Document:

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             AMENDED AND RESTATED EMPLOYMENT AGREEMENT made this 2nd day of
January, 2000 by and between EDO Corporation, a New York corporation (the
"Company"), and Ira Kaplan ("Executive").

                                           W I T N E S S E T H:

             WHEREAS, the Company and Executive have previously entered into an
Executive Termination Agreement (the "Termination Agreement") providing
Executive with certain rights upon the occurrence of a Change in Control as
defined therein;

             WHEREAS, substantially contemporaneously with the execution hereof,
the Company is entering into an Agreement and Plan of Merger (the "Merger
Agreement") with AIL Systems Inc. ("AIL") pursuant to which AIL will become a
wholly owned subsidiary of the Company;

             WHEREAS, the Company acknowledges that the merger contemplated
under the Merger Agreement (the "Merger") would constitute a Change of Control
of the Company under the terms of the Termination Agreement, and that Executive
would have the right to terminate his employment following the effective time of
the Merger (the "Effective Time") and receive the separation benefits payable
thereunder;

             WHEREAS, the Company has determined that, notwithstanding the
occurrence of such a Change of Control, it wants to have the services of the
Executive following the Effective Time, and the Executive is willing to agree to
provide such services, in each case on the terms and conditions set forth
herein;

             WHEREAS, the Executive understands and agrees that, by agreeing to
the terms and conditions of this Agreement, if he terminates his own employment
voluntarily other than for Good Reason prior to the end of the initial term of
this Amended and Restated Employment Agreement, as specified in Section 2 below,
he may lose the right to receive the amounts that would otherwise have been
payable to him under the Termination Agreement;

             NOW, THEREFORE, the Company and Executive agree to supercede the
Termination Agreement and enter into the following Amended and Restated
Employment Agreement:

             1. Effect at Effective Time. This Amended and Restated Employment
Agreement shall be and become effective at the Effective Time. Until the time,
if any, at which the Effective Time occurs, the Termination Agreement shall
remain in full force and effect. Upon the occurrence of the Effective Time, the
Termination Agreement shall be
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superceded in its entirety by this Agreement and neither the Company nor the
Executive shall have any rights against, or obligations to, the other
thereunder. In the event that the Effective Time does not occur by June 15, 2000
or the Merger Agreement is terminated in accordance with its terms, this Amended
and Restated Employment Agreement shall be rendered void and without effect and
neither the Company nor the Executive has or will have any rights against, or
obligations to, the other party hereunder.

             2.  Term; Duties.

             (a) Term. This Amended and Restated Employment Agreement shall have
an initial term commencing on the Effective Time and ending on the first
anniversary thereof (the "Initial Term"). The term of this Amended and Restated
Employment Agreement shall automatically be extended for one additional year on
each anniversary of the Effective Time, unless either party to this Amended and
Restated Employment Agreement shall give the other party at least 60 days'
written notice prior to such anniversary date. The Initial Term and each and any
extension of the term hereof shall be referred to as the "Employment Term."

             (b) Duties. During the Employment Term, the Executive shall have
the title of Executive Vice President -- Chief Operating Officer and such
executive duties and responsibilities that are commensurate with such office and
his training and experience as shall be assigned to him from time to time by the
Company's Chief Executive Officer or the Board of Directors. The Executive shall
devote his full business time, other than periods of absence due to vacation or
illness, to the Company's affairs.

             3. Compensation. During the Employment Term, the Executive will
receive the following compensation for his services hereunder:

             (a) Base Salary. The Executive's annual base salary shall be at the
rate in effect on the date this Amended and Restated Employment Agreement is
executed. Such base salary shall be periodically reviewed by the Board of
Directors (or a duly authorized committee thereof) and may, as a result of such
review, be increased in accordance with the Company's policies and practices for
senior executives generally. The Executive's base salary, as it may be increased
from time to time, shall not be decreased without his written consent.

             (b) Annual Incentive. The Executive shall be eligible for an annual
incentive award in accordance with the Company's policies and practices
applicable generally to the Company's senior executives.

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             (c) Benefits. The Executive shall be eligible to participate in
such employee and executive benefit plans and policies as shall generally be
made available to the Company's senior executives from time to time; including,
without limitation, all group life, health, accident and disability insurance
plans, and each qualified and nonqualified pension, profit-sharing or savings
plan maintained generally for the benefit of the Company's employees or for its
senior executives. Notwithstanding the foregoing, the amount of retirement
benefits (and the form in which any such benefits are) payable to the Executive
may not be reduced without his written consent.

             4.  Entitlement to Separation Benefits.

             (a) Termination Without Cause or For Good Reason. If during the
Initial Term Executive's employment is terminated due to his death or Disability
(as defined below), by the Company without "Cause" or by Executive in a
"Termination for Good Reason" (as each such term is defined below), the
Executive shall be paid the separation benefits described in Section 5 hereof.
For the avoidance of doubt, despite the provisions of the Termination Agreement,
Executive shall not be entitled to any payment of separation benefits under
Section 5 if he shall terminate his employment voluntarily (other than in a
Termination for Good Reason as expressly defined in this Amended and Restated
Employment Agreement) prior to the end of the Initial Term. After the expiration
of the Initial Term, upon any termination of Executive's employment by the
Company for any reason, including without "Cause", or the Executive's
termination of employment for any reason, including "Good Reason," the Company
shall only pay Executive severance benefits in accordance with the Company's
otherwise applicable policies and practices for senior executives (and not the
separation benefits described in Section 5 hereof) and the provisions of Section
10(g)(pertaining to legal fees) shall cease to have any effect.

             (b) Form of Payment. The total of the cash amounts to be paid under
Section 5(a) , subject to any taxes required to be withheld, shall be paid to
Executive as follows: (A) in a lump sum, on or before the fifth day following
"Date of Employment Termination" (as defined below); or (B) at Executive's
option, in monthly installments not to exceed a 36-month period, commencing on
the fifth day of the month following the Date of Employment Termination, if
written notification from the Executive is received by the Company within 90
days prior to the Date of Employment Termination or, if later, within 10 days
prior to the Effective Time.

             (c) Loans. [The amount of any loan or advance to Executive shall be
due and payable as of the Date of Employment Termination. The Company shall have
no right of set off against any amount due Executive under this Agreement].

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         (d) Termination for Cause. If the Executive's employment is terminated
by the Company for Cause, the Company shall pay the Executive his full base
salary through the Date of Employment Termination (at the rate in effect as of
the Date of Employment Termination), and the Company shall have no further
obligations to the Executive under this Agreement.

         (e) Disability. Disability shall mean the Executive's inability to
perform the principal duties of his position for a period of at least 180
consecutive days due to illness or injury. Disability shall be deemed to exist
under this Amended and Restated Employment Agreement if the Executive shall
become eligible to receive long-term disability benefits under any plan, policy
or arrangement maintained by the Company.

         (f) Definition of Cause. The following are the only reasons for which
the Company may terminate Executive's services for Cause without further
obligations under this Agreement:

         -        for providing the Company with materially false reports
                  concerning Executive's business interests or
                  employment-related activities;

         -        for making materially false representations relied upon by the
                  Company in furnishing information to shareholders, a stock
                  exchange, or the Securities and Exchange Commission;

         -        for maintaining an undisclosed, unauthorized and material
                  conflict of interest in the discharge of duties owed by
                  Executive to the Company;

         -        for misconduct causing a serious violation by the Company of
                  state or federal laws;

         -        for theft of Company funds or corporate assets; or

         -        for conviction of a crime (excluding traffic violations or
                  similar misdemeanors).

         (g) "Termination for Good Reason" shall mean termination of Executive's
employment by Executive following, or in connection with:

         -        during the Employment Term, any reduction in Executive's base
                  salary or any reduction in the Executive's bonus or incentive
                  compensation from the highest dollar amount or other rate of
                  bonus or incentive compensation payable to the Executive as an
                  annual bonus for the three calendar years

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                  preceding the Effective Time or a significant reduction in the
                  aggregate value of the benefits to which Executive was
                  entitled immediately prior to the Effective Time;

         -        the Company's requiring Executive to be based at any office or
                  location more than 25 miles from the one where he worked
                  immediately prior to the Effective Time, except for travel
                  reasonably required in the performance of Executive's
                  responsibilities;

         -        any purported termination by the Company of Executive's
                  employment otherwise than as permitted by this Agreement, it
                  being understood that any such purported termination shall not
                  be effective for any purpose of this Agreement; or

         -        any failure by the Company to obtain the assumption and
                  agreement to perform this Agreement by a successor as
                  contemplated by Section 9(a) hereof.

         (h) "Date of Employment Termination" shall mean the earlier of the date
on which Executive or the Company gives written notice of termination of
Executive's employment to the other party or, in the case where the Employment
Term expires due to the delivery of a notice of non-renewal, the date the
Employment Term lapses.

         5. Amount of Separation Benefits.

         (a) Cash Separation Payments. Upon a termination of Executive's
employment under circumstances described in Section 4(a), the Executive shall
receive the following amounts in cash:

         -        Executive's full base salary through the Date of Employment
                  Termination, at the rate in effect ten (10) days prior to the
                  Date of Employment Termination; plus

         -        the product of

                  (A)      an amount equal to Executive's full base salary
                           earned from the beginning of the calendar year in
                           which Date of Employment Termination occurs through
                           the Date of Employment Termination, and

                  (B)      the greater of

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                           (i)      20% and

                           (ii)     the percentage equal to the highest
                                    percentage of base salary paid to the
                                    Executive as an annual bonus for any of the
                                    three calendar years preceding the calendar
                                    year in which the Executive's termination of
                                    employment occurs (the "Prior Bonus
                                    Percentage"),

                  reduced by any installment of cash bonus previously paid by
                  the Company to Executive for said calendar year; plus

         -        the full amount, if any, of any incentive or special award
                  which Executive earned but which has not yet been paid; plus

         -        three times the sum of

                  (A)      Executive's annual base salary, at the highest rate
                           in effect at any time up to Date of Employment
                           Termination, and

                  (B)      an amount equal to the product of

                           (i)      the annual base salary referred to in
                                    subclause (A) and

                           (ii)     the greater of

                                    (1)      20% and

                                    (2)      the Prior Bonus Percentage;

                  provided, however, that two-thirds of such amount (the
                  "Forfeitable Amount") shall be subject to recapture by the
                  Company in the event that a court of competent jurisdiction
                  finds that the Executive breached any of the covenants
                  contained in Section 7 in any material way; plus

         -        an amount which, as of the Date of Employment Termination, is
                  equal to the present value (calculated at a discount rate of
                  7% per annum) of (x) the lump sum value of the Retirement
                  Pension to which Executive would have been entitled if the
                  four (4) years after the Date of Employment Termination were
                  added to his Credited Service under the EDO Corporation
                  Employees Pension Plan, reduced by (y) the lump sum value of
                  the Retirement Pension to which Executive will be entitled
                  under the

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                  terms of such plan based upon termination of employment as of
                  the Date of Employment Termination and assuming commencement
                  of payment of Executive's pension benefits at age 65. The lump
                  sum value of Executive's Retirement Pension shall be
                  determined as of Executive's retirement at age 65, using the
                  same methods and assumptions used at the Date of Employment
                  Termination for purposes of the EDO Corporation Employees
                  Pension Plan.

             (b) Benefits. For three (3) years after the Date of Employment
Termination, the Company shall maintain in full force and effect and Executive
(and, if eligible dependents, if applicable) shall continue to participate in
all group life, health and accident, and disability insurance, and other
employee benefit plans, programs and arrangements in which Executive was
entitled to participate immediately prior to the Date of Employment Termination,
provided that (i) continued participation is possible under the general terms
and provisions of such plans, programs and arrangements and (ii) as of the third
anniversary of Executive's Date of Termination, Executive shall be deemed to
have retired (regardless of Executive's age at such time) from active employment
with the Company for purposes of any plan or program maintained by the Company
under which medical, health, life or other welfare benefits are provided to
eligible retirees. If participation is barred, or an applicable plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Company shall arrange to provide Executive with benefits substantially
similar to those which he was entitled to receive immediately prior to the Date
of Employment Termination. At the end of the period of coverage above provided
for, Executive shall have the option to have assigned to him, at no cost and
with no apportionment of prepaid premiums, any assignable insurance owned by the
Company and relating specifically to him. The foregoing shall not be deemed to
apply to any plan which is intended to meet the requirements of Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code") or any successor
section thereto.

             (c) No Offset or Mitigation. Executive shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit so provided for be reduced by any compensation earned by him as the
result of employment by another employer after the Date of Employment
Termination, or otherwise.

             (d) Release. Notwithstanding the foregoing, payment of any amounts
under Section 5(a) shall be subject to and conditioned upon the execution by the
Executive of an appropriate release in such form as shall reasonably be
requested by the Company. For the avoidance of doubt, such release shall, among
other things, release the Company from any on going obligations under the
provisions of Section 10(g), pertaining to legal fees.

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             (e) Treatment of Termination for Purposes of the SERP. If the
Executive's employment terminates in a manner which entitles the Executive to
receive the benefits payable under this Section 5, or terminates for any reason
other than Cause after the end of the Initial Term, the Executive shall be
eligible to receive a lump sum payment from the Company of an amount at least
equal to the present value of his accrued benefits under the Supplemental
Executive Retirement Plan ("SERP"), as in effect on the date hereof, regardless
of any amendment, termination or other modification the SERP occurring after the
date hereof.

             6. Special Retention Payment. To induce the Executive to enter into
this Amended and Restated Employment Agreement and to remain in the employ of
the Company during the critical transition period following the Effective Time
to enable the Company to successfully integrate the operations of the Company
and AIL, if the Executive is still employed by the Company on the last day of
the Initial Term, then subject to the execution by the Executive of a release in
accordance with the provisions of Section 5(d), the Company shall pay to the
Executive an amount in cash, in consideration for the performance of such
services on behalf of the Company following the Effective Time, an amount equal
to the cash amount that would have been paid to the Executive pursuant to
Section 5(a) had his employment with the Company been terminated without Cause,
which amount shall be subject to the same conditions as apply to the amounts
payable under Section 5(a) (the "Special Retention Payment"). If payable in
accordance with the preceding sentence, such Special Retention Payment shall be
paid to Executive as follows: (A) in a lump sum, on or before the 10th day
following the Date of Employment Termination or (B) at Executive's option, in
monthly installments not to exceed a 36-month period, commencing on the fifth
day of the month following the Date of Employment Termination, if written
notification by the Executive is received by the Company within 90 days prior to
the Date of Employment Termination. If the Executive receives the Special
Retention Payment, the Company shall also provide to the Executive and his
dependents the same benefits (and on the same terms and for the same period of
time) as such benefits would have been provided under Section 5(b), were it
applicable.

             7.  Covenants.

             (a) Confidential Information. The Executive acknowledges and agrees
that the Executive has and will come into contact with, have access to and learn
various technical and nontechnical trade secrets and other confidential
information, which are the property of the Company (the "Confidential
Information"). Such Confidential Information includes but is not limited to
methods, procedures, devices and other means used by the Company in the conduct
of its business, marketing plans and strategies, pricing plans and strategies,
data processing programs, databases, formulae, secret processes, machines and
adaptions thereto, inventions, research projects, and all other matters of a
technical nature,

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all of which Confidential Information is not publicly available, but has been
developed by the Company at its great effort and expense; names and addresses of
the Company's customers and their representatives responsible for entering into
contracts for the Company's services, customer leads or referrals, specific
customer needs and requirements and the manner in which they have been met by
the Company, information with respect to pricing, costs, profits, sales,
markets, plans for future business and other development, all of which
Confidential Information is not available from directories or other public
sources; and information with respect to the Company's employees, their names
and addresses, compensation, experience, qualifications, abilities, job
performance and similar information. All of the Confidential Information has
been developed, acquired or compiled by the Company at its great effort and
expense.

             (b) Non-Disclosure of Confidential Information. The Executive
acknowledges and agrees that any disclosure, divulging, revealing or other use
of any of the aforesaid Confidential Information by the Executive, other than in
connection with the Company's business will be highly detrimental to the
business of the Company and serious loss of business and pecuniary damage may
result therefrom. Accordingly, the Executive specifically covenants and agrees
to hold all such Confidential Information and any documents containing or
reflecting the same in the strictest confidence, and the Executive will not,
both during employment with the Company or at any time thereafter, without the
Company's prior written consent, disclose, divulge or reveal to any person
whomsoever, or use for any purpose other than the exclusive benefit of the
Company, any Confidential Information whatsoever, whether contained in his
memory or embodied in writing or other physical form.

             (c) Covenant Not To Compete. The Executive acknowledges and agrees
that the Company is engaged in a highly competitive business, and by virtue of
his position and responsibilities with the Company, and his access to the
Confidential Information, engaging in any business which is directly or
indirectly competitive with the Company will cause it great and irreparable
harm. Consequently, the Executive covenants and agrees that during the Term, and
for a period of two years after the Date of Employment Termination, the
Executive shall not directly or indirectly own, manage, operate, control, be
employed by, participate in, or be connected with, in any manner, any business
engaged in whole or in part in the pursuit of electronic counter-measures,
environmental monitoring, radar systems, satellite communications or advanced
electro-optical products for the defense and aerospace industries in the
continental United States and any other country in which the Company conducts
business at the relevant time (or, with respect to the period following the Date
of Termination, at such Date of Termination), without the prior written specific
consent of the Company. If requested, this consent shall not be unreasonably
withheld where the elements of competition are not direct, or specific, to the
Company's business.

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             (d) Non-Solicitation of Customers. The Executive acknowledges and
agrees that during the course and solely as a result of his employment with the
Company, the Executive has and will become aware of some, most or all of the
Company's customers and clients, their names and addresses, their
representatives responsible for engaging the Company's services, their specific
needs and requirements, and leads and referrals to prospective customers and
clients. The Executive further acknowledges and agrees that the loss of such
customers and clients would cause the Company great and irreparable harm.
Consequently, the Executive covenants and agrees that the Executive will not,
for a period of two years after the Date of Employment Termination, directly or
indirectly solicit or seek to do business with any customer or client, former
customer or client or prospective customer or client of the Company with whom
the Executive came into contact while employed by the Company or who was known
to the Executive to be a current, former or prospective customer or client of
the Company, without the prior written specific consent of the Company. If
requested, this consent shall not be unreasonably withheld with respect to the
solicitation of any such customer or client in respect of a product, process or
service which, at the relevant time, is not competitive with any product,
process or service which is available from the Company or which the Company has
begun substantial efforts to make available to its clients or customers.

             (e) Non-Solicitation of Employees. The Executive acknowledges and
agrees that during the course of employment by the Company, the Executive has
and may hereafter come into contact with some, most or all of the Company's
employees, their knowledge, skills, abilities, salaries, commissions, benefits
and other matters with respect to such employees not generally known to the
public. The Executive further acknowledges and agrees that any solicitation,
luring away or hiring of such employees of the Company will be highly
detrimental to the business of the Company and will cause the Company serious
loss of business and great and irreparable harm. Consequently, the Executive
covenants and agrees that during the course of employment by the Company and for
a period of two years after the Date of Employment Termination the Executive
shall not directly or indirectly, on behalf of himself or another, solicit, lure
or hire any employees of the Company of whom the Executive became aware while
employed by the Company, or assist or aid in any such activity.

             (f) Enforcement of Covenants. The Executive acknowledges and agrees
that compliance with the covenants set forth in this Section 7 is necessary to
protect the business and goodwill of the Company and that any breach of this
Section 7 or any subparagraph hereof will result in irreparable and continuing
harm to the Company, for which money damages may not provide adequate relief.
Accordingly, in the event of any breach or anticipatory breach of Section 7 by
the Executive, the Company and the Executive agree that the Company shall have
the right in its sole discretion to terminate

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any payments otherwise due under this Agreement and shall also be entitled to
the following particular forms of relief as a result of such breach, in addition
to any remedies otherwise available to it at law or equity: (a) injunctions,
both preliminary and permanent, enjoining or restraining such breach or
anticipatory breach, and the Executive hereby consents to the issuance thereof
forthwith and without bond by any court of competent jurisdiction, (b) recovery
of all reasonable sums and costs, including attorneys' fees, incurred by the
Company to enforce the provisions of Section 7, and (c) as liquidated damages,
to recapture the Forfeitable Amount in accordance with the provisions of Section
5(a) hereof (or Section 6 hereof, to the extent a payment is made thereunder
which is calculated based on the provisions of Section 5(a)). .

             (g) Prior Commitments. The covenants set forth in this Section 7
supplement, and do not supersede, the covenants contained in any other agreement
between the Executive and the Company (other than the Termination Agreement).

             8.  Taxes.

             (a) Imposition of Excise Tax. In the event that any amount or
benefit paid or distributed to Executive pursuant to this Agreement, taken
together with any amounts or benefits otherwise paid or distributed to Executive
by the Company or any affiliated company (collectively, the "Covered Payments"),
would be an "excess parachute payment" as defined in Section 280G of the Code
and would thereby subject Executive to the tax (the "Excise Tax") imposed under
Section 4999 of the Code (or any similar tax that may hereafter be imposed), the
provisions of this Section 8 shall apply to determine the amounts payable to
Executive pursuant to this Agreement.

             (b) Present Value of Benefits. Immediately following Date of
Employment Termination, the Company shall notify Executive of the aggregate
present value of all termination benefits to which he would be entitled under
this Agreement and any other plan, program or arrangement as of the projected
date of termination, together with the projected maximum payments, determined as
of such projected date of termination that could be paid without Executive being
subject to the Excise Tax.

             (c) Payment Cap. If the aggregate value of all compensation
payments or benefits to be paid or provided to Executive under this Agreement
and any other plan, agreement or arrangement with the Company is less than 105%
of the amount which can be paid to Executive without Executive incurring an
Excise Tax, then the amounts payable to Executive under this Agreement may, in
the discretion of the Company, be reduced (but not below zero) to the maximum
amount which may be paid hereunder without Executive becoming subject to such an
Excise Tax (such reduced payments to be referred to as the "Payment Cap"). In
the event that Executive receives reduced payments and benefits

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hereunder, Executive shall have the right to designate which of the payments and
benefits otherwise provided for in this Agreement that he will receive in
connection with the application of the Payment Cap.

             (d) Tax Adjustment. If the aggregate value of all compensation
payments or benefits to be paid or provided to Executive under this Agreement
and any other plan, agreement or arrangement with the Company is greater than
105% of the amount which can be paid to Executive without Executive incurring an
Excise Tax, the Company shall pay to Executive immediately following Executive's
termination of employment an additional amount (the "Tax Adjustment") such that
the net amount retained by Executive with respect to such Covered Payments,
after deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Adjustment provided for by this
Section 8 , but before deduction for any Federal, state or local income or
employment tax withholding on such Covered Payments, shall be equal to the
amount of the Covered Payments.

             (e) Calculation of Payment. For purposes of determining whether any
of the Covered Payments will be subject to the Excise Tax and the amount of such
Excise Tax,

             (i) such Covered Payments will be treated as "parachute payments"
       within the meaning of Section 280G of the Code, and all "parachute
       payments" in excess of the "base amount" (as defined under Section
       280G(b)(3) of the Code) shall be treated as subject to the Excise Tax,
       unless, and except to the extent that, in the good faith judgment of the
       Company's independent certified public accountants appointed prior to the
       Effective Date or tax counsel selected by such Accountants (the
       "Accountants"), the Company has a reasonable basis to conclude that such
       Covered Payments (in whole or in part) either do not constitute
       "parachute payments" or represent reasonable compensation for personal
       services actually rendered (within the meaning of Section 280G(b)(4)(B)
       of the Code) in excess of the "base amount," or such "parachute payments"
       are otherwise not subject to such Excise Tax, and

             (ii) the value of any non-cash benefits or any deferred payment or
       benefit shall be determined by the Accountants in accordance with the
       principles of Section 280G of the Code.

             (f) Assumptions on Rates. For purposes of determining whether
Executive would receive a greater net after-tax benefit were the amounts payable
under this Agreement reduced in accordance with Section 8(c), Executive shall be
deemed to pay:

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             (i) Federal income taxes at the highest applicable marginal rate of
       Federal income taxation for the calendar year in which the first amounts
       are to be paid hereunder, and

             (ii) any applicable state and local income taxes at the highest
       applicable marginal rate of taxation for such calendar year, net of the
       maximum reduction in Federal incomes taxes which could be obtained from
       the deduction of such state or local taxes if paid in such year;

provided, however, that Executive may request that such determination be made
based on his individual tax circumstances, which shall govern such determination
so long as Executive provides to the Accountants such information and documents
as the Accountants shall reasonably request to determine such individual
circumstances.

             (g) Adjustments. If Executive receives reduced payments and
benefits under this Section 8 is determined not to be applicable to Executive
because the Accountants conclude that Executive is not subject to any Excise Tax
and it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding (a "Final Determination") that,
notwithstanding the good faith of Executive and the Company in applying the
terms of this Agreement, the aggregate "parachute payments" within the meaning
of Section 280G of the Code paid to Executive or for his benefit are in an
amount that would result in Executive being subject an Excise Tax, then the
amount equal to such excess parachute payments shall be deemed for all purposes
to be a loan to Executive made on the date of receipt of such excess payments,
which Executive shall have an obligation to repay to the Company on demand,
together with interest on such amount at the applicable Federal rate (as defined
in Section 1274(d) of the Code) from the date of the payment hereunder to the
date of repayment by Executive. If this Section 8 is not applied to reduce
Executive's entitlements because the Accountants determine that Executive would
not receive a greater net-after tax benefit by applying this Section 8 and it is
established pursuant to a Final Determination that, notwithstanding the good
faith of Executive and the Company in applying the terms of this Agreement,
Executive would have received a greater net after tax benefit by subjecting his
payments and benefits hereunder to the Payment Cap, then the aggregate
"parachute payments" paid to Executive or for his benefit in excess of the
Payment Cap shall be deemed for all purposes a loan to Executive made on the
date of receipt of such excess payments, which Executive shall have an
obligation to repay to the Company on demand, together with interest on such
amount at the applicable Federal rate (as defined in Section 1274(d) of the
Code) from the date of the payment hereunder to the date of repayment by
Executive. If Executive receives reduced payments and benefits by reason of this
Section 8 and it is established pursuant to a Final Determination that Executive
could have received a greater amount without exceeding the Payment Cap, then the
Company shall promptly thereafter

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pay Executive the aggregate additional amount which could have been paid without
exceeding the Payment Cap, together with interest on such amount at the
applicable Federal rate (as defined in Section 1274(d) of the Code) from the
original payment due date to the date of actual payment by the Company.

             (h) Repayment of Excess Amounts. In the event that the Excise Tax
is subsequently determined by the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to be less than the amount taken
into account hereunder in calculating the Tax Adjustment made, Executive shall
repay to the Company, at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such prior Tax Adjustment that
would not have been paid if such Excise Tax had been applied in initially
calculating such Tax Adjustment, plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Tax Adjustment to be refunded to the
Company has been paid to any Federal, state or local tax authority, repayment
thereof shall not be required until actual refund or credit of such portion has
been made to Executive, and interest payable to the Company shall not exceed
interest received or credited to Executive by such tax authority for the period
it held such portion. Executive and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expenses
thereof) if Executive's good faith claim for refund or credit is denied.

             (i) Additional Company Payments. In the event that the Excise Tax
is later determined by the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Tax Adjustment is made (including, but not
limited to, by reason of any payment the existence or amount of which cannot be
determined at the time of the Tax Adjustment), the Company shall make an
additional Tax Adjustment in respect of such excess (plus any interest or
penalty payable with respect to such excess and the amount of any other expenses
incurred by Executive in connection with any audit, appeal, litigation or other
judicial or administrative process pertaining to the Tax Adjustment or any
amounts deemed subject to the Excise Tax) at the time that the amount of such
excess is finally determined.

             (j) Timing of Payment. Any Tax Adjustment (or portion thereof)
provided for in Section 8(d) above shall be paid to Executive not later than 10
business days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Adjustment (or portion thereof) cannot be finally
determined on or before the date on which payment is due, the Company shall pay
to Executive by such date an amount estimated in good faith by the Accountants
to be the minimum amount of such Tax Adjustment and shall pay the remainder of
such Tax Adjustment (together with interest at

                                       14
<PAGE>
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount of the
estimated Tax Adjustment exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company to Executive, payable on
the fifth business day after written demand by the Company for payment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).

             9.  Successors, Binding Agreement.

             (a) Mandatory Assumption. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Executive, to expressly assume
and agree to perform this Amended and Restated Employment Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.

             (b) Definition of Company. As used in this Amended and Restated
Employment Agreement, "Company" shall include any successor to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in Section 9(a) or which otherwise becomes bound by all the terms and
provisions of this Amended and Restated Employment Agreement by operation of
law.

             (c) Executive's Successors. This Amended and Restated Employment
Agreement shall inure to the benefit of, and be enforceable by, Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die while any amounts
would still be payable if he had continued to live, all such amounts shall be
paid in accordance with the terms of this Amended and Restated Employment
Agreement to Executive's devisee, legatee, or other designee or, if there be no
such designee, to his estate.

             10. Miscellaneous Provisions.

             (a) Notices. Notices and all other communications provided for
in this Amended and Restated Employment Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Amended and Restated
Employment Agreement, provided that all notices to the Company shall be directed
to the attention of the Corporate Counsel, or to such

                                       15
<PAGE>
other address as either party may have furnished to the other in writing in
accordance herewith. Notices of change of address shall be effective only upon
receipt.

             (b) Amendment, Waiver. No provisions of this Amended and Restated
Employment Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing signed by Executive
and, on behalf of the Company, by such officer as may be specifically designated
by the Board. Any failure at any time of either party to enforce any provision
of this Amended and Restated Employment Agreement shall not constitute a waiver
of such provision, or prejudice the right of either party to enforce such
provision at any subsequent time.

             (c) Unfunded Arrangement. All benefits provided for in this Amended
and Restated Employment Agreement are provided on an unfunded basis and are not
intended to meet the qualification requirements of section 401 of the Code. The
Company shall not be deemed to be a trustee of any amounts to be paid under this
Amended and Restated Employment Agreement and shall not be required to segregate
any assets with respect to benefits under this Amended and Restated Employment
Agreement. Such benefits shall be payable solely from the general assets of the
Company.

             (d) Entire Agreement. No agreements or representations, oral or
otherwise, expressed or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Amended and
Restated Employment Agreement.

             (e) Governing Law. The validity, interpretation, construction and
performance of this Amended and Restated Employment Agreement shall be governed
by the laws of the State of New York, without regard to principles of conflict
of laws.

             (f) Severability. The invalidity or unenforceability of any one or
more provisions of this Amended and Restated Employment Agreement shall not
affect the validity or enforceability of any other provision of this Amended and
Restated Employment Agreement, which shall remain in full force and effect.

             (g) Legal Fees. In the event of any action or proceeding between
the parties arising out of this Amended and Restated Employment Agreement, the
Company will pay the costs of any such legal proceedings including, but not
limited to, the costs of Executive for all expenses, including attorneys' fees,
incurred in such action or proceeding. Such costs and expenses shall be advanced
to Executive currently as reasonably required to continue such action or
proceeding.

                                       16
<PAGE>
             IN WITNESS WHEREOF, each of the duly authorized officer of the
Company and the Executive have executed this Amended and Restated Employment
Agreement as of the date first written above.

                                                  EDO CORPORATION

                                                  By
                                                    ----------------------------
                                                     Chairman of the Board

                                                  IRA KAPLAN

                                                  ------------------------------

                                       17<PAGE>
             AMENDED AND RESTATED EMPLOYMENT AGREEMENT made this 2nd day of
January, 2000 by and between EDO Corporation, a New York corporation (the
"Company"), and Marvin D. Genzer ("Executive").

                              W I T N E S S E T H:

             WHEREAS, the Company and Executive have previously entered into an
Executive Termination Agreement (the "Termination Agreement") providing
Executive with certain rights upon the occurrence of a Change in Control as
defined therein;

             WHEREAS, substantially contemporaneously with the execution hereof,
the Company is entering into an Agreement and Plan of Merger (the "Merger
Agreement") with AIL Systems Inc. ("AIL") pursuant to which AIL will become a
wholly owned subsidiary of the Company;

             WHEREAS, the Company acknowledges that the merger contemplated
under the Merger Agreement (the "Merger") would constitute a Change of Control
of the Company under the terms of the Termination Agreement, and that Executive
would have the right to terminate his employment following the effective time of
the Merger (the "Effective Time") and receive the separation benefits payable
thereunder;

             WHEREAS, the Company has determined that, notwithstanding the
occurrence of such a Change of Control, it wants to have the services of the
Executive following the Effective Time, and the Executive is willing to agree to
provide such services, in each case on the terms and conditions set forth
herein;

             WHEREAS, the Executive understands and agrees that, by agreeing to
the terms and conditions of this Agreement, if he terminates his own employment
voluntarily other than for Good Reason (as defined below) prior to the end of
the initial term of this Amended and Restated Employment Agreement, as specified
in Section 2 below, he may lose the right to receive the amounts that would
otherwise have been payable to him under the Termination Agreement;

             NOW, THEREFORE, the Company and Executive agree to supercede the
Termination Agreement and enter into the following Amended and Restated
Employment Agreement:

             1. Effect at Effective Time. This Amended and Restated Employment
Agreement shall be and become effective at the Effective Time. Until the time,
if any, at which the Effective Time occurs, the Termination Agreement shall
remain in full force and effect. Upon the occurrence of the Effective Time, the
Termination Agreement shall be
<PAGE>
superceded in its entirety by this Agreement and neither the Company nor the
Executive shall have any rights against, or obligations to, the other
thereunder. In the event that the Effective Time does not occur by June 15, 2000
or the Merger Agreement is terminated in accordance with its terms, this Amended
and Restated Employment Agreement shall be rendered void and without effect and
neither the Company nor the Executive has or will have any rights against, or
obligations to, the other party hereunder.

             2.  Term; Duties.

             (a) Term. This Amended and Restated Employment Agreement shall have
an initial term commencing on the Effective Time and ending on the first
anniversary thereof (the "Initial Term"). The term of this Amended and Restated
Employment Agreement shall automatically be extended for one additional year on
each anniversary of the Effective Time, unless either party to this Amended and
Restated Employment Agreement shall give the other party at least 60 days'
written notice prior to such anniversary date. The Initial Term and each and any
extension of the term hereof shall be referred to as the "Employment Term."

             (b) Duties. During the Employment Term, the Executive shall have
the tile of Senior Vice President -- General Counsel and such executive duties
and responsibilities that are commensurate with such position and his training
and experience as shall be assigned to him from time to time by the Company's
Chief Executive Officer or the Board of Directors. The Executive shall devote
his full business time, other than periods of absence due to vacation or
illness, to the Company's affairs.

             3. Compensation. During the Employment Term, the Executive will
receive the following compensation for his services hereunder:

             (a) Base Salary. The Executive's annual base salary shall be at the
rate in effect on the date this Amended and Restated Employment Agreement is
executed. Such base salary shall be periodically reviewed by the Board of
Directors (or a duly authorized committee thereof) and may, as a result of such
review, be increased in accordance with the Company's policies and practices for
senior executives generally. The Executive's base salary, as it may be increased
from time to time, shall not be decreased without his written consent.

             (b) Annual Incentive. The Executive shall be eligible for an annual
incentive award in accordance with the Company's policies and practices
applicable generally to the Company's senior executives.

                                       2
<PAGE>
             (c) Benefits. The Executive shall be eligible to participate in
such employee and executive benefit plans and policies as shall generally be
made available to the Company's senior executives from time to time; including,
without limitation, all group life, health, accident and disability insurance
plans, and each qualified and nonqualified pension, profit-sharing or savings
plan maintained generally for the benefit of the Company's employees or for its
senior executives. Notwithstanding the foregoing, the amount of retirement
benefits (and the form in which any such benefits are) payable to the Executive
may not be reduced without his written consent.

             4.    Entitlement to Separation Benefits.

             (a) Termination Without Cause or For Good Reason. If during the
Initial Term Executive's employment is terminated due to his death or Disability
(as defined below), by the Company without "Cause" or by Executive in a
"Termination for Good Reason" (as each such term is defined below), the
Executive shall be paid the separation benefits described in Section 5 hereof.
For the avoidance of doubt, despite the provisions of the Termination Agreement,
Executive shall not be entitled to any payment of separation benefits under
Section 5 if he shall terminate his employment voluntarily (other than in a
Termination for Good Reason as expressly defined in this Amended and Restated
Employment Agreement) prior to the end of the Initial Term. After the expiration
of the Initial Term, upon any termination of Executive's employment by the
Company for any reason, including without "Cause", or the Executive's
termination of employment for any reason, including "Good Reason," the Company
shall only pay Executive severance benefits in accordance with the Company's
otherwise applicable policies and practices for senior executives (and not the
separation benefits described in Section 5 hereof) and the provisions of Section
10(g)(pertaining to legal fees) shall cease to have any effect.

             (b) Form of Payment. The total of the cash amounts to be paid under
Section 5(a) , subject to any taxes required to be withheld, shall be paid to
Executive as follows: (A) in a lump sum, on or before the fifth day following
"Date of Employment Termination" (as defined below); or (B) at Executive's
option, in monthly installments not to exceed a 36-month period, commencing on
the fifth day of the month following the Date of Employment Termination, if
written notification from the Executive is received by the Company within 90
days prior to the Date of Employment Termination or, if later, within 10 days
prior to the Effective Time.

             (c) Loans. The amount of any loan or advance to Executive shall be
due and payable as of the Date of Employment Termination. The Company shall have
no right of set off against any amount due Executive under this Agreement.

                                       3
<PAGE>
             (d) Termination for Cause. If the Executive's employment is
terminated by the Company for Cause, the Company shall pay the Executive his
full base salary through the Date of Employment Termination (at the rate in
effect as of the Date of Employment Termination), and the Company shall have no
further obligations to the Executive under this Agreement.

             (e) Disability. Disability shall mean the Executive's inability to
perform the principal duties of his position for a period of at least 180
consecutive days due to illness or injury. Disability shall be deemed to exist
under this Amended and Restated Employment Agreement if the Executive shall
become eligible to receive long-term disability benefits under any plan, policy
or arrangement maintained by the Company.

             (f) Definition of Cause. The following are the only reasons for
which the Company may terminate Executive's services for Cause without further
obligations under this Agreement:

         -        for providing the Company with materially false reports
                  concerning Executive's business interests or
                  employment-related activities;

         -        for making materially false representations relied upon by the
                  Company in furnishing information to shareholders, a stock
                  exchange, or the Securities and Exchange Commission;

         -        for maintaining an undisclosed, unauthorized and material
                  conflict of interest in the discharge of duties owed by
                  Executive to the Company;

         -        for misconduct causing a serious violation by the Company of
                  state or federal laws;

         -        for theft of Company funds or corporate assets; or

         -        for conviction of a crime (excluding traffic violations or
                  similar misdemeanors).

             (g) "Termination for Good Reason" shall mean termination of
Executive's employment by Executive following, or in connection with:

         -        during the Employment Term, any reduction in Executive's base
                  salary or any reduction in the Executive's bonus or incentive
                  compensation from the highest dollar amount or other rate of
                  bonus or incentive compensation payable to the Executive as an
                  annual bonus for the three calendar years

                                       4
<PAGE>
                  preceding the Effective Time or a significant reduction in the
                  aggregate value of the benefits to which Executive was
                  entitled immediately prior to the Effective Time;

         -        the Company's requiring Executive to be based at any office or
                  location more than 25 miles from the one where he worked
                  immediately prior to the Effective Time, except for travel
                  reasonably required in the performance of Executive's
                  responsibilities;

         -        any purported termination by the Company of Executive's
                  employment otherwise than as permitted by this Agreement, it
                  being understood that any such purported termination shall not
                  be effective for any purpose of this Agreement; or

         -        any failure by the Company to obtain the assumption and
                  agreement to perform this Agreement by a successor as
                  contemplated by Section 9(a) hereof.

             (h) "Date of Employment Termination" shall mean the earlier of the
date on which Executive or the Company gives written notice of termination of
Executive's employment to the other party or, in the case where the Employment
Term expires due to the delivery of a notice of non-renewal, the date the
Employment Term lapses.

             5.    Amount of Separation Benefits.

             (a) Cash Separation Payments. Upon a termination of Executive's
employment under circumstances described in Section 4(a), the Executive shall
receive the following amounts in cash:

         -        Executive's full base salary through the Date of Employment
                  Termination, at the rate in effect ten (10) days prior to the
                  Date of Employment Termination; plus

         -        the product of

                   (A)   an amount equal to Executive's full base salary earned
                         from the beginning of the calendar year in which Date
                         of Employment Termination occurs through the Date of
                         Employment Termination, and

                   (B)   the greater of

                                       5
<PAGE>
                         (i)   20% and

                         (ii)  the percentage equal to the highest percentage of
                               base salary paid to the Executive as an annual
                               bonus for any of the three calendar years
                               preceding the calendar year in which the
                               Executive's termination of employment occurs (the
                               "Prior Bonus Percentage"),

                  reduced by any installment of cash bonus previously paid by
                  the Company to Executive for said calendar year; plus

         -        the full amount, if any, of any incentive or special award
                  which Executive earned but which has not yet been paid; plus

         -        three times the sum of

                  (A)   Executive's annual base salary, at the highest rate in
                        effect at any time up to Date of Employment
                        Termination, and

                  (B) an amount equal to the product of

                           (i) the annual base salary referred to in subclause
                           (A) and

                           (ii) the greater of

                                    (1) 20% and

                                    (2) the Prior Bonus Percentage;

                  provided, however, that two-thirds of such amount (the
                  "Forfeitable Amount") shall be subject to recapture by the
                  Company in the event that a court of competent jurisdiction
                  finds that the Executive breached any of the covenants
                  contained in Section 7 in any material way; plus

         -        an amount which, as of the Date of Employment Termination, is
                  equal to the present value (calculated at a discount rate of
                  7% per annum) of (x) the lump sum value of the Retirement
                  Pension to which Executive would have been entitled if the
                  four (4) years after the Date of Employment Termination were
                  added to his Credited Service under the EDO Corporation
                  Employees Pension Plan, reduced by (y) the lump sum value of
                  the Retirement Pension to which Executive will be entitled
                  under the

                                       6
<PAGE>
                   terms of such plan based upon termination of employment as of
                   the Date of Employment Termination and assuming commencement
                   of payment of Executive's pension benefits at age 65. The
                   lump sum value of Executive's Retirement Pension shall be
                   determined as of Executive's retirement at age 65, using the
                   same methods and assumptions used at the Date of Employment
                   Termination for purposes of the EDO Corporation Employees
                   Pension Plan.

             (b) Benefits. For three (3) years after the Date of Employment
Termination, the Company shall maintain in full force and effect and Executive
(and, if eligible dependents, if applicable) shall continue to participate in
all group life, health and accident, and disability insurance, and other
employee benefit plans, programs and arrangements in which Executive was
entitled to participate immediately prior to the Date of Employment Termination,
provided that (i) continued participation is possible under the general terms
and provisions of such plans, programs and arrangements and (ii) as of the third
anniversary of Executive's Date of Termination, Executive shall be deemed to
have retired (regardless of Executive's age at such time) from active employment
with the Company for purposes of any plan or program maintained by the Company
under which medical, health, life or other welfare benefits are provided to
eligible retirees. If participation is barred, or an applicable plan, program or
arrangement is discontinued or the benefits thereunder are materially reduced,
the Company shall arrange to provide Executive with benefits substantially
similar to those which he was entitled to receive immediately prior to the Date
of Employment Termination. At the end of the period of coverage above provided
for, Executive shall have the option to have assigned to him, at no cost and
with no apportionment of prepaid premiums, any assignable insurance owned by the
Company and relating specifically to him. The foregoing shall not be deemed to
apply to any plan which is intended to meet the requirements of Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code") or any successor
section thereto.

             (c) No Offset or Mitigation. Executive shall not be required to
mitigate the amount of any payment or benefit provided for in this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment or
benefit so provided for be reduced by any compensation earned by him as the
result of employment by another employer after the Date of Employment
Termination, or otherwise.

             (d) Release. Notwithstanding the foregoing, payment of any amounts
under Section 5(a) shall be subject to and conditioned upon the execution by the
Executive of an appropriate release in such form as shall reasonably be
requested by the Company. For the avoidance of doubt, such release shall, among
other things, release the Company from any on going obligations under the
provisions of Section 10(g), pertaining to legal fees.

                                       7
<PAGE>
             (e) Treatment of Termination for Purposes of the SERP. If the
Executive's employment terminates in a manner which entitles the Executive to
receive the benefits payable under this Section 5, or terminates for any reason
other than Cause after the end of the Initial Term, the Executive shall be
eligible to receive a lump sum payment from the Company of an amount at least
equal to the present value of his accrued benefits under the Supplemental
Executive Retirement Plan ("SERP"), as in effect on the date hereof, regardless
of any amendment, termination or other modification the SERP occurring after the
date hereof.

             6. Special Retention Payment. To induce the Executive to enter into
this Amended and Restated Employment Agreement and to remain in the employ of
the Company during the critical transition period following the Effective Time
to enable the Company to successfully integrate the operations of the Company
and AIL, if the Executive is still employed by the Company on the last day of
the Initial Term, then subject to the execution by the Executive of a release in
accordance with the provisions of Section 5(d), the Company shall pay to the
Executive an amount in cash, in consideration for the performance of such
services on behalf of the Company following the Effective Time, an amount equal
to the cash amount that would have been paid to the Executive pursuant to
Section 5(a) had his employment with the Company been terminated without Cause,
which amount shall be subject to the same conditions as apply to the amounts
payable under Section 5(a) (the "Special Retention Payment"). If payable in
accordance with the preceding sentence, such Special Retention Payment shall be
paid to Executive as follows: (A) in a lump sum, on or before the 10th day
following the Date of Employment Termination or (B) at Executive's option, in
monthly installments not to exceed a 36- month period, commencing on the fifth
day of the month following the Date of Employment Termination, if written
notification by the Executive is received by the Company within 90 days prior to
the Date of Employment Termination. If the Executive receives the Special
Retention Payment, the Company shall also provide to the Executive and his
dependents the same benefits (and on the same terms and for the same period of
time) as such benefits would have been provided under Section 5(b), were it
applicable.

             7.  Covenants.

             (a) Confidential Information. The Executive acknowledges and agrees
that the Executive has and will come into contact with, have access to and learn
various technical and nontechnical trade secrets and other confidential
information, which are the property of the Company (the "Confidential
Information"). Such Confidential Information includes but is not limited to
methods, procedures, devices and other means used by the Company in the conduct
of its business, marketing plans and strategies, pricing plans and strategies,
data processing programs, databases, formulae, secret processes, machines and
adaptions thereto, inventions, research projects, and all other matters of a
technical nature,

                                       8
<PAGE>
all of which Confidential Information is not publicly available, but has been
developed by the Company at its great effort and expense; names and addresses of
the Company's customers and their representatives responsible for entering into
contracts for the Company's services, customer leads or referrals, specific
customer needs and requirements and the manner in which they have been met by
the Company, information with respect to pricing, costs, profits, sales,
markets, plans for future business and other development, all of which
Confidential Information is not available from directories or other public
sources; and information with respect to the Company's employees, their names
and addresses, compensation, experience, qualifications, abilities, job
performance and similar information. All of the Confidential Information has
been developed, acquired or compiled by the Company at its great effort and
expense.

             (b) Non-Disclosure of Confidential Information. The Executive
acknowledges and agrees that any disclosure, divulging, revealing or other use
of any of the aforesaid Confidential Information by the Executive, other than in
connection with the Company's business will be highly detrimental to the
business of the Company and serious loss of business and pecuniary damage may
result therefrom. Accordingly, the Executive specifically covenants and agrees
to hold all such Confidential Information and any documents containing or
reflecting the same in the strictest confidence, and the Executive will not,
both during employment with the Company or at any time thereafter, without the
Company's prior written consent, disclose, divulge or reveal to any person
whomsoever, or use for any purpose other than the exclusive benefit of the
Company, any Confidential Information whatsoever, whether contained in his
memory or embodied in writing or other physical form.

             (c) Covenant Not To Compete. The Executive acknowledges and agrees
that the Company is engaged in a highly competitive business, and by virtue of
his position and responsibilities with the Company, and his access to the
Confidential Information, engaging in any business which is directly or
indirectly competitive with the Company will cause it great and irreparable
harm. Consequently, the Executive covenants and agrees that during the Term, and
for a period of two years after the Date of Employment Termination, the
Executive shall not directly or indirectly own, manage, operate, control, be
employed by, participate in, or be connected with, in any manner, any business
engaged in whole or in part in the pursuit of electronic counter-measures,
environmental monitoring, radar systems, satellite communications or advanced
electro-optical products for the defense and aerospace industries in the
continental United States and any other country in which the Company conducts
business at the relevant time (or, with respect to the period following the Date
of Termination, at such Date of Termination), without the prior written specific
consent of the Company. If requested, this consent shall not be unreasonably
withheld where the elements of competition are not direct, or specific, to the
Company's business.

                                       9
<PAGE>
             (d) Non-Solicitation of Customers. The Executive acknowledges and
agrees that during the course and solely as a result of his employment with the
Company, the Executive has and will become aware of some, most or all of the
Company's customers and clients, their names and addresses, their
representatives responsible for engaging the Company's services, their specific
needs and requirements, and leads and referrals to prospective customers and
clients. The Executive further acknowledges and agrees that the loss of such
customers and clients would cause the Company great and irreparable harm.
Consequently, the Executive covenants and agrees that the Executive will not,
for a period of two years after the Date of Employment Termination, directly or
indirectly solicit or seek to do business with any customer or client, former
customer or client or prospective customer or client of the Company with whom
the Executive came into contact while employed by the Company or who was known
to the Executive to be a current, former or prospective customer or client of
the Company, without the prior written specific consent of the Company. If
requested, this consent shall not be unreasonably withheld with respect to the
solicitation of any such customer or client in respect of a product, process or
service (including legal services) which, at the relevant time, is not
competitive with any product, process or service which is available from the
Company or which the Company has begun substantial efforts to make available to
its clients or customers.

             (e) Non-Solicitation of Employees. The Executive acknowledges and
agrees that during the course of employment by the Company, the Executive has
and may hereafter come into contact with some, most or all of the Company's
employees, their knowledge, skills, abilities, salaries, commissions, benefits
and other matters with respect to such employees not generally known to the
public. The Executive further acknowledges and agrees that any solicitation,
luring away or hiring of such employees of the Company will be highly
detrimental to the business of the Company and will cause the Company serious
loss of business and great and irreparable harm. Consequently, the Executive
covenants and agrees that during the course of employment by the Company and for
a period of two years after the Date of Employment Termination the Executive
shall not directly or indirectly, on behalf of himself or another, solicit, lure
or hire any employees of the Company of whom the Executive became aware while
employed by the Company, or assist or aid in any such activity.

             (f) Enforcement of Covenants. The Executive acknowledges and agrees
that compliance with the covenants set forth in this Section 7 is necessary to
protect the business and goodwill of the Company and that any breach of this
Section 7 or any subparagraph hereof will result in irreparable and continuing
harm to the Company, for which money damages may not provide adequate relief.
Accordingly, in the event of any breach or anticipatory breach of Section 7 by
the Executive, the Company and the

                                       10
<PAGE>
Executive agree that the Company shall have the right in its sole discretion to
terminate any payments otherwise due under this Agreement and shall also be
entitled to the following particular forms of relief as a result of such breach,
in addition to any remedies otherwise available to it at law or equity: (a)
injunctions, both preliminary and permanent, enjoining or restraining such
breach or anticipatory breach, and the Executive hereby consents to the issuance
thereof forthwith and without bond by any court of competent jurisdiction, (b)
recovery of all reasonable sums and costs, including attorneys' fees, incurred
by the Company to enforce the provisions of Section 7, and (c) as liquidated
damages, to recapture the Forfeitable Amount in accordance with the provisions
of Section 5(a) hereof (or Section 6 hereof, to the extent a payment is made
thereunder which is calculated based on the provisions of Section 5(a)). .

             (g) Prior Commitments. The covenants set forth in this Section 7
supplement, and do not supersede, the covenants contained in any other agreement
between the Executive and the Company (other than the Termination Agreement).

             8.  Taxes.

             (a) Imposition of Excise Tax. In the event that any amount or
benefit paid or distributed to Executive pursuant to this Agreement, taken
together with any amounts or benefits otherwise paid or distributed to Executive
by the Company or any affiliated company (collectively, the "Covered Payments"),
would be an "excess parachute payment" as defined in Section 280G of the Code
and would thereby subject Executive to the tax (the "Excise Tax") imposed under
Section 4999 of the Code (or any similar tax that may hereafter be imposed), the
provisions of this Section 8 shall apply to determine the amounts payable to
Executive pursuant to this Agreement.

             (b) Present Value of Benefits. Immediately following Date of
Employment Termination, the Company shall notify Executive of the aggregate
present value of all termination benefits to which he would be entitled under
this Agreement and any other plan, program or arrangement as of the projected
date of termination, together with the projected maximum payments, determined as
of such projected date of termination that could be paid without Executive being
subject to the Excise Tax.

             (c) Payment Cap. If the aggregate value of all compensation
payments or benefits to be paid or provided to Executive under this Agreement
and any other plan, agreement or arrangement with the Company is less than 105%
of the amount which can be paid to Executive without Executive incurring an
Excise Tax, then the amounts payable to Executive under this Agreement may, in
the discretion of the Company, be reduced (but not below zero) to the maximum
amount which may be paid hereunder without Executive becoming subject to such an
Excise Tax (such reduced payments to be referred to as the

                                       11
<PAGE>
"Payment Cap"). In the event that Executive receives reduced payments and
benefits hereunder, Executive shall have the right to designate which of the
payments and benefits otherwise provided for in this Agreement that he will
receive in connection with the application of the Payment Cap.

             (d) Tax Adjustment. If the aggregate value of all compensation
payments or benefits to be paid or provided to Executive under this Agreement
and any other plan, agreement or arrangement with the Company is greater than
105% of the amount which can be paid to Executive without Executive incurring an
Excise Tax, the Company shall pay to Executive immediately following Executive's
termination of employment an additional amount (the "Tax Adjustment") such that
the net amount retained by Executive with respect to such Covered Payments,
after deduction of any Excise Tax on the Covered Payments and any Federal, state
and local income tax and Excise Tax on the Tax Adjustment provided for by this
Section 8 , but before deduction for any Federal, state or local income or
employment tax withholding on such Covered Payments, shall be equal to the
amount of the Covered Payments.

             (e) Calculation of Payment. For purposes of determining whether any
of the Covered Payments will be subject to the Excise Tax and the amount of such
Excise Tax,

             (i) such Covered Payments will be treated as "parachute payments"
       within the meaning of Section 280G of the Code, and all "parachute
       payments" in excess of the "base amount" (as defined under Section
       280G(b)(3) of the Code) shall be treated as subject to the Excise Tax,
       unless, and except to the extent that, in the good faith judgment of the
       Company's independent certified public accountants appointed prior to the
       Effective Date or tax counsel selected by such Accountants (the
       "Accountants"), the Company has a reasonable basis to conclude that such
       Covered Payments (in whole or in part) either do not constitute
       "parachute payments" or represent reasonable compensation for personal
       services actually rendered (within the meaning of Section 280G(b)(4)(B)
       of the Code) in excess of the "base amount," or such "parachute payments"
       are otherwise not subject to such Excise Tax, and

             (ii) the value of any non-cash benefits or any deferred payment or
       benefit shall be determined by the Accountants in accordance with the
       principles of Section 280G of the Code.

             (f) Assumptions on Rates. For purposes of determining whether
Executive would receive a greater net after-tax benefit were the amounts payable
under this Agreement reduced in accordance with Section 8(c), Executive shall be
deemed to pay:

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<PAGE>
             (i) Federal income taxes at the highest applicable marginal rate of
       Federal income taxation for the calendar year in which the first amounts
       are to be paid hereunder, and

             (ii) any applicable state and local income taxes at the highest
       applicable marginal rate of taxation for such calendar year, net of the
       maximum reduction in Federal incomes taxes which could be obtained from
       the deduction of such state or local taxes if paid in such year;

provided, however, that Executive may request that such determination be made
based on his individual tax circumstances, which shall govern such determination
so long as Executive provides to the Accountants such information and documents
as the Accountants shall reasonably request to determine such individual
circumstances.

             (g) Adjustments. If Executive receives reduced payments and
benefits under this Section 8 is determined not to be applicable to Executive
because the Accountants conclude that Executive is not subject to any Excise Tax
and it is established pursuant to a final determination of a court or an
Internal Revenue Service proceeding (a "Final Determination") that,
notwithstanding the good faith of Executive and the Company in applying the
terms of this Agreement, the aggregate "parachute payments" within the meaning
of Section 280G of the Code paid to Executive or for his benefit are in an
amount that would result in Executive being subject an Excise Tax, then the
amount equal to such excess parachute payments shall be deemed for all purposes
to be a loan to Executive made on the date of receipt of such excess payments,
which Executive shall have an obligation to repay to the Company on demand,
together with interest on such amount at the applicable Federal rate (as defined
in Section 1274(d) of the Code) from the date of the payment hereunder to the
date of repayment by Executive. If this Section 8 is not applied to reduce
Executive's entitlements because the Accountants determine that Executive would
not receive a greater net-after tax benefit by applying this Section 8 and it is
established pursuant to a Final Determination that, notwithstanding the good
faith of Executive and the Company in applying the terms of this Agreement,
Executive would have received a greater net after tax benefit by subjecting his
payments and benefits hereunder to the Payment Cap, then the aggregate
"parachute payments" paid to Executive or for his benefit in excess of the
Payment Cap shall be deemed for all purposes a loan to Executive made on the
date of receipt of such excess payments, which Executive shall have an
obligation to repay to the Company on demand, together with interest on such
amount at the applicable Federal rate (as defined in Section 1274(d) of the
Code) from the date of the payment hereunder to the date of repayment by
Executive. If Executive receives reduced payments and benefits by reason of this
Section 8 and it is established pursuant to a Final Determination that Executive
could have received a greater amount without exceeding the Payment Cap, then the
Company shall promptly thereafter

                                       13
<PAGE>
pay Executive the aggregate additional amount which could have been paid without
exceeding the Payment Cap, together with interest on such amount at the
applicable Federal rate (as defined in Section 1274(d) of the Code) from the
original payment due date to the date of actual payment by the Company.

             (h) Repayment of Excess Amounts. In the event that the Excise Tax
is subsequently determined by the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to be less than the amount taken
into account hereunder in calculating the Tax Adjustment made, Executive shall
repay to the Company, at the time that the amount of such reduction in the
Excise Tax is finally determined, the portion of such prior Tax Adjustment that
would not have been paid if such Excise Tax had been applied in initially
calculating such Tax Adjustment, plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Tax Adjustment to be refunded to the
Company has been paid to any Federal, state or local tax authority, repayment
thereof shall not be required until actual refund or credit of such portion has
been made to Executive, and interest payable to the Company shall not exceed
interest received or credited to Executive by such tax authority for the period
it held such portion. Executive and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expenses
thereof) if Executive's good faith claim for refund or credit is denied.

             (i) Additional Company Payments. In the event that the Excise Tax
is later determined by the Accountants or pursuant to any proceeding or
negotiations with the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Tax Adjustment is made (including, but not
limited to, by reason of any payment the existence or amount of which cannot be
determined at the time of the Tax Adjustment), the Company shall make an
additional Tax Adjustment in respect of such excess (plus any interest or
penalty payable with respect to such excess and the amount of any other expenses
incurred by Executive in connection with any audit, appeal, litigation or other
judicial or administrative process pertaining to the Tax Adjustment or any
amounts deemed subject to the Excise Tax) at the time that the amount of such
excess is finally determined.

             (j) Timing of Payment. Any Tax Adjustment (or portion thereof)
provided for in Section 8(d) above shall be paid to Executive not later than 10
business days following the payment of the Covered Payments; provided, however,
that if the amount of such Tax Adjustment (or portion thereof) cannot be finally
determined on or before the date on which payment is due, the Company shall pay
to Executive by such date an amount estimated in good faith by the Accountants
to be the minimum amount of such Tax Adjustment and shall pay the remainder of
such Tax Adjustment (together with interest at

                                       14
<PAGE>
the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined, but in no event later than 45 calendar days after
payment of the related Covered Payment. In the event that the amount of the
estimated Tax Adjustment exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company to Executive, payable on
the fifth business day after written demand by the Company for payment (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).

             9.  Successors, Binding Agreement.

             (a) Mandatory Assumption. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Executive, to expressly assume
and agree to perform this Amended and Restated Employment Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place.

             (b) Definition of Company. As used in this Amended and Restated
Employment Agreement, "Company" shall include any successor to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in Section 9(a) or which otherwise becomes bound by all the terms and
provisions of this Amended and Restated Employment Agreement by operation of
law.

             (c) Executive's Successors. This Amended and Restated Employment
Agreement shall inure to the benefit of, and be enforceable by, Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive should die while any amounts
would still be payable if he had continued to live, all such amounts shall be
paid in accordance with the terms of this Amended and Restated Employment
Agreement to Executive's devisee, legatee, or other designee or, if there be no
such designee, to his estate.

             10. Miscellaneous Provisions.

             (a) Notices. Notices and all other communications provided for in
this Amended and Restated Employment Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Amended and Restated
Employment Agreement, provided that all notices to the Company shall be directed
to the attention of the Corporate Counsel, or to such

                                       15
<PAGE>
other address as either party may have furnished to the other in writing in
accordance herewith. Notices of change of address shall be effective only upon
receipt.

             (b) Amendment, Waiver. No provisions of this Amended and Restated
Employment Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is agreed to in writing signed by Executive
and, on behalf of the Company, by such officer as may be specifically designated
by the Board. Any failure at any time of either party to enforce any provision
of this Amended and Restated Employment Agreement shall not constitute a waiver
of such provision, or prejudice the right of either party to enforce such
provision at any subsequent time.

             (c) Unfunded Arrangement. All benefits provided for in this Amended
and Restated Employment Agreement are provided on an unfunded basis and are not
intended to meet the qualification requirements of section 401 of the Code. The
Company shall not be deemed to be a trustee of any amounts to be paid under this
Amended and Restated Employment Agreement and shall not be required to segregate
any assets with respect to benefits under this Amended and Restated Employment
Agreement. Such benefits shall be payable solely from the general assets of the
Company.

             (d) Entire Agreement. No agreements or representations, oral or
otherwise, expressed or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Amended and
Restated Employment Agreement.

             (e) Governing Law. The validity, interpretation, construction and
performance of this Amended and Restated Employment Agreement shall be governed
by the laws of the State of New York, without regard to principles of conflict
of laws.

             (f) Severability. The invalidity or unenforceability of any one or
more provisions of this Amended and Restated Employment Agreement shall not
affect the validity or enforceability of any other provision of this Amended and
Restated Employment Agreement, which shall remain in full force and effect.

             (g) Legal Fees. In the event of any action or proceeding between
the parties arising out of this Amended and Restated Employment Agreement, the
Company will pay the costs of any such legal proceedings including, but not
limited to, the costs of Executive for all expenses, including attorneys' fees,
incurred in such action or proceeding. Such costs and expenses shall be advanced
to Executive currently as reasonably required to continue such action or
proceeding.

                                       16
<PAGE>
             IN WITNESS WHEREOF, each of the duly authorized officer of the
Company and the Executive have executed this Amended and Restated Employment
Agreement as of the date first written above.

                                                  EDO CORPORATION

                                                  By
                                                    ----------------------------

                                                  MARVIN D. GENZER

                                                  ------------------------------

                                       17

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