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**Confidential Communication**eligible for participation in, and shall receive all benefits under, all welfare benefit plans,practices, policies and programs provided by the Company which are made available generally to allother employees of the Company (excepting any plan, practice, policy or program preempted by thisAgreement such as policies which provides benefits in the nature of severance or continuation pay),including but not limited to medical, dental, vision and term life insurance benefits, subject toall of the terms, conditions and premiums applicable to other employees of the Company.          (d) During the Employment Period, the Company shall provide the Executive with a car allowanceof $850.00 per month.          (e) During the Employment Period, the Executive shall be entitled to at least five (5) weeksof paid vacation time for each calendar year in accordance with the Company’s normal and customarypolicies and procedures now in force or as such policies and procedures may be modified in thefuture for employees of the Company generally.          (f) During the Employment Period, the Company shall reimburse the Executive for all reasonablebusiness expenses upon the presentation of statements of such expenses in accordance with theCompany’s normal and customary policies and procedures now in force or as such policies andprocedures may be modified with respect to senior executive officers of the Company.          3. Employment Period.          The Company shall employ Executive on the terms and subject to the conditions of thisAgreement commencing as of the date of the execution of this Agreement (the “EffectiveDate”). Except as otherwise provided herein, Executive shall be considered an “at-will”employee, meaning that, subject to the provisions and other consequences of this Agreement, nocause or notice is required for termination. The period during which Executive is employed by theCompany pursuant to this Agreement shall be referred to as the “Employment Period.” TheExecutive’s employment hereunder and the Employment Period shall terminate upon the earliest tooccur of the following events:          (a) *Death*. The Executive’s employment hereunder shall terminate upon his death.          (b) *Disability*. The Company shall be entitled to terminate the Executive’s employmenthereunder for “Disability” if, as a result of the Executive’s incapacity due to physical ormental illness or injury, the Executive shall have been unable to perform his duties hereunder fora period of ninety (90) consecutive days, and within thirty (30) days after Notice of Termination(as defined in Section 4 below) for Disability is given following such 90-day period the Executiveshall not have returned to the performance of his duties on a full-time basis. Nothing in thisAgreement shall be interpreted to affect or limit any party’s rights or obligations under theAmericans with Disabilities Act or similar state law.          (c) *Cause*. For purposes of this Section, “Cause” shall mean discharge resulting from adetermination by the Company that the Executive has (i) been convicted of a criminal offenseinvolving dishonesty, fraud, theft, embezzlement, breach of trust or moral turpitude; (ii)performed an act or failed to act which, if he were prosecuted and convicted, would constitute acrime or offense involving money or property of the Company; (iii) violated the provisions ofSection 8 pertaining to confidential information; or (iv) willfully refuses to perform the dutiesreasonably assigned to Executive and consistent with his status as Executive V.P., Sales &Marketing of the Company, provided however that this Section 3(c)(iv) shall not apply following aChange in Control as defined in Section 5(c).          (d) *Without Cause*. The Company may terminate the Executive’s employment hereunder during theEmployment Period without Cause.
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**Confidential Communication**          (e) *Voluntarily*. The Executive may voluntarily terminate his employment hereunder (other thanfor Good Reason), provided that the Executive provides the Company with notice of his intent toterminate his employment at least four (4) weeks in advance of the Date of Termination (as definedin Section 4 below). In the event Executive terminates his employment or ceases his duties withoutproviding four (4) weeks notice or fails to fulfill Executive’s principal job responsibilitiesduring such notice period, the Company, at its option and without regard to Section 3(c), may deemExecutive’s employment terminated for Cause.          (f) *For Good Reason*. The Executive may terminate his employment hereunder for Good Reason andany such termination shall be deemed a termination by the Company without Cause. For purposes ofthis Agreement, “Good Reason” shall mean (i) a material breach of this Agreement by theCompany, (ii) circumstances that give rise to a constructive termination under applicable statelaw; providedthat in either (i) or (ii) above, the Executive shall notify theCompany within thirty (30) days after the event or events which the Executive believes constituteGood Reason hereunder and shall describe in such notice in reasonable detail such event or eventsand provide the Company a thirty (30) day period after delivery of such notice to cure such breachor diminution.          4. Termination Procedure.          (a) *Notice of Termination*. Any termination of the Executive’s employment by the Company orby the Executive during the Employment Period (other than a termination on account of the death ofExecutive) shall be communicated by written “Notice of Termination” to the other partyhereto in accordance with Section 11(a).          (b) *Date of Termination*. “Date of Termination” shall mean (i) if the Executive’semployment is terminated by his death, the date of his death, (ii) if the Executive’s employment isterminated pursuant to Section 3(b), thirty (30) days after Notice of Termination, provided thatthe Executive shall not have returned to the performance of his duties hereunder on a full-timebasis within such thirty (30) day period, (iii) if the Executive voluntarily terminates hisemployment, the date specified in the notice given pursuant to Section 3(e) herein which shall notbe less than four (4) weeks after the Notice of Termination is delivered to the Company, or suchearlier date as the Company elects to terminate Executive’s employment for Cause pursuant to thatsection, (iv) if the Executive terminates his employment for Good Reason pursuant to Section 3(f)herein, thirty (30) days after Notice of Termination, and (v) if the Executive’s employment isterminated for any other reason, the date on which a Notice of Termination is given or any laterdate (within thirty (30) days, or any alternative time period agreed upon by the parties, after thegiving of such notice) set forth in such Notice of Termination.          5. Termination Payments.          (a) *Without Cause*. In the event of the termination of the Executive’s employment during theEmployment Period by the Company without Cause, the Executive shall be entitled to: (i) any accruedbut unused vacation, (ii) Base Salary through the Date of Termination (to the extent nottheretofore paid); and (iii) the continuation of Base Salary for twelve (12) months following theDate of Termination, which shall be paid in accordance with the Company’s ordinary payrollpractices in effect from time to time. In addition, in the event of a termination by the Companywithout Cause: (1) if the Executive elects to continue the Company’s group health plans pursuant tohis rights under COBRA, the Company shall pay the Executive’s COBRA continuation premiums until theearlier of (x) the date the Executive receives group health benefits from another employer or (y)twelve (12) months after the Date of Termination; and (2) (A)all unvested stock options, unvested restricted stock units and any other unvestedequity-based awards or grants previously granted to the Executive shall become fully vested andwill be exercised or paid in accordance with the terms of any applicable grant or award agreementsand plans governing such awards or
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**Confidential Communication**grants (and  this Agreement shall be deemed an amendment of all such applicable grant or award(agreements for the purpose of the accelerated vesting provided for in this clause), and (B) allstock options (both vested and unvested) granted on or prior to the Effective Date will remainfully exercisable until the tenth anniversary of the grant date of such option (and this Agreementshall be deemed an amendment of all such stock option grant or award agreements for the purpose ofthe extension of the period of exercise provided for in this clause). Notwithstanding theforegoing, the payments and benefits provided in this Section 5 are subject to and conditioned uponthe Executive executing a general release and waiver (in the form reasonably acceptable to theCompany), waiving all claims the Executive may have against the Company, its successors, assigns,affiliates, executives, officers and directors, and such payments are subject to and conditionedupon the Executive’s compliance with the Restrictive Covenants provided in Sections 7 and 8 hereof.Except as provided in this Section 5(a), the Company shall have no additional obligations underthis Agreement.     (b) *Cause, Disability, Death or Voluntarily other than for Good Reason*. If the Executive’semployment is terminated during the Employment Period by (i) the Company for Cause, (ii)voluntarily by the Executive other than for Good Reason, or (iii) as a result of the Executive’sdeath or Disability, the Company shall pay the Executive or the Executive’s estate, as the case maybe, within thirty (30) days following the Date of Termination the Executive’s accrued but unusedvacation and his Base Salary through the Date of Termination (to the extent not theretofore paid).Except as provided in this Section 5(b), the Company shall have no additional obligations underthis Agreement.     (c) *Change in Control.*Upon the occurrence of a Change in Control all unvested stockoptions, unvested restricted stock units and any other unvested equity-based awards or grantspreviously granted to the Executive shall become fully vested and will be exercised or paid inaccordance with the terms of any applicable grant or award agreements and plans governing suchawards or grants (and this Agreement shall be deemed an amendment of all such applicable grant oraward agreements for the purpose of the accelerated vesting provided for in this clause). In theevent the Company terminates the Executive’s employment without Cause, or Executive terminatesExecutive’s employment with Good Reason, as more fully defined in this subsection, within one (1)year following a Change in Control (as defined herein), the Executive shall be entitled to: (i)any accrued but unused vacation; (ii) Base Salary through the Date of Termination (to the extentnot theretofore paid); and (iii) the continuation of Base Salary for eighteen (18) months followingthe Date of Termination, which shall be paid in accordance with the Company’s ordinary payrollpractices in effect from time to time. Moreover, in the event of such a termination by theCompany: (1) if the Executive elects to continue the Company’s group health plans pursuant to hisrights under COBRA, the Company shall pay the Executive’s COBRA continuation premiums until theearlier of (x) the date the Executive receives group health benefits from another employer or (y)eighteen (18) months after the Date of Termination. Finally, notwithstanding any provision in anyapplicable stock option or other equity-based grant or award agreement between the Company and theExecutive all stock options granted on or prior to the Effective Date will remain fully exercisableuntil the tenth (10th) anniversary of the grant date of such option, (and this Agreementshall be deemed an amendment of all such stock option grant or award agreements for the purpose ofthe extension of the period of exercise provided for in this clause); provided, however,that if the Company determines in good faith that the extension of the option’s exercise periodresults in the options being considered deferred compensation subject to Section 409A of theInternal Revenue Code ( the “Code”), such extension shall not take effect.     For purposes of this subsection, the term “Good Reason” shall specifically includecircumstances in which the Company (or its successor entity in a Change of Control) has (i) ormade a material change in the nature or scope of the responsibilities, title and authorityExecutive had immediately prior to the Changein Control; (ii) decreased the total annual compensation or benefits payable to Executiveother than as a result of a decrease in incentive-based compensation payable to Executive and toall other similarly situated employees of Company on the basis of Company’s financial performance;or (iii) relocated, or given
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**Confidential Communication**Executive written notice of a relocation of Executive’s principal place of employment to a locationthat is more than fifty (50) miles distant from Executive’s principal place of employmentimmediately prior to the Change in Control.     For purposes of this Agreement, a “Change in Control” shall mean and include the firstto occur after the date of this Agreement of any of the following transactions or events:          A. Any sale or transfer of all or substantially all of the assets of the Company to an entitynot under direct or indirect control by, or under common control with, the Company;          B. A merger or consolidation involving the Company, unless the stockholders of the Companyreceive in the transaction, with respect to their stock in the Company, stock or other securitiesrepresenting a majority in voting interest of the acquiring entity’s equity securities;          C. Any sale of a majority voting interest of the outstanding stock of the Company by theholders thereof in a single transaction or series of related transactions; or          D. Any change in a majority of the members of the Board that occurs at a single meeting ofshareholders or by virtue of any action taken, pursuant to applicable law and in accordance withthe charter and bylaws of the Company, by shareholders in lieu of a single meeting.          E. A change in WEDC’s Chief Executive Officer.          (d) *Specified Employee Status.*In addition, notwithstanding any other provision of thisAgreement to the contrary, in the event that the Executive’s employment is terminated when he is a“specified employee” within the meaning of Section 409A of the Code, as determined in accordancewith the Section 409A methodology in place or established by the Company as in effect on the dateof termination (a “Specified Employee”), any amounts of deferred compensation that would otherwisebe payable under this Agreement during the six-month period immediately following the date of the“separation from service” within the meaning of Section 409A of the Code (other than unpaid accruedbase salary through the date of termination and other than any other payments that are notconsidered deferred compensation under Section 409A) shall be paid to the Executive on the DelayedPayment Date. The “Delayed Payment Date” shall, for purposes of this Agreement, mean the firstbusiness day after the date that is six months following the Executive’s “separation from service”within the meaning of Section 409A of the Code. All payments not payable within such six-monthperiod for purposes of Section 409A shall be paid on the dates, or according to the schedule,provided for herein.          6. Legal Fees.          In the event of any contest or dispute between the Company and the Executive with respect tothis Agreement or the Executive’s employment hereunder, each of the parties shall be responsiblefor their respective legal fees and expenses.          7. Non-Solicitation.          During the Employment Period and for one (1) year thereafter, the Executive hereby agrees notto, directly or indirectly, solicit or hire or assist any other person or entity in soliciting orhiring any employee of the Company or any of its subsidiaries to perform services for any entity(other than theCompany or its subsidiaries), or attempt to induce any such employee to leave the employmentof the Company or its subsidiaries.
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**Confidential Communication**          8. Confidentiality; Non-Disclosure; Non-Disparagement.          (a) During the Employment Period and thereafter, the Executive shall hold in strict confidenceany proprietary or Confidential Information related to the Parent, the Company and theiraffiliates. For purposes of this Agreement, the term “Confidential Information” shall meanall information of the Company or any of its affiliates (in whatever form) which is not generallyknown to the public, and which derives value from not being generally known, including withoutlimitation any inventions, processes, methods of distribution, customer lists or customers’ ortrade secrets**.**          (c) Upon the termination of the Employment Period, the Executive shall not take, without theprior written consent of the Company, any drawing, blueprint, specification or other document (inwhatever form) of the Parent, the Company or their affiliates, which is of a confidential naturerelating to the Company or its affiliates, or, without limitation, relating to any of their methodsof distribution, or any description of any formulas or secret processes and will return any suchinformation (in whatever form) then in his possession.          (d) The Executive shall not defame or disparage the Company, its affiliates and theirofficers, directors, members or executives. The Executive hereby agrees to cooperate with theCompany in refuting any defamatory or disparaging remarks by any third party made in respect of theParent, the Company, their affiliates or their directors, members, officers or executives. Nothingin this Agreement shall be shall be construed to limit, impede or impair the right of any party tocommunicate with government agencies regarding matters that are within the jurisdictions of suchagencies.          9. Injunctive Relief.          It is impossible to measure in money the damages that will accrue to the Company in the eventthat the Executive breaches any of the restrictive covenants provided in Sections 7 and 8 hereof.In the event that the Executive breaches any such restrictive covenant, the Company shall beentitled to an injunction restraining the Executive from violating such restrictive covenant(without posting any bond or other security). If the Company shall institute any action orproceeding to enforce any such restrictive covenant, the Executive hereby waives the claim ordefense that the Company has an adequate remedy at law and agrees not to assert in any such actionor proceeding the claim or defense that the Company has an adequate remedy at law. The foregoingshall not prejudice the Company’s right to require the Executive to account for and pay over to theCompany, and the Executive hereby agrees to account for and pay over, the compensation, profits,monies, accruals or other benefits derived or received by the Executive as a result of anytransaction constituting a breach of any of the restrictive covenants provided in Sections 7 or 8hereof.          10. Representations.          (a) The parties hereto hereby represent that they each have the authority to enter into thisAgreement, and the Executive hereby represents to the Company that the execution of, andperformance of duties under, this Agreement shall not constitute a breach of or otherwise violateany other agreement to which the Executive is a party.          (b) The Executive hereby represents to the Company that he will not utilize or disclose anyconfidential information obtained by the Executive in connection with his former employment withrespect to this duties and responsibilities hereunder.
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**Confidential Communication**          11. Miscellaneous.          (a) Any notice or other communication required or permitted under this Agreement shall beeffective only if it is in writing and shall be deemed to be given when delivered personally orfour days after it is mailed by registered or certified mail, postage prepaid, return receiptrequested or one day after it is sent by a reputable overnight courier service and, in each case,addressed as follows (or if it is sent through any other method agreed upon by the parties):          If to the Company:          White Electronic Designs Corp., 3601 E. University Drive, Phoenix, AZ 85034          Attention: Office of the CEO          with a copy to the White Electronic Designs Corp. Chairman of the Board          If to the Executive, to the address for the Executive on file with the Company at the time of the noticeor to such other address as any party hereto may designate by notice to the others.          (b) This Agreement shall constitute the entire agreement among the parties hereto withrespect to the Executive’s employment hereunder, and supersedes and is in full substitution for anyand all prior understandings or agreements with respect to the Executive’s employment (it beingunderstood that, except as otherwise expressly stated in this Agreement, stock options or otherequity-based awards or grants made to the Executive shall be governed by the relevant plan and anyother related grant or award agreement and any other related documents).          (c) This Agreement may be amended only by an instrument in writing signed by the partieshereto, and any provision hereof may be waived only by an instrument in writing signed by the partyor parties against whom or which enforcement of such waiver is sought. The failure of any partyhereto at any time to require the performance by any other party hereto of any provision hereofshall in no way affect the full right to require such performance at any time thereafter, nor shallthe waiver by any party hereto of a breach of any provision hereof be taken or held to be a waiverof any succeeding breach of such provision or a waiver of the provision itself or a waiver of anyother provision of this Agreement.          (d) The parties hereto acknowledge and agree that each party has reviewed and negotiated theterms and provisions of this Agreement and has had the opportunity to contribute to its revision.Accordingly, the rule of construction to the effect that ambiguities are resolved against thedrafting party shall not be employed in the interpretation of this Agreement. Rather, the terms ofthis Agreement shall be construed fairly as to both parties hereto and not in favor or againsteither party.          (e) This Agreement is binding on and is for the benefit of the parties hereto and theirrespective successors, assigns, heirs, executors, administrators and other legal representatives.Neither this Agreement nor any right or obligation hereunder may be assigned by the Executive. TheCompany shall require any successor (whether direct or indirect, by purchase, merger, consolidationor otherwise) to all or substantially all of the business and/or assets of the Company to assumethis Agreement in the same manner and to the same extent that the Company would have been requiredto perform it if no such succession had taken place. As used in the Agreement, the “Company” shallmean both the Company as defined above and any such successor that assumes this Agreement, byoperation of law or otherwise.          (f) Any provision of this Agreement (or portion thereof) which is deemed invalid, illegal orunenforceable in any jurisdiction shall, as to that jurisdiction and subject to this Section, beineffective to the
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**Confidential Communication**extent of such invalidity, illegality or unenforceability, without affecting in any way theremaining provisions thereof in such jurisdiction or rendering that or any other provisions of thisAgreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should bedeemed invalid, illegal or unenforceable because its scope is considered excessive, such covenantshall be modified so that the scope of the covenant is reduced only to the minimum extent necessaryto render the modified covenant valid, legal and enforceable. No waiver of any provision orviolation of this Agreement by Company shall be implied by Company’s forbearance or failure to takeaction.          (g) The Company may withhold from any amounts payable to the Executive hereunder all federal,state, city or other taxes that the Company may reasonably determine are required to be withheldpursuant to any applicable law or regulation, (it being understood, that the Executive shall beresponsible for payment of all taxes in respect of the payments and benefits provided herein).          (h) The payments and other consideration to the Executive under this Agreement shall be madewithout right of offset.          (i) This Agreement is intended to constitute an enforceable contract for the payment ofcompensation, severance and certain other benefits. The Agreement is not intended to constitute a“nonqualified deferred compensation plan” within the meaning of Section 409A of the Code.Notwithstanding the foregoing, in the event this Agreement or any benefit paid to Executivehereunder is deemed to be subject to Section 409A of the Code, the Executive consents to theCompany adopting such conforming amendments as the Company deems necessary, in its sole discretion,to comply with Section 409A of the Code, without reducing the amounts of any benefits due to theExecutive hereunder**.**          (j) This Agreement shall be governed by and construed in accordance with the laws of theState of Arizona without reference to its principles of conflicts of law.          (k) This Agreement may be executed in several counterparts, each of which shall be deemed anoriginal, but all of which shall constitute one and the same instrument.          (l) The headings in this Agreement are inserted for convenience of reference only and shallnot be a part of or control or affect the meaning of any provision hereof.          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first writtenabove.       White Electronic Designs Corp.          Name: Karen M. Kock            Date    Title: V.P., Human Resources          Name: Paul D. Quadros            Date    Title: Compensation Committee Chair          Name: Dan V. Tarantine            Date  
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