Document:

EXECUTIVE EMPLOYMENT AGREEMENT

 Exhibit 10.26 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 This
Executive Employment Agreement (the “Agreement”) is made and entered into as of the 3rd day of March, 2008, by and between Stephen
Pudles (the “Executive”) and API Nanotronics Corp., a Delaware corporation (the “Company”). 
 WHEREAS, the Company desires to employ Executive and to enter into an agreement, embodying the terms of such employment; and 
 WHEREAS, Executive desires to accept such employment and enter into such an agreement; 
 NOW, THEREFORE, in
consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows: 
 1.
Term of Employment. Subject to the provisions of Section 8 of this Agreement, Executive shall be employed by the Company for a period commencing on /s/ no later than 5-5 (the “Effective Date”) and ending on the date of
termination of this Agreement in accordance with the provisions of Section 8. 
 2. Position. 
 a. During the Employment Term, Executive shall serve as the Chief Executive Officer of the Company. In such position, Executive shall have such duties
and authority as shall be determined from time to time by the Board of Directors of the Company, the Compensation Committee of the Board of Directors or such other delegate of the Board of Directors’ authority hereunder as the Board of
Directors may designate (collectively, the “Board”). Executive shall be nominated to serve as a member of the Board of Directors of the Company at the Company’s next Annual Meeting. Executive shall serve as a member of the
Boards of Directors of the Company and any of its subsidiaries without additional compensation if requested. 
 b. During the Employment
Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services, either directly or indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude Executive, subject to the prior approval of the Board, from
accepting appointment to or continuing to serve on any board of directors or trustees of any business corporation or any charitable organization or any industry association; further provided, in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of Executive’s duties hereunder or conflict with Section 9 or Section 10. Set forth on Exhibit A hereto is a complete list, as of the Effective Date, of the
Executive’s positions on any board of directors or trustees of any business corporation or any charitable organization. 
 c. At all
times during the Employment Term, Executive shall strictly adhere to and obey all of the Company’s written rules, regulations and policies, including 

 
without limitation the API Nanotronics Corp. Code of Ethics as provided to Executive on February 21, 2008, and as amended from time to time to conform
to applicable rules and regulations or as determined by the Board or Directors, which govern the operation of the Company’s business and the conduct of employees of the Company. 
 3. Base Salary. During the Employment Term, the Company shall pay Executive a base salary at the annual rate of $265,000, payable in regular
installments in accordance with the Company’s usual payment practices. Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board.
Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.” 
 4.
Annual Bonus. 
 a. With respect to each full fiscal year of the Company during the Employment Term (“Fiscal Year”),
Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”). The amount of each Annual Bonus shall be based on achievement of the annual EBITDA targets and other performance targets (collectively, the
“Bonus Targets”) determined by the Board commencing with the Bonus Targets for the Company’s Fiscal Year commencing June 1, 2008 and ending May 31, 2009. Within 90 days following the Effective Date and
thereafter on or before the date which is 30 days prior to the end of each of the Company’s subsequent Fiscal Year ends, the Board will propose Bonus Targets for the upcoming Fiscal Year in consultation with the Executive and will make any
adjustments to the Bonus Targets that the Board and the Executive agree are reasonable and appropriate. For each Fiscal Year, if the Company achieves 100% of its Bonus Targets for such Fiscal Year, the Annual Bonus shall be equal to 50% of
Executive’s Base Salary for that Fiscal Year. The Board will determine in its discretion what adjustments, if any, will be made to the Annual Bonus amount to be paid to Executive in the event the Company achieves more than 100% of its Bonus
Targets for a Fiscal Year. 
 b. Each Annual Bonus shall be deemed to vest and accrue at the end of the last day of the Fiscal Year for
which it is earned. Each Annual Bonus shall be paid as soon as practicable following the end of the Fiscal Year for which it is earned, subject to the certification by the Chief Financial Officer of the Company and approval by the Board of
achievement of the applicable performance targets and goals described in this Section 4 above and the amount of such Annual Bonus. The Annual Bonus, if any, shall be paid to Executive in all cases within the later of i) two and one-half
(2.5) months after the end of the Fiscal Year or ii) 30 days after the completion of an external audit to the satisfaction of the Board, but in no event later than two and one-half (2.5) months after the end of the calendar year in which
the Annual Bonus vests. 
 5. Stock Option Award. On or as soon as practicable following the Effective Date, Executive will be
granted under the Company’s 2006 Equity Incentive Plan (the “Plan”) an option agreement (the “Option Agreement”) containing (i) incentive options for shares of common stock, up to the amount permitted by
applicable law, and non-qualified stock options for the remainder resulting in the aggregate right to purchase up to 11,236,650 shares of the 

 
Company’s common stock (the “Time Based Shares”), and (ii) nonqualified options to purchase up to 7,491,100 shares of the
Company’s common stock (the “Performance Shares”), subject to the terms and conditions of the Company’s Plan, and subject to the action of the committee that administers such Plan (collectively, the “Stock
Options”). The per-share exercise price for the Stock Options will be the fair market value of a share of the Company’s common stock on the date of grant as provided in the Plan. The Stock Options with respect to the Time Based Shares
will vest in equal installments annually over a three-year period tied to the Effective Date of this Agreement and the Stock Options with respect to the Performance Shares will vest in equal installments annually over a three-year period tied to the
Fiscal Year end of the Company upon the Company achieving various performance goals. Such performance targets shall be based upon EBITDA targets and other performance targets (collectively, the “Performance Targets”) determined by the
Board in consultation with Executive. The Performance Targets for the Stock Options with respect to the (i) first one-third ( 1/3) of the Performance Shares shall be determined within 90 days of the date of this Agreement, (ii) the second one-third ( 1/3) of the Performance Shares shall be determined no later than 30 days prior to the Company’s May 2009 Fiscal Year end and (iii) the third and final one-third ( 1/3) of the Performance Shares shall be determined no later than 30 days prior to the Company’s May 2010 Fiscal Year end .
Additionally, the Option Agreement shall have the other terms as set forth in Exhibit B and other reasonable and customary stock option agreement terms not inconsistent with those set forth in Exhibit B.

 6. Employee Benefits. 
 a. During the Employment Term, Executive shall be entitled to participate in the employee benefit plans of the Company or API Electronics Inc. (other than annual bonus plans, severance plans, and incentive plans) as
in effect from time to time (collectively, “Employee Benefits”), on the same basis as those benefits are generally made available to other similarly situated executives. 
 b. Executive shall receive three (3) weeks paid vacation, of which not more than ten (10) days shall be taken consecutively, during each year
of employment to accumulate from year to year to the extent not used and to be paid in cash to the extent not taken during the Employment Term, and such holiday and sick time as the as provided under the Company’s policies from time to time.

 c. Executive shall receive a car allowance of $1,000 per month. 
 d. Executive shall be reimbursed for the costs of temporary housing within commuting distance of 375 Rabro Drive, Hauppauge, New York for a period
commencing on the Effective Date and ending on the earlier of (i) six months from the Effective Date and (ii) the purchase of a new permanent residence within commuting distance of the Company’s offices at 375 Rabro Drive, Hauppauge,
New York (the “New Residence”). Costs of temporary housing reimbursed shall consist of reasonable rent, which amount shall be approved in advance by the Company, utilities (heat, electricity, gas and water), telephone, cable or
satellite TV service, high speed internet connection and a one-car parking space if not included with rent. 

 e. Executive shall be reimbursed for the relocation expenses of moving from his present residence
(“Old Residence”) to his New Residence consisting of (i) the cost of the physical movement of his belongings, (ii) any real estate agent fee on the sale of his Old Residence or the purchase of his New Residence,
(iii) attorneys fees incurred in the sale of his Old Residence or the purchase of his New Residence, (iv) land transfer taxes paid by Executive on the sale of his Old Residence or the purchase of his New Residence and (v) one
month’s salary to be used by Executive for other miscellaneous moving costs on a non-accountable basis (collectively, “Relocation Expenses”). The aggregate amount of Relocation Expenses for which Executive shall be reimbursed shall
not exceed $100,000. 
 f. The Company will reimburse you for reasonable out-of-pocket expenses related to your attendance at four meetings
of the IPC, all subject to your submission of an expense reimbursement request in accordance with Company guidelines. 
 7. Business
Expenses. During the Employment Term, reasonable business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies. 
 8. Termination. The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason;
provided that Executive will be required to give the Company at least 60 days advance written notice of any resignation of Executive’s employment. Notwithstanding any other provision of this Agreement, the provisions of this
Section 8 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates. 
 a.
By the Company For Cause or By Executive Resignation. 
 (i) The Employment Term and Executive’s employment hereunder may be
terminated by the Company for Cause (as defined below) and shall terminate automatically upon Executive’s resignation; provided that Executive shall be required to give the Company at least 60 days advance written notice of a
resignation. 
 For purposes of this Agreement, “Cause” shall mean: 
  

	 	(A)	the wilfull and material breach of Exectuive of any provision of this Agreement; 

  

	 	(B)	any act by Executive of fraud or dishonesty including, but not limited to, stealing or falsification of company records, with respect to the Company or its affiliates;

  

	 	(C)	failure by Executive to perform his duties as lawfully directed by the Board, provided the Company has delivered to Executive a written notice setting forth such failure and shall
have given Executive an opportunity to meet with the Company and to remedy or cure such failure within 15 business days following delivery of such written notice; 

	 	(D)	misappropriation of company funds or of any corporate opportunity; 

  

	 	(E)	conviction of Executive of a felony, or of a crime that the Company, in its sole discretion, determines involves a subject matter which may reflect negatively on the reputation or
business of the Company or any of its affiliates (or a plea of nolo contendere thereto), provided that notice of termination is given within 90 days of the Company’s knowledge of the conviction; 

  

	 	(F)	acts by Executive attempting to secure or securing any personal profit not fully disclosed to and approved by the Board in connection with any transaction entered into on behalf of
the Company or any of its affiliates; 

  

	 	(G)	gross, willful or wanton negligence, misconduct, or conduct on the part of Executive, which constitutes a breach of any fiduciary duty or duty of loyalty owed to the Company by
Executive, provided the Company has delivered to Executive a written notice setting forth such conduct and shall have given Executive an opportunity to meet with the Company and to remedy or cure such conduct within 15 business days following
delivery of such written notice; 

  

	 	(H)	acceptance by Executive of employment with another employer; 

  

	 	(I)	conduct on the part of Executive, even if not in connection with the performance of Executive’s duties contemplated under this Agreement, that could result in serious prejudice
to the interests of the Company or any of its affiliates, as determined by the Board in its sole discretion, and failure by Executive to cease such conduct immediately upon receipt of notice to cease such conduct; or 

  

	 	(J)	violation of any material federal or state securities laws, rules or regulations, as determined by the Board in its sole and good faith discretion. 

 (ii) If Executive’s employment is terminated by the Company for Cause, or if Executive resigns, Executive shall be entitled to receive: 

(A) the Base Salary through the date of termination; 
 (B) reimbursement, within 30 days following submission by Executive to the Company of appropriate supporting documentation, for any
unreimbursed 

 
business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; provided claims
for such reimbursement (accompanied by appropriate supporting documentation) are submitted to the Company within 90 days following the date of Executive’s termination of employment; and 
 (C) such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans as described in Section 6
(the amounts described in clauses (A) through (C) hereof being referred to as the “Accrued Rights”). 
 Following
such termination of Executive’s employment by the Company for Cause or resignation by Executive, except as set forth in this Section 8(a)(ii), Executive shall have no further rights to any compensation or any other benefits under this
Agreement. 
 b. Disability or Death. 
 (i) The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes physically or mentally incapacitated and is
therefore unable for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as
“Disability”). Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing. The determination of
Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement. 
 (ii) Upon
termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive: 
 (A) the Accrued Rights; and 
 (B) subject to Executive’s continued compliance with the provisions of Sections 9 and 10, continued payment of the Base Salary in accordance with the Company’s normal payroll practices, as in effect on the date of termination of
Executive’s employment, for a period of three months following the date of such termination. 
 The amount set forth in
Section 8(b)(ii)(B) shall be in lieu of, and not in addition to, any severance benefits under any severance plan or policy of the Company or any of its affiliates. Following Executive’s termination of employment due to death or Disability,
except as set forth in this Section 8(b)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement. 

 c. By the Company Without Cause. 
 (i) The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause. 
 (ii) If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability), Executive shall be
entitled to receive: 
 (A) the Accrued Rights; and 
 (B) subject to Executive’s continued compliance with the provisions of Sections 9 and 10, continued payment of the Base Salary in
accordance with the Company’s normal payroll practices, as in effect on the date of termination of Executive’s employment, (i) for a period of six months following the date of such termination if such date of termination is in the one
year period commencing on the Effective Date, (ii) for a period of twelve months following the date of such termination if such date of termination is in the period commencing on the date immediately following the first anniversary of the
Effective Date and ending on the fourth anniversary of the Effective Date and (iii) for a period of eighteen months following the date of such termination if such date of termination is after the fourth anniversary of the Effective Date;
provided, that the Company’s payment of the foregoing amounts to Executive under this Section 8(c)(ii)(B) shall be expressly conditioned upon and in consideration of Executive’s execution and nonrevocation of a General Release in
favor of the Company, in a form substantially identical to Exhibit C hereto. (The period during which Executive is entitled to receive his Base Salary after termination of employment is referred to as the “Severance Period”
and the amount so received as “Severance Payments.”) 
 The amount set forth in Section 8(c)(ii)(B) shall be in lieu
of, and not in addition to, any severance benefits under any severance plan or policy of the Company or any of its affiliates. Following Executive’s termination of employment by the Company without Cause (other than by reason of
Executive’s death or Disability), except as set forth in this Section 8(c)(ii), Executive shall have no further rights to any compensation or any other benefits under this Agreement. 
 d. Notice of Termination. Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall
be communicated by written Notice of Termination to the other party hereto in accordance with Section 13(i) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated. 

 e. Board/Committee Resignation. Upon termination of Executive’s employment for any reason,
Executive agrees to resign, as of the date of such termination and to the extent applicable, from the Board of Directors of the Company (and any committees thereof) and the Board of Directors (and any committees thereof) of any of the Company’s
affiliates. 
 9. Non-Competition. 
 a. Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates and accordingly agrees as follows: 
 (1) During the Employment Term and, for the Severance Period following the date Executive ceases to be employed by the Company if the Executive is
terminated by the Company without Cause, or if Executive’s employment otherwise is terminated and (B) Executive is not entitled to Severance as a result of such termination, then in such cases, for the two years following termination of
employment (collectively, the “Restricted Period”), Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise whatsoever (“Person”), directly or indirectly: 
  

	 	(i)	engage in any business that competes with the businesses of the Company or its affiliates (including, without limitation, businesses which the Company or its affiliates have
specific plans to conduct in the future and as to which plans Executive is aware) in any geographical area in which the Company or its affiliates produces, sells, leases, rents, licenses or otherwise provides its products or services, including
without limitation the manufacture of electronic components for the U.S. Department of Defense and Department of Defense contractors of the type manufactured by the Company’s affiliates (a “Competitive Business”);

  

	 	(ii)	enter the employ of, or render any services to, any Person (or any division or controlled or controlling affiliate of any Person) who or which engages in a Competitive Business;

  

	 	(iii)	acquire a financial interest in, or otherwise become actively involved with, any Competitive Business, directly or indirectly, as an individual, partner, shareholder, officer,
director, principal, agent, trustee or consultant; or 

  

	 	(iv)	interfere with, or attempt to interfere with, business relationships (whether formed before, on or after the date of this Agreement) between the Company or any of its affiliates and
customers, clients, agents, contractors, managers, consultants, suppliers or investors of the Company or its affiliates. 

 (2) Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly,
own, solely as an investment, securities of any Person engaged in the business of the Company or its affiliates which are publicly traded on a national or regional stock exchange or on the over-the-counter market if Executive (i) is not a
controlling person of, or a member of a group which controls, such person and (ii) does not, directly or indirectly, own 5% or more of any class of securities of such Person. 
 (3) During the Restricted Period, Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction with any Person, directly
or indirectly: 
  

	 	(i)	Solicit, encourage or attempt to solicit or encourage any employee of the Company or any of its affiliates to leave the employment of the Company or its affiliates; or

  

	 	(ii)	Hire, engage or employ any such employee who was employed by the Company or its affiliates as of the date of Executive’s termination of employment with the Company or who left
the employment of the Company or its affiliates coincident with, or within one year prior to or after, the termination of Executive’s employment with the Company. 

 (4) During the Restricted Period, Executive will not, directly or indirectly, solicit, encourage or attempt to solicit or encourage any customer or
prospective customer of the Company or any of its affiliates or any independent contractor providing services to the Company or any of its affiliates, determined, in each case, as of the date of termination, to terminate, modify or diminish its
relationship with the Company or any of its affiliates or to seek to persuade any customer of the Company or any of its affiliates, determined as of the date of termination, to conduct with anyone else any business or activity that such customer
conducts or could conduct with the Company or any of its affiliates. 
 b. It is expressly understood and agreed that although Executive and
the Company consider the restrictions contained in this Section 9 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially
determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding
shall not affect the enforceability of any of the other restrictions contained herein. The provisions of this Section 9 shall survive the termination of Executive’s employment for any reason. 

 10. Confidentiality; Intellectual Property. 
 a. Confidentiality. 
 (i) Except as
prohibited by Section 10(b)(v) below, Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person, or
(y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non-public, proprietary or confidential
information (including without limitation trade secrets, know-how, knowledge capital, research and development, software, consulting techniques, source codes, databases, inventions, processes, formulae, software, databases, technology, designs and
other intellectual property, information concerning finances, investments, projections, profits, strategies, pricing, costs, products, services, service providers, vendors, customers, clients, partners, investors, personnel, compensation,
recruiting, training, advertising, sales, marketing, promotions, government and regulatory activities and approvals), in whatever form or media, concerning the past, current or future business, activities and operations of the Company, its
subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis, including any such information obtained prior to the Effective Date (“Confidential Information”)
without the prior written authorization of the Board. 
 (ii) “Confidential Information” shall not include any information
that is (x) generally known to the industry or the public other than as a result of Executive’s breach of this covenant or any breach of other confidentiality obligations by third parties, (y) made legitimately available to Executive
by a third party without breach of any confidentiality obligation, or (z) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is
so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment. 
 (iii) Upon termination of
Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright,
trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company or any of its affiliates, (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and
copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or
other computer, whether or not company property) that contain Confidential Information or otherwise relate to the business of the Company or any of its affiliates, except that Executive may retain only those portions of any personal notes, notebooks
and diaries that do not contain any Confidential Information, and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware. 

 b. Intellectual Property. 
 (i) If Executive has created, invented, designed, developed, contributed to or improved any works of authorship, inventions, intellectual property,
materials, documents or other work product (including without limitation, research, reports, software, databases, systems, applications, presentations, textual works, content, or audiovisual materials) (“Works”), either alone or
with third parties, prior to Executive’s employment by the Company hereunder, that are relevant to or implicated by such employment (“Prior Works”), Executive hereby grants the Company a perpetual, non-exclusive, royalty-free,
worldwide, assignable, sublicensable license under all rights and intellectual property rights (including rights under patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) therein for all purposes in
connection with the Company’s current and future business. 
 (ii) If Executive creates, invents, designs, develops, contributes to or
improves any Works, either alone or with third parties, at any time during Executive’s employment by the Company and within the scope of such employment and/or with the use of any the Company resources (“Company Works”),
Executive shall promptly and fully disclose same to the Company and hereby irrevocably assigns, transfers and conveys, to the maximum extent permitted by applicable law, all rights and intellectual property rights therein (including rights under
patent, industrial property, copyright, trademark, trade secret, unfair competition and related laws) to the Company to the extent ownership of any such rights does not vest originally in the Company. 
 (iii) Executive agrees to keep and maintain adequate and current written records (in the form of notes, sketches, drawings, and any other form or media
requested by the Company) of all Company Works. The records will be available to and remain the sole property and intellectual property of the Company at all times. 
 (iv) Executive shall take all requested actions and execute all requested documents (including any licenses or assignments required by a government contract) at the Company’s expense (but without further
remuneration) to assist the Company in validating, maintaining, protecting, enforcing, perfecting, recording, patenting or registering any of the Company’s rights in the Prior Works and Company Works. If the Company is unable for any other
reason to secure Executive’s signature on any document for this purpose, then Executive hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and attorney in fact, to act
for and in Executive’s behalf and stead to execute any documents and to do all other lawfully permitted acts in connection with the foregoing. 
 (v) Executive shall not improperly use for the benefit of, bring to any premises of, divulge, disclose, communicate, reveal, transfer or provide access to, or share with the Company any confidential, proprietary or
non-public information or intellectual property relating to a former employer or other third party without the prior written permission of such third party. Executive hereby indemnifies, holds harmless and agrees to defend the Company and its
officers, directors, partners, employees, agents and representatives from any breach of the foregoing covenant. Executive shall comply with all relevant policies and guidelines of the 

 
Company, including regarding the protection of confidential information and intellectual property and potential conflicts of interest. Executive acknowledges
that the Company may amend any such policies and guidelines from time to time, and that Executive remains at all times bound by their most current version. 
 (vi) The provisions of this Section 10 shall survive the termination of Executive’s employment for any reason. 
 11. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 9 or Section 10 would be
inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law,
the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 12. Background Check. [This section is deliberately omitted.] 
 13. Miscellaneous. 
 a. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof. 
 b. Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the
parties hereto. 
 c. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. 
 d. Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. 
 e.
Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void
ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which 

 
is an affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations
of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity. 
 f. Set Off; No
Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its
affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment. Anything in this Agreement to the contrary notwithstanding, in the event that Executive provides
services for pay to anyone other than the Company or any of its affiliates during the term of Executive’s employment hereunder, all amounts paid to Executive during such period pursuant to this Agreement shall be reduced (or if paid to
Executive, refunded to the Company by Executive) by the amounts of salary, bonus or other cash or in-kind compensation earned by, paid or granted to Executive during such period as a result of Executive’s performing such services (regardless of
when such earned amounts are actually paid to Executive). 
 g. Compliance with IRC Section 409A. Notwithstanding anything
herein to the contrary, (i) if at the time of Executive’s termination of employment with the Company Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under
Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that
is six months following Executive’s termination of employment with the Company (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Executive hereunder
could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the
Code, or otherwise such payment or other benefits shall be restructured, to the extent possible without any additional liability for the Company, in a manner, determined by the Board, that does not cause such an accelerated or additional tax.

 h. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
 i. Notice. For the purpose of
this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three business days after it has been mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt. 

 If to the Company: 
 API Nanotronics Corp. 
 505 University Avenue, Suite 1400 
 Toronto, Ontario M5G 1X3 
 Canada 
 Attention: Phillip DeZwirek 
 If to Executive: 
 To the most recent address of Executive set forth in the personnel records of the Company. 
 j. Executive Representation. Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the
Company and the performance by Executive of Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise
bound. 
 k. Prior Agreements. This Agreement supercedes all prior agreements and understandings (including verbal agreements)
between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates. 
 l. Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during
Executive’s employment hereunder. This provision shall survive any termination of this Agreement. 
 m. Withholding Taxes. The
Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. 
 n. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first
above written. 
  

							
	 API NANOTRONICS CORP.
	 		 	EXECUTIVE
			
	 /s/ Phillip DeZwirek
	 		 	 /s/ Stephen Pudles

	 By:
	 		 	Stephen Pudles
	 Title: /s/ ChairmanSTOCK OPTION AGREEMENT

 Exhibit 10.27 
 STEPHEN PUDLES 
 STOCK OPTION AGREEMENT 
 API NANOTRONICS CORP. 
 2006 EQUITY INCENTIVE PLAN 
 THIS AGREEMENT is dated and made effective as of April 22, 2008 (“Effective Date”) by and between API NANOTRONICS CORP., a Delaware
corporation (the “Company”), and Stephen Pudles (“Optionee”). 
 WITNESSETH: 
 WHEREAS, Optionee became an employee of the Company on the date hereof; and 
 WHEREAS, the employment agreement (the “Employment Agreement”) dated March 3, 2008 between the Company and the Optionee
requires that the Company grant him the options set forth herein as soon as practicable; 
 WHEREAS, the Company desires to grant stock
options to Optionee on the Effective Date to purchase shares of the Company’s Common Stock pursuant to the Company’s 2006 Equity Incentive Plan, as amended (the “Plan”); and 
 WHEREAS, the Board of Directors of the Company and its Compensation Committee has authorized the grant of stock options to Optionee and has determined
that the Fair Market Value of Common Stock of the Company on the Effective Date shall be the exercise price per share provided below. 
 NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows: 
 1.
Grant of Option. The Company hereby grants to Optionee as of the Effective Date the right and option (the “Incentive Option”) to purchase up to 11,236,650 shares of Common Stock (“Time Based
Shares”) and the right and option (the “Nonqualified Option” and collectively with the Incentive Option, the “Option”) to purchase up to 7,491,100 shares of Common Stock (the “Performance
Shares” and collectively, with the Time Based Shares, the “Shares”) at an exercise price of $0.0925 per Share on the terms and conditions set forth herein and subject to the terms and conditions of the Plan. The Incentive
Option is intended to qualify as an “incentive stock option” within the meaning of Section 422, or any successor provision, of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder
subject to the limitations set forth in Section 9(b) of the Plan. The Nonqualified Option is not intended to qualify as an “incentive stock option” under Section 422 of the Code. 
 All capitalized terms not defined in this Agreement shall have the meaning set forth in the Plan. 

 2. Duration and Exercisability. 
 a. Vesting/Exercise Period of Incentive Option. The Incentive Option shall become exercisable as to portions of the Time Based Shares as follows:
(i) the Incentive Option shall not be exercisable with respect to any of the Time Based Shares until the first anniversary of the Effective Date; (ii) on such first anniversary of the Effective Date the Incentive Option shall become
exercisable as to thirty-three and one-third percent (33-1/3%) of the Time Based Shares; (iii) on the second anniversary of the Effective Date, the Incentive Option shall become exercisable as to an additional thirty-three and one-third percent
(33-1/3%) of the Time Based Shares; and (iv) on the third anniversary of the Effective Date, the Incentive Option shall become exercisable as to an additional thirty-three and one-third percent (33-1/3%) of the Time Based Shares; subject to the
Optionee’s continuous employment with the Company through the vesting date. The Time Based Shares that may be treated as subject to purchase pursuant to an “incentive stock option” within the meaning of Section 422 of the Code in
any given year shall be limited to conform to the $100,000 limit set forth at Section 9.1(b) of the Plan and Section 422 of the Code. 
 b. Vesting/Exercise Period of Nonqualified Option. The Nonqualified Option with respect to the Performance Shares will vest in three equal annual installments tied to the next three fiscal year ends of the Company as specified below
but only if the specified performance targets for the applicable fiscal year are achieved. Such performance targets shall be based upon EBITDA targets and other performance targets (collectively, the “Performance Targets”)
determined by the Board in consultation with Optionee. The Performance Targets for the Nonqualified Option with respect to (i) the first one-third (1/3) of the Performance Shares shall be determined within 120 days of March 3, 2008,
(ii) the second one-third (1/3) of the Performance Shares shall be determined no later than 30 days prior to the Company’s May 2009 fiscal year end and (iii) the third and final one-third (1/3) of the Performance Shares
shall be determined no later than 30 days prior to the Company’s May 2010 fiscal year end. The Performance Shares will vest in three equal annual installments 60 days after the end of each of the first three fiscal years, starting with the
fiscal year commencing June 1, 2008, subject to (i) achievement of the Performance Targets for the applicable fiscal year and (ii) Optionee’s continuous employment with the Company through the vesting date. 
 c. Change of Control. If a Change in Control occurs during the term of Optionee’s employment with the Company, the Option, to the extent that
it has not already become exercisable, will immediately become exercisable with respect to 50% of the Time Based Shares and 50% of the Performance Shares with respect to which the Option is not then exercisable. 
 d. Expiration. The Option shall expire on the tenth anniversary of the Effective Date (“Expiration Date”) and must be exercised,
if at all, on or before the earlier of the Expiration Date and any date on which the Option terminates in accordance with the provisions of Section 3. 
  

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 e. Lapse Upon Expiration. To the extent that this Option is not exercised prior to the applicable
expiration date set forth in Section 2(d) or Section 3 of this Agreement, all rights of Optionee under this Option shall thereupon be forfeited. 
 3. Termination. 
 a. Termination for Any Reason Other than Death or Disability. If
Optionee is Terminated for any reason other than his death or Disability (as such term is hereafter defined), this Option shall be exercisable only to the extent the Option was exercisable on the date of Termination, but had not previously been
exercised, and shall expire on the earlier of (i) the close of business three months after the Termination Date (as hereafter defined) and (ii) the Expiration Date. Notwithstanding the foregoing, if the Optionee is terminated for Cause,
then the Option shall terminate immediately on the Optionee’s Termination Date. 
 b. Termination Because of Death or Disability.
If Optionee is Terminated because of his death or his Disability (or Optionee dies within three (3) months after a Termination other than because of his Disability or because of the existence of Cause), then this Option shall be exercisable by
Optionee, or the person or persons to whom Optionee’s rights under this Option shall have passed by Optionee’s will or by the laws of descent and distribution, only to the extent the Option was exercisable on the date of Optionee’s
Termination, but had not previously been exercised, and shall expire on the earlier of: (i) the close of business six months after Optionee’s Termination Date and (ii) the Expiration Date. 
 c. Change of Control. In the case of a Change of Control, the terms of the Option may be modified by the Committee as provided in the Plan.

 d. Definitions. 
 “Cause” shall have the meaning set forth in the Employment Agreement. 
 “Change of Control” shall
have the meaning set forth in the Plan. 
 “Disability” means a permanent and total disability within the meaning of
Section 22(e)(3) of the Code (as provided under Section 422(c)(6), or such applicable successor provision, of the Code), as determined by the Committee. 
 “Termination” or “Terminated” means that Optionee has for any reason ceased to provide services as an employee of the Company or Subsidiary of the Company, except in the case of sick
leave, military leave, or any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by contract or statute.
The Committee shall have sole discretion to determine whether Optionee has ceased to provide services and the effective date on which Optionee ceased to provide services (the “Termination Date”). 
  

 3 

 4. Manner of Exercise. 
 a. General. The Option may be exercised only by Optionee (or other proper party in the event of death or Disability), subject to the conditions of
the Plan and this Agreement, and subject to such other administrative rules as the Committee deems advisable, by delivering written notice of exercise to the Company at its principal office. The notice shall state the number of Shares exercised,
whether Time Based Shares or Performance Shares are being purchased, and whether or not such Shares are being exercised pursuant to an “incentive stock option” and shall be accompanied by payment in full of the Option exercise price for
all Shares exercised pursuant to the notice subject to the remainder of this Section 4. Any exercise of the Option shall be effective upon receipt of such notice by the Company together with payment that complies with the terms of the Plan and
this Agreement. The Option may be exercised with respect to any number or all of the shares as to which it can then be exercised and, if partially exercised, may be so exercised as to the unexercised Shares at any time and from time to time prior to
expiration of the Option as provided in this Agreement. 
 b. Form of Payment. Subject to approval by the Committee, payment of the
Option exercise price by Optionee shall be in the form of cash, personal check, certified check, or where permitted by law and provided that a public market for the Company’s stock exists: (i) through a “same day sale” commitment
from Optionee and a broker-dealer that is a member of the Financial Industry Regulatory Authority, Inc. (a “FINRA Dealer”) whereby Optionee irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased
to pay for the exercise price and whereby the FINRA Dealer irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company; or (ii) through a “margin” commitment from Optionee and a FINRA Dealer
whereby Optionee irrevocably elects to exercise the Option and to pledge the Shares so purchased to the FINRA Dealer in a margin account as security for a loan from the FINRA Dealer in the amount of the exercise price, and whereby the FINRA Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price directly to the Company. Optionee shall be solely responsible for any income or other tax consequences from any payment for Shares with Optionee’s Common Stock of the
Company. 
 c. Stock Transfer Records. Provided that the notice of exercise and payment are in form and substance satisfactory to
counsel for the Company, as soon as practicable after the effective exercise of all or any part of the Option, Optionee shall be recorded on the stock transfer books of the Company as the owner of the Shares purchased, and the Company shall deliver
to Optionee, or to the FINRA Dealer, as the case may be, one or more duly issued stock certificates evidencing such ownership. All requisite original issue or transfer documentary stamp taxes shall be paid by the Company. Optionee shall pay all
other costs of the Company incurred to issue such Shares to such FINRA Dealer. 
 Shares purchased pursuant to exercise hereunder:
(i) may be deposited with a FINRA Dealer designated by Optionee, in street name, if so provided in such exercise notice accompanied by all applications and forms reasonably required by the Committee to effect such deposit, or (ii) may be
issued to Optionee and such other person, as joint owners with the right of survivorship, as is specifically described in such exercise notice. Optionee shall be solely responsible for any income or other tax consequences of such a designation of
ownership hereunder (or the severance thereof). 
  

 4 

 5. Miscellaneous. 
 a. Employment Rights as Shareholder. This Agreement shall not confer on Optionee any right with respect to continuance of employment by the Company
or any Subsidiary, nor shall it affect the right of the Company to Terminate such employment. Optionee’s employment rights are governed solely by his Employment Agreement. Optionee shall have no rights as a shareholder with respect to Shares
subject to this Option until such Shares are issued to Optionee upon the exercise of this Option. No adjustment shall be made for dividends (ordinary or extra-ordinary, whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such shares are issued, except as provided in Section 12 of the Plan. 
 b. Securities
Law Compliance. The exercise of the Option and the issuance and transfer of Shares shall be subject to compliance by the Company and Optionee with all applicable requirements of federal and state securities laws and with all applicable
requirements of any stock exchange on which the Company’s Common Stock may be listed at the time of such issuance or transfer. The Company shall not be required to sell or issue any Shares if such issuance would constitute a violation of any
provision of any law or regulation of any governmental authority. 
 c. Mergers, Recapitalization, Stock Splits, Etc. The provisions
of Sections 14 and 17 of the Plan, as amended effective the Effective Date, shall govern all Options in the event of any reorganization, merger, consolidation, recapitalization, reclassification, change in par value, stock split-up, combination of
shares or dividend payable in capital stock, or other such transaction described under Sections 14 and 17 of the Plan, and the Company reserves all discretion provided therein. 
 d. Withholding Taxes on Disqualifying Disposition. In the event of a disqualifying disposition of the Shares acquired through the exercise of this
Option pursuant to the exercise of an “incentive stock option” as defined in Section 422 of the Code, Optionee hereby agrees to promptly provide the Company written notice of such disposition, which notice shall be deemed delivered
when received by the Company. Upon notice of a disqualifying disposition, the Company may take such action as it deems appropriate to insure that, if necessary to comply with all applicable federal or state income tax laws or regulations, all
applicable federal and state payroll, income or other taxes are withheld from any amounts payable by the Company to Optionee. If the Company is unable to withhold such federal and state taxes, for whatever reason, Optionee hereby agrees to pay to
the Company an amount equal to the amount the Company would otherwise be required to withhold under federal or state law. Optionee may, subject to the approval and discretion of the Committee or such administrative rules it may deem advisable, elect
to have all or a portion of such tax withholding obligations satisfied by delivering shares of the Company’s Common Stock having a fair market value equal to such obligations. For the purpose of this Section 5(d), a “disqualifying
disposition” means a sale or other transfer of any Shares purchased pursuant to the exercise of an “incentive stock 

  

 5 

 
option” as defined in Section 422 of the Code hereunder on or before the later of (i) the date two (2) years after the Effective Date and
(ii) the date one (1) year after transfer of such Shares to Optionee upon exercise of the Option, as more particularly set forth at Section 422(a)(1) of the Code. 
 e. Nontransferability. The Option may not be transferred in any manner other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of Participant only by Participant. The terms of the Option shall be binding upon the executors, administrators, successors and assigns of Participant. 
 f. 2006 Equity Incentive Plan. The Option evidenced by this Agreement is granted pursuant to the Plan, as amended the Effective Date, a copy of
which Plan has been made available to Optionee and is hereby incorporated into this Agreement. This Agreement shall be subject to and in all respects limited and conditioned as provided in the Plan. The Plan governs this Option and, in the event of
any questions as to the construction of this Agreement or in the event of a conflict between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides. 
 g. Stock Legend. The Committee may require that the certificates for any Shares purchased by Optionee (or, in the case of death, Optionee’s
successors) bear an appropriate legend to reflect the restrictions of applicable law. 
 h. Scope of Agreement. This Agreement shall
bind and inure to the benefit of the Company and its successors and assigns and Optionee and any successor or successors of Optionee permitted by Section 3 or Section 5(e) of this Agreement. 
 i. Interpretation. The Committee shall have the sole discretion to interpret and administer the Plan. Any determination made by the Committee with
respect to any Option shall be final and binding on the Company and on all persons having an interest in the Option granted under this Agreement and the Plan. 
 j. Entire Option. The Plan, as amended, is incorporated herein by reference. This Agreement and the Plan constitute the entire agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersede all prior understandings and agreements with respect to such subject matter. 
 k.
Successors and Assigns. The Company may assign any of its rights under the Option. The Option shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set
forth herein, the Option shall be binding upon Optionee and Optionee’s heirs, executors, administrators, legal representatives, successors and assigns. 
 l. Governing Law. The Option shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to that body of law pertaining to choice of law or conflict of
law. 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year
first above written. 
  

							
	API Nanotronics Corp.	 		 	OPTIONEE
				
	By:	 	 /s/ Phillip DeZwirek
	 		 	 /s/ Stephen Pudles

	Its:	 	/s/ Chairman	 		 	[Signature]
		 		 		 	Stephen Pudles

  

 7

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