CONSULTING AND RETIREMENT AGREEMENT
THIS CONSULTING AND RETIREMENT AGREEMENT (this "Agreement") is made and
entered into as of August 17, 2005 (the "Effective Date") by and between
AEROFLEX INCORPORATED, a Delaware corporation with its principal office at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (together with its successors and
assigns, "Aeroflex"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇, who resides at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇") (▇▇▇▇▇ and Aeroflex referred to herein as the
"Parties"). The Parties acknowledge that the terms and conditions of this
Agreement have been voluntarily agreed to and that such terms are final and
binding.
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇ is employed by Aeroflex as Vice Chairman, Chief Financial
Officer and is a member of Aeroflex's Board of Directors; and
WHEREAS, ▇▇▇▇▇ has expressed a desire to resign as an officer and employee
of Aeroflex as provided in this Agreement; and
WHEREAS, Aeroflex and ▇▇▇▇▇ intend that this Agreement supersedes and
replaces all other agreements between Aeroflex and ▇▇▇▇▇; and
WHEREAS, Aeroflex accepts ▇▇▇▇▇'▇ resignation in accordance with and as
provided in this Agreement; and
WHEREAS, the Parties now desire to settle fully and finally all claims and
obligations arising out of the Employment Agreement made and entered into as of
March 1, 1999 between
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Aeroflex and ▇▇▇▇▇, as amended by Amendment No. 1 effective as of September 1,
1999, Amendment No. 2 effective as of August 13, 2001, Amendment No. 3 made as
of November 8, 2001, and Amendment No. 4 made as of May 13, 2004 (collectively,
the "Employment Agreement");
NOW, THEREFORE, in consideration of the covenants and promises made herein,
the Parties hereby agree as follows:
1. ▇▇▇▇▇'▇ Employment Term under the Employment Agreement will terminate as
of midnight on December 31, 2005 (the "Termination Date").
2. ▇▇▇▇▇ hereby resigns as Vice Chairman, Chief Financial Officer, officer
and employee of Aeroflex and each of its subsidiaries and affiliates effective
as of the Termination Date, subject, however, to such earlier resignation as the
Parties may mutually agree upon, and subject to earlier termination of ▇▇▇▇▇ as
Chief Financial Officer upon Aeroflex's appointment of his successor.
3. On and after the Effective Date, ▇▇▇▇▇ shall not be entitled to, or
receive, any compensation, benefit, retirement, vacation or reimbursement under
or in respect of the Employment Agreement except as specifically set forth in
this Agreement.
4. Commencing on the Effective Date, Aeroflex shall pay, and ▇▇▇▇▇ shall be
entitled to receive from Aeroflex, the following:
(a) ▇▇▇▇▇'▇ present Salary as in effect on the Effective Date (subject
to cost of living increases) as provided in Section 3 of the Employment
Agreement, until the Termination Date;
(b) the Annual Bonus for the fiscal year ended June 30, 2005, provided
for in
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Section 4(a) of the Employment Agreement, payable on or before September 30,
2005;
(c) in lieu of the Annual Bonus provided for in Section 4(a) of the
Employment Agreement which would otherwise have been paid for the fiscal year
ended June 30, 2006, $1,000,000, payable $500,000 on January 1, 2006 and
$500,000 on July 1, 2006;
(d) ▇▇▇▇▇ shall retain all previous grants of options to purchase
shares of stock of Aeroflex, which shall continue to vest and be exercisable in
accordance with and pursuant to the plans and agreements covering such options;
(e) reimbursement of expenses on the same terms as provided in Section
7 of the Employment Agreement until the Termination Date, but not the cost and
expenses referred to in the last sentence of Section 7;
(f) the perquisites referred to in Sections 8(a) and (b) presently
received by ▇▇▇▇▇, until the Termination Date;
(g) except as otherwise specifically set forth herein, the employee
benefit plans set forth in Section 9 of the Employment Agreement, until the
Termination Date;
(h) Aeroflex will continue to pay the premiums on the three (3) life
insurance policies described in Schedule A attached hereto (the "Policies")
until the Termination Date; and
(i) ▇▇▇▇▇ shall retain all rights, benefits and payments due him under
Aeroflex's Supplemental Executive Retirement Plan ("SERP"), including accrual of
his service credits and rights under his SERP through, but not beyond, the
Termination Date; provided, however, that if Aeroflex fails to maintain the
SERP, ▇▇▇▇▇'▇ SERP retirement benefits shall be determined as if the SERP had
remained in effect until the Termination Date.
5. (a) Effective upon the Termination Date, and until December 31,
2009 (the
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"Consulting Period"), ▇▇▇▇▇ shall become a consultant to Aeroflex in
recognition of the continued value to Aeroflex of his extensive knowledge and
expertise.
(b) During the Consulting Period, ▇▇▇▇▇ shall consult with Aeroflex
and its executive officers regarding its respective businesses and operations.
Such consulting services shall not require more than 75 days in any calendar
year nor more than two days in any week, it being understood and agreed that
during the Consulting Period ▇▇▇▇▇ shall have the right, consistent with the
provisions of Section 6 below, to engage in full-time or part-time employment
with other business enterprises. ▇▇▇▇▇ also will cooperate with Aeroflex in any
pending or future litigation or investigation or other dispute concerning third
parties in which ▇▇▇▇▇, by virtue of his prior employment, has relevant
knowledge or information.
(c) ▇▇▇▇▇'▇ service as a consultant shall only be required at such
times and such places as shall not result in unreasonable inconvenience to him
or Aeroflex, recognizing his other business commitments that he may have to
accord priority over the performance of services for Aeroflex. In order to
minimize interference with ▇▇▇▇▇'▇ other commitments, his consulting services,
to the extent practicable and not prejudicial to Aeroflex, may be rendered by
personal consultation at his residence or office wherever maintained, or by
correspondence through mail, telephone, fax or other similar mode of
communication at times, including weekends and evenings, most convenient to him.
(d) During the Consulting Period, ▇▇▇▇▇ shall continue to receive a
consulting fee from Aeroflex each year in an amount equivalent to his Salary in
effect on the Termination Date, payable and subject to annual increase on the
same terms as provided in Section 3 of the Employment Agreement.
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(e) The Consulting Period shall terminate on December 31, 2009, or
earlier upon ▇▇▇▇▇'▇ death or upon his failure to perform consulting services as
provided in Section 5(b), pursuant to thirty (30) days written notice by
Aeroflex to ▇▇▇▇▇ of the grounds constituting such failure and reasonable
opportunity afforded ▇▇▇▇▇ to cure the alleged failure. Upon any such
termination, payment of consulting fees and benefits (with the exception of
lifetime medical benefits under Section 5(h) below) shall cease.
(f) During the Consulting Period, ▇▇▇▇▇ shall be entitled to expense
reimbursement for reasonable out-of-pocket expenses incurred by him in
performing his consulting services, upon his submission of such accounts and
records as may be reasonably required and approved by Aeroflex.
(g) During the Consulting Period, ▇▇▇▇▇ shall be entitled to the use
of an automobile and payment of related expenses on the same terms as are in
effect on the Termination Date.
(h) During the Consulting Period and until ▇▇▇▇▇ is first eligible for
Medicare, Aeroflex will continue ▇▇▇▇▇'▇ medical insurance to the extent
permitted by COBRA ("COBRA Coverage") and pay or otherwise reimburse ▇▇▇▇▇ and
his Spouse for any additional medical care reimbursement and insurance benefits
he would otherwise have received under Aeroflex's Medical Expense Reimbursement
Plan ("MERP"). Thereafter, and until the end of the Consulting Period, medical
expenses incurred by ▇▇▇▇▇ for himself or his Spouse which are not reimbursable
by Medicare shall be paid and covered by Aeroflex through (i) medical insurance
policies or otherwise to the extent of the medical care reimbursement and
insurance he would have received under his prior COBRA Coverage (premiums for
which shall be paid by Aeroflex)
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and (ii) the MERP. After the Consulting Period, medical expenses incurred by
▇▇▇▇▇ for himself or his Spouse during ▇▇▇▇▇'▇ lifetime which are not
reimbursable by Medicare shall be paid and covered by Aeroflex through
"wraparound" medical insurance policies (the premiums for which shall be paid by
Aeroflex) or otherwise, to the extent of the coverage which is essentially
equivalent to ▇▇▇▇▇'▇ prior COBRA Coverage. Aeroflex shall pay all premiums for
his COBRA Coverage, and ▇▇▇▇▇ and his Spouse when first eligible will elect to
be covered by Medicare to the extent of the maximum benefits provided by
Medicare.
(i) Aeroflex owns the Policies on ▇▇▇▇▇'▇ life, listed on Schedule A
attached hereto. Aeroflex will continue to pay the premiums on the Policies
until the earlier of December 31, 2009 or the death of ▇▇▇▇▇. On December 31,
2009, ▇▇▇▇▇ may purchase all the Policies by paying Aeroflex an amount equal to
all premiums paid by Aeroflex for the Policies. Such election must be made by
▇▇▇▇▇ no later than January 3l, 2010 and payment made by ▇▇▇▇▇ by February 15,
2010.
6. (a) ▇▇▇▇▇ agrees that during the Consulting Period and thereafter he
shall not, and shall not cause others to, use, reveal, report, publish, transfer
or otherwise disclose to any person, corporation or other entity, any
Confidential Information (as defined in Section 14(a) of the Employment
Agreement) without prior written consent of the Chief Executive Officer of
Aeroflex, except to responsible officers and employees of Aeroflex.
Notwithstanding the foregoing, the prohibitions of this Section shall not apply
to any Confidential Information that becomes general public knowledge other than
from ▇▇▇▇▇ or is required to be divulged by law, court order or by
administrative process. The restrictions set forth in this Section 6 are in
addition to and not in lieu of protections afforded to trade secrets and
Confidential Information
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under applicable law. Nothing in this Agreement is intended to diminish or
otherwise limit the right to Aeroflex under applicable law to protect its trade
secrets and Confidential Information.
(b) Upon the Termination Date, ▇▇▇▇▇ shall promptly deliver to
Aeroflex all plans, manuals, letters, notes, notebooks, reports, computer
programs and copies thereof and all other materials and property, including
without limitation, those of a secret or confidential nature relating to
Aeroflex's business that are then in his possession or control.
7. ▇▇▇▇▇ 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 under this Agreement following his death by
giving Aeroflex written notice thereof; provided, however, that absent any then
effective contrary notice, his beneficiary shall be his estate. In the event of
▇▇▇▇▇'▇ death, or of a judicial determination of his incompetence, reference in
this Agreement to ▇▇▇▇▇ shall be deemed to refer, as appropriate, to his
beneficiary, estate or other legal representative.
8. All payments to ▇▇▇▇▇ or his beneficiary under this Agreement shall be
subject to withholding on account of federal, state and local taxes as required
by law.
9. Nothing herein is intended to limit Aeroflex's indemnification of
▇▇▇▇▇, and Aeroflex shall indemnify him to the fullest extent permitted by
applicable law consistent with Aeroflex's Certificate of Incorporation, By-Laws
and agreements as in effect on the Effective Date, with respect to any action or
failure to act on his part while he is an officer, director or employee of
Aeroflex or any Subsidiary. Aeroflex shall cause ▇▇▇▇▇ to be covered at all
times by directors' and officers' liability insurance on terms no less favorable
than the directors' and officers' liability insurance maintained by Aeroflex as
in effect on the Effective Date in terms of coverage and amounts. Aeroflex shall
continue to indemnify ▇▇▇▇▇ as provided above and
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maintain such liability insurance during the Consulting Period for any claims
that may be made against him with respect to his service as a director or
officer of Aeroflex and its subsidiaries or a consultant to Aeroflex.
10. Except as otherwise required by law or regulation, ▇▇▇▇▇ hereby
agrees that he shall not make any statement, written or verbal, in any form or
media or take any action in disparagement of Aeroflex, including, but not
limited to, references to Aeroflex's products, services, corporate policies,
officers, directors and employees or any other action which may disparage
Aeroflex to the general public and Aeroflex's employees, customers, suppliers,
and business and financial relations. Except as otherwise required by law or
regulation, Aeroflex, through its officers and directors, hereby agrees that it
shall not make any statement, written or verbal, in any form or media or take
any action in disparagement of ▇▇▇▇▇. Aeroflex shall consult with ▇▇▇▇▇ prior to
its issuance of a press release concerning his retirement.
11. Except as otherwise provided in this Agreement and as a material
inducement to Aeroflex to enter into this Agreement, ▇▇▇▇▇ hereby waives,
releases and discharges Aeroflex, its Board members, officers, directors,
stockholders, employees, agents, attorneys, subsidiaries, affiliates, and their
successors and assigns, from any and all manner of action, claims, demands,
liabilities, causes of action, suits, damages, debts, demands, and obligations,
past or present, known or unknown, he ever had, now has or may have, from the
beginning of the World to the Effective Date. This includes, but is not limited
to, claims arising under federal, state or local laws prohibiting employment or
other discrimination or claims growing out of any legal restrictions on
Aeroflex's rights to terminate its employees.
12. The Parties respectivelyrepresent and warrant that each is fully
authorized and
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empowered to enter into this Agreement and that the performance of its or his
obligations, as the case may be, under this Agreement will not violate any
agreement between such Party and any other person, firm or organization.
Aeroflex represents and warrants that this Agreement has been duly authorized by
all necessary corporate action and is valid, binding and enforceable in
accordance with its terms.
13. No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both ▇▇▇▇▇ and an authorized officer of
Aeroflex. 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 Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
14. 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.
15. 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. The Parties agree that the appropriate forum and venue of any
disputes arising out of this Agreement shall be any State or Federal Court in
the counties of Nassau or Suffolk, State of New York, and each of the Parties
hereto submits to the personal jurisdiction of any such Court. The foregoing
shall not limit the right of any Party to obtain execution of judgment in any
other jurisdiction.
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16. Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered either personally, by fax, or by
nationally recognized overnight courier service (such as Federal Express), duly
addressed to the Party concerned at the address indicated below or to such
changed address as the Party may subsequently give notice of.
If to Aeroflex or the Board:
Aeroflex Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chairman
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇:
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
c/o ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
17. Capitalized terms used but not defined herein shall have the
respective meanings ascribed to such terms in the Employment Agreement.
18. This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
AEROFLEX INCORPORATED
Attest: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
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Asst. Secy. Vice-Chairman
Witness: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
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