Document:

Exhibit 10.33

 

Form of Amendment No. 7 to, and Consent under, the

Amended and Restated Limited Liability Company Operating Agreement

 

of

 

VGG HOLDING LLC

 

This
Amendment No. 7 to, and Consent under (this “Amendment and Consent”),
the Amended and Restated Limited Liability Company Operating Agreement of VGG
Holding LLC, a Delaware limited liability company (the “Company”), is
entered into and shall be effective as of [          ], 2010, by and among the Company, the Class A Members
of the Company listed on the signature pages hereof and the Persons listed
as Additional Class B-1 Members on the signature pages hereof (the “Newly
Admitted Members”).

 

WHEREAS,
the Company was formed pursuant to that certain Limited Liability Company
Operating Agreement, dated as of July 13, 2007, as amended and restated by
that certain Amended and Restated Limited Liability Company Operating
Agreement, dated as of August 15, 2007, by and among the Persons listed as
Class A Members on the signature pages thereof, as amended by Amendment
No. 1 to the Amended and Restated Limited Liability Company Operating
Agreement, dated September 13, 2007, by and among the Company and the
Persons listed as Class B Members on the signature pages thereof, as
further amended by Amendment No. 2 to the Amended and Restated Limited
Liability Company Operating Agreement, dated as of September 21, 2007, by
and among the Company, TCW/Crescent Mezzanine Partners IV, L.P., a Delaware
limited partnership, TCW/Crescent Mezzanine Partners IVB, L.P., a Delaware limited
partnership, MAC Equity Holdings, LLC, a Delaware limited liability company,
and Newstone Capital Partners, L.P., a Delaware limited partnership, as further
amended by Amendment No. 3 to the Amended and Restated Limited Liability
Company Operating Agreement, dated as of October 26, 2007, by and among
the Company and the Persons listed as Additional Class B Members on the
signature pages thereof, as further amended by Amendment No. 4 to the
Amended and Restated Limited Liability Company Operating Agreement, dated as of
November 30, 2007, by and among the Company, the Persons listed as
Original Golden Gate Members on the signature pages thereof and CCG AV,
LLC - Series E, a Delaware limited liability company and an Affiliate of
the Original Golden Gate Members, as further amended by Amendment No. 5 to
the Amended and Restated Limited Liability Company Operating Agreement, dated
as of March 4, 2009, by and among the Company and the Persons listed as
Additional Class A Members on the signature pages thereof, and as
further amended by Amendment No. 6 to the Amended and Restated Limited
Liability Company Operating Agreement, dated as of September 17, 2009, by
and among the Company, certain Investors of the Company listed on the signature
pages thereof and the Persons listed as Additional Class B-1 Members
on the signature pages thereof (the “Operating Agreement”);

 

WHEREAS,
on April 6, 2010, AX Holding filed a certificate of amendment to its
certificate of incorporation with the Secretary of State of the State of
Delaware pursuant to which its name was changed to Aeroflex Holding Corp. (“Aeroflex
Holding”);

 

WHEREAS,
Aeroflex Holding has filed a registration statement with the SEC relating to an
initial public offering of its common stock (the “Aeroflex Holding IPO”);

 

 

WHEREAS,
the parties hereto desire to amend certain provisions of the Operating
Agreement in connection with the Aeroflex Holding IPO;

 

WHEREAS,
the Board of Managers of the Company has approved the issuance of Class B-1
Membership Interests to the Newly Admitted Members and desires to admit the
Newly Admitted Members; and

 

WHEREAS,
each of the Investors listed on the signature pages hereto constitute all
the Investors whose Percentage Interest is equal to or greater than 10% of the
Total Percentage Interest of the Company.

 

NOW,
THEREFORE, in consideration of the mutual agreements made herein, the Company,
the Investors listed on the signature pages hereof and the Newly Admitted
Members hereby agree as follows:

 

1.             Unless otherwise defined herein, capitalized terms
shall have the meanings ascribed to them in the Operating Agreement.

 

2.             In accordance with Section 3.3 and Section 7.1(a) of
the Operating Agreement, effective as of the date hereof, the Newly Admitted
Members are hereby admitted to the Company as Additional Class B-1
Members.

 

3.             Schedule A, Schedule B and Schedule
B-1 to the Operating Agreement are hereby amended in the forms annexed
hereto, to reflect the names, addresses, Capital Contributions, Class A
Percentage Interests, Class B Percentage Interests and Class B-1
Percentage Interests of the Members after the admission of the Newly Admitted
Members to the Company.  Schedule B-1 is
also hereby amended to reflect the Floor with respect to the Class B-1
Membership Interests of each Class B-1 Member.

 

4.             By executing this Amendment
and Consent, each of the Veritas Fund, Golden Gate and Goldman hereby consents,
(i) in accordance with Section 7.4(a)(i) and Section 7.4(a)(v)(B) of
the Operating Agreement, to the issuance by Aeroflex Holding of such number of
Equity Securities in connection with the Aeroflex Holding IPO as shall be
determined by Aeroflex Holding in its sole discretion, (ii) in accordance
with Section 7.4(a)(ii) of the Operating Agreement, to the
Transfer by the Company of such number of Equity Securities in connection with
the Aeroflex Holding IPO as shall be determined by the Company in its sole
discretion, (iii) in accordance with Section 7.4(a)(vi) of
the Operating Agreement, to the amendment and restatement of the certificate of
incorporation and bylaws of Aeroflex Holding in the form attached hereto as Exhibit A
and Exhibit B, respectively, and (iv) in accordance with Section 7.4(a)(vii) of
the Operating Agreement, to the execution and delivery by Aeroflex Holding of
an underwriting agreement relating to the Aeroflex Holding IPO with Goldman,
Sachs & Co. and the other parties thereto and the performance by
Aeroflex Holdings of its obligations thereunder, and (v) in accordance
with Section 3.9 and Section 7.4(a)(viii) of the
Operating Agreement, to the issuance of Class B-1 Percentage Interests to
the Newly Admitted Members as set forth on Schedule B-1 and (vi) in
accordance with Section 7.4(a)(viii), to the amendment of the
Employment Agreements of Leonard Borow, John

 

2

 

Adamovich, Jr., John Buyko, Charles Badlato and Carl Caruso, in
the forms attached hereto as Exhibit C, Exhibit D, Exhibit E,
Exhibit F, and Exhibit G, respectively.

 

5.             The Operating Agreement is
hereby amended as follows:

 

(a)           The following defined terms
shall be added to Article I of the Operating Agreement:

 

“Director Designation Agreement” means the
Director Designation Agreement, dated as of November [  ], 2010, between Aeroflex Holding and the
Company.

 

“Necessary Action” means, with respect to a
specified result, all commercially reasonable actions (to the extent permitted
by Applicable Law and the certificate of incorporation and bylaws of Aeroflex
Holding that are within the power of the Company as a stockholder of Aeroflex
Holding) necessary to cause such result, including (i) exercising its
rights pursuant to the Director Designation Agreement to designate individuals
to be included in the slate of nominees recommended to the stockholders of Aeroflex
Holding for election of directors at any annual or special meeting of the
stockholders of Aeroflex Holding at which directors of Aeroflex Holding are to
be elected, (ii) causing the voting of, or providing a written consent or
proxy with respect to, Voting Shares and (iii) calling and attending
meetings in person or by proxy.

 

“VGG Nominee” has the meaning set forth in
the Director Designation Agreement.

 

“Voting Shares” means the shares of capital
stock of Aeroflex Holding that are entitled to vote generally in the election
of directors.

 

(b)           Section 3.8 of the
Operating Agreement is hereby amended by deleting the words “Notwithstanding
any other provision of this Agreement, at any time from and after the
occurrence of an IPO,” and replacing such words with “Notwithstanding any other
provision of this Agreement, (i) at any time from and after the earlier to
occur of (A) the second anniversary of the consummation of an IPO or (B) with
respect to any Investor seeking to redeem its Class A Membership Interests,
such time as the board of directors of Aeroflex Holding does not contain at
least one director designated by such Investor, unless due to an action,
omission or decision by such Investor or any of its designees to the board of
directors of Aeroflex Holding, provided that in the event Aeroflex Holding
fails to nominate to the board of directors of Aeroflex Holding a particular
VGG Nominee selected by an Investor to the board of directors of Aeroflex
Holding in accordance with Section 2(d) of the Director Designation
Agreement, the failure by such Investor to select an acceptable Replacement VGG
Nominee (as defined below) shall be deemed for the purpose of this clause (B) to
be an action or decision by such Investor to not designate a director to serve
on the board of directors of Aeroflex Holding, or (ii) with the prior
written approval of each of the

 

3

 

Veritas Fund (so long as Veritas owns Membership Interests), Golden
Gate (so long as Golden Gate owns Membership Interests) and Goldman (so long as
Goldman owns Membership Interests), at any time from and after the consummation
of an IPO,”.

 

(c)           Section 4.2(a) is hereby
amended by adding the following language to the end of the last sentence
thereof:  “Notwithstanding anything in
this Agreement to the contrary, (i) the Employment/Directorship Date for
each of Andrew Kaminsky and Edward Wactlar shall be November [   ],
2010 and (ii) the Reduction Percentage for David Markman shall be
determined as follows:  (A) if his
Termination Date is prior to November [   ], 2011, the
Reduction Percentage shall be 100%, (B) if his Termination Date is on or
after November [  ], 2011 but prior
to November [  ], 2012, the
Reduction Percentage shall be 50% and (B) if his Termination Date is on or
after November [   ], 2012, the Reduction Percentage shall
be 0%.”

 

(d)           Section 7.2(k) of the
Operating Agreement shall be deleted in its entirety and shall be replaced with
the following:  “[Reserved]”.

 

(e)           Section 7.2 of the Operating
Agreement is hereby amended to add the following Sections 7.2(o), 7.2(p),
7.2(q), 7.2(r) and 7.2(s):

 

“(o) At all times commencing upon the
consummation of the Aeroflex Holding IPO and continuing until such time as
Aeroflex Holding is required to comply with Rule 303A.01 of the New York
Stock Exchange Listed Company Manual (the “NYSE Majority Independent Board
Rule”), the Company shall take all Necessary Action to cause each Manager
appointed pursuant to Section 7.2(b), (c), (d) or (f) to
be elected to the board of directors of Aeroflex Holding.  Notwithstanding the foregoing and
notwithstanding anything to the contrary in Section 7.2(b), (c) or
(d), in the event any of Veritas, Golden Gate or Goldman gain the right to
appoint any additional Managers solely as a result of an increase in its
Percentage Interest following the exercise by any Class A Member of its
redemption rights pursuant to Section 3.8, the Company shall not be
required to take any action (but may do so in its sole discretion) to seek to cause
any such newly-appointed Manager to be elected to the board of directors of
Aeroflex Holding in accordance with the preceding sentence until the next
meeting of stockholders at which directors are elected.

 

(p)  Subject to Section 7.2(r),
during such time as Aeroflex Holding is required to comply with the NYSE
Majority Independent Board Rule and the Company is entitled, pursuant to
the Director Designation Agreement, to nominate four VGG Nominees, the persons
the Company shall nominate as VGG Nominees shall be selected as follows:  two of such VGG Nominees shall be Managers
selected by Veritas, one of such VGG Nominees shall be a Manager selected by
Golden Gate and one of such VGG Nominees shall be a Manager selected by
Goldman.  In the event Aeroflex Holding
fails to nominate a particular VGG Nominee selected by an Investor to the board
of directors of Aeroflex

 

4

 

Holding
in accordance with Section 2(d) of the Director Designation
Agreement, such Investor shall have the right to select a replacement VGG
Nominee (a “Replacement VGG Nominee”). 
Notwithstanding any other provision of this Agreement, such Replacement
VGG Nominee need not be a Manager.

 

(q)  Except as permitted pursuant to the last
sentence of Section 7.2(s), the Company shall not take any action,
including, without limitation, causing the voting of, or providing a written
consent or proxy with respect to, Voting Shares, to remove any VGG Nominee from
the board of directors of Aeroflex Holding without the prior written consent of
the Investor who selected such VGG Nominee in accordance with Section 2(p).  In the event of a vacancy on the board of
directors of Aeroflex Holding arising through the death, resignation,
disqualification or removal of a VGG Nominee selected by any of Veritas, Golden
Gate or Goldman pursuant to Section 7.2(p), the Company shall take
all Necessary Action to fill such vacancy with a Manager selected by the
Investor who selected the VGG Nominee whose death, resignation, disqualification
or removal created such vacancy, to the extent that, following such selection,
the number of Managers appointed by such Investor who are then serving as
directors of Aeroflex Holding does not exceed the number of VGG Nominees which
such Investor would be entitled to select pursuant to Section 7.2(p) if
an election of directors of Aeroflex Holding was held on the date of such
selection.

 

(r)  Notwithstanding anything in Section 7.2(p) to
the contrary, following the redemption of Class A Membership Interests by
any Investor pursuant to Section 3.8, the rights of such redeeming
Investor to select VGG Nominees pursuant to Section 7.2(p) shall
immediately terminate and, unless otherwise agreed upon by the remaining
Investors, the Company shall decline to exercise its rights pursuant to Section 2(b) of
the Director Designation Agreement to nominate such number of VGG Nominees that
such redeeming Investor had the right to select pursuant to Section 7.2(p) immediately
prior to such redemption.  For the avoidance
of doubt, except as otherwise agreed upon by the remaining Investors, no
non-redeeming Investor shall gain the right to select additional persons to be
nominated as VGG Nominees following any such redemption.  Except as expressly permitted by the first
sentence of this Section 7.2(r), the Company hereby agrees that, to
the extent prejudicial to an Investor, it will not (i) decline to exercise
any of its rights pursuant to the Director Designation Agreement, (ii) waive
any provision of the Director Designation Agreement or (iii) agree to any
amendment of the Director Designation Agreement, in each case without the prior
written approval of each of the Veritas Fund (so long as Veritas owns
Membership Interests), Golden Gate (so long as Golden Gate owns Membership
Interests) and Goldman (so long as Goldman owns Membership Interests).

 

(s)  Each Investor shall cause any Manager
appointed by it pursuant to Section 7.2(b), (c), (d) or (f) who
has been nominated to the board of directors of Aeroflex Holding pursuant to
this Agreement and the Director Designation Agreement to immediately resign
from the board of directors of Aeroflex Holding (i) upon the redemption of
Class A Membership Interests by such Investor

 

5

 

pursuant
to Section 3.8 or (ii) in the event such Manager (A) is
removed from the Board of Managers pursuant to Section 7.2(f) or
resigns from the Board of Managers or becomes disabled or (B) is required
to resign from the Board of Managers pursuant to Section 7.2(g).  If, on the date that Aeroflex Holding first
is required to comply with the NYSE Majority Independent Board Rule, the number
of Managers appointed by any Investor that are then serving as directors of
Aeroflex Holding exceeds the number of VGG Nominees which such Investor would
be entitled to select pursuant to Section 7.2(p) if an
election of directors of Aeroflex Holding was held on such date (the “Director
Appointment Maximum”), such Investor shall immediately cause the
resignation from the board of directors of Aeroflex Holding of that number of
Managers that is in excess of the Director Appointment Maximum.  In the event any Investor shall fail to cause
the resignation of any Manager in accordance with this Section 7.2(s),
the Company shall be authorized to take all Necessary Action to remove any such
Manager from the board of directors of Aeroflex Holding.”

 

(f)            Section 8.4 of the
Operating Agreement shall be deleted in its entirety and shall be replaced by
the notation “[Reserved]”.

 

(g)           Section 8.6 of the
Operating Agreement shall be amended for the purpose of correcting an error in
clause (B) of the proviso thereof by replacing the term “Auction Sale”
with “Sale Transaction”.

 

(h)           All references to Section 8.4
in the Operating Agreement shall be disregarded and all defined terms used
exclusively in Section 8.4 shall be deleted.

 

6.             All other terms of the Operating Agreement shall
remain in full force and effect and, by their execution of this Amendment and
Consent, each Newly Admitted Member makes the representations and warranties
set forth in Section 5.2 of the Operating Agreement and agrees to
be bound by all of the terms and conditions of the Operating Agreement
applicable to the Members.

 

7.             This Amendment and Consent may be executed in
several counterparts, and all counterparts so executed shall constitute one
agreement, binding on all of the parties hereto, notwithstanding that all of
the parties are not signatory to the original or same counterpart.

 

[The remainder of this page is intentionally left blank.]

 

6

 

In
WITNESS WHEREOF, the parties hereto have duly executed this Amendment and
Consent as of the date first above written.

 

 

	
   

  	
  VGG
  HOLDING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

7

 

Amendment No. 7 and Consent to the

Amended and Restated Limited Liability Company Operating Agreement

 

of

 

VGG HOLDING LLC

 

 

Investor Signature Pages

 

 

 

 

	
   

  	
  THE
  VERITAS CAPITAL FUND III, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  AX
  HOLDING LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  GATE CAPITAL INVESTMENT FUND II, L.P.

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

8

 

	
   

  	
  GOLDEN
  GATE CAPITAL INVESTMENT ANNEX FUND II, L.P.

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  GATE CAPITAL INVESTMENT FUND II (AI), L.P.

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  GATE CAPITAL INVESTMENT ANNEX FUND II (AI), L.P.

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GOLDEN
  GATE CAPITAL ASSOCIATES II-QP, LLC

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

9

 

	
   

  	
  GOLDEN
  GATE CAPITAL ASSOCIATES II-AI, LLC

  
	
   

  	
  By:
  Golden Gate Capital Management II, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CCG
  AV, LLC - SERIES A

  
	
   

  	
  By:
  Golden Gate Capital Management, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CCG
  AV, LLC - SERIES C

  
	
   

  	
  By:
  Golden Gate Capital Management, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  CCG
  AV, LLC - SERIES I

  
	
   

  	
  By:
  Golden Gate Capital Management, LLC, its Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  GS
  DIRECT, L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

10

 

Amendment No. 7 and Consent to the

Amended and Restated Limited Liability Company Operating Agreement

 

of

 

VGG HOLDING LLC

 

 

Additional Class B-1 Member Signature Page

 

 

 

 

	
   

  	
  Andrew
  Kaminsky

  
	
   

  	
  Name
  of Additional Class B-1 Member

  
	
   

  	
   

  
	
   

  	
  Class B-1
  Percentage Interest: 0.10000000%

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  

 

11

 

Amendment No. 7 and Consent to the

Amended and Restated Limited Liability Company Operating Agreement

 

of

 

VGG HOLDING LLC

 

 

Additional Class B-1 Member Signature Page

 

 

 

 

	
   

  	
  Edward
  Wactlar

  
	
   

  	
  Name
  of Additional Class B-1 Member

  
	
   

  	
   

  
	
   

  	
  Class B-1
  Percentage Interest: 0.10000000%

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  

 

12

 

Amendment No. 7 and Consent to the

Amended and Restated Limited Liability Company Operating Agreement

 

of

 

VGG HOLDING LLC

 

 

Additional Class B-1 Member Signature Page

 

 

 

 

 

 

	
   

  	
  David
  Markman

  
	
   

  	
  Name
  of Additional Class B-1 Member

  
	
   

  	
   

  
	
   

  	
  Class B-1
  Percentage Interest: 0.10000000%

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  

 

13

 

Exhibit A

 

Amended and Restated Certificate of Incorporation

 

14

 

Exhibit B

 

Amended and Restated Bylaws

 

15

 

Exhibit C

 

Amendment No. 2  to the
Employment Agreement of Leonard Borow

 

16

 

Exhibit D

 

Amendment No. 5 to the Employment Agreement of John Adamovich, Jr.

 

17

 

Exhibit E

 

Amendment No. 2  to the
Employment Agreement of John Buyko

 

18

 

Exhibit F

 

Amendment No. 3  to the
Employment Agreement of Charles Badlato

 

19

 

Exhibit G

 

Amendment No. 5  to the
Employment Agreement of Carl Caruso

 

20EXHIBIT 10.34

 

FORM OF AMENDMENT NO. 5 TO
EMPLOYMENT AGREEMENT

 

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

 

WITNESSETH:

 

WHEREAS, the Parties entered into an Employment Agreement
dated November 9, 2005, as amended in November 21, 2006, December 1,
2006, December 31, 2008 and September 17, 2009 (the “Agreement”)
under which the Parties agreed upon the terms pursuant to which the Executive
would provide services to the Company as further described therein, and

 

WHEREAS, the parties desire to amend the Agreement to revise
and define the term of the Agreement and otherwise comply with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations and notices promulgated thereunder.

 

NOW,
THEREFORE, the parties hereto agree as follows, effective as of the date
hereof:

 

1.             Section 1 of the
Employment Agreement shall be deleted and replaced in its entirety with the
following:

 

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

 

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

 

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

 

 

established
by the Board (the “FY EBITDA Target”); and (iii) 100% of the Executive’s
Base Salary will be awarded to the Executive as a bonus if the Company’s EBITDA
is equal to or greater than the maximum EBITDA Target established by the Board
(the “Maximum EBITDA”). The Executive’s bonus shall be determined by linear
interpolation if the Company’s EBITDA is between the Threshold EBITDA and the
FY EBITDA Target or between the FY EBITDA Target and the Maximum EBITDA, as the
case may be. If the Board fails to establish the Threshold EBITDA or the
Maximum EBITDA for any fiscal year, such targets shall be presumed to be,
respectively, $10,000,000 less and $10,000,000 more than the FY EBITDA Target.
No annual bonus will be paid if the Company’s EBITDA is below the Threshold EBITDA
for any Fiscal Year. The FY EBITDA Target shall be equitably adjusted by the
Board in the event of any divestiture, acquisition or other extraordinary
event. Any annual bonus payable hereunder shall be paid on or prior to March 15
of the year following the year such bonus is earned.

 

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

 

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

 

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

 

“(7) Notwithstanding
anything herein to the contrary, if (i) the Executive is to receive
payments or benefits under this Agreement by reason of his separation from
service (as such term is defined in Section 409A of the Code) other than
as a result of his death, (ii) the Executive is a “specified employee”
within the meaning of Code Section 409A for the period in which the
payment or benefits would otherwise commence, and (iii) such payment or
benefit would otherwise subject the Executive to any tax, interest or penalty
imposed under Section 409A of the Code (or any regulation promulgated
thereunder) if the payment or benefit would commence within six months of a
termination of the Executive’s employment, then such payment or benefit
required under this Agreement shall not commence until the first day which is
at least six months after the termination of the Executive’s employment.  Such payments or benefits, which would have
otherwise been required to be made over such six month period, 

 

2

 

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

 

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

 

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

 

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

 

3

 

“(iv) Notwithstanding
the foregoing, if all or any portion of the Severance Benefits or other
payments and/or benefits provided under this Agreement, and/or any other
payments and benefits that the Executive receives or is entitled to receive
from the Company, its subsidiaries or any of its affiliates, constitutes an
excess “parachute payment” within the meaning of Section 280G(b) of
the Internal Revenue Code of 1986, as amended, (the “Code”) (each such
parachute payment, a “Parachute Payment”) and will result in the imposition on
the Executive of an excise tax under Section 4999 of the Code, then, the
Parachute Payments shall instead be reduced to the aggregate amount of
Parachute Payments that may be made to the Executive without incurring such
excise tax, as determined by the Company’s auditors.  Any such reduction in the preceding sentence
shall be done first by reducing any cash payments with the last payment reduced
first; next any equity or equity derivatives that are included under Section 280G
of the Code at full value rather than accelerated value; next any equity or
equity derivatives based on acceleration value shall be reduced with the
highest value reduced first (as such values are determined under Treasury
Regulation Section 1.280G-1, Q&A 24); finally any other non-cash
benefits will be reduced.”

 

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

 

“(v) Notwithstanding
anything herein to the contrary, if (i) the Executive is to receive
payments or benefits under this Agreement by reason of his separation from
service (as such term is defined in Section 409A of the Code) other than
as a result of his death, (ii) the Executive is a “specified employee”
within the meaning of Code Section 409A for the period in which the
payment or benefits would otherwise commence, and (iii) such payment or
benefit would otherwise subject the Executive to any tax, interest or penalty imposed
under Section 409A of the Code (or any regulation promulgated thereunder)
if the payment or benefit would commence within six months of a termination of
the Executive’s employment, then such payment or benefit required under this
Agreement shall not commence until the first day which is at least six months
after the termination of the Executive’s employment.  Such payments or benefits, which would have
otherwise been required to be made over such six month period, shall be paid to
the Executive in one lump sum payment or otherwise provided to the Executive as
soon as administratively feasible after the first day which is at least six
months after the termination of the Executive’s employment.  Thereafter, the 

 

4

 

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

 

8.             Except as specifically
provided in and modified by this Amendment, the Agreement is in all other
respects hereby ratified and confirmed and references to the Agreement shall be
deemed to refer to the Agreement as modified by this Amendment.

 

9.             This Amendment may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.

 

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

 

	
   

  	
  AEROFLEX INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John
  Adamovich, Jr.

  

 

5

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