EXHIBIT
10.31

     

    AMENDMENT NO. 2 TO
EMPLOYMENT AGREEMENT

     

    AMENDMENT
NO. 2 TO THE EMPLOYMENT AGREEMENT (this “Amendment”) made as of the 31st day of
December, 2008 by and between AEROFLEX INCORPORATED, a Delaware corporation
(hereinafter the “Company”) and CHARLES BADLATO (hereinafter the “Employee” 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
(the “Agreement”) under which the Parties agreed upon the terms pursuant to
which the Employee would provide services to the Company as further described
therein, and

    


    WHEREAS, Section 409A has been
added to the Internal Revenue Code of 1986, as amended (the “Code”), and this
Agreement must be amended to comply with the final regulations issued under Code
Section 409A.

    


    NOW,
THEREFORE, the parties hereto agree as follows, effective as of December 31,
2008:

     

    
      	
               
      

            	
              1.

            	
              A
      new provision shall be added at the end of Section 1(f) of the Agreement,
      immediately following Section 1(f)(iii), to read in its entirety as
      follows

            


    

     

    “Notwithstanding
the above no event shall be considered a Change in Control unless and until such
purported Change in Control meets the requirements of a ‘change in control
event,’ as set forth in Treasury Regulation §1.409A-3(i)(5).”

     

    
      	
               
      

            	
              2.

            	
              Section
      1(h) of the Agreement shall be amended by adding the following sentence to
      the end thereof:

            


    

     

    “Notwithstanding
the foregoing, no such condition shall be considered a ‘Disability,’ unless such
condition also meets the requirements of being ‘Disabled’ under Section
409A(a)(2)(C) of the Code.”

     

    
      	
               
      

            	
              3.

            	
              Section
      4 of the Agreement shall be amended by adding the following sentence to
      the end thereof:

            


    

     

    “Any
annual bonus payable under this Agreement shall be paid on or prior to March 15
of the year following the year such bonus is earned.”


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      	
               
      

            	
              4.

            	
              Section
      8(e)(iii)(B) of the Agreement is hereby amended and restated in its
      entirety to read as follows:

            


    

     

    “(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 equal to the after-tax cost to the Employee of
equivalent benefits.”

     

    
      	
               
      

            	
              5.

            	
              Section
      8(h) of the Agreement is hereby amended and restated in its entirety to
      read as follows:

            


    

     

    “(h)
Termination Due to Non-Renewal.  In the event that the Employee’s
employment is terminated due to non-renewal by the Company in accordance with
Section 2(b) hereof, the Employee shall be entitled to receive an amount equal
to one-half (1/2) of his Base Salary paid in equal installments in accordance
with the normal payroll practices of the Company over a twelve (12) month
period.”

     

    
      	
               
      

            	
              6.

            	
              A
      new Section 27 of the Agreement is hereby added, which shall read in its
      entirety as follows:

            


    

     

    “Compliance
with Code Section 409A.  It is intended that any expense reimbursement
made under this Agreement shall be exempt from Code Section
409A.  Notwithstanding the foregoing, if any expense reimbursement
shall be determined to be ‘deferred compensation’ within the meaning of Code
Section 409A, including without limitation any reimbursement under Sections 6
and 8(e)(iii)(B), then the reimbursement shall be made to the Employee as soon
as practicable after submission of the reimbursement request, but no later than
December 31 of the year following the year during which such expense was
incurred.”

     

    7.           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.

     

    8.           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.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


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

     

    
      
        	 
      	
                AEROFLEX
      INCORPORATED

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ John Adamovich, Jr.

              	 
      
	 
      	 
      	
                John
      Adamovich, Jr., Senior Vice President

              
	 
      	 
      	
                and
      Secretary

              
	 
      	 
      	 
      
	 
      	 
      	
                /s/ Charles Badlato

              	 
      
	 
      	 
      	
                Charles
      Badlato

              


      

    


    
      
         


      

      
        3