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Exhibit 10.2  

 
 

SEVERANCE PROTECTION AGREEMENT    
    

        THIS AGREEMENT made as of May 13, 2003, by and between Axsys Technologies, Inc. (the "Company") and David A. Almeida (the "Executive"). 

        WHEREAS,
the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence
of a Change in Control can result in significant distraction of the Company's key management personnel because of the uncertainties inherent in such a situation; 

        WHEREAS,
the Board has determined that it is essential and in the best interests of the Company and its stockholders for the Company to retain the services of the Executive in the event
of a threat or occurrence of a Change in Control and to ensure the Executive's continued dedication and efforts in such event without undue concern for the Executive's personal financial and
employment security; and 

        WHEREAS,
in order to induce the Executive to remain in the employ of the Company and/or one of its Affiliates (the entity or entities employing the Executive, the "Employing Affiliate"),
particularly in the event of a threat or the occurrence of a Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits in
the event the Executive's employment is terminated as a result of, or in connection with, a Change in Control. 

        NOW,
THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 

        1.     Term of Agreement. This Agreement shall commence as of the date of this agreement, and shall continue in effect until
January 1, 2005 (the "Term"); provided, however, that on January 1, 2004, and on each
January 1 thereafter, the Term shall automatically be extended for one year unless either the Executive or the Company shall have given written notice to the other at least ninety days prior
thereto that the Term shall not be so extended; provided, further, however, that following the occurrence of a Change in Control, the Term shall not
expire prior to the expiration of twenty-four months after such occurrence. 

        2.     Termination of Employment. If, during the Term, the Executive's employment with the Company or an Employing Affiliate
shall be terminated within twenty-four months following a Change in Control, the Executive shall be entitled to the following compensation and benefits: 

        (a)   If
the Executive's employment with the Company or an Employing Affiliate shall be terminated (1) by the Company for Cause or Disability, (2) by reason of
the Executive's death, or (3) by the Executive other than for Good Reason or pursuant to a Window Period Termination, the Company shall pay to the Executive the Accrued Compensation. 

        (b)   If
the Executive's employment with the Company or an Employing Affiliate shall be terminated for any reason other than as specified in Section 2(a), or if the
Executive terminates his employment with or without Good Reason during the one month period commencing six months following a Change in Control (a "Window Period Termination"), the Executive shall be
entitled to the following: 

        (1)   the
Company shall pay the Executive the Accrued Compensation; 

        (2)   the
Company shall pay the Executive as severance pay an amount equal to 2.99 times the sum of (a) the highest annual base salary paid to the Executive during the
12-month period immediately prior to the Termination Date and (b) the average of the annual cash bonuses paid to the Executive during the 3 calendar years prior to the year in which
the Termination Date occurs (prorated for any lesser period during which the Executive has been employed or for which bonuses have been determined, if applicable, and, in the case of each of
(a) and (b), determined without reduction for any portion thereof that has been deferred by the Executive); provided, however, that, if the Executive has been employed for less than a 

 

full
year as of the Termination Date, the amount of clause (b) hereof shall be equal to the Executive's target bonus amount for such year, prorated for the period during which the Executive has
been employed; and 

        (3)   for
twelve months following the Termination Date (the "Continuation Period"), the Company shall continue on behalf of the Executive and his dependents and beneficiaries
the life insurance, disability, medical, dental, prescription drug and hospitalization coverages and benefits provided to the Executive immediately prior to a Change in Control (the "Benefits
Continuation"), or, if greater, the coverages and benefits provided at any time thereafter; provided, however, that within five days following the
Termination Date, the Executive may elect to receive from the Company in cash, in lieu of the Benefits Continuation, the value of the Benefits Continuation. The coverages and benefits (including
deductibles and costs to the Executive) provided in this Section 2(b)(3) during the Continuation Period shall be no less favorable to the Executive and his dependents and beneficiaries than the
most favorable of such coverages and benefits referred to above. The Company's obligation hereunder with respect to the foregoing coverages and benefits shall be reduced to the extent that the
Executive obtains any such coverages and benefits pursuant to a subsequent employer's benefit plans, in which case the Company may reduce any of the coverages or benefits it is required to provide the
Executive hereunder so long as the aggregate coverages and benefits (including deductibles and costs to the Executive) of the combined benefit plans are no less favorable to the Executive than the
coverages and benefits required to be provided hereunder. This Section 2(b)(3) shall not be interpreted so as to limit any benefits to which the Executive, his dependents or beneficiaries may
be entitled under any of the Company's employee benefit plans, programs or practices following the Executive's termination of employment, including but not limited to retiree medical and life
insurance benefits. 

        (c)   The
cash amounts provided for in Sections 2(a) and 2(b) shall be paid in a single lump sum cash payment within ten days after the Termination Date (or earlier, if
required by applicable law). 

        (d)   The
severance pay and benefits provided for in this Section 2 shall be in lieu of any other severance pay to which the Executive may be entitled under any
severance or employment agreement with the Company or any other plan, agreement or arrangement of the Company or any other Affiliate of the Company. The Executive's entitlement to any compensation or
benefits other than as provided herein shall be determined in accordance with the employee benefit plans of the Company and any of its Affiliates and other applicable agreements, programs and
practices as in effect from time to time. 

        (e)   If
the Executive's employment is terminated by the Company or an Employing Affiliate without Cause prior to the date of a Change in Control but the Executive reasonably
demonstrates that such termination (1) was at the request of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change in Control (a "Third Party")
and who effectuates a Change in Control or (2) otherwise arose in connection with, or in anticipation of, a Change in Control which has been threatened or proposed and which actually occurs,
such termination shall be deemed to have occurred after a Change in Control, it being agreed that any such action taken following shareholder approval of a transaction which if consummated would
constitute a Change in Control, shall be deemed to be in anticipation of a Change in Control provided such transaction is actually consummated. 

        3.     Effect of Section 280G of the Internal Revenue Code.

        (a)
Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments and benefits provided under this Agreement and benefits provided to, or for the
benefit of, the Executive under any other Company plan or agreement (such payments or benefits collectively 

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referred
to herein as the "Payments") would be subject to the excise tax (the "Excise Tax") imposed under Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), the
Payments shall be reduced (but not below zero) if and to the extent necessary so that no Payment to be made or benefit to be provided to the Executive shall be subject to the Excise Tax (such reduced
amount is hereinafter referred to as the "Limited Payment Amount"). Unless the Executive shall have given prior written notice specifying a different order to the Company to effectuate the foregoing,
the Company shall reduce or eliminate the Payments by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the Determination (as hereinafter defined). Any notice given by the Executive pursuant to the
preceding sentence shall take precedence over the provisions of any other plan, arrangement or agreement governing the Executive's rights and entitlements to any benefits or compensation. 

        (b)
The determination of whether the Payments shall be reduced to the Limited Payment Amount pursuant to this Agreement and the amount of such Limited Payment Amount shall be made, at
the Company's expense, by an accounting firm selected by the Company and reasonably acceptable to the Executive which is one of the five largest accounting firms in the United States (the "Accounting
Firm"). The Accounting Firm shall provide its determination (the "Determination"), together with detailed supporting calculations and documentation to the Company and the Executive within ten days of
the Termination Date, if applicable, or such other time as requested by the Company or by the Executive (provided the Executive reasonably believes that any of the Payments may be subject to the
Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable by the Executive with respect to the Payments, it shall furnish the Executive with an opinion reasonably acceptable to
the Executive that no Excise Tax will be imposed with respect to any such Payments. The Determination shall be binding, final and conclusive upon the Company and the Executive. 

        4.     Notice of Termination. Following a Change in Control, any intended termination of the Executive's employment by the
Company or an Employing Affiliate shall be communicated by a Notice of Termination from the Company to the Executive, and any intended termination of the Executive's employment by the Executive for
Good Reason shall be communicated by a Notice of Termination from the Executive to the Company. 

        5.     Fees and Expenses. The Company shall pay, as incurred, all legal fees and related expenses (including the costs of
experts, evidence and counsel) that the Executive may reasonably incur following a Change in Control as a result of or in connection with (a) the Executive's contesting, defending or disputing
the basis for the termination of the Executive's employment, (b) the Executive's hearing before the Board of Directors of the Company as contemplated in Section 16.4 or (c) the
Executive's seeking to obtain or enforce any right or benefit provided by this Agreement or by any other plan or arrangement maintained by the Company or one of its Affiliates under which the
Executive is or may be entitled to receive benefits. 

        6.     Unauthorized Disclosure.

        (a)
The Executive agrees and understands that during the Executive's employment with the Company or an Employing Affiliate, the Executive has been and will be exposed to and receive
information relating to the affairs of the Company considered by the Company to be confidential and in the nature of trade secrets (including but not limited to procedures, memoranda, notes, records
and customer lists, whether such information has been or is made, developed or compiled by the Executive or otherwise has been or is made available to him) (any and all such information, the
"Confidential Information"). The Executive agrees that, during the Term and thereafter, he shall keep such Confidential Information confidential and will not disclose such Confidential Information,
either directly or indirectly, to any third person or entity without the prior written consent of the Company; provided, however, that (i) the
Executive shall have no such obligation to the extent such Confidential 

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Information
is or becomes publicly known other than as a result of the Executive's breach of his obligations hereunder or is received by the Executive following the Termination Date and
(ii) the Executive may, after giving prior notice to the Company to the extent practicable under the circumstances, disclose such Confidential Information to the extent required by applicable
laws or governmental regulations or judicial or regulatory process. 

        (b)
The Executive agrees that all Confidential Information is and will remain the property of the Company. The Executive further agrees that, during the Term and thereafter, he shall
hold in the strictest confidence all Confidential Information, and shall not, directly or indirectly, duplicate, sell, use, lease, commercialize, disclose or otherwise divulge to any person or entity
any portion of the Confidential Information or use any Confidential Information for his own benefit or profit or allow any person or entity, other than the Company and its authorized employees, to use
or otherwise gain access to any Confidential Information. 

        (c)
All memoranda, notes, records, customer lists and other documents made or compiled by the Executive or otherwise made available to him concerning the business of the Company or its
subsidiaries or Affiliates shall be the Company's property and shall be delivered to the Company upon the termination of the Executive's employment with the Company or an Employing Affiliate or at any
other time upon request by the Company, and the Executive shall retain no copies of those documents. The Executive shall never at any time have or claim any right, title or interest in any material,
invention or matter of any sort created, prepared or used in connection with the business of the Company or its subsidiaries or Affiliates. 

        7.     Non-competition.

        (a)
By and in consideration of the Company's entering into this Agreement and the payments to be made and benefits to be provided by the Company hereunder and further in consideration of
the Executive's exposure to the proprietary information of the Company, the Executive agrees that the Executive will not, during the Term, and thereafter during the Non-competition Term
(as hereinafter defined), directly or indirectly, own, manage, operate, join, control, be employed by, or participate in the ownership, management, operation or control of, or be connected in any
manner with, including but not limited to holding any position as a shareholder, director, officer, consultant, independent contractor, employee, partner, or investor in, any Restricted Enterprise (as
defined below); provided, however, that in no event shall ownership of less than one percent of the outstanding equity securities of any issuer whose
securities are registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), standing alone, be prohibited by this Section 7. For purposes of this paragraph, the term
"Restricted Enterprise" shall mean any person, corporation, partnership or other entity that is engaged in the precision systems or industrial components business or otherwise competes, directly or
indirectly, with any business or activity conducted or proposed to be conducted by the Company or any of its subsidiaries or Affiliates as of the date of the Executive's termination of employment.
Following termination of employment, upon request of the Company, the Executive shall notify the Company of the Executive's then current employment status. For purposes of this Agreement, the
"Non-competition Term" shall mean the period beginning on the Termination Date and ending on the first anniversary of such date. Any material breach of the terms of this paragraph shall be
considered Cause under Section 16.4. 

        (b)
The Executive agrees that any breach of the terms of this Section 7 would result in irreparable injury and damage to the Company and/or its subsidiaries or Affiliates for
which the Company and/or its subsidiaries or Affiliates would have no adequate remedy at law; the Executive therefore also agrees that in the event of said breach or any threat of breach, the Company
and/or its subsidiaries or Affiliates, as applicable, shall be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by the
Executive and/or any and all persons and/or entities acting for and/or with the Executive, without having to prove damages, in 

4

 

addition
to any other remedies to which the Company and/or its subsidiaries or Affiliates may be entitled at law or in equity. The terms of this paragraph shall not prevent the Company and/or its
subsidiaries or Affiliates from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages from the Executive. The Executive
and the Company further agree that the provisions of the covenants contained in this Section 7 are reasonable and necessary to protect the businesses of the Company and its subsidiaries or
Affiliates because of the Executive's access to Confidential Information and his material participation in the operation of such businesses. Should a court or arbitrator determine, however, that any
provision of the covenants contained in this Section 7 is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties hereto agree that such covenants should
be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable or valid. 

        The
existence of any claim or cause of action by the Executive against the Company and/or its subsidiaries or Affiliates, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the covenants contained in this Section 7. 

        8.     Notice. For the purposes of this Agreement, notices and all other communications provided for in this Agreement (including
any Notice of Termination) shall be in writing, shall be signed by the Executive if to the Company or by a duly authorized officer of the Company if to the Executive, and shall be deemed to have been
duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided that
all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date
of delivery thereof or on the third business day after the mailing thereof (whichever is earlier), except that notice of change of address shall be effective only upon receipt. 

        9.     Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any benefit, bonus, incentive or other plan or program provided by the Company or any other Affiliate of the Company for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other agreements with the Company or any other Affiliate of the Company. Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan or program of the Company or any other Affiliate of the Company shall be payable in accordance with such plan or program, except as explicitly modified
by this Agreement. 

        10.   (a)
Full Settlement. The Company's obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any circumstances, including but not limited to any set-off, counterclaim, defense, recoupment, or other claim, right or action
which the Company may have against the Executive or others. 

        (b)  No Mitigation. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in
Section 2(b)(3). 

        11.   Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and the Company. No waiver by any party hereto at any time of any breach by any other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party which are not expressly set forth in this Agreement. 

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        12.   Successors; Binding Agreement.

        (a)
This Agreement shall be binding upon and shall inure to the benefit of the Company and its Successors and Assigns. The Company shall require its Successors and Assigns to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 

        (b)
Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 

        13.   Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of
Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the
State of Delaware. 

        14.   Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other provisions hereof. 

        15.   Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto, and supersedes all prior
agreements, if any, understandings and arrangements, oral or written, between the parties hereto, with respect to the subject matter hereof. 

        16.   Definitions.

        16.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean all amounts of compensation for
services rendered to the Company or an Employing Affiliate that have been earned or accrued through the Termination Date but that have not been paid as of the Termination Date, including
(a) base salary, (b) reimbursement for reasonable and necessary business expenses incurred by the Executive on behalf of the Company or an Employing Affiliate during the period ending on
the Termination Date and (c) vacation pay; provided, however, that Accrued Compensation shall not include any amounts described in
clause (a) that have been deferred pursuant to any salary reduction or deferred compensation elections made by the Executive. 

        16.2. Affiliate. For purposes of this Agreement, "Affiliate," means, with respect to any Person, any entity, directly or
indirectly, controlled by, controlling or under common control with such Person. 

        16.3. [Intentionally
Omitted.] 

        16.4. Cause. For purposes of this Agreement, a termination of employment is for "Cause" if the Executive 

        (a)   has
been convicted of a felony (including a plea of nolo contendere); 

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        (b)   intentionally
and continually failed substantially to perform his reasonably assigned duties with the Company or an Employing Affiliate (other than a failure resulting
from the Executive's incapacity due to physical or mental illness or from the assignment to the Executive of duties that would constitute Good Reason) which failure continued for a period of at least
thirty days after a written notice of demand for substantial performance, signed by a duly authorized officer of the Company, has been delivered to the Executive specifying the manner in which the
Executive has failed substantially to perform such duties; or 

        (c)   intentionally
engaged in illegal conduct or willful misconduct, which is demonstrably and materially injurious to the Company or an Employing Affiliate. 

For
purposes of this Agreement, no act, or failure to act, on the Executive's part shall be considered "intentional" unless the Executive has acted, or failed to act, with a lack of good faith and
with a lack of reasonable belief that the Executive's action or failure to act was in the best interest of the Company or an Employing Affiliate. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of the Company's Chairman of the Board, Chief Executive Officer or a senior officer of the Company or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company or an Employing Affiliate. The
termination of employment of the Executive shall not be deemed to be for Cause pursuant to subparagraph (b) or (c) above unless and until there shall have been delivered to the Executive
a copy of a resolution duly adopted by the affirmative vote of not less than three-fourths of the entire membership of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in subparagraph (b) or (c) above, and specifying the particulars thereof in detail. Notwithstanding anything contained in this Agreement to
the contrary, no failure to perform by the Executive after a Notice of Termination is given to the Company by the Executive shall constitute Cause for purposes of this Agreement. 

        16.5. Change in Control. A "Change in Control" shall mean the occurrence during the Term of: 

        (a)   An
acquisition (other than directly from the Company) of any common stock of the Company ("Common Stock") or other voting securities of the Company entitled to vote
generally for the election of directors (the "Voting Securities") by any "Person" (as the term "person" is used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after
which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent or more of the then outstanding shares of Common
Stock or the combined voting power
of the Company's then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred, Common Stock or Voting
Securities which are acquired in a Non-Control Acquisition (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of
which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (a "Subsidiary"), (ii) the Company or its Subsidiaries,
(iii) any Person in connection with a Non-Control Transaction (as hereinafter defined) or (iv) an Affiliate; 

        (b)   The
individuals who, as of the date of this agreement, are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if the election, or nomination for election by the Company's shareholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Agreement, be considered a member of the 

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Incumbent
Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or 

        (c)   The
consummation of: 

        (1)   A
merger, consolidation, reorganization or other business combination with or into the Company or in which securities of the Company are issued, unless such merger,
consolidation, reorganization or other business combination is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation, reorganization or
other business combination with or into the Company or in which securities of the Company are issued where: 

        (A)  the
shareholders of the Company, immediately before such merger, consolidation, reorganization or other business combination own directly or indirectly immediately
following such merger, consolidation, reorganization or other business combination, at least fifty percent of the combined voting power of the outstanding voting securities of the corporation
resulting from such merger or consolidation, reorganization or other business combination (the "Surviving Corporation") in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, reorganization, or other business combination, 

        (B)  the
individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation, reorganization or
other business combination constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning
a majority of the combined voting power of the outstanding voting securities of the Surviving Corporation, and 

        (C)  no
Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee benefit plan (or any trust forming a part thereof) that, immediately
prior to such merger, consolidation, reorganization or other business combination was maintained by the Company, the Surviving Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation, reorganization or other business combination had Beneficial Ownership of fifty percent or more of the then outstanding Voting Securities or common
stock of the Company, has Beneficial Ownership of fifty percent or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. 

        (2)   A
complete liquidation or dissolution of the Company; or 

        (3)   The
sale or other disposition of all or substantially all of the assets of the Company to any Person (other than (i) any such sale or disposition that results in
at least fifty percent of the Company's assets being owned by a Subsidiary or Subsidiaries or (ii) a distribution to the Company's stockholders of the stock of a Subsidiary or any other
assets); 

provided, however, that no transaction or series of transactions by which Stephen W. Bershad, or any Person in which Stephen W. Bershad has Beneficial
Ownership, directly or indirectly, of 25 percent of the outstanding ownership interests or voting power, acquires fifty percent or more of the then outstanding shares of Common Stock or the
combined voting power of the Company's then outstanding Voting Securities shall constitute a Change in Control for purposes of this Agreement (regardless of the form of transaction or series of
transactions by which such acquisition occurs (including, without 

8

 

limitation,
any acquisition described in clause (a) hereof or any merger or other transaction described in clause (c) hereof)). 

Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the
then outstanding Common Stock or Voting Securities as a result of the acquisition of Common Stock or Voting Securities by the Company which, by reducing the number of shares of Common Stock or Voting
Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person, provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of shares of Common Stock or Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional shares of Common Stock or Voting Securities which increase the percentage of the then outstanding shares of Common Stock or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur. 

        16.6. Company. For purposes of this Agreement, all references to the Company shall include its Successors and Assigns. 

        16.7. Disability. For purposes of this Agreement, "Disability" shall mean a physical or mental infirmity which impairs the
Executive's ability to substantially perform his duties with the Company or an Employing Affiliate for six consecutive months, and within the time period set forth in a Notice of Termination given to
the Executive (which time period shall not be less than thirty days), the Executive shall not have returned to full-time performance of his duties; provided,
however, that if the Company's Long Term Disability Plan, or any successor plan (the "Disability Plan"), is then in effect, the Executive shall not be deemed disabled for
purposes of this Agreement unless the Executive is also eligible for long-term disability benefits under the Disability Plan (or similar benefits in the event of a successor plan). 

        16.8. Good Reason.

        (a)   For
purposes of this Agreement, "Good Reason" shall mean the occurrence after a Change in Control of any of the following events or conditions: 

        (1)   a
material adverse change in the Executive's duties or responsibilities (including reporting responsibilities), except in connection with the termination of his
employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason; 

        (2)   a
reduction in the Executive's annual base salary; 

        (3)   the
relocation of the offices of the Company or an Employing Affiliate at which the Executive is principally employed to a location more than 25 miles from the location
of such offices immediately prior to a Change in Control, or the requirement that the Executive be based anywhere other than at such offices, except to the extent the Executive was not previously
assigned to a principal location and except for required travel on the business of the Company or an Employing Affiliate to an extent substantially consistent with the Executive's business travel
obligations at the time of a Change in Control; or 

        (4)   the
failure by the Company or an Employing Affiliate to pay to the Executive any portion of the Executive's current compensation or to pay to the Executive any portion
of an installment of deferred
compensation under any deferred compensation program of the Company or an Employing Affiliate in which the Executive participated, within seven days of the date such compensation is due. 

        (b)   Any
event or condition described in Section 16.8(a)(1) through (4) which occurs prior to a Change in Control but which the Executive reasonably
demonstrates (i) was at the request of a Third Party who effectuates a Change in Control or (ii) otherwise arose in connection with or in 

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anticipation
of a Change in Control which has been threatened or proposed and which actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior
to a Change in Control, it being agreed that any such action taken following shareholder approval of a transaction which if consummated would constitute a Change in Control, shall be deemed to be in
anticipation of a Change in Control provided such transaction is actually consummated. 

        16.9. Notice of Termination. For purposes of this Agreement, following a Change in Control, "Notice of Termination" shall
mean a written notice of termination of the Executive's employment, signed by the Executive if to the Company or by a duly authorized officer of the Company if to the Executive, which indicates the
specific termination provision in this Agreement, if any, relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing
of Good Reason, Disability or Cause shall not serve to waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights hereunder. 

        16.10. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean, with respect to the
Company, a corporation or other entity acquiring all or substantially all the assets and business of the Company, as the case may be, whether by operation of law or otherwise. 

        16.11. Termination Date. For purposes of this Agreement, "Termination Date" shall mean (a) in the case of the
Executive's death, his date of death, (b) if the Executive's employment is terminated for Disability, thirty days after Notice of Termination is given (provided that the Executive shall not
have returned to the performance of his duties on a full-time basis during such thirty day period) and (c) if the Executive's employment is terminated for any other reason, the date
specified in the Notice of Termination (which, in the case of a termination for Cause shall not be less than thirty days, and in the case of a termination for Good Reason shall not be more than sixty
days, from the date such Notice of Termination is given); provided, however, that if within thirty days after any Notice of Termination is given the
party receiving such Notice of Termination in good faith notifies the other party that a dispute exists concerning the basis for the termination, the Termination Date shall be the date on which the
dispute is finally determined, either by mutual written agreement of the parties, or by the final judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been taken). Notwithstanding the pendency of any such dispute, the Company or an Employing Affiliate shall continue to pay the Executive his base salary and continue the
Executive as a participant (at or above the level provided prior to the date of such dispute) in all compensation, incentive, bonus, pension, profit sharing, medical, hospitalization, prescription
drug, dental, life insurance and disability benefit plans in which he was participating when the notice giving rise to the dispute was given, until the dispute is finally resolved whether or not the
dispute is resolved in favor of the Company, and the Executive shall not be obligated to repay to the Company or an Employing Affiliate any amounts paid or benefits provided pursuant to this sentence. 

10

 

        IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officers and the Executive has executed this Agreement as of the day and year first above
written. 

	 	 	AXSYS TECHNOLOGIES, INC.
	

 	
 	

/s/  STEPHEN W. BERSHAD      
 By: Stephen W. Bershad

Its: Chief Executive Officer
	

 	
 	

EXECUTIVE
	

 	
 	

/s/  DAVID A. ALMEIDA      
 David A. Almeida
	

ATTEST	
 	

 
	

/s/  KATHERINE BOWNES      
 By: Katherine Bownes	
 	

 

11

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Exhibit 10.1  

 
 

FIRST AMENDMENT TO CREDIT AGREEMENT    
    

        THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called this "Amendment"), dated as of April 21, 2003, is among Cimarex Energy Co., a Delaware corporation
("Borrower"), Bank One, NA, a national banking association having its principal office in Chicago, Illinois, as LC Issuer and as Administrative Agent, and the Lenders party to the Original Agreement
defined below ("Lenders"). 

W I T N E S S E T H:  

        WHEREAS, Borrower, Administrative Agent and Lenders entered into that certain Credit Agreement dated as of October 2, 2002 (as amended, supplemented, or
restated to the date hereof, the "Original Agreement"), for the purpose and consideration therein expressed, whereby Lenders became obligated to make loans to Borrower as therein provided; and 

        WHEREAS,
Borrower, Administrative Agent and Lenders desire to amend the Original Agreement as set forth herein; 

        NOW,
THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and in the Original Agreement, in consideration of the loans which may hereafter
be made by Lenders to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 

ARTICLE I

DEFINITIONS AND REFERENCES  

        §
1.1.    Terms Defined in the Original Agreement.    Unless the context otherwise requires or unless
otherwise expressly defined herein, the terms defined in the Original Agreement shall have the same meanings whenever used in this Amendment. 

        §
1.2.    Other Defined Terms.    Unless the context otherwise requires, the following terms when used in
this Amendment shall have the meanings assigned to them in this Section 1.2. 

        "Amendment"
means this First Amendment to Credit Agreement. 

        "Amendment
Documents" means this Amendment and any other documents and agreements executed and delivered pursuant hereto. 

        "Credit
Agreement" means the Original Agreement as amended hereby. 

ARTICLE II

AMENDMENTS TO ORIGINAL AGREEMENT  

        §
2.1.    Defined Terms.    Section 1.1 of the Original Agreement is hereby amended to add the
following definitions thereto in appropriate alphabetical order to read as follows: 

        "Dividend'
means, as to any Person, any declaration or payment of any dividend or the making of any distribution, loan, advance or investment on or with respect to any shares of a
Person's capital stock (other than dividends or distributions payable solely in shares or other evidence of ownership of such Person's capital stock)." 

        "Restricted
Payment' means (a) any Dividend and (b) any payment on account of the purchase, redemption or other acquisition or retirement by a Person of any of such
Person's capital stock (except capital stock acquired on the conversion or exchange thereof into or for other capital stock of such Person)." 

 

        §
2.2.    Production Reports.    Section 6.1(vii) of the Original Agreement is hereby
amended in its entirety to read as follows: 

        "(xii) By
March 31 and September 30 of each year, beginning March 31, 2003, a report describing the gross volume of production and sales attributable to
production during the preceding six-month period from the properties described in the Engineering Report in Section 6.1(x) or Section 6.1(xi) and describing the
related severance taxes, other taxes, and leasehold operating expenses attributable thereto and incurred during such month." 

        §
2.3.    Restricted Payments.    Section 7.1 of the Original Agreement is hereby amended in its
entirety to read as follows: 

        "7.1.    Restricted Payments.    The Borrower will not, nor will it permit any Subsidiary to, directly or indirectly,
declare or make any Restricted Payment; provided that (a) any Subsidiary may declare and pay Dividends to the Borrower or to a Wholly-Owned Subsidiary and (b) for so long as no Default,
Unmatured Default or Deficiency (as defined in Section 2.8) exists or would exist after giving effect thereto, the Borrower and its Subsidiaries may declare or make Restricted Payments which do
not in the aggregate exceed an amount equal to $25,000,000 during any fiscal year of the Borrower; provided that the aggregate amount of Restricted Payments made pursuant to
clause (b) of this Section 7.1 shall never exceed $50,000,000." 

        §
2.4.    Indebtedness.    Section 7.2 of the Original Agreement is hereby amended to
re-designate existing clause "(vi)" as clause "(vii)" and to add a new clause (vi) thereto immediately following clause (v) thereof to read as follows: 

        "(vi) Indebtedness
of Borrower in respect of guarantee obligations of Cimarex Energy Services, Inc., an Oklahoma corporation, which do not in the aggregate exceed
$25,000,000 at any one time outstanding." 

        §
2.5    Redetermination of the Borrowing Base.    Administrative Agent hereby notifies Borrower that from
the date hereof until the next date hereafter as of which the Borrowing Base is redetermined, the Borrowing Base shall be $275,000,000. 

        §
2.6    Aggregate Commitment.    Borrower, Administrative Agent and Lenders hereby confirm that as of the
date hereof, the Aggregate Commitment is $200,000,000. 

ARTICLE III

CONDITIONS OF EFFECTIVENESS  

        §
3.1.    Effective Date.    This Amendment shall become effective as of the date first above written when
and only when: 

        (a)   Administrative
Agent shall have received all of the following, at Administrative Agent's office, duly executed and delivered and in form and substance satisfactory to
Administrative Agent, all of the following: 

        (i)    this
Amendment; 

        (ii)   a
certificate of the Secretary of Borrower dated the date of this Amendment certifying: (i) that resolutions adopted by the Board of Directors of the Borrower
authorize the execution, delivery and performance of this Amendment and the other Amendment Documents by Borrower; (ii) the names and true signatures of the officers of the Borrower authorized
to sign this Amendment and the other Amendment Documents; and (iii) that all of the representations and warranties set forth in Article IV hereof are true and correct at and as of the
time of such effectiveness; and 

        (iii)  such
other supporting documents as Administrative Agent may reasonably request. 

2

 

        (b)   Borrower
shall have paid, in connection with such Loan Documents, all fees and reimbursements to be paid to Administrative Agent pursuant to any Loan Documents, or
otherwise due Administrative Agent and including fees and disbursements of Administrative Agent's attorneys. 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES  

        §
4.1.    Representations and Warranties of Borrower.    In order to induce Administrative Agent and each
Lender to enter into this Amendment, Borrower represents and warrants to Administrative Agent and each Lender that: 

        (a)   The
representations and warranties contained in Article V of the Original Agreement are true and correct at and as of the time of the effectiveness hereof, except
to the extent that the facts on which such representations and warranties are based have been changed by the extension of credit under the Credit Agreement. 

        (b)   Borrower
is duly authorized to execute and deliver this Amendment and the other Amendment Documents and is and will continue to be duly authorized to borrow monies and
to perform its obligations under the Credit Agreement. Borrower has duly taken all corporate action necessary to authorize the execution and delivery of this Amendment and the other Amendment
Documents and to authorize the performance of the obligations of Borrower hereunder and thereunder. 

        (c)   The
execution and delivery by Borrower of this Amendment and the other Amendment Documents, the performance by Borrower of its obligations hereunder and thereunder and
the consummation of the transactions contemplated hereby and thereby do not and will not conflict with any provision of law, statute, rule or regulation or of the certificate of incorporation and
bylaws of Borrower, or of any material agreement, judgment, license, order or permit applicable to or binding upon Borrower, or result in the creation of any lien, charge or encumbrance upon any
assets or properties of Borrower. Except for those which have been obtained, no consent, approval, authorization or order of any court or governmental authority or third party is required in
connection with the execution and delivery by Borrower of this Amendment and the other Amendment Documents or to consummate the transactions contemplated hereby and thereby. 

        (d)   When
duly executed and delivered, each of this Amendment and the Credit Agreement will be a legal and binding obligation of Borrower, enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors' rights and by equitable principles of general application. 

        (e)   The
audited annual consolidated financial statements of Borrower dated as of December 31, 2002 fairly present the consolidated financial position at such dates
and the consolidated statement of operations and the changes in consolidated financial position for the periods ending on such dates for Borrower. Copies of such financial statements have heretofore
been delivered to each Lender. Since such dates no material adverse change has occurred in the financial condition or businesses or in the consolidated financial condition or businesses of Borrower. 

ARTICLE V

MISCELLANEOUS  

        §
5.1.    Ratification of Agreements.    The Original Agreement as hereby amended is hereby ratified and
confirmed in all respects. Any reference to the Credit Agreement in any Loan Document shall be deemed to be a reference to the Original Agreement as hereby amended. The execution, delivery and
effectiveness of this Amendment and the other Amendment Documents shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Lenders under the Credit 

3

 

Agreement,
the Notes, or any other Loan Document nor constitute a waiver of any provision of the Credit Agreement, the Notes or any other Loan Document. 

        §
5.2.    Survival of Agreements.    All representations, warranties, covenants and agreements of Borrower
herein shall survive the execution and delivery of this Amendment and the performance hereof, including without limitation the making or granting of the Loans, and shall further survive until all of
the Obligations are paid in full. All statements and agreements contained in any certificate or instrument delivered by Borrower or any Subsidiary hereunder or under the Credit Agreement to any Lender
shall be deemed to constitute representations and warranties by, and/or agreements and covenants of, Borrower under this Amendment and under the Credit Agreement. 

        §
5.3.    Loan Documents.    This Amendment and the other Amendment Documents are each a Loan Document,
and all provisions in the Credit Agreement pertaining to Loan Documents apply hereto and thereto. 

        §
5.4.    CHOICE OF LAW.    THIS AMENDMENT SHALL BE
CONSTRUED IN ACCORDANCE THE INTERNAL LAWS OF THE STATE OF COLORADO, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

        §
5.5.    Counterparts.    This Amendment may be executed in any number counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may execute this Amendment by signing any such counterpart. This Agreement shall be effective when it has been executed by the
Borrower, the Administrative Agent, the LC Issuer and the Lenders and each party has notified the Administrative Agent by facsimile transmission or telephone that it has taken such action. 

        THIS
AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS OF THE PARTIES. 

        IN
WITNESS WHEREOF, this Amendment is executed as of the date first above written. 

	

 	
 	

CIMAREX ENERGY CO.
	

 	
 	

By:	
 	

 Paul Korus

Chief Financial Officer
	

 	
 	

BANK ONE, NA,

Individually, as LC Issuer and as Administrative Agent
	

 	
 	

By:	
 	

 J. Scott Fowler

Director, Capital Markets
	 	 	 	 	 

4

 

	

 	
 	

BANK OF AMERICA, N.A., a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

BANK OF OKLAHOMA, N.A., a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

COMERICA BANK—TEXAS, a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

NATEXIS BANQUES POPULAIRES, a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

ROYAL BANK OF CANADA, a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

UNION BANK OF CALIFORNIA, N.A., a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

U.S. BANK NATIONAL ASSOCIATION, a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	 	 	 	 	 

5

 

	

 	
 	

WACHOVIA BANK, NATIONAL ASSOCIATION, a Lender
	

 	
 	

By:	
 	

 Name:

Title:
	

 	
 	

WELLS FARGO BANK, N.A., a Lender
	

 	
 	

By:	
 	

 Name:

Title:

6

 
        First
Amendment 

CONSENT AND AGREEMENT  

        Each undersigned Guarantor hereby (i) consents to the provisions of this Amendment and the transactions contemplated herein, (ii) ratifies and
confirms the Subsidiary Guaranty dated as of October 2, 2002 made by it for the benefit of Administrative Agent and Lenders executed pursuant to the Credit Agreement and the other Loan
Documents to which such Guarantor is a party, (iii) agrees that all of its respective obligations and covenants thereunder shall remain unimpaired by the execution and delivery of this
Amendment and the other documents and instruments executed in connection herewith, and (iv) agrees that the Guaranty and such other Loan Documents shall remain in full force and effect. 

	

 	
 	

KEY PRODUCTION COMPANY, INC.
	

 	
 	

By:	
 	

 Paul Korus

Vice President, Chief Financial Officer & Treasurer
	

 	
 	

BROCK GAS SYSTEMS AND EQUIPMENT, INC.
	

 	
 	

By:	
 	

 Paul Korus

Vice President, Chief Financial Officer & Treasurer
	

 	
 	

COLUMBUS ENERGY CORP.
	

 	
 	

By:	
 	

 Paul Korus

Vice President, Chief Financial Officer & Treasurer
	

 	
 	

CIMAREX ENERGY SERVICES, INC.
	

 	
 	

By:	
 	

 Paul Korus

Vice President, Chief Financial Officer & Treasurer

7

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FIRST AMENDMENT TO CREDIT AGREEMENT

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