AMENDMENT
NO. 5 TO THE EMPLOYMENT AGREEMENT (this “Amendment”) made as of the
     day of November 2010 by and between AEROFLEX
INCORPORATED, a Delaware corporation (hereinafter the “Company”) and JOHN
ADAMOVICH, JR. (hereinafter the “Executive” and together with the Company, the “Parties”).


 


WITNESSETH:


 


WHEREAS, the Parties entered into an Employment Agreement
dated November 9, 2005, as amended in November 21, 2006, December 1,
2006, December 31, 2008 and September 17, 2009 (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 revise
and define the term of the Agreement 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 1 of the
Employment Agreement shall be deleted and replaced in its entirety with the
following:


 


“Employment Period.  Subject to Section 3, the Company hereby
agrees to employ the Executive, and the Executive hereby agrees to be employed
by the Company, in accordance with the terms and provisions of this Agreement,
for the period commencing as of the Effective Date and ending at midnight on September 17,
2013.”


 


2.             Section 2(b)(ii) of
the Employment Agreement is hereby amended and restated, which shall read in
its entirety as follows:


 


“Bonus.
For each Fiscal Year ending during the Employment Period, the Executive shall
be eligible to receive an annual bonus of between 33 1/3% and 100% of his Base
Salary based upon the achievement of the Company’s EBITDA targets for such
Fiscal Year as established by the Board of Directors of the Company (the “Board”).  More particularly, (i) 33 1/3%% of the
Executive’s  Base Salary will be awarded
to the Executive as a bonus if the Company’s EBITDA is equal to the minimum
EBITDA target established by the Board (the “Threshold EBITDA”); (ii) 66
2/3% of the Executive’s Base Salary will be awarded as a bonus if the Company’s
EBITDA is equal to the FY EBITDA Target 


 

















 


established
by the Board (the “FY EBITDA Target”); and (iii) 100% of the Executive’s
Base Salary will be awarded to the Executive as a bonus if the Company’s EBITDA
is equal to or greater than the maximum EBITDA Target established by the Board
(the “Maximum EBITDA”). The Executive’s bonus shall be determined by linear
interpolation if the Company’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 the Company’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.             Section 2(b)(ix) of
the Agreement is hereby amended and restated, which shall read in its entirety
as follows:


 


“(ix) Car
Allowance.  The Company will provide
the Executive with a car allowance in the amount of One Thousand ($1,000) per
month, such amount to be paid monthly in accordance with the normal payroll
practices of the Company.”


 


4.             Section 2(c)(7) of
the Agreement is hereby amended and restated, which shall read in its entirety
as follows:


 


“(7) Notwithstanding
anything herein to the contrary, if (i) the Executive is to receive
payments or benefits under this Agreement 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 Executive 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 Executive 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 the Executive’s employment, then such payment or benefit
required under this Agreement shall not commence until the first day which is
at least six months after the termination of the Executive’s employment.  Such payments or benefits, which would have
otherwise been required to be made over such six month period, 


 


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shall
be paid to the Executive in one lump sum payment or otherwise provided to the
Executive as soon as administratively feasible after the first day which is at
least six months after the termination of the Executive’s employment.  Thereafter, the payments and benefits shall
continue, if applicable, for the relevant period set forth in the applicable
section of this Agreement.  For purposes
of this Agreement, all references to “termination of employment” and other
similar language shall be deemed to refer to the Executive’s “separation from
service” as defined in Treasury Regulation Section 1.409A-1(h).”


 


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


 


“(a) Without
Cause.  If during the Employment
Period, the Company shall terminate the Executive’s employment without Cause
(other than within 24 months after a Change in Control, as defined below), the
Company shall pay to the Executive or his heirs (1) within ten (10) days
after the Date of Termination the sum of the Executive’s Base Salary through
the Date of Termination to the extent not theretofore paid, plus all accrued
vacation pay, unreimbursed business expenses and other accrued but unpaid
compensation described in Section 2(b) above (the “Accrued
Obligations”); (2) an amount equal to the Executive’s Base Salary for the
one-year period immediately following the Date of Termination, payable in such
installments and at such intervals as is in accordance with the Company’s
normal payroll practices, as if the Executive had remained an employee of the
Company through the expiration of such period; (3) any amount arising from
the Executive’s participation in, or benefits under, any Investment Plans (“Accrued
Investments”), which amounts shall be payable in accordance with the terms and
conditions of such Investment Plans; (4) the unpaid bonus, if any,
applicable for the Fiscal Year in which the Date of Termination occurs,
prorated to the Date of Termination, but in no event less than of 50% of the
Bonus to which the Executive otherwise would have been entitled for that Fiscal
Year pursuant to Section 2(b)(ii) had he not been terminated, such
bonus, if any, shall be paid at the time the company pays bonuses to other
senior executives of the Company; and (5) the members of the Executive’s
family shall be entitled to continue and participate in the Company’s Welfare
Plans for said one-year period.”


 


6.             Section 5(c)(iv) of
the Agreement is hereby amended and restated, which shall read in its entirety
as follows:


 


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“(iv) Notwithstanding
the foregoing, if all or any portion of the Severance Benefits or other
payments and/or benefits provided under this Agreement, and/or any other
payments and benefits that the Executive 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 Executive 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 Executive without incurring such
excise tax, as determined by the Company’s 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.”


 


7.             Section 5(c)(v) of
the Agreement is hereby amended and restated, which shall read in its entirety
as follows:


 


“(v) Notwithstanding
anything herein to the contrary, if (i) the Executive is to receive
payments or benefits under this Agreement 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 Executive 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 Executive 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
the Executive’s employment, then such payment or benefit required under this
Agreement shall not commence until the first day which is at least six months
after the termination of the Executive’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 Executive in one lump sum payment or otherwise provided to the Executive as
soon as administratively feasible after the first day which is at least six
months after the termination of the Executive’s employment.  Thereafter, the 


 


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payments
and benefits shall continue, if applicable, for the relevant period set forth
in the applicable section of this Agreement. 
For purposes of this Agreement, all references to “termination of
employment” and other similar language shall be deemed to refer to the
Executive’s “separation from service” as defined in Treasury Regulation Section 1.409A-1(h).”


 


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
  Adamovich, Jr.

  



 


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