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


 

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