EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE
EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
this 9th day of November, 2005 (the "Effective Date"), by and between
Aeroflex
Incorporated, a Delaware corporation
(together with its
successors and assigns
permitted hereunder, the "Company"), and
John Adamovich, Jr. (the "Executive").
WHEREAS, the
Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the
Company and its
stockholders to
employ
the Executive, and the Executive desires to be
employed by the Company, on the
terms and conditions set forth herein.
NOW, THEREFORE,
the Company and the Executive agree as follows:
1. EMPLOYMENT
PERIOD. Subject to Section 3, the Company hereby agrees to
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employ the Executive, and the Executive
hereby agrees to be employed by the
Company, in accordance with the terms and
provisions of this Agreement, for the
period commencing as of the Effective Date
and ending at midnight on November 8,
2007 (the "Employment Period").
2. TERMS OF
EMPLOYMENT.
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(a) Positions and Duties.
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(i) During the term of the Executive's employment hereunder,
the
Executive shall serve as Chief Financial
Officer of the Company and, in so
doing, shall report directly to the
President and the Board of Directors of the
Company. The Executive shall have such
management, supervisory and operational
functions and other powers, functions and
duties consistent with the Executive's
title and duties as may from time to time
reasonably be prescribed by the Board.
(ii) During the term of the Executive's employment hereunder,
and
excluding any periods of vacation, paid
holiday, and sick and personal leave to
which the Executive is entitled, the
Executive agrees to devote substantially
all of his business time to the business
and affairs of the Company and, to the
extent necessary to discharge the
responsibilities assigned to the Executive
hereunder, to use the Executive's
reasonable best efforts to perform faithfully,
effectively and efficiently such
responsibilities. During the term of the
Executive's employment, it shall not be a
violation of this Agreement for the
Executive to (1) serve on corporate, civic
or charitable boards or committees,
(2) manage personal investments and (3)
serve as an officer of one or more
affiliates of the Company, so long as such
activities do not significantly
interfere with the performance of the
Executive's responsibilities as an
employee of the Company in accordance with
this Agreement.
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(b) Compensation.
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(i) (1)
Base
Salary. During the
term of the Executive's
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employment hereunder, the Executive shall
receive an annual salary (the "Base
Salary") of Three Hundred Eighty Thousand
Dollars ($380,000), which shall be
paid in accordance with the customary
payroll practices of the Company for
services rendered as Chief Financial
Officer of the Company.
(2)
COLA. Executive's Base
Salary shall be increased
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during the second year of the Employment
Period by an amount equal to the
increase in the cost-of-living during the
first year of the Employment Period,
as reported in the "Consumer Price Index,
New York and Northeastern New Jersey,
All Items", published by the U.S.
Department of Labor (or if such index is no
longer published, the successor or
comparable index which is published). Such
amount shall be calculated and paid to
Executive in a single sum on or before
the third month of the second year of the
Employment Period.
(ii) Bonus.
The Executive shall
receive a bonus (the "Bonus"),
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of Two Hundred Thousand Dollars ($200,000)
in each year of the Employment
Period, and, except as otherwise provided
herein, subject to continued
employment during each such yearly period.
Such Bonus shall be payable no later
than December 31, 2006 and December 31,
2007, respectively. At the discretion of
the Board of Directors, the Executive may
be entitled to additional bonuses
based upon evaluation of the Executive and
his performance by the President and
the Board of Directors. The $200,000 Bonus
for the second year of the Employment
Term shall be increased by the
cost-of-living adjustment formula provided for in
Paragraph 2(b)(i)(2).
(iii) Investment
Plans. During the term
of the Executive's
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employment hereunder, the Executive shall
be entitled to participate in all
savings and retirement plans, practices,
policies and programs ("Investment
Plans") appertaining to his position in
accordance with practices established by
the Board, including 401K and supplemental
life insurance plans, but Executive
shall not participate in the Company's
Supplemental Executive Retirement Plan.
(iv) Welfare
Benefit Plans. During
the term of the Executive's
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employment hereunder, the Executive shall
be eligible for participation in and
shall receive all benefits under welfare
benefit plans, practices, policies and
programs ("Welfare Plans") provided by the
Company (including, without
limitation, medical, prescription, dental,
disability, salary continuance, group
life, accidental death and travel accident
insurance plans and programs) to the
extent applicable to executive employees
generally in accordance with practices
established by the Board.
(v) Expenses.
During the term of the
Executive's employment
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hereunder, the Executive shall be entitled
to receive prompt reimbursement for
all reasonable expenses incurred by the
Executive in performing his duties
hereunder, including, without limitation,
transportation, hotel, and living
expenses and other business and
entertainment expenses, in accordance with the
policies, practices and procedures of the
Company.
(vi) Vacation
and Holidays. During
each complete twelve month
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period of the Executive's employment
hereunder, the Executive shall be entitled
to 20 paid vacation days and such paid
holiday and leave time as are in
accordance with the plans, policies,
programs and practices of the Company.
(vii) Restricted
Stock.
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(1)
Within ninety (90) days after the execution and
delivery of this Agreement, the Executive
shall receive 10,000 shares of the
Company's Common Stock, $.10 par value.
Such shares ("Restricted Stock") shall
vest fifty (50%) percent if the Executive
is employed hereunder at the end of
the first year of the Employment Period,
and one hundred (100%) percent if the
Executive is employed hereunder at the end
of the second year of the Employment
Period, or immediately upon termination of
Executive's employment by reason of
the Executive's death or disability, or by
the Company other than for "Cause".
All title and interest to the Restricted
Stock which does not vest shall revert
to the Company.
(2)
The Restricted Stock shall not be sold, transferred
or encumbered otherwise than by will or the
laws of descent and distribution
during the Employment Period.
(3)
The Company shall, if permitted by the rules
governing registration statements on Form
S-8, cause a registration statement on
Form S-8 covering the Restricted Stock to
be filed with the Securities and
Exchange Commission prior to November 1,
2006 or within ninety (90) days of
termination of the Executive's employment
if such termination occurs prior to
November 1, 2006.
(4)
If any law, regulation of the Securities and
Exchange Commission, or any regulation of
any other commission or agency having
jurisdiction shall require the Company or
the Executive to take any action with
respect to the Restricted Stock, then the
date upon which the Company shall
deliver or cause to be delivered the
certificate or certificates for the
Restricted Stock shall be postponed until
full compliance has been made with all
such requirements of law or regulation.
(5)
Executive represents that the Restricted Stock will
be acquired in good faith for investment
and not for resale or distribution, and
agrees that the Restricted Stock being so
acquired will not be sold except in
compliance with applicable securities laws
and, to the extent required, in
accordance with the volume and time and
other restrictions of Rule 144 of the
Securities Act of 1933.
(viii) Stock
Options. Aeroflex
shall grant to Executive options
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to purchase 250,000 shares of its Common
Stock, $.10 par value, in accordance
with the stock option agreement annexed
hereto as Exhibit "A" and made a part
hereof.
(ix) Car
Allowance. The Company
will provide the Executive with
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a car allowance of One Thousand ($1,000)
per month.
3. TERMINATION
OF EMPLOYMENT.
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(a) Death or Disability. The
Executive's employment shall terminate
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automatically upon the Executive's death
during the Employment Period. If a
Disability (as defined below) of the
Executive has occurred during the
Employment Period, the Company may give to
the Executive written notice in
accordance with Section 12(b) of its
intention to terminate the Executive's
employment. In such event, the Executive's
employment with the Company shall
terminate effective on the 30th day after
receipt of such notice by the
Executive (the "Disability Effective
Date"); provided, that within the 30 days
after such receipt, the Executive shall not
have returned to full-time
performance of the Executive's duties. For
purposes of this Agreement,
"Disability" shall mean the Executive's
inability to perform his duties and
obligations hereunder for a period of 90
consecutive days due to mental or
physical incapacity as determined by a
physician selected by the Company or its
insurers and acceptable to the Executive or
the Executive's legal representative
(such agreement as to acceptability not to
be withheld unreasonably).
(b) Cause.
The Company may
terminate the Executive's employment
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during the Employment Period for Cause or
without Cause. For purposes of this
Agreement, "Cause" shall mean (i) a breach
by the Executive of the Executive's
material obligations under Section 2(a)
which is not cured within ten (10) days
of the receipt by the Executive of written
notice thereof from the Company; (ii)
commission by the Executive of an act of
fraud upon, or willful misconduct of a
material nature toward, the Company, as
reasonably determined by a majority of
the Board, (iii) a material breach by the
Executive of Section 6, 7 or 8; (iv)
the conviction of the Executive of any
felony or any misdemeanor involving moral
turpitude (or a plea of nolo contendere
thereto); (v) the Executive being found
liable in any civil proceeding for an act
by the Executive constituting work
place harassment; or (vi) the willful and
continuing failure of the Executive to
carry out, or comply with, in any material
respect any reasonable directive of
the Board consistent with the terms of this
Agreement.
(c)
Termination for Good Reason by the Executive. The Executive
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may terminate this Agreement for Good
Reason and such termination shall
constitute a termination without Cause by
the Company. "Good Reason" shall mean
the occurrence of a breach by the Company
of its material obligations to the
Executive, which breach is not cured within
ten (10) Business Days of the
receipt by the Company of written notice
thereof from the Executive.
(d) Notice of
Termination. Any
termination (i) by the Company,
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whether for Cause or without Cause, or (ii)
the Executive, whether or not for
Good Reason, shall be communicated by
Notice of Termination (as defined below)
to the other party hereto given in
accordance with Section 12(b). For purposes
of this Agreement, a "Notice of
Termination" means a written notice which (i)
indicates the specific termination
provision in this Agreement relied upon,(ii)
to the extent applicable, sets forth in
reasonable detail the facts and
circumstances, if any, claimed to provide a
basis for termination of the
Executive's employment
