Document:

Exhibit 10.1

 

Exhibit 10.1 Description of Compensatory Plan

 

This description is provided pursuant to Paragraph 10(ii) to Item 601
of Regulation S-B, which provides for a written description of a compensatory
plan when no formal document contains the compensation information.

 

Steve Roe is our General
Manager.  On December 16, 2003 the Board
of Directors of Little Sioux Corn Processors, L.L.C. approved compensation for
Mr. Roe in the amount of $105,000 for calendar year 2004.Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT, made and entered into as of November 6,
2003, between Aeroflex Incorporated, a Delaware corporation, with its principal
office located at 35 South Service Road, Plainview, NY  11803 (together with its successors and
assigns permitted under this Agreement, the “Company”), and Charles Badlato,
who resides at 22 Danville Drive, Greenlawn, New York 11740 (the “Employee”).

 

W I T N E S S E T H

 

WHEREAS, the Company has determined that it is in the best interests of
the Company and its shareholders to enter into an employment agreement setting
forth the obligations and duties of both the Company and the Employee (this
“Agreement”); and

 

WHEREAS, the Company wishes to assure itself of the continued services
of the Employee for the period hereinafter provided, and the Employee is
willing to be employed by the Company for said period, upon the terms and
conditions provided in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Employee (individually a
“Party” and together the “Parties”) agree as follows:

 

1.  DEFINITIONS.

 

(a)  “Base Salary” shall mean
the annual salary to which the Employee is entitled pursuant to Section 3
below.

 

(b)  “Beneficiary” shall mean
the person or persons named by the Employee pursuant to Section 21 below
or, in the event that no such person is named or survives the Employee, his
estate.

 

(c)  “Board” shall mean the
Board of Directors of the Company.

 

(d)  “Bonus” shall mean any
bonus to which the Employee is entitled pursuant to Section 4 below.

 

(e)  “Cause” shall mean:

 

(i)  the Employee’s conviction
of a felony involving moral turpitude,

 

(ii)  the Employee’s willful
gross misconduct in carrying out his duties under this Agreement, or

 

 

(iii)  a breach by the Employee
of the provisions of Section 9 or Section 10 below.

 

(f)  “Change in Control” shall
mean:

 

(i)  a change in control as such
term is presently defined in Regulation 240.12b-2 under the Securities Exchange
Act of 1934 (“Exchange Act”);

 

(ii)  if during the Term of
Employment any “person” (as such term is used in Section 13(d) and 14(d)
of the Exchange Act) other than the Company or any person who on the date of
this Agreement is a director or officer of the Company, becomes the “beneficial
owner” (as defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% of the voting power
of the Company’s then outstanding securities; or

 

(iii)  if during the Term of
Employment individuals who at the beginning of such period constitute the Board
cease for any reason other than death, disability or retirement to constitute
at least a majority thereof.

 

(g)  “Compensation Committee”
shall mean the Compensation Committee of the Board.

 

(h)  “Disability” shall mean the
illness or other mental or physical disability of the Employee resulting in his
failure to perform substantially his duties under this Agreement for a period
of six or more consecutive months or an aggregate of nine months in any
12-month period.

 

(i)  “Fiscal Year” shall mean
the fiscal year of the Company, which is the 12-month period beginning each
July 1 and ending on the next succeeding June 30.

 

(j)  “Good Reason” shall mean:

 

(i)  reduction in the Employee’s
Base Salary,

 

(ii)  the loss by the Employee
of his position,

 

(iii)  a significant diminution
of the Employee’s duties or responsibilities or the assignment to him of duties
or responsibilities inconsistent with his position,

 

(iv)  a material reduction in
any plan or program of the Company in which the Employee participates unless
such reduction affects the senior management of the Company generally, or

 

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(v)  the Employee must, in
carrying out his duties and responsibilities under this Agreement, spend
significant time outside Long Island or New York City.

 

(k)  “Spouse” shall mean, during
the Term of Employment, the woman who as of the relevant date is legally
married to the Employee.

 

(l)  “Term of Employment” or
“Term”  shall mean the period specified
in Section 2(b) below.

 

2.  TERM OF EMPLOYMENT,
POSITIONS AND DUTIES.

 

(a)  Employment of
Employee.  The Company hereby employs
the Employee, and the Employee hereby accepts employment with the Company, in
the position and with the duties and responsibilities set forth below, and upon
such other terms and conditions as are hereinafter stated.

 

(b)  Term of Employment.  The Term of Employment shall commence on the
date above written, and shall terminate on the third anniversary subsequent to
said date and, unless either Party gives six (6) months prior written notice to
the other that it does not want the Term to continue, the Term of Employment
shall thereafter automatically extend for successive periods of one year.

 

(c)  Title and Duties.  Until the date of termination of his
employment hereunder, the Employee shall be employed as an executive officer of
the Company.  If the Board so requests,
the Employee shall serve as a member of the board of a subsidiary or affiliate
of the Company.

 

(d)  Time and Effort.  The Employee agrees to devote his full
business time and attention and his best efforts and abilities to the affairs
of the Company.  Nothing shall preclude
the Employee from (i) serving on the boards of a reasonable number of other
corporations, trade associations and/or charitable organizations, (ii) engaging
in charitable activities and community affairs or (iii) managing his personal
investments and affairs; provided, however, that such activities do not
materially interfere with the proper performance of his duties and
responsibilities specified in Section 2(c) above.

 

3.  BASE SALARY.

 

(a)  The Employee shall receive
from the Company an initial annual Base Salary, payable in accordance with the
regular payroll practices of the Company, of $185,016.  During the Term of Employment, the
Compensation Committee shall review the Base Salary no less often than annually
for increase as of each July 1 beginning with July 1, 2004; provided,
however, that increases shall not be less than the increases in the Consumer
Price Index for the New York and Northeastern New Jersey Region, as published
by the United States Department of Labor, Bureau of Labor Statistics using
June 2003 as the basedate, determined and payable as provided in
Section 3(b) below.

 

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(b) The cost-of-living adjustment (COLA) with respect to the Employee’s
Base Salary shall be made annually as follows:

 

The first calculation shall be made on or before September 1,
2004, with respect to the period July 1, 2003 through June 30, 2004
with a lump-sum payment for the COLA being made as soon as practicable.  The same procedure shall be followed each
year thereafter with respect to the period commencing the July 1 of the
preceding year through June 30 of the year in which the calculation is
being made.  If the Employee’s
employment shall terminate during any annual period referred to in this
Section 3(b), then the cost-of-living increment provided for herein shall
be prorated accordingly.

 

4.  BONUSES.

 

 During the Term of Employment,
the Company may pay the Employee bonuses as determined by the Board.

 

5.  STOCK OPTIONS.

 

During the Term of Employment, the Employee shall be eligible to
receive stock option grants and similar awards under existing and future plans
or programs of the Company adopted and administered by the Compensation
Committee and approved by shareholders.

 

6.  EXPENSES AND EXPENSE
REIMBURSEMENT.

 

During the Term of Employment, the Employee shall be entitled to prompt
reimbursement by the Company for all reasonable out-of-pocket expenses incurred
by him in performing services under this Agreement, upon his submission of such
accounts and records as may be required by Company policy. In addition,
Employee shall be entitled to a car allowance in the amount of $600 per month.

 

7.  EMPLOYEE BENEFIT PLANS AND
PROGRAMS.

 

The Employee shall participate in all employee benefit plans and
programs for which he is eligible and which are made available to the Company’s
executive officers and other employees generally, as such plans or programs may
be in effect from time to time, including, without limitation, pension and
other retirement plan, profit-sharing plans, savings and similar plans, group
life insurance, accidental death and dismemberment insurance, travel accident
insurance, hospitalization insurance, surgical insurance, medical insurance,
dental insurance, short-term and long-term disability insurance, sick leave
(including salary continuation arrangements), vacations, holidays and any other
employee benefit plans or programs that may be sponsored by the Company from
time to time, including any plans that supplement the foregoing types of plans,
whether funded or unfunded.

 

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8.  TERMINATION OF EMPLOYMENT.

 

(a)  General.  Except as otherwise provided in this
Agreement, in the event of termination of the Employee’s employment under this
Agreement, he, his dependents or his Beneficiary, as may be the case, shall be
entitled to receive benefits under the Company’s employee benefit plans
described in Section 7 above, in accordance with the applicable terms and
conditions of each plan, and reimbursement of any business expenses incurred by
the Employee but not yet paid to him.

 

(b)  Termination Due to
Death.  In the event that the Employee’s
employment is terminated due to his death, his Beneficiary shall be entitled to
the sum of (i) 50% of the Employee’s annual Base Salary, at the rate in effect
on the date of his death, for the greater of (A) the balance of the Term of
Employment at the time of such termination or (B) one year; and (ii) any Bonus
previously awarded but not yet paid to him, payable in accordance with the
Company’s regular payroll practices.

 

(c)  Termination Due to
Disability.  In the event of Disability,
the Company or the Employee may terminate the Employee’s employment.  If the Employee’s employment is terminated
due to Disability, he shall be entitled to the benefits described in 8(b)
above.

 

(d)  Termination by the Company
for Cause.  In the event that the
Employee’s employment is terminated for Cause, he shall be entitled to:

 

(i)  his Base Salary through the
date of termination of his employment for Cause, and

 

(ii)  any Bonus awarded but not
yet paid to him.

 

The Employee shall be permitted to respond and defend himself before
the Board or a committee thereof within a reasonable time after written
notification of any proposed termination of his employment for Cause under
clauses (ii) and (iii) of Section 1(e) above.

 

(e)  Termination Without Cause.

 

(i)  Termination Without Cause
shall mean:

 

(A)  termination of the Employee’s employment by
the Company other than due to death or Disability or for Cause, or

 

(B)  termination by the Employee for Good Reason.

 

(ii)  The Employee may not
terminate his employment for Good Reason unless:

 

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(A)  he has delivered a written notice to the
Board within 12 months of his having actual knowledge of one of the events,
described in Section 1(j) above, providing a basis for Good Reason,
stating which one of those events has occurred;

 

(B)  within 30 days of the delivery of the
notice, the Company has not remedied such event and provided him with a written
notice of such remedy, and

 

(C)  in the event the Company has not remedied
such event as provided in clause (B) above, the Employee notifies the Company
in writing that he is terminating his employment.  The failure of the Employee to terminate for Good Reason as to
any one event described in Section 1(j) above shall not affect his entitlement
to terminate for Good Reason as to any other such event.

 

(iii)  In the event of Termination Without Cause,
the Employee shall be entitled to receive any Bonus awarded but not yet paid to
him, and, for the greater of (x) remainder of the Term of Employment at the
time of termination or (y) one year:

 

(A)  Base Salary at the rate in effect on the
date of his termination, and

 

(B) benefits
under any employee benefit plans of the Company in which he participated or, as
to any plans in which his continued participation is precluded, the after-tax
cost to the Employee of equivalent benefits.

 

(f)  Termination Following
Change in Control.  In the event there
shall be a Change in Control of the Company or of any person directly or
indirectly presently controlling the Company, the Employee may, within six
months of his becoming aware of such event, terminate his employment with the
Company.  Upon such termination, the
Employee shall receive immediately in a lump sum an amount equal to three times
the sum of (i) his annual Base Salary and (ii) the amount of any Bonus payable
to him for the last completed fiscal year less $100, but in no event an amount
greater than is deductible under Section 280G of the Internal Revenue Code
of 1986, as amended, such amount to be determined by the Company’s independent auditors.

 

(g)  Voluntary Termination by
the Employee.  The Employee shall have
the right, upon 90 days’ written notice to the Company, voluntarily to
terminate his employment, in which event the Employee’s entitlements shall be
the same as if he had been terminated by the Company for Cause, as provided in
Section 8(d) above.

 

(h) Termination Due to Non-Renewal. In the event that the Employee’s
employment is terminated due to non-renewal by the Company in accordance with
Section 2(b) hereof, the Employee shall be entitled to receive an amount
equal to his base salary for a six(6) month period payable in accordance with
the normal payroll practices of the Company.

 

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(i)  No Mitigation;  No Offset. 
In the event of termination of the Employee’s employment under this
Section 8, he shall be under no obligation to seek other employment or to
offset or repay any amounts that he receives under this Agreement by any
payments that he receives from a subsequent employer.

 

(i)  Nature of Payments.  Any amounts due under this Section 8
are in the nature of severance payments or liquidated damages or both, and
shall fully compensate the Employee and his dependents or Beneficiary, as the
case may be, for any and all direct damages and consequential damages that any
of them may suffer as a result of termination of the Employee’s employment, and
they are not in the nature of a penalty.

 

9.  CONFIDENTIAL INFORMATION.

 

(a)   The Employee understands
and hereby acknowledges that as a result of his employment with the Company he
will necessarily become informed of and have access to certain valuable and
confidential information of the Company and any of its subsidiaries, joint
ventures or affiliates, including without limitation inventions, trade secrets,
technical information, know-how, plans, specifications, and identity of
customers and suppliers, and that such information even though it may be
developed or otherwise acquired by the Employee is the exclusive property of
the Company to be held by the Employee in trust and solely for the Company’s
benefit.  Accordingly, the Employee
hereby agrees that he shall not at any time either during or subsequent to his
employment hereunder use, reveal, report, publish, transfer or otherwise disclose
to any person, corporation or other entity any of the Company’s confidential
information without the prior written consent of the Company, except to
responsible officers and employees of the Company and other responsible persons
who are in a contractual or fiduciary relationship with the Company or who have
a need for such information for purposes in the interest of the Company and
except for such information that legally and legitimately is or becomes of
general public knowledge from authorized sources other than the Employee.

 

(b)  Upon the termination of his
employment with the Company for any reason whatsoever, the Employee shall
promptly deliver to the Company all drawings, manuals, letters, notes,
notebooks, reports and copies thereof and all other materials including without
limitation those of a secret or confidential nature relating to the Company’s
business that are in the Employee’s possession or control.

 

10.   COVENANT NOT TO COMPETE.

 

The Employee agrees that during the Term and for a period of two (2)
years after termination of his employment with the Company for any reason, he
shall not, within 50 miles of any location at which the Company, at the time of
his termination of employment, is conducting its business (or in such smaller area
or for such lesser period as may be determined by a court of competent
jurisdiction to be a reasonable limitation on the competitive activity of the
Employee), directly or indirectly:

 

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(a)  engage in a competitive
line of business to that carried on by the Company either for his own account
or with or for anyone else,

 

(b)  solicit or attempt to
solicit business of any customers of the Company or products or services the
same or similar to those offered, sold, produced or under development by the
Company,

 

(c)  otherwise divert or attempt
to divert from the Company any business whatsoever,

 

(d)  solicit or attempt to
solicit for any business endeavor any employee of the Company,

 

(e)  interfere with any business
relationship between the Company and any other person, or

 

(f)  render any services as an
officer, director, employee, partner, consultant or otherwise to, or have any
interest as a stockholder, partner, lender or otherwise in, any person that is
so engaged.

 

Notwithstanding anything to the contrary in this Section 10, the
provisions hereof shall not prevent the Employee from purchasing or owning up
to 5% of the voting securities of any corporation the stock of which is
publicly traded.

 

For the purposes of this Section 10, “Company” shall mean Aeroflex
Incorporated, its subsidiaries and affiliates.

 

11.  INJUNCTIVE RELIEF.

 

The Parties specifically agree that any breach of any of the provisions
of Section 9 or Section 10 above shall constitute a material breach
of this Agreement.  In the event of a
breach or threatened breach by the Employee of any of the provisions of
Section 9 or Section 10 of this Agreement, the Company shall be
entitled to pursue any remedies available to the Company at law or in equity,
including, but not limited to, injunctive relief.

 

12.  WITHHOLDING TAXES.

 

All payments to the Employee or his Beneficiary shall be subject to
withholding on account of federal, state and local taxes as required by
law.  If any payment hereunder is
insufficient to provide the amount of such taxes required to be withheld, the
Company may withhold such taxes from any other payment due the Employee or his
Beneficiary.  In the event that all cash
payments due the Employee are insufficient to provide the required amount of
such withholding taxes, the Employee or his Beneficiary, within five (5) days
after written notice from the Company, shall pay to the Company the amount of
such withholding taxes in excess of all cash payments due the Employee or his Beneficiary.

 

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13.  INDEMNIFICATION.

 

The Company agrees to indemnify the Employee to the fullest extent
permitted by applicable law consistent with the Company’s Certificate of
Incorporation and By-Laws as in effect on the effective date of this Agreement
with respect to any action or failure to act on his part while he was an
officer, director and/or employee (a) of the Company or any subsidiary thereof
or (b) of any other entity if his service with such entity was at the request
of the Company.  This provision shall
survive the termination of this Agreement.

 

14.  EFFECT OF AGREEMENT ON
OTHER BENEFITS.

 

The existence of this Agreement shall not prohibit or restrict the
Employee’s entitlement to participate fully in the Employee compensation,
employee benefit and other plans or programs of the Company in which senior
Employees are eligible to participate.

 

15.  ASSIGNABILITY; BINDING
NATURE.

 

This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Employee)
and assigns.  No rights or obligations
of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred
pursuant to (a) a merger or consolidation in which the Company is not the
continuing entity or (b) sale or liquidation of all or substantially all of the
assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law.  The Company further agrees that,
in the event of a sale of assets or liquidation as described in the preceding
sentence, it will use its best efforts to cause such assignee or transferee
expressly to assume the liabilities, obligations and duties of the Company
hereunder.  No obligations of the
Employee under this Agreement may be assigned or transferred by the Employee.

 

16.  REPRESENTATIONS.

 

The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance of
its or his, as the case may be, obligations under this Agreement will not
violate any agreement between such Party and any other person, firm or
organization.

 

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17.  ENTIRE AGREEMENT.

 

Except to the extent otherwise provided herein, this Agreement contains
the entire understanding and agreement between the Parties concerning the
subject matter hereof and supersedes any prior agreements, whether written or
oral, between the Parties concerning the subject matter hereof.

 

18.  AMENDMENT OR WAIVER.

 

No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both the Employee and an authorized officer
of the Company other than the Employee. 
No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such
other Party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time.  Any waiver must be in writing and signed by
the Employee or an authorized officer of the Company other than the Employee,
as the case may be.

 

19.  SEVERABILITY.

 

In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.

 

20.  SURVIVORSHIP.

 

The respective rights and obligations of the Parties hereunder shall
survive any termination of the Employee’s employment with the Company to the
extent necessary to the intended preservation of such rights and obligations as
described in this Agreement.

 

21.  BENEFICIARIES/REFERENCES.

 

The Employee shall be entitled to select (and change, to the extent
permitted under any applicable law) a beneficiary or beneficiaries to receive
any compensation or benefit payable hereunder following the Employee’s death by
giving the Company written notice thereof. 
In the event of the Employee’s death or of a judicial determination of
his incompetence, reference in this Agreement to the Employee shall be deemed
to refer to his beneficiary, and if the Employee shall not have designated a
beneficiary, his Spouse.

 

22.  GOVERNING LAW/JURISDICTION.

 

This Agreement shall be governed by and construed and interpreted in
accordance with the laws of New York, without reference to principles of
conflict of laws.

 

10

 

23.  RESOLUTION OF DISPUTES.

 

(a)  Any disputes arising under
or in connection with this Agreement shall be resolved by litigation in a court
of competent jurisdiction in the State of New York.

 

(b)   Each party shall bear its
own costs, fees and expenses, including attorneys’ fees, of any action in
connection with this Agreement.

 

(c)   Pending the outcome or
resolution of any dispute, the Company shall continue payment of all amounts
due the Employee under this Agreement without regard to any dispute.

 

24.     NOTICES.

 

Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered either personally, by fax, by
overnight delivery service (such as Federal Express) or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address
as such Party may subsequently give such notice of.

 

If to the Company or the Board:

 

Aeroflex Incorporated

35 South Service Road

Plainview, NY  11803

Attention: Michael Gorin

FAX:  (516) 694-4823

 

If to the Employee:

 

Charles Badlato

22 Danville Drive

Greenlawn, NY 11740

 

25.     HEADINGS.

 

The headings
of the sections contained in this Agreement are for convenience only and shall
not be deemed to control or affect the meaning or construction of any provision
of this Agreement.

 

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26.    COUNTERPARTS.

 

This Agreement may be executed in two or more counterparts.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

 

	
   

  	
  Aeroflex
  Incorporated

  
	
   

  	
   

  
	
  Attest:

  	
  /s/ Barbara
  Allen

  	
   

  	
  By:

  	
  /s/  Michael Gorin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ 
  Charles Badlato

  	
   

  
	
   

  	
  Charles Badlato

  
						

 

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