**Exhibit10.2**

 

AMENDED AND RESTATEDEMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”),is made and entered into as of January 17, 2008, by and betweenCommunications & Power Industries, Inc., a Delaware corporation(hereinafter called the “Corporation”), and Joel A. Littman (hereinaftercalled the “Executive”).

 

WITNESSETH THAT:

 

WHEREAS, the Corporation and the Executive are partyto an Employment Agreement, dated as of April 27, 2006 (the “OriginalEmployment Agreement”), providing for the employment of the Executive asChief Financial Officer of the Corporation; and

 

WHEREAS, the parties desire to amend and restate theOriginal Employment Agreement pursuant to the terms and provisions set forthherein;

 

NOW, THEREFORE, the Corporation and the Executive,each intending to be legally bound, hereby mutually covenant and agree asfollows (certain defined terms are set forth in Section 8(d) hereof):

 

# 1.                                       Employmentand Term.

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## (a)                                  Employment.  The Corporation shall employ the Executive asthe Chief Financial Officer of the Corporation, and the Executive shall soserve, for the term set forth in Section 1(b).

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## (b)                                 Term.  The term of the Executive’s employment underthis Agreement commenced on April 27, 2006 (the “Commencement Date”)and shall end on the third anniversary of the Commencement Date, subject to theextension of such term as hereinafter provided and subject to earliertermination as provided in Section 8.  The term of this Agreement shall be extendedautomatically for one (1) additional year as of the third anniversary ofthe Commencement Date, and each anniversary date thereafter unless, no laterthan six (6) months prior to any such renewal date, either the Corporationor the Executive gives written notice to the other, in accordance with Section 14,that the term of this Agreement shall not be so extended; provided, however, noautomatic extension of the term shall occur with respect to an anniversary dateif Executive has attained the age of sixty-five (65).

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# 2.                                       Duties.  During the period of employment as providedin Section 1(b) hereof, the Executive shall serve as ChiefFinancial Officer of the Corporation and Chief Financial Officer of the Parentand have all powers and duties consistent with such positions, subject to thereasonable direction of the Chief Executive Officer.  The Executive shall devote substantially hisentire time during reasonable business hours (reasonable sick leave andvacations excepted) and reasonable best efforts to fulfill faithfully, responsiblyand to the best of his ability his duties hereunder.

 

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# 3.                                       Salary.

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## (a)                                  BaseSalary.  For services performed bythe Executive for the Corporation pursuant to this Agreement during the periodof employment as provided in Section 1(b) hereof, the Corporationshall pay the Executive a base salary at the rate of Two Hundred ThirtyThousand U.S. dollars ($230,000 U.S.) per year, payable in substantially equalinstallments in accordance with the Corporation’s regular payrollpractices.  The Executive’s base salary(with any increases under Section 3(b), below) shall not be subjectto reduction; provided, however, in connection with an across-the-board salaryreduction that applies to substantially all of the management executives ofParent and its subsidiaries, Executive’s base salary may be reduced by apercentage amount equal to the average amount of the percentage decreaseaffecting such other management executives, but in no event more than 10%.  Any compensation which may be paid to theExecutive under any additional compensation or incentive plan of theCorporation or Parent or which may be otherwise authorized from time to time bythe Board (or an appropriate committee thereof) shall be in addition to thebase salary to which the Executive shall be entitled under this Agreement.

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## (b)                                 SalaryIncreases.  During the period ofemployment as provided in Section 1(b) hereof, the base salaryof the Executive shall be reviewed no less frequently than annually by theBoard to determine whether or not the same should be increased in light of theduties and responsibilities of the Executive and the performance thereof, andif it is determined that an increase is merited, such increase shall bepromptly put into effect and the base salary of the Executive as so increasedshall constitute the base salary of the Executive for purposes of Section 3(a).

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# 4.                                       AnnualBonuses.  For each fiscal year duringthe term of employment, the Executive shall be eligible to receive a bonuspayable in cash and/or in Parent’s common stock.  The amount of the bonus shall be based on theachievement of certain operating and/or financial goals, in accordance with theterms of a bonus plan adopted and administered by the Board for seniorexecutives of the Parent and its subsidiaries, which plan may be amended fromtime to time by the Board in its discretion. Executive’s target annual bonus for fiscal year 2006 will be equal to0.60 times his current annual salary.

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# 5.                                       EquityIncentive Compensation.  During theterm of employment hereunder the Executive shall be eligible to participate, inan appropriate manner relative to other senior executives of the Parent and itssubsidiaries, in any equity-based incentive compensation plan or programapproved by the Board from time to time, including (but not by way oflimitation) any plan providing for the granting of (a) options to purchasestock of the Parent, (b) restricted stock of the Parent or (c) similarequity-based units or interests.

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# 6.                                       OtherBenefits.  In addition to thecompensation described in Sections 3, 4 and 5, above, the Executiveshall also be entitled to the following:

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## (a)                                  Participationin Benefit Plans.  The Executiveshall be entitled to participate in all of the various retirement, welfare,disability, fringe benefit, executive perquisite and expense reimbursementplans, and any other programs and arrangements of the Corporation and Parent tothe extent the Executive is eligible for participation under the 

 

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## terms of such plans, programs and arrangements, with the participationlevels to be determined by Executive’s salary, position and tenure, and suchother factors as apply in such plans and programs.  Except as otherwise specifically provided inthis Agreement, the Executive shall also be entitled to all benefits providedto him under the practices of the Corporation as in effect immediately prior tothe Commencement Date.

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## (b)                                 Vacationand Holidays.  The Executive shall beentitled to the number of weeks of vacation during each year of this Agreementper the formula determined by the existing policies of the Corporation, or suchgreater period as the Board may approve, and to the paid holidays given by theCorporation to its employees generally, without reduction in salary or otherbenefits.

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# 7.                                       Covenantsof the Executive.  In order to inducethe Corporation to enter into this Agreement, the Executive hereby agrees asfollows:

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## (a)                                  Confidentiality.  Except for and on behalf of the Corporationwith the consent of or as directed by the Board, the Executive shall keepconfidential and shall not divulge to any other person or entity, during theterm of employment or thereafter, any of the business secrets or otherconfidential information regarding the Parent and its subsidiaries which hasnot otherwise become public knowledge; provided, however, that nothing in thisAgreement shall preclude the Executive from disclosing information (i) toan appropriate extent to parties retained to perform services for the Parent orits subsidiaries or (ii) under any other circumstances to the extent suchdisclosure is, in the reasonable judgment of the Executive, appropriate ornecessary to further the best interests of the Corporation or its subsidiariesor (iii) as may be required by law, legal process or subpoena.

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## (b)                                 Records.  All papers, books and records of every kindand description relating to the business and affairs of the Parent and itssubsidiaries, whether or not prepared by the Executive, other than personalnotes prepared by or at the direction of the Executive, shall be the sole andexclusive property of the Corporation, and the Executive shall surrender themto the Corporation at any time upon request by the Board.

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## (c)                                  Non-Competition.  The Executive hereby agrees with the Corporationthat during the term of his employment hereunder, and in certain instances, asprovided below, for a period following termination of his employment hereunder,he shall not, directly or indirectly, engage in, or be employed by, or act as aconsultant to, or be a director, officer, owner or partner of, or acquire asubstantial interest in, any business activity or entity which competessignificantly with the Parent or any of its subsidiaries, provided, however,that as to the period after termination of the Executive’s employmenthereunder, the restrictive covenants set forth in this Section 7(c) shallapply only in the case of terminations without****Causeor resignations for Good Reason and then only for a period beginning on theDate of Termination and ending, as applicable, eighteen (18) months ortwenty-four (24) months later (which period will be based the applicablemultiplier pursuant to subsection (ii) of Section 9(b) ofthis Agreement);

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## (d)                                 Non-Solicitation.  During the time period after termination (ifany) during which the Executive is subject to the noncompetition covenants of Section 7(c) ofthis Agreement, he shall not induce or attempt to induce any customer,supplier, licensee or 

 

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## other individual, corporation or other business organization having abusiness relation with the Parent or its subsidiaries to cease doing businesswith the Parent or its subsidiaries or in any way interfere with therelationship between any such customer, supplier, licensee or other person andthe Parent or its subsidiaries.  Inaddition, during the eighteen (18) month period following termination ofemployment for any reason (or, if longer, the period during which the Executiveis subject to the non-competition covenants of Section 7(c) ofthis Agreement), the Executive shall not solicit any employee of the Parent orany of its subsidiaries to leave the employment thereof or in any way interferewith the relationship of such employee with the Parent or its subsidiaries.

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## (e)                                  Enforcement.  The Executive recognizes that the provisionsof this Section 7 are vitally important to the continuing welfareof the Corporation and its subsidiaries and that money damages would constitutean inadequate remedy for any violation thereof. Accordingly, in the event of any such violation by the Executive, theCorporation and its subsidiaries, in addition to any other remedies they mayhave, shall have the right to institute and maintain a proceeding to compelspecific performance thereof or to seek an injunction restraining any action bythe Executive in violation of this Section 7.

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# 8.                                       Termination.  Unless earlier terminated in accordance withthe following provisions of this Section 8, the Corporation shallcontinue to employ the Executive and the Executive shall remain employed by theCorporation during the entire term of this Agreement as set forth in Section 1(b).  Section 9 hereof sets forthcertain obligations of the Corporation in the event that the Executive’semployment is terminated.

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## (a)                                  Deathor Disability.  Except to the extentotherwise provided in Section 9 with respect to certain post-Dateof Termination payment obligations of the Corporation, this Agreement shallterminate immediately as of the Date of Termination in the event of theExecutive’s death or in the event that the Executive becomes disabled.  The Executive will be deemed to be disabledwhen he is unable to engage in any substantial gainful activity by reason ofany medically determinable physical or mental impairment that can be expectedto result in death or can be expected to last for a continuous period of notless than twelve (12) months, or begins receiving income replacement benefitsfor a period of not less than three (3) months under an accident and healthplan of the Corporation or an affiliate by reason of any medically determinablephysical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than twelve (12) months.  If any question arises as to whether theExecutive is disabled, upon reasonable request therefor by the Board, theExecutive shall submit to reasonable medical examination for the purpose ofdetermining the existence, nature and extent of any such disability.  In accordance with Section 14,the Board shall promptly give the Executive written notice of any suchdetermination of the Executive’s disability. In the event of disability, until the Date of Termination, the basesalary payable to the Executive under Section 3 hereof shall bereduced dollar-for-dollar by the amount of disability benefits, if any, paid tothe Executive in accordance with any disability policy or program of theCorporation or its affiliates.

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## (b)                                 Dischargefor Cause.  In accordance with theprocedures hereinafter set forth, the Board may discharge the Executive fromhis employment hereunder for Cause. Except to the extent otherwise provided in Section 9with respect to certain post-Date of 

 

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## Termination obligations of the Corporation, this Agreement shallterminate immediately as of the Date of Termination in the event the Executiveis discharged for Cause.  Any dischargeof the Executive for Cause shall be communicated by a Notice of Termination tothe Executive given in accordance with Section 14 of thisAgreement.  For purposes of thisAgreement, a “Notice of Termination” means a written notice which (i) indicatesthe specific termination provision in this Agreement relied upon, (ii) setsforth in reasonable detail the facts and circumstances claimed to provide abasis for termination of the Executive’s employment under the provision soindicated and (iii) if the Date of Termination is to be other than thedate of receipt of such notice, specifies the Date of Termination (which dateshall in all events be within thirty (30) days after the giving of suchnotice).  In the case of a discharge ofthe Executive for Cause, the Notice of Termination shall include a copy of aresolution duly adopted by the Board at a meeting called and held for suchpurpose (after reasonable notice to the Executive and reasonable opportunityfor the Executive to be heard before the Board prior to such vote), findingthat, in the reasonable and good faith opinion of the Board, the Executive wasguilty of conduct constituting Cause.  Nopurported termination of the Executive’s employment for Cause shall beeffective without a Notice of Termination.

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## (c)                                  Terminationfor Other Reasons.  The Corporationmay discharge the Executive without Cause by giving written notice to theExecutive in accordance with Section 14 at least thirty (30) daysprior to the Date of Termination.  TheExecutive may resign from his employment by giving written notice to theCorporation in accordance with Section 14 at least thirty (30) daysprior to the Date of Termination.  Exceptto the extent otherwise provided in Section 9 with respect tocertain post-Date of Termination obligations of the Corporation, this Agreementshall terminate immediately as of the Date of Termination in the event theExecutive is discharged without Cause or resigns.

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## (d)                                 Definitions.  For purposes of this Agreement, the followingcapitalized terms shall have the meanings set forth below:

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### (i)                                     “AccruedObligations” shall mean, as of the Date of Termination, the sum of (A) theExecutive’s base salary hereunder through the Date of Termination to the extentnot theretofore paid, (B) the amount of any incentive compensation,deferred compensation and other cash compensation accrued by the Executive asof the Date of Termination to the extent not theretofore paid, (C) anyvacation pay, expense reimbursements and other cash entitlements accrued by theExecutive as of the Date of Termination to the extent not theretofore paid, and(D) with respect to any bonus plans for the fiscal year of termination, ifExecutive has been employed for at least six (6) months during such fiscalyear and has not been terminated for Cause or resigned without Good Reason, apartial bonus for the fiscal year of termination equal to the bonus payable forthe full fiscal year in accordance with the applicable plan, program or policy,multiplied by a fraction equal to the fraction of the fiscal year precedingExecutive’s termination.

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### (ii)                                  “BaseSalary” shall mean the annual base salary paid to Executive immediatelyprior to the termination of employment, provided that such amount shall in noevent be less than the annual base salary payable to Executive during the one (1) yearperiod immediately prior to the termination.

 

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### (iii)                               “Board” means theboard of directors of Parent.

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### (iv)                              “Cause”shall mean (i) acts or omissions by the Executive which constituteintentional material misconduct or a knowing violation of a material policy ofthe Parent or any of its subsidiaries, (ii) the Executive personallyreceiving a benefit in money, property or services from the Parent or any ofits subsidiaries or from another person dealing with the Parent or any of itssubsidiaries, in material violation of applicable law or policy of Parent orany of its subsidiaries, (iii) an act of fraud, conversion,misappropriation, or embezzlement by the Executive or his conviction of, orentering a guilty plea or plea of no contest with respect to, a felony, or theequivalent thereof (other than DUI), or (iv) any deliberate and materialmisuse or deliberate and material improper disclosure of confidential orproprietary information of Parent or any of its subsidiaries.  Notwithstanding the foregoing, no act oromission by the Executive shall constitute Cause hereunder unless theCorporation has given detailed written notice thereof to the Executive, and theExecutive has failed to remedy such act or omission within a reasonable timeafter receiving such notice.

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### (v)                                 A“Change of Control” shall be deemed to have occurred if:

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#### (A)                              Anyindividualorgroupconstitutinga“person”,assuchtermisusedinSectionsl3(d)andl4(d)(2)oftheSecuritiesExchangeActof1934,asamended(“ExchangeAct”)(otherthan(A)theParentoranyofitssubsidiaries,(B)anytrusteeorotherfiduciaryholdingsecuritiesunderanExecutivebenefitplanoftheParentorofanyofitssubsidiariesor(C)anyCypressFund(s)),isorbecomesthebeneficialowner,directlyorindirectly,ofsecuritiesoftheParentrepresentingfiftypercent(50%)ormoreofthecombinedvotingpoweroftheParent’soutstandingsecuritiesthenentitledordinarily(andapartfromrightsaccruingunderspecialcircumstances)tovotefortheelectionofdirectors;or

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#### (B)                                ContinuingDirectorsceasetoconstituteatleastamajorityoftheBoard;or

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#### (C)                                thereoccursareorganization,merger,consolidationorothercorporatetransactioninvolvingtheParent(a“Transaction”),ineachcasewithrespecttowhichthestockholdersoftheParentimmediatelypriortosuchTransactiondonot,immediatelyaftertheTransaction,ownmorethan50%ofthecombinedvotingpoweroftheParentorothercorporationresultingfromsuchTransaction;or

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#### (D)                               allorsubstantiallyalloftheassetsoftheCorporationorParentaresold,liquidatedordistributed.

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### (vi)                              “ContinuingDirectors”shallmean(A)thedirectorsoftheParentinofficeonthedatehereofand(B)anysuccessortoanysuchdirectorwho(x)wasnominatedorselectedbyamajorityoftheContinuingDirectorsinofficeatthetimeofthedirector’snominationorselection,and(y)whoisnotan“affiliate”or“associate”(asdefinedinrule12b-2undertheExchangeAct)ofanyTenPercentOwner.

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### (vii)                           “CypressFund”shallmeananyinvestmentfundwhichisan“affiliate”ofCypressAssociatesIILLC.

 

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### (viii)                        “DateofTermination”  shallmean(A)intheeventofadischargeoftheExecutivebytheBoardforCause,thedatetheExecutivereceivesaNoticeofTermination,oranylaterdatespecifiedinsuchNoticeofTermination,asthecasemaybe,(B)intheeventofadischargeoftheExecutivewithoutCauseoraresignationbytheExecutive,thedatespecifiedinthewrittennoticetotheExecutive(inthecaseofdischarge)ortheCorporation(inthecaseofresignation),whichdateshallbenolessthanthirty(30)daysfromthedateofsuchwrittennotice,(C)intheeventoftheExecutive’sdeath,thedateoftheExecutive’sdeath,and(D)intheeventoftheExecutive’sdisabilitypursuanttoSection8(a),thedatetheExecutivereceiveswrittennoticeofdeterminationofdisability(or,ifearlier,twelve(12)monthsfromthedatetheExecutive’sdisabilitybegan).

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### (ix)                                “GoodReason”  shallmeananyofthefollowing(A)theassignmenttotheExecutiveofanydutiesinconsistentinanyrespectwiththeExecutive’spositionswiththeCorporationandParentassetforthinthisAgreement(includingstatus,offices,titlesandreportingrequirements),authority,dutiesorresponsibilitiesascontemplatedbySection2,oranyactionbytheCorporationorParentwhichresultsindiminutioninsuchpositions,authority,dutiesorresponsibilities,excludingforthispurposeanyactionnottakeninbadfaithandwhichisremediedbytheCorporationorParentpromptlyafterreceiptofwrittennoticethereofgivenbytheExecutiveinaccordancewithSection14;or(B)anymaterialfailurebytheCorporationtocomplywithanyoftheprovisionsofthisAgreement,otherthananyfailurenotoccurringinbadfaithandwhichisremediedbytheCorporationpromptlyafterreceiptofwrittennoticethereofgivenbytheExecutiveinaccordancewithSection14;or(C)therelocationoftheofficeswhereExecutiveisrequiredtoreporttoalocationthatis50milesormoredistantfromtheCorporation’sexistinglocationinPaloAlto,California;or(D)thefailuretoappointExecutiveasChiefFinancialOfficerofthecombinedoracquiringentityinconnectionwithaChangeofControl,reportingtoitsChiefExecutiveOfficer;or(E)theCorporationgivingnoticetotheExecutiveinaccordancewithSection1(b)thatthetermofthisAgreementshallnotbeextendedupontheexpirationofthethen-currentterm.

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### (x)                                   “Parent”shallmeanCPIInternational,Inc.

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### (xi)                                “PotentialChangeofControl”shallmeantheearliesttooccurof(a)theexecutionofanagreementorletterofintent,theconsummationofthetransactionsdescribedinwhichwouldresultinaChangeofControl,(b)theapprovalbytheBoardofatransactionorseriesoftransactions,theconsummationofwhichwouldresultinaChangeofControl,or(c)thepublicannouncementofatenderofferfortheParent’svotingstock,thecompletionofwhichwouldresultinaChangeofControl;provided,thatnosucheventshallbea“PotentialChangeofControl”unless(i)inthecaseofanyagreementorletterofintentdescribedinclause(a),thetransactiondescribedthereinissubsequentlyconsummatedbytheParentandtheotherpartyorpartiestosuchagreementorletterofintentandthereuponconstitutesa“ChangeofControl”,(ii)inthecaseofanyBoard-approvedtransactiondescribedinclause(b),thetransactionsoapprovedissubsequentlyconsummatedandthereuponconstitutesa“ChangeofControl”or(iii)inthecaseofanytenderofferdescribedinclause(c),suchtenderofferissubsequentlycompletedandsuchcompletionthereuponconstitutesa“ChangeofControl.”

 

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### (xii)                             “TenPercentOwner”shallmeananypersonwhoisthebeneficialowner,directlyorindirectly,ofsecuritiesrepresentingtenpercent(10%)ormoreofthecombinedvotingpowerofParent’soutstandingsecuritiesthenentitledordinarilytovotefortheelectionofdirectors;provided,however,sharesheldasofthedatehereofbyanyCypressFundshallnotbecountedforpurposesofdeterminingwhetheranysuchfundisa“TenPercentOwner.”

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# 9.                                       ObligationsoftheCorporationUponTermination.  ThefollowingprovisionsdescribetheobligationsoftheCorporationtotheExecutiveunderthisAgreementuponterminationofhisemployment.  However,exceptasexplicitlyprovidedinthisAgreement,nothinginthisAgreementshalllimitorotherwiseadverselyaffectanyrightswhichtheExecutivemayhaveunderapplicablelaw,underanyotheragreementwiththeParentoranyofitssubsidiaries,orunderanycompensationorbenefitplan,program,policyorpracticeoftheParentoranyofitssubsidiaries.

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## (a)                                  Death,Disability,DischargeforCause,orResignationWithoutGoodReason.  IntheeventthisAgreementterminatespursuanttoSection8(a)byreasonofthedeathordisabilityoftheExecutive,orpursuanttoSection8(b)byreasonofthedischargeoftheExecutivebytheCorporationforCause,orpursuanttoSection8(c)byreasonoftheresignationoftheExecutiveotherthanforGoodReason,theCorporationshallpaytotheExecutive,orhisheirsorestate,intheeventoftheExecutive’sdeath,allAccruedObligationsinalumpsumincashwithinfifteen(15)daysaftertheDateofTermination;provided,however,thatanyportionoftheAccruedObligationswhichconsistsofbonus,deferredcompensation,orincentivecompensation,shallbedeterminedandpaidinaccordancewiththetermsoftherelevantplanasapplicabletotheExecutive,subjecttothepartialbonusprovisionsofclause(D)ofthedefinitionof“AccruedObligations.”

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## (b)                                 DischargeWithoutCauseorResignationwithGoodReason.  IntheeventthatthisAgreementterminatespursuanttoSection8(c)byreasonofthedischargeoftheExecutivebytheCorporationotherthanforCauseordisabilityorbyreasonoftheresignationoftheExecutiveforGoodReason,andsubjecttosatisfactionoftherequirementsofSection9(d):

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### (i)                                     TheCorporationshallpayallAccruedObligationstotheExecutiveinalumpsumincashwithinfifteen(15)daysaftertheDateofTermination;provided,however,thatanyportionoftheAccruedObligationswhichconsistsofbonus,deferredcompensation,orincentivecompensationshallbedeterminedandpaidinaccordancewiththetermsoftherelevantplanasapplicabletotheExecutive,subjecttothepartialbonusprovisionsofclause(D)ofthedefinitionof“AccruedObligations.”

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### (ii)                                  TheCorporationshallpaytotheExecutive,inaccordancewiththeschedulesetforthinthenextsentence,anamountequalto1.5timesthesumof(A)theExecutive’sBaseSalaryand(B)theaveragevalueofthemanagementincentiveplanandotherperformancebonuses(excludingthediscretionarybonusannouncedbytheBoardinDecember,2005)earnedbytheExecutivewithrespecttotheprecedingthree(3)fullfiscalyears;provided,however,notwithstandingtheforegoing,ifthedischargeorresignationoccurswithintwo(2)yearsfollowingthedateofaChangeofControloraPotentialChangeofControl,thentheapplicablemultipleshallbe2.0,andtheamountin

 

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### clause(B)shallbebaseduponthehighestmanagementincentiveplanandotherperformancebonusearnedbyExecutive(excludingthediscretionarybonusannouncedbytheBoardinDecember,2005)withrespecttoanyfiscalyearduringtheprecedingthreefullfiscalyears(ratherthantheaverageamount).  ThetotalamountsetforthintheprecedingsentenceshallbepaidtotheExecutiveinthreeequalinstallments,withthefirstinstallmentoccurringthirty(30)daysaftertheDateofTermination,thesecondinstallmentoccurringsix(6)monthsaftertheDateofTermination,andthethirdinstallmentoccurringone(1)yearaftertheDateofTermination.

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### (iii)                               Foraperiodofeighteen(18)monthsaftertheDateofTermination,theCorporationshallcontinuetoprovidebenefitstotheExecutiveand/ortheExecutive’sfamilyatleastequaltothosewhichwouldhavebeenprovidedtotheminaccordancewiththeplans,programsandarrangementsreferredtoinSection6(a)ofthisAgreement;provided,however,notwithstandingtheforegoing,ifthedischargeorresignationoccurswithintwo(2)yearsfollowingthedateofaChangeofControloraPotentialChangeofControl,thentheapplicabletimeperiodshallbetwenty-four(24)months;provided,however,anybenefits(suchasongoingcontributionsandparticipationina401(k)plan)whichmaynotbeprovidedpursuanttoapplicablelaworregulationsshallnotbeprovidedduringtheforegoingperiod;provided,further,ExecutiveagreestoelectCOBRAcoveragetotheextentavailableundertheCorporation’shealthinsuranceplans(andtheCorporationshallreimbursethecostofanypremiumsforsuchcoverageonanafter-taxbasis).  AnypaymentorreimbursementunderthisSection9(b)(iii)thatistaxabletotheExecutiveshallbemadebyDecember31ofthecalendaryearfollowingthecalendaryearinwhichExecutiveorfamilymemberincurredtheexpense.

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### (iv)                              Alllong-termincentivecompensationawardstotheExecutive,including(butnotbywayoflimitation)allequity-basedincentivecompensationawards(suchas(A)optionstopurchasestockofParent,(B)restrictedstockofParent,or(C)similarequity-basedunitsorinterests)shall,ifnototherwisevested,vestinfulluponsuchterminationofthisAgreement.

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## (c)                                  RequiredDelayForCertainDeferredCompensationandSection409A.  IntheeventthatanycompensationwithrespecttotheExecutive’sterminationis“deferredcompensation”withinthemeaningofSection409AoftheInternalRevenueCodeof1986,asamended(the“Code”)andtheregulationsthereunder(“Section409A”),thestockoftheCorporation,Parent,oranyaffiliateispubliclytradedonanestablishedsecuritiesmarketorotherwise,andtheExecutiveisdeterminedtobea“specifiedemployee,”asdefinedinSection409A(a)(2)(B)(i),paymentofsuchcompensationshallbedelayedasrequiredbySection409A.  Suchdelayshalllastsix(6)monthsfromtheDateofTermination,exceptintheevenoftheExecutive’sdeath.  Withinthirty(30)daysfollowingtheendofsuchsix(6)monthperiod,or,ifearlier,theExecutive’sdeath,theCorporationwillmakeacatch-uppaymenttotheExecutiveequaltothetotalamountofsuchpaymentsthatwouldhavebeenmadeduringthesix(6)monthperiodbutforthisSection9(c).  WhereverpaymentsunderthisSection9aretobemadeininstallments,eachsuchinstallmentshallbedeemedtobeaseparatepaymentforpurposesofSection409A.

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## (d)                                 ReleaseasConditiontoPayment.  AsaconditiontoreceivingthebenefitsandpaymentsunderSection9(b),theExecutiveshallberequiredtoexecuteareleaseofanyclaimsandpotentialclaimsagainsttheCorporationanditsaffiliatesanddirectorsthattheExecutivemighthaverelatedtohisemployment.  Inaddition,inconnectionwithanysuchrelease,theExecutiveandtheCorporationshallenterintoreasonablemutualnon-disparagementcovenants.  ThetimingofthepaymentsunderSection9(b)uponexecutionofthereleaseshallbegovernedbythefollowingprovisions:

 

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### (i)                                     TheCorporationmustdeliverthereleasetotheExecutiveforexecutionnolaterthanfourteen(14)daysaftertheDateofTermination.  IftheCorporationfailstodeliverthereleasetotheExecutivewithinsuchfourteen(14)dayperiod,thentheExecutivewillbedeemedtohavesatisfiedthereleaserequirementandwillreceivepaymentsconditionedonexecutionofthereleaseasthoughtheExecutivehadexecutedthereleaseandallrevocationrightshadlapsedattheendofsuchfourteen(14)dayperiod.

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### (ii)                                  TheExecutivemustexecutethereleasewithinfortyfive(45)daysfromitsdeliverytohim.

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### (iii)                               IftheExecutivehasrevocationrights,theExecutiveshallexercisesuchrights,ifatall,notlaterthanseven(7)daysafterexecutingtherelease.

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### (iv)                              Inanycaseinwhichtherelease(andtheexpirationofanyrevocationrights)couldonlybecomeeffectiveinone(1)particulartaxyearoftheExecutive,withrespecttoanycashpaymentsthatareconditionedonexecutionoftherelease,thefirstofanysuchcashpaymentsshallbeginwithinthirty(30)daysafterthereleasebecomeseffectiveandrevocationrightshavelapsed.

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### (v)                                 Inanycaseinwhichtherelease(andtheexpirationofanyrevocationrights)couldbecomeeffectiveinone(1)oftwo(2)taxableyearsoftheExecutivedependingonwhentheExecutiveexecutestherelease,withrespecttoanycashpaymentsconditionedonexecutionoftherelease,thefirstofanysuchcashpaymentsshallnotbeginbeforethefirstbusinessdayofthelaterofsuchtaxyears.

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# 10.                                 CertainAdditionalPaymentsbytheCorporation.  TheCorporationagreesthat:

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## (a)                                  AnythinginthisAgreementtothecontrarynotwithstanding,intheeventitshallbedeterminedthatanypaymentordistributionbytheCorporationorParenttoorforthebenefitoftheExecutive(whetherpaidorpayableordistributedordistributablepursuanttothetermsofthisAgreementorotherwise,butdeterminedwithoutregardtoanyadditionalpaymentsrequiredunderthisSection10)(a“Payment”)wouldbesubjecttotheexcisetaximposedbySection4999oftheCodeorifanyinterestorpenaltiesareincurredbytheExecutivewithrespecttosuchexcisetax(suchexcisetax,togetherwithanysuchinterestandpenalties,beinghereinaftercollectivelyreferredtoasthe“ExciseTax”),thentheExecutiveshallbeentitledtoreceiveanadditionalpayment(a“Gross-UpPayment”)inanamountsuchthat,afterpaymentbytheExecutiveofalltaxes(includinginterestorpenaltiesimposedwithrespecttosuchtaxes,butnotincludinginterestandpenaltiesimposedbyreasonoftheExecutive’sfailuretofiletimelytaxreturnsortopaytaxesshowndueonsuchreturnsandanyinterest,additions,increasesorpenaltiesunrelatedtotheExciseTaxortheGross-UpPayment),including,withoutlimitation,theExciseTaximposedupon

 

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## theGross-UpPayment,theExecutiveretainsanamountoftheGross-UpPaymentequaltotheExciseTaximposeduponthePayment;provided,however,ifa10%orsmallerreductionintheamountspayabletoExecutivepursuanttoSection9(b)(ii)abovewouldresultinnoamountsowingbyExecutiveinrespectofsuchExciseTax,thenthepaymentsinSection9(b)(ii)aboveshallbereduced(butinnoeventbymorethan10%),byanamountsufficienttoeliminatetheExciseTax.

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## (b)                                 SubjecttotheprovisionsofSection10(c),below,alldeterminationsrequiredtobemadeunderthisSection10,includingwhetherandwhenaGross-UpPaymentisrequiredandtheamountofsuchGross-UpPaymentandtheassumptionstobeutilizedinarrivingatsuchdetermination,shallbemadebyErnst&Young(the“AccountingFirm”),whichshallprovidedetailedsupportingcalculationsbothtotheCorporationandtheExecutivewithinfifteen(15)businessdaysofthereceiptofnoticefromtheExecutivethattherehasbeenaPayment,orsuchearliertimeasisrequestedbytheCorporation.  IntheeventthattheAccountingFirmisservingasaccountantorauditorfortheindividual,entityorgroupeffectingtheChangeofControlinquestion,theExecutiveshallappointanothernationallyrecognizedaccountingfirmtomakethedeterminationsrequiredhereunder(whichaccountingfirmshallthenbereferredtoastheAccountingFirmhereunder).  AllfeesandexpensesoftheAccountingFirmshallbebornesolelybytheCorporation.  AnyGross-UpPayment,asdeterminedpursuanttothisSection10,shallbepaidbytheCorporationtotheExecutivewithinfive(5)daysofthereceiptoftheAccountingFirm’sdetermination.  IftheAccountingFirmdeterminesthatnoExciseTaxispayablebytheExecutive,itshallfurnishtheExecutivewithawrittenopinionthatfailuretoreporttheExciseTaxontheExecutive’sapplicablefederalincometaxreturnwouldnotresultintheimpositionofanegligenceorsimilarpenalty.  AnygoodfaithdeterminationbytheAccountingFirmshallbebindingupontheCorporationandtheExecutive.  AsaresultoftheuncertaintyintheapplicationofSection4999oftheCodeatthetimeoftheinitialdeterminationbytheAccountingFirmhereunder,itispossiblethatGross-UpPaymentswhichwillnothavebeenmadebytheCorporationshouldhavebeenmade(“Underpayment”),consistentwiththecalculationsrequiredtobemadehereunder.  IntheeventthattheCorporationexhaustsitsremediespursuanttoSection10(c),below,andtheExecutivethereafterisrequiredtomakeapaymentofanyExciseTax,theAccountingFirmshalldeterminetheamountoftheUnderpaymentthathasoccurredandanysuchUnderpaymentshallbepromptlypaidbytheCorporationtoorforthebenefitoftheExecutive.

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## (c)                                  TheExecutiveshallnotifytheCorporationinwritingofanyclaimbytheInternalRevenueServicethat,ifsuccessful,wouldrequirethepaymentbytheCorporationofaGross-UpPayment.  Suchnotificationshallbegivenassoonaspracticablebutnolaterthanfifteen(15)businessdaysaftertheExecutiveisinformedinwritingofsuchclaimandshallapprisetheCorporationofthenatureofsuchclaimandthedateonwhichsuchclaimisrequestedtobepaid.  TheExecutiveshallnotpaysuchclaimpriortotheexpirationofthethirty(30)-dayperiodfollowingthedateonwhichExecutivegivessuchnoticetotheCorporation(orsuchshorterperiodendingonthedatethatanypaymentoftaxeswithrespecttosuchclaimisdue).  IftheCorporationnotifiestheExecutiveinwritingpriortotheexpirationofsuchperiodthatitdesirestocontestsuchclaim,theExecutiveshall:

 

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### (i)            Give theCorporation any information reasonably requested by the Corporation relating tosuch claim,

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### (ii)           Take suchaction in connection with contesting such claim as the Corporation shallreasonably request in writing from time to time, including, without limitation,accepting legal representation with respect to such claim by an attorneyreasonably selected by the Corporation,

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### (iii)          Cooperatewith the Corporation in good faith in order effectively to contest such claim,and

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### (iv)          Permit theCorporation to participate in any proceedings relating to such claim;

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provided,however, that the Corporation shall bear and pay directly all costs andexpenses (including additional interest and penalties) incurred in connectionwith such contest and shall indemnify and hold the Executive harmless, on anafter-tax basis, for any Excise Tax or income tax (including interest andpenalties with respect thereto) imposed as a result of such representation andpayment of costs and expenses.  Withoutlimiting the foregoing provisions of this Section 10(c), theCorporation shall control all proceedings taken in connection with such contestand, at its sole option, may pursue or forego any and all administrativeappeals, proceedings, hearings and conferences with the taxing authority inrespect of such claim and may, at its sole option, either direct the Executiveto pay the tax claimed and sue for a refund or contest the claim in anypermissible manner; and the Executive agrees to prosecute such contest to adetermination before any administrative tribunal, in a court of initialjurisdiction and in one or more appellate courts, as the Corporation shalldetermine; provided, however, that if the Corporation directs the Executive topay such claim and sue for a refund, the Corporation shall (to the extentpermitted by law) advance the amount of such payment to the Executive on aninterest-free basis and shall indemnify and hold the Executive harmless, on anafter-tax basis, from any Excise Tax or income tax (including interest orpenalties with respect thereto) imposed with respect to such advance or withrespect to any imputed income with respect to such advance; and furtherprovided that any extension of the statute of limitations relating to paymentof taxes for the taxable year of the Executive with respect to which suchcontested amount is claimed to be due is limited solely to such contestedamount.  Furthermore, the Corporation’scontrol of the contest shall be limited to issues with respect to which aGross-Up Payment would be payable hereunder and the Executive shall be entitledto settle or contest, as the case may be, any other issue raised by theInternal Revenue Service or any other taxing authority.

 

## (d)           If, afterthe receipt by the Executive of an amount advanced by the Corporation pursuantto Section 10(c), above, the Executive becomes entitled to receiveany refund with respect to such claim, the Executive shall (subject to theCorporation’s complying with the requirements of said Section 10(c))promptly pay to the Corporation the amount of such refund (together with anyinterest paid or credited thereon, after taxes applicable thereto).  If, after the receipt by the Executive of anamount advanced by the Corporation pursuant to said Section 10(c),a determination is made that the Executive shall not be entitled to any refundwith respect to such claim and the Corporation does not notify 

 

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## the Executive in writingof its intent to contest such denial of refund prior to the expiration ofthirty (30) days after such determination, then such advance shall be forgivenand shall not be required to be repaid; and the amount of such advance shalloffset, to the extent thereof, the amount of the Gross-Up Payment required tobe paid.

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## (e)           AnyGross-Up Payment shall be paid to or for the benefit of the Executive by December 31of the calendar year following the calendar year in which the Excise Tax isremitted, or, if no Excise Tax is remitted, by December 31 of the calendaryear following the calendar year in which there is a final and nonappealablesettlement or other resolution of an audit or litigation relating to the ExciseTax.

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# 11.           No Set-Off orMitigation.  The Corporation’sobligation to make the payments provided for in this Agreement and otherwise toperform its obligations hereunder shall not be affected by any set-off,counterclaim, recoupment, defense or other claim, right or action which theCorporation may have against the Executive or others.  In no event shall the Executive be obligatedto seek other employment or take any other action by way of mitigation of theamounts payable to the Executive under any of the provisions of this Agreementand such amounts shall not be reduced whether or not the Executive obtainsother employment; provided, however, if Executive is employed during anyportion of the period covered by Section 9(b)(iii) above andreceives benefits in connection with such employment, the Corporation shall notbe required to provide any benefits pursuant to Section 9(b)(iii) tothe extent duplicative benefits are provided by such new employer.

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# 12.           Payment of CertainExpenses.  The prevailing party inany dispute under this Agreement shall be entitled, to the extent permitted bylaw, to reimbursement from the other party for all of the prevailing party’scosts (including but not limited to the arbitrator’s compensation), expenses,and attorneys’ fees.

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# 13.           Binding Effect.  This Agreement shall be binding upon andinure to the benefit of the heirs and representatives of the Executive and thesuccessors and assigns of the Corporation. The Corporation shall require any successor (whether direct or indirect,by purchase, merger, reorganization, consolidation, acquisition of property orstock, liquidation, or otherwise) to all or a substantial portion of itsassets, by agreement in form and substance reasonably satisfactory to theExecutive, expressly to assume and agree to perform this Agreement in the samemanner and to the same extent that the Corporation would be required to performthis Agreement if no such succession had taken place.  Regardless of whether such an agreement isexecuted, this Agreement shall be binding upon any successor of the Corporationin accordance with the operation of law, and such successor shall be deemed the“Corporation” for purposes of this Agreement.

 

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14.           Notices.  All notices, requests, demands and othercommunications hereunder shall be in writing and shall be deemed to have beenduly given if delivered by hand, reputable overnight courier or mailed withinthe continental United States by first class certified mail, return receiptrequested, postage prepaid, addressed as follows:

 

## (a)           If to theCorporation, to:

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Communications &Power Industries, Inc.811 Hansen WayPalo Alto, California 94303-1110Attn: Chief Executive Officer

 

## (b)           If to the Executive,to:

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Joel A. Littman c/o Communications & Power Industries, Inc.811 Hansen WayPalo Alto, California 94303-1110

 

Suchaddresses may be changed by written notice sent to the other party at the lastrecorded address of that party.

 

# 15.           Tax Withholding.  The Corporation shall provide for thewithholding of any taxes required to be withheld by federal, state, provincialor local law with respect to any payment in cash, shares of stock and/or otherproperty made by or on behalf of the Corporation to or for the benefit of theExecutive under this Agreement or otherwise. The Corporation may, at its option: (a) withhold such taxes fromany cash payments owing from the Corporation to the Executive, (b) requirethe Executive to pay to the Corporation in cash such amount as may be requiredto satisfy such withholding obligations and/or (c) make other satisfactoryarrangements with the Executive to satisfy such withholding obligations.

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# 16.           Arbitration.

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## (a)           General.  Except as to (a) actions described in Section 7(e),any controversy, dispute, or claim between the parties to this Agreement,including any claim arising out of, in connection with, or in relation to theformation, interpretation, performance or breach of this Agreement shall besettled exclusively by arbitration, before a single arbitrator, in accordancewith this Section 16 and the then most applicable rules of theAmerican Arbitration Association. Judgment upon any award rendered by the arbitrator may be entered by anystate or federal court having jurisdiction thereof.  Such arbitration shall be administered by theAmerican Arbitration Association. Arbitration shall be the exclusive remedy for determining any suchdispute, regardless of its nature. Notwithstanding the foregoing, either party may in an appropriate matterapply to a court for provisional relief, including a temporary restrainingorder or a preliminary injunction, on the ground that the award to which theapplicant may be entitled in arbitration may be rendered ineffectual withoutprovisional relief.  Unless mutuallyagreed by the parties otherwise, any arbitration shall take place in the Cityof Palo Alto, California.

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## (b)           Selection ofArbitrator.  In the event the partiesare unable to agree upon an arbitrator, the parties shall select a singlearbitrator from a list of nine arbitrators (which shall be retired judges orcorporate or litigation attorneys experienced in executive employmentagreements) provided by the office of the American Arbitration Associationhaving jurisdiction over Palo Alto, California. If the parties are unable to agree upon an arbitrator from the list sodrawn, then the parties shall each strike names alternately from the list, withthe first to strike being determined by lot. After each party has used four strikes, the remaining name on the listshall be the arbitrator.  If such personis unable to serve for any reason, the parties shall repeat this process untilan arbitrator is selected.

 

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## (c)           Applicabilityof Arbitration; Remedial Authority. This agreement to resolve any disputes by binding arbitration shallextend to claims against any parent, subsidiary or affiliate of each party,and, when acting within such capacity, any officer, director, shareholder,employee or agent of each party, or of any of the above, and shall apply aswell to claims arising out of state and federal statutes and local ordinancesas well as to claims arising under the common law.  In the event of a dispute subject to thisparagraph the parties shall be entitled to reasonable discovery subject to thediscretion of the arbitrator.  Theremedial authority of the arbitrator (which shall include the right to grantinjunctive or other equitable relief) shall be the same as, but no greaterthan, would be the remedial power of a court having jurisdiction over theparties and their dispute.  Thearbitrator shall, upon an appropriate motion, dismiss any claim without anevidentiary hearing if the party bringing the motion establishes that he or itwould be entitled to summary judgment if the matter had been pursued in courtlitigation.  In the event of a conflictbetween the applicable rules of the American Arbitration Association andthese procedures, the provisions of these procedures shall govern.

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## (d)           Feesand Costs.  Any filing oradministrative fees shall be borne initially by the party requesting arbitration.  The Corporation shall be responsible for thecosts and fees of the arbitration, unless the Executive wishes to contribute(up to 50%) of the costs and fees of the arbitration.

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## (e)           AwardFinal and Binding.  The arbitratorshall render an award and written opinion, and the award shall be final andbinding upon the parties.  If any of theprovisions of this paragraph, or of this Agreement, are determined to beunlawful or otherwise unenforceable, in whole or in part, such determinationshall not affect the validity of the remainder of this Agreement, and thisAgreement shall be reformed to the extent necessary to carry out its provisionsto the greatest extent possible and to insure that the resolution of allconflicts between the parties, including those arising out of statutory claims,shall be resolved by neutral, binding arbitration.  If a court should find that the arbitrationprovisions of this Agreement are not absolutely binding, then the partiesintend any arbitration decision and award to be fully admissible in evidence inany subsequent action, given great weight by any finder of fact, and treated asdeterminative to the maximum extent permitted by law.

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# 17.           No Assignment.  Except as otherwise expressly providedherein, this Agreement is not assignable by any party and no payment to be madehereunder shall be subject to anticipation, alienation, sale, transfer,assignment, pledge, encumbrance or other charge.

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# 18.           Execution inCounterparts.  This Agreement may beexecuted by the parties hereto in two (2) or more counterparts, each ofwhich shall be deemed to be an original, but all such counterparts shallconstitute one and the same instrument, and all signatures need not appear onany one counterpart.

 

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# 19.           Governing Law.  This Agreement shall be construed andinterpreted in accordance with and governed by the laws of the State ofCalifornia, other than the conflict of laws provisions of such laws.

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# 20.           Severability.  If any provision of this Agreement shall beadjudged by any court of competent jurisdiction to be invalid or unenforceablefor any reason, such judgment shall not affect, impair or invalidate theremainder of this Agreement. Furthermore, if the scope of any restriction or requirement contained inthis Agreement is too broad to permit enforcement of such restriction orrequirement to its full extent, then such restriction or requirement shall beenforced to the maximum extent permitted by law, and the Executive consents andagrees that any court of competent jurisdiction may so modify such scope in anyproceeding brought to enforce such restriction or requirement.

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# 21.           Prior Understandings.  This Agreement amends and restates theOriginal Employment Agreement in its entirety. This Agreement embodies the entire understanding of the parties heretoand supersedes all other oral or written agreements or understandings betweenthem regarding the subject matter hereof. No change, alteration or modification hereof may be made except in a writing,signed by each of the parties hereto. The headings in this Agreement are for convenience and reference onlyand shall not be construed as part of this Agreement or to limit or otherwiseaffect the meaning hereof.

 

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INWITNESS WHEREOF, the parties hereto have executed and delivered this Agreementas of the day and year first above written.

 
|   | CORPORATION                                            |
|--------|--------------------------------------------------------|
|   | Communications &  Power Industries, Inc. |
|   |                                                   |
|   |                                                   |
|   | By:                                                    | /s/ ROBERT A. FICKETT |
|   |                                                   |   |
|   | Title:                                                 | Robert A. Fickett, COO |
|   |                                                   |
|   |                                                   |
|   | EXECUTIVE                                              |
|   |                                                   |
|   |                                                   |
|   | /s/ JOEL A. LITTMAN                                    |
|   | Joel A. Littman                                        |
|        |                                                        |  |  |  |

 

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