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Aeroflex Holding Corp. – ‘PRER14A’ on 7/28/14

On:  Monday, 7/28/14, at 12:30pm ET   ·   Accession #:  1047469-14-6434   ·   File #:  1-34974

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 7/28/14  Aeroflex Holding Corp.            PRER14A                1:2.0M                                   Merrill Corp/New/FA

Revised Preliminary Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRER14A     Revised Preliminary Proxy Solicitation Material     HTML   1.64M 


Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
"Table of Contents
"Summary
"Questions and Answers About the Special Meeting and the Merger
"Cautionary Statement Regarding Forward-Looking Information
"The Special Meeting
"Date, Time and Place of the Special Meeting
"Purpose of the Special Meeting
"Vote Required
"Voting by VGG Holding and the Significant Holders
"Recommendation of the Board
"Record Date; Stockholders Entitled to Vote
"Quorum
"How to Vote
"Broker Voting and Broker Non-Votes
"Revocation of Proxies
"Appointment of Proxy Holders; Tabulation of Proxy Votes
"Access to Proxy Materials
"Postponements and Adjournments
"Solicitation of Proxies
"Rights of Stockholders Who Seek Appraisal
"Stockholder List
"Questions and Additional Information
"The Merger
"Parties to the Merger
"The Merger Consideration
"Background of the Merger
"Reasons for the Merger; Recommendation of the Board
"Opinion of Goldman, Sachs & Co
"Opinion of Stifel, Nicolaus & Company, Incorporated
"Company Financial Forecasts
"Financing of the Merger
"Interests of Certain Persons in the Merger
"Regulatory Matters
"Cobham Shareholders' Approval of the Merger
"Accounting Treatment of the Merger
"Material U.S. Federal Tax Consequences of the Merger
"Conduct of Our Business if the Merger is Not Completed
"Market Price of Our Common Stock
"Appraisal Rights
"Litigation Relating to the Merger
"The Merger Agreement
"Explanatory Note Regarding the Merger Agreement
"Effects of the Merger; Directors and Executive Officers; Certificate of Incorporation; Bylaws
"Closing and Effective Time; Marketing Period
"Treatment of Common Stock and Restricted Stock Units
"Exchange and Payment Procedures
"Company Financing Cooperation
"Representations and Warranties
"Conduct of Our Business Pending the Merger
"Solicitation of Acquisition Proposals
"Company Stockholders Special Meeting
"Cobham Shareholders' General Meeting
"Filings; Other Actions; Notification
"Stockholder Litigation
"Employee Benefit Matters
"Conditions to the Merger
"Termination
"Termination Fees
"Expenses
"Remedies
"Indemnification; Directors' and Officers' Insurance
"Modification or Amendment
"Vote Required for Adoption of the Merger Agreement
"The Support Agreement
"Approval of the Adjournment of the Special Meeting
"101
"Adjournment
"Vote Required and Recommendation of the Board
"102
"Security Ownership of Certain Beneficial Owners and Management
"104
"Stockholder Proposals
"107
"Householding of Special Meeting Materials
"108
"Where You Can Find More Information
"Annex A Agreement and Plan of Merger
"Article I
"The Merger; Closing; Effective Time
"1.1
"A-1
"1.2
"Closing
"1.3
"Effective Time
"Article II
"Certificate of Incorporation and Bylaws of the Surviving Corporation
"2.1
"The Certificate of Incorporation
"A-2
"2.2
"The Bylaws
"Article III
"Directors and Officers of the Surviving Corporation
"3.1
"Directors
"3.2
"Officers
"Article IV
"Effect of the Merger on Capital Stock; Exchange of Certificates
"4.1
"Effect on Capital Stock
"4.2
"Payment
"A-3
"4.3
"Restricted Stock Units
"A-6
"4.4
"Adjustments to Prevent Dilution
"Article V
"5.1
"Representations and Warranties of the Company
"5.2
"Representations and Warranties of Parent and Merger Sub
"A-26
"Article VI
"Covenants
"6.1
"Interim Operations
"A-29
"6.2
"Acquisition Proposals
"A-32
"6.3
"Proxy Statement; Parent Shareholder Circular
"A-36
"6.4
"Company Stockholders Meeting
"A-38
"6.5
"Parent Shareholders Meeting
"6.6
"A-39
"6.7
"Access and Reports
"A-42
"6.8
"Stock Exchange De-listing; Exchange Act Deregistration
"A-43
"6.9
"Publicity
"6.10
"Employee Benefits
"6.11
"A-45
"6.12
"6.13
"Takeover Statutes
"A-46
"6.14
"Financing Cooperation
"A-47
"6.15
"Rule 16b-3
"A-48
"6.16
"6.17
"Director Resignations
"6.18
"Control of Operations
"6.19
"Further Assurances
"Article VII
"Conditions
"7.1
"Conditions to Each Party's Obligation to Effect the Merger
"A-49
"7.2
"Conditions to Obligations of Parent and Merger Sub
"A-50
"7.3
"Conditions to Obligation of the Company
"A-51
"7.4
"Frustration of Closing Conditions
"Article VIII
"8.1
"Termination by Mutual Consent
"8.2
"Termination by Either Parent or the Company
"8.3
"Termination by the Company
"A-52
"8.4
"Termination by Parent
"A-53
"8.5
"Effect of Termination and Abandonment
"Article IX
"Miscellaneous and General
"9.1
"Survival
"A-56
"9.2
"9.3
"Waiver of Conditions
"9.4
"Counterparts; Effectiveness
"9.5
"Governing Law and Venue; Waiver of Jury Trial; Remedies
"9.6
"Notices
"A-58
"9.7
"Entire Agreement
"A-59
"9.8
"No Third Party Beneficiaries
"9.9
"Obligations of Parent and of the Company
"A-60
"9.10
"Transfer Taxes
"9.11
"Definitions
"9.12
"Severability
"9.13
"Interpretation; Construction
"9.14
"Assignment
"9.15
"No Recourse
"A-61
"Annex A
"Table of Defined Terms
"Annex B
"Form of Surviving Corporation Certificate of Incorporation
"Annex C
"Form of Support Agreement
"Annex B Opinion of Goldman, Sachs & Co
"Annex C Opinion of Stifel, Nicolaus & Company, Incorporated
"Annex D Support Agreement
"Annex E Section 262 of the General Corporation Law of the State of Delaware

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TABLE OF CONTENTS
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

AEROFLEX HOLDING CORP.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

ý

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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PRELIMINARY COPIES—SUBJECT TO COMPLETION, DATED JULY 28, 2014

LOGO

Aeroflex Holding Corp.
35 South Service Road
Plainview, New York 11803

[            ], 2014

Dear Stockholder:

        On behalf of the Board of Directors (the "Board") of Aeroflex Holding Corp. (the "Company") I would like to invite you to attend a special meeting of stockholders of the Company (the "Special Meeting"), which will be held on [            ], 2014, at [            ] a.m., Eastern Time, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022.

        On May 19, 2014, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Cobham plc ("Cobham") and Army Acquisition Corp. ("Merger Sub"), pursuant to which, at the Effective Time (as defined in the Merger Agreement), Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation, but as a wholly-owned subsidiary of Cobham (the "Merger"). At the Special Meeting, you will be asked to consider and vote upon a proposal to adopt the Merger Agreement as such agreement may be amended from time to time in accordance with its terms. We are also asking that you grant the authority to vote your shares to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement. The proxy statement accompanying this letter is furnished in connection with the solicitation of proxies by the Board to be used at the Special Meeting.

        If the Merger contemplated by the Merger Agreement is completed, you will be entitled to receive $10.50 in cash, without interest and less any applicable withholding taxes, for each share of our common stock, par value $0.01 per share (the "Common Stock"), owned by you (unless you have properly exercised your appraisal rights with respect to such shares), which represents a premium of approximately 27.1% to the closing price of our Common Stock of $8.26 on May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014.

        The Board has determined that the Merger Agreement and the terms and conditions of the Merger and the Merger Agreement are fair to, and in the best interests of, the Company and its stockholders and has approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Board considered a number of factors in evaluating the Merger and consulted with its outside legal and financial advisors. In addition, on July 2, 2014, Cobham held a general meeting of its shareholders and obtained the requisite votes from its shareholders to approve the Merger Agreement. The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.

        Your vote is very important, regardless of the number of shares you own. The proposal to adopt the Merger Agreement must be approved by the holders of a majority of the outstanding shares of our Common Stock entitled to vote at the Special Meeting. Therefore, if you do not return your proxy card, submit a proxy via the Internet or telephone or attend the Special Meeting and vote in person, it will have the same effect as if you voted "AGAINST" adoption of the Merger Agreement. Only stockholders who owned shares of Common Stock at the close of business on [            ], 2014, the


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record date for the Special Meeting, will be entitled to vote at the Special Meeting. To vote your shares, you may return your proxy card, submit a proxy via the Internet or telephone or attend the Special Meeting and vote in person. Even if you plan to attend the Special Meeting, we urge you to promptly submit a proxy for your shares via the Internet or telephone or by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-paid reply envelope.

        If your shares of Common Stock are held in "street name" by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee will be unable to vote your shares of Common Stock without instructions from you. You should instruct your bank, brokerage firm or other nominee to vote your shares of Common Stock, following the procedures provided by your bank, brokerage firm or other nominee. The failure to instruct your bank, brokerage firm or other nominee to vote your shares of Common Stock "FOR" the proposal to adopt the Merger Agreement will have the same effect as voting "AGAINST" the proposal to adopt the Merger Agreement.

        Stockholders of the Company who do not wish to vote in favor of the proposal to adopt the Merger Agreement will have the right to seek appraisal of the fair value of their shares of Common Stock if they deliver a demand for appraisal before the vote is taken on the Merger Agreement and comply with all the requirements of Delaware law, which requirements are summarized in the accompanying proxy statement and reproduced in their entirety in Annex E thereto.

        The accompanying proxy statement provides you with detailed information about the Special Meeting, the Merger Agreement and the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We encourage you to read the entire proxy statement and its annexes, including the Merger Agreement, carefully. You may also obtain additional information about the Company from documents filed with the Securities and Exchange Commission from time to time.

        If you have any questions or need assistance voting your shares of Common Stock, please call Georgeson Inc., the Company's proxy solicitor, toll-free at (800) 509-0976.

        Thank you for your support of the Company.

    Sincerely,

 

 

Edward S. Wactlar
Senior Vice President, General Counsel and
Secretary

        This proxy statement is dated [            ], 2014, and is first being mailed to our stockholders on or about [            ], 2014.

        NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT OR THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.


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Aeroflex Holding Corp.
35 South Service Road
Plainview, New York 11803-0622

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Time/Date:

  [            ], 2014, at [            ] a.m., Eastern Time

Place:

 

The offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022.

Items of Business:

 

1.

 

To consider and vote upon the adoption of the Agreement and Plan of Merger (the "Merger Agreement"), dated as of May 19, 2014, as it may be amended from time to time in accordance with its terms, by and among Aeroflex Holding Corp. (the "Company"), Cobham plc, a public limited company organized under the laws of England and Wales ("Cobham") and Army Acquisition Corp., a Delaware corporation and an indirect wholly-owned subsidiary of Cobham ("Merger Sub"). A copy of the Merger Agreement is attached as Annex A to the accompanying proxy statement.

 

2.

 

To consider and vote upon the adjournment of the special meeting of stockholders (the "Special Meeting"), if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.

 

3.

 

To transact any other business that may properly come before the Special Meeting, or any adjournment or postponement of the Special Meeting, by or at the direction of the Board of Directors of the Company (the "Board").

Record Date:

 

Only stockholders of record at the close of business on [            ], 2014, the record date of the Special Meeting, are entitled to notice of, and to vote at, the Special Meeting or at any adjournment or postponement of the Special Meeting. All stockholders of record are cordially invited to attend the Special Meeting in person.

Proxy Voting:

 

Your vote is very important, regardless of the number of shares of common stock of the Company, par value $0.01 per share (the "Common Stock"), you own. To vote your shares, you may return your proxy card, submit a proxy via the Internet or telephone or attend the Special Meeting and vote in person. Even if you plan to attend the Special Meeting, we urge you to promptly submit a proxy for your shares via the Internet or telephone or by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-paid reply envelope. If you fail to return your proxy card, fail to submit your proxy by phone or over the Internet or fail to vote in person, your shares of Common Stock will not be counted for purposes of determining whether a quorum is present at the Special Meeting and will have the same effect as a vote "AGAINST" the proposal to adopt the Merger Agreement.

Vote Required to Approve Each Item of Business:

 

1.

 

The adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock entitled to vote thereon.


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2.

 

The adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to approve the adoption of the Merger Agreement requires the affirmative vote of the holders of shares representing a majority in voting power present, either in person or by proxy, and entitled to vote thereon.

Recommendation of the Board of Directors:

 

The Board has determined that the Merger Agreement and the merger of Merger Sub with and into the Company (the "Merger") contemplated by the Merger Agreement are fair to, and in the best interests of, the Company and its stockholders and has approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.

Attendance at the Special Meeting:

 

Only stockholders of record or their duly authorized proxies have the right to attend the Special Meeting. To gain admittance, you must present valid identification containing a photograph, such as a driver's license or passport. If you are a beneficial owner but not the record owner of the Common Stock (your shares are held through a bank, brokerage firm or other nominee), please bring to the Special Meeting a copy of your brokerage statement evidencing your beneficial ownership of the Common Stock of the Company and valid photo identification. If you are the representative of a corporate or institutional stockholder, you must present valid photo identification along with proof that you are the representative of such stockholder. Please note that cameras, recording devices or similar electronic devices will not be permitted at the Special Meeting.

Mailing Date:

 

These proxy materials are first being mailed to our stockholders on or about [            ], 2014.

Appraisal:

 

Stockholders of the Company who do not vote in favor of the proposal to adopt the Merger Agreement will have the right to seek appraisal of the fair value of their shares of Common Stock if they deliver a demand for appraisal before the vote is taken on the Merger Agreement and comply with all the requirements of Delaware law, which are summarized in the accompanying proxy statement and reproduced in their entirety in Annex E attached thereto.


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        WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR OVER THE INTERNET. IF YOU ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

    By Order of the Board of Directors,

 

 

Edward S. Wactlar
Senior Vice President, General Counsel and Secretary

Dated [            ], 2014
Plainview, NY

 

 

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TABLE OF CONTENTS

 
  Page  

SUMMARY

    1  

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

   
13
 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

   
21
 

THE SPECIAL MEETING

   
23
 

Date, Time and Place of the Special Meeting

   
23
 

Purpose of the Special Meeting

   
23
 

Vote Required

   
23
 

Voting by VGG Holding and the Significant Holders

   
23
 

Recommendation of the Board

   
24
 

Record Date; Stockholders Entitled to Vote

   
24
 

Quorum

   
24
 

How to Vote

   
24
 

Broker Voting and Broker Non-Votes

   
25
 

Revocation of Proxies

   
25
 

Appointment of Proxy Holders; Tabulation of Proxy Votes

   
26
 

Access to Proxy Materials

   
26
 

Postponements and Adjournments

   
26
 

Solicitation of Proxies

   
26
 

Rights of Stockholders Who Seek Appraisal

   
27
 

Stockholder List

   
27
 

Questions and Additional Information

   
27
 

THE MERGER

   
28
 

Parties to the Merger

   
28
 

The Merger

   
28
 

The Merger Consideration

   
29
 

Background of the Merger

   
29
 

Reasons for the Merger; Recommendation of the Board

   
36
 

Opinion of Goldman, Sachs & Co. 

   
40
 

Opinion of Stifel, Nicolaus & Company, Incorporated

   
50
 

Company Financial Forecasts

   
58
 

Financing of the Merger

   
61
 

Interests of Certain Persons in the Merger

   
62
 

Regulatory Matters

   
66
 

Cobham Shareholders' Approval of the Merger

   
67
 

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  Page  

Accounting Treatment of the Merger

    68  

Material U.S. Federal Tax Consequences of the Merger

   
68
 

Conduct of Our Business if the Merger is Not Completed

   
70
 

Market Price of Our Common Stock

   
70
 

Appraisal Rights

   
70
 

Litigation Relating to the Merger

   
74
 

THE MERGER AGREEMENT

   
76
 

Explanatory Note Regarding the Merger Agreement

   
76
 

Effects of the Merger; Directors and Executive Officers; Certificate of Incorporation; Bylaws

   
76
 

Closing and Effective Time; Marketing Period

   
77
 

Treatment of Common Stock and Restricted Stock Units

   
77
 

Exchange and Payment Procedures

   
78
 

Company Financing Cooperation

   
79
 

Representations and Warranties

   
80
 

Conduct of Our Business Pending the Merger

   
82
 

Solicitation of Acquisition Proposals

   
84
 

Company Stockholders Special Meeting

   
87
 

Cobham Shareholders' General Meeting

   
87
 

Filings; Other Actions; Notification

   
88
 

Stockholder Litigation

   
90
 

Employee Benefit Matters

   
91
 

Conditions to the Merger

   
92
 

Termination

   
94
 

Termination Fees

   
96
 

Expenses

   
97
 

Remedies

   
97
 

Indemnification; Directors' and Officers' Insurance

   
97
 

Modification or Amendment

   
98
 

Vote Required for Adoption of the Merger Agreement

   
98
 

THE SUPPORT AGREEMENT

   
99
 

APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING

   
101
 

Adjournment

   
101
 

Vote Required and Recommendation of the Board

   
101
 

ii


Table of Contents

 
  Page  

MARKET PRICE OF OUR COMMON STOCK

    102  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

   
104
 

STOCKHOLDER PROPOSALS

   
107
 

HOUSEHOLDING OF SPECIAL MEETING MATERIALS

   
108
 

WHERE YOU CAN FIND MORE INFORMATION

   
108
 

Annex A    Agreement and Plan of Merger

   
 
 

Annex B    Opinion of Goldman, Sachs & Co.

       

Annex C    Opinion of Stifel, Nicolaus & Company, Incorporated

       

Annex D    Support Agreement

       

Annex E    Section 262 of the General Corporation Law of the State of Delaware

       

iii


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SUMMARY

        Below is a summary of (x) the terms of the proposed merger between Aeroflex Holding Corp. ("Aeroflex," "the Company," "we" or "us"), and Army Acquisition Corp., a Delaware corporation ("Merger Sub"), an indirect wholly-owned subsidiary of Cobham plc, a public limited company organized under the laws of England and Wales ("Cobham"), pursuant to which, at the Effective Time (as defined below), Merger Sub will be merged with and into the Company (the "Merger"), and (y) the other transactions contemplated by the Agreement and Plan of Merger, dated as of May 19, 2014, as it may be amended from time to time in accordance with its terms, by and among Aeroflex, Cobham and Merger Sub (the "Merger Agreement"). This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. To better understand the Merger or the terms described below, you should read this entire proxy statement and its annexes carefully, as well as those additional documents to which we refer you. Each item in this summary includes a page reference directing you to a more complete description of that topic. You may obtain the information incorporated by reference into this proxy statement by following the instructions set forth in the section entitled "Where You Can Find More Information" in this proxy statement.


Parties to the Merger (Page 28)

        Aeroflex, a Delaware corporation, is a leading global provider of radio frequency, or RF, and microwave integrated circuits, components and systems used in the design, development and maintenance of technically demanding, high-performance wireless communication systems. Our solutions include highly specialized microelectronic components and test and measurement equipment used by companies in the: (x) commercial wireless communications; (y) space, avionics and defense; and (z) medical and other markets. Aeroflex's diverse technologies allow it to design, develop, manufacture and market a broad range of test, measurement and microelectronic products. We were founded in 1937 and have proprietary technology that is based on the extensive know-how of our approximately 650 engineers and experienced management team.

        Cobham, founded in 1934 and headquartered in Dorset, England, protects lives and livelihoods with its differentiated technology and know-how, operating with a deep insight into customer needs and agility. Cobham and its subsidiaries offer an innovative range of technologies and services to solve challenging problems in harsh environments across commercial, defense and security markets, from deep space to the depths of the ocean, specializing in meeting the growing demand for data, connectivity and bandwidth. Employing more than 10,000 people on five continents, Cobham and its subsidiaries have customers and partners in over 100 countries, with leading positions in: audio, video and data communications, including satellite communications; defense electronics; air-to-air refueling; aviation services; life support and mission equipment.

        Merger Sub is a Delaware corporation that is an indirect wholly-owned subsidiary of Cobham, and was formed solely for the purpose of entering into the Merger Agreement and completing the transactions contemplated by the Merger Agreement. Upon completion of the proposed Merger, Merger Sub will cease to exist.


The Merger (Page 28)

        The Merger Agreement provides that upon the filing and effectiveness of a certificate of merger with the Secretary of State of the State of Delaware (or at such later date as we and Cobham may

 

1


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agree in writing and specify in the certificate of merger) (the "Effective Time"), Merger Sub will merge with and into the Company and the Company will cease to be an independent publicly-traded company and will instead be an indirect wholly-owned subsidiary of Cobham. We currently expect to complete the Merger during the third calendar quarter of 2014, assuming that all of the conditions set forth in the Merger Agreement have been satisfied or waived. If the Merger is completed, you will not own any shares of the capital stock of the surviving corporation.


The Merger Consideration (Page 29)

        In the Merger, each share of common stock of the Company, par value $0.01 per share (the "Common Stock") (except for (x) certain shares owned by Cobham, the Company and certain of their respective subsidiaries, and (y) shares owned by stockholders who have properly demanded appraisal rights (the shares referenced in clauses (x) and (y), collectively, the "Excluded Shares")) outstanding immediately prior to the Effective Time will be converted into the right to receive $10.50 in cash (the "Per Share Merger Consideration"), without interest, less any applicable withholding taxes.


Reasons for the Merger; Recommendation of The Board (Page 36)

        After consideration of various factors described in the section entitled "The Merger—Reasons for the Merger; Recommendation of the Board," the Board of Directors of the Company (the "Board") (w) determined that the Merger is fair to, and in the best interests of, the Company and our stockholders, (x) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, (y) resolved that the Merger Agreement be submitted for consideration by the stockholders of the Company at a special meeting of stockholders (the "Special Meeting"), and (z) recommended that our stockholders vote to adopt the Merger Agreement.

        In considering the recommendation of the Board with respect to the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers may have interests in the Merger that may be different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger, and in recommending that the Merger Agreement be adopted by the stockholders of the Company. See the section entitled "The Merger—Interests of Certain Persons in the Merger."

        The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting of stockholders, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.


Opinion of Goldman, Sachs & Co. (Page 40)

        Goldman, Sachs & Co. ("Goldman Sachs") delivered its opinion to the Company's Board that, as of May 19, 2014, and based upon and subject to the factors and assumptions set forth therein, the $10.50 in cash per share to be paid to the holders (other than Cobham and its affiliates) of shares of Common Stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.

        The full text of the written opinion of Goldman Sachs, dated May 19, 2014, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided its opinion for the information and assistance of the Company's Board in connection with its consideration of the Merger. The Goldman Sachs opinion is not a recommendation as to how any holder of Common Stock should vote with respect to the Merger or any other matter. Pursuant to an engagement letter between the

 

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Company and Goldman Sachs, the Company has agreed to pay Goldman Sachs a transaction fee of approximately $14 million, all of which is payable upon consummation of the Merger.


Opinion of Stifel, Nicolaus & Company, Incorporated (Page 50)

        Stifel, Nicolaus & Company, Incorporated ("Stifel") delivered its opinion to the Company's Board that, as of May 19, 2014, and based upon and subject to the factors and assumptions set forth therein, the Per Share Merger Consideration to be paid to the holders of Common Stock (other than Excluded Shares) pursuant to the Merger Agreement was fair from a financial point of view to such holders.

        The full text of the written opinion of Stifel, dated May 19, 2014, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex C to this proxy statement. Stifel provided its opinion for the information and assistance of the Company's Board in connection with its consideration of the Merger. The Stifel opinion is not a recommendation as to how any holder of Common Stock should vote with respect to the Merger or any other matter. Pursuant to an engagement letter between the Company and Stifel, the Company agreed to pay Stifel a fee of $1 million, which was paid upon the delivery of the opinion and is not otherwise contingent upon the successful consummation of the Merger.


Financing of the Merger (Page 61)

        Cobham is financing the Merger, including the refinancing of existing debt facilities of Aeroflex, through (x) the entrance into a $1.30 billion senior unsecured bridge loan facility (the "Facility") from Bank of America Merrill Lynch International Limited and The Royal Bank of Scotland plc (collectively, the "Lenders") and (y) the placement of 60 million new Cobham shares for gross proceeds of approximately £180 million (equivalent to approximately $303.8 million as of May 23, 2014) (the "Placing").

        The Placing was announced by Cobham on May 20, 2014 and completed on May 23, 2014.

        The Facility will be made available to Cobham following the satisfaction of certain conditions precedent for the purpose of partially financing Cobham's payment obligations under the Merger Agreement and repayment of certain financial indebtedness of Aeroflex and its subsidiaries. As a result, up to the full amount of the Facility is expected to be funded to complete the Merger.

        The obligations of the Lenders to provide debt financing under the Facility are subject to certain conditions, which are further described under the section entitled "The Merger—Financing of the Merger."


Interests of Certain Persons in the Merger (Page 62)

        In considering the recommendation of the Board that you vote to adopt the Merger Agreement, you should be aware that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, the interests of stockholders. These interests may be different from, or in conflict with, your interests as a stockholder generally. The members of the Board were made aware of the material facts as to these additional interests, and considered them, before they approved the Merger Agreement. These interests include the following:

 

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        For a discussion of these interests, see the section entitled "The Merger—Interests of Certain Persons in the Merger."


Regulatory Matters (Page 66)

        The Merger cannot be completed until the "ultimate parent entities" (as defined in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")) of the Company and Cobham each file a notification and report form under the HSR Act and the applicable waiting period has expired or been terminated. The ultimate parent entities of the Company and Cobham filed the notification and report forms under the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of the Department of Justice (the "DOJ") on May 30, 2014. The waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on June 30, 2014.

        The closing of the Merger also requires clearance from the German Federal Cartel Office ("FCO") under the competition laws of Germany. The parties submitted a pre-merger notification to the FCO on June 18, 2014. On July 2, 2014, the FCO granted clearance to the consummation of the Merger.

        Under the terms of the Merger Agreement, the parties to the Merger are required to submit a joint voluntary notice of the Merger to the Committee on Foreign Investment in the United States ("CFIUS"). CFIUS is an interagency committee of the U.S. government that evaluates transactions in which a foreign entity acquires control of a U.S. business to determine whether national security will be adversely affected and, if so, what mitigation might be required. The parties have submitted a joint voluntary notice that was accepted for review by CFIUS on June 13, 2014. Completion of the transaction is conditioned on completion of the CFIUS process, which is defined as (x) written notice from CFIUS that, after review of the Merger contemplated by the Merger Agreement, it determined that there are no unresolved national security concerns with respect to the Merger and that action under Section 721 of the Defense Production Act of 1950, as amended, has been concluded; (y) a conclusion by CFIUS that the Merger is not a covered transaction and not subject to review under applicable law; or (z) CFIUS shall have sent a report to the President of the United States requesting the President's decision on the joint voluntary notice and either (1) the period during which the President may announce his decision to take action to suspend, prohibit or place any limitations on the Merger shall have expired without any such action being threatened, announced or taken or (2) the President shall have announced a decision not to take any action to suspend, prohibit or place any limitations on the Merger (the "CFIUS Process"). The timing of any decision by CFIUS is wholly within the control of CFIUS, with certain statutory constraints. There is no assurance that CFIUS will clear the Merger or that it will not impose mitigation measures that would preclude the applicable closing conditions in the Merger Agreement from being satisfied.

        The parties to the Merger Agreement have provided notice of the Merger to the Defense Security Service ("DSS"), which is the agency with cognizance over the facility security clearances held by the Company. Under 32 C.F.R. 117.56(b)(2)(iv), DSS must determine, prior to completion of the Merger, that a cleared U.S. company subject to Foreign Ownership Control or Influence ("FOCI") has submitted an acceptable FOCI action plan and has agreed to interim measures that address any FOCI issues pending formal execution of a FOCI mitigation or negation agreement. The parties jointly submitted a proposed FOCI action plan on June 27, 2014. The timing of any decision by DSS is wholly

 

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within the control of DSS. There is no assurance that DSS will determine that the proposed FOCI action plan is acceptable or that it will not impose unacceptable mitigation measures that would preclude the applicable closing conditions in the Merger Agreement from being satisfied.

        Finally, Section 122.4(b) of the International Traffic in Arms Regulations (the "ITAR") requires companies that are registered with the U.S. Department of State, Directorate of Defense Trade Controls ("DDTC") to notify DDTC at least 60 days in advance of any intended sale or transfer to a foreign person of ownership or control of the registrant or any entity thereof. The Company is registered under the ITAR, and thus has provided DDTC with the notification required by the ITAR Section 122.4(b). The Company and Cobham submitted notices to DDTC on June 3 and 4, 2014, respectively.


Cobham Shareholders' Approval of the Merger (Page 67)

        Pursuant to the Merger Agreement, Cobham is required to prepare and file with the United Kingdom's Financial Conduct Authority (the "FCA"), a shareholder circular to be sent to Cobham's shareholders in connection with the Merger. Subject to the qualifications described below in "The Merger Agreement—Cobham Shareholders' General Meeting", Cobham's proxy circular must include its recommendation that Cobham shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. On June 16, 2014, Cobham filed with, and obtained approval from, the FCA of the shareholder circular. The shareholder circular was mailed to Cobham's shareholders on June 16, 2014, following the receipt of FCA approval. Cobham held a general meeting of its shareholders on July 2, 2014, and obtained the requisite votes from its shareholders to approve the Merger Agreement.


Material U.S. Federal Tax Consequences of the Merger (Page 68)

        The exchange of shares of our Common Stock for cash pursuant to the Merger will be treated as a taxable sale for U.S. federal income tax purposes (and also may be taxed under applicable state, local and foreign tax laws). As such, stockholders who are U.S. holders (as defined in the section entitled "The Merger—Material U.S. Federal Income Tax Consequences of the Merger") and who receive the Per Share Merger Consideration in exchange for their shares of Common Stock will recognize gain or loss in an amount equal to the difference, if any, between the cash payments received pursuant to the Merger and their adjusted tax basis in their shares of Common Stock. A non-U.S. holder generally will not be subject to U.S. federal income tax on the receipt of cash pursuant to the Merger.

        You should read "The Merger—Material U.S. Federal Tax Consequences of the Merger" for a definition of "U.S. holder" and a more detailed discussion of the U.S. federal income tax consequences of the Merger. We encourage you to consult your own tax advisor to determine the particular U.S. federal, state, local and foreign tax consequences to you of the receipt of the Per Share Merger Consideration in exchange for shares of our Common Stock pursuant to the Merger.


Appraisal Rights of Stockholders (Page 70)

        Under the General Corporation Law of the State of Delaware (the "DGCL"), stockholders are entitled to appraisal rights in connection with the Merger, provided that such stockholders must not vote in favor of the adoption of the Merger Agreement, must submit a written demand for appraisal prior to the stockholder vote on the adoption of the Merger Agreement and must meet all of the other conditions set forth in Section 262 of the DGCL. Stockholders who properly assert and perfect their rights to appraisal will be entitled to have the "fair value" of their shares of Common Stock determined by the Delaware Court of Chancery (the "Delaware Court"), and to receive payment based

 

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on that valuation. The ultimate amount that you receive in an appraisal proceeding may be less than, equal to or more than the amount that you would have received under the Merger Agreement.

        To exercise your appraisal rights, you must submit a written demand for appraisal to the Company before the vote is taken on the Merger Agreement, you must not vote in favor of the proposal to adopt the Merger Agreement and you must comply with all the other requirements of the DGCL for the exercise of appraisal rights. Your failure to follow exactly the procedures specified under the DGCL will result in the loss of your appraisal rights. See the section entitled "The Merger—Appraisal Rights" and the text of Section 262 of the DGCL, which is reproduced in its entirety as Annex E to this proxy statement and incorporated by reference herein. If you hold your shares of Common Stock through a bank, brokerage firm or other nominee and you wish to exercise your appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors promptly.


Litigation Relating to the Merger (Page 74)

        On June 3, 2014, a putative class action complaint was commenced against us, our directors, Cobham and Merger Sub in the Delaware Court. In this action, captioned Ramon Acevedo v. Aeroflex Holding Corp. et al., C.A. No. 9730-VCL, the plaintiff purports to bring the action on behalf of a putative class of public stockholders of the Company, and seeks, among other relief: (i) certification of the class, (ii) equitable relief, (iii) to enjoin the consummation of the Merger, (iv) an accounting for damages allegedly sustained as a result of the conduct described in the complaint, and (v) fees and costs. Plaintiff alleges in the complaint that our directors breached their fiduciary duties because, among other things, they undervalued the Company and failed to maximize the value of the Company to its public stockholders by allegedly pursuing a flawed sales process and agreeing to allegedly preclusive deal protection devices. The complaint further alleges that the Company, Cobham and Merger Sub aided and abetted the directors' alleged breaches of their fiduciary duties. On June 18, 2014, the Company, our directors and Merger Sub filed an answer that denied the material substantive allegations of the complaint. On July 14, 2014, the plaintiff filed an amended putative class action complaint, which includes the allegations set forth above and, among others, adds allegations (i) of deficiencies in the sales process and selection of Goldman Sachs as a financial advisor in connection with the transaction, (ii) of disclosure violations in the preliminary proxy statement the Company filed on July 3, 2014, and (iii) that the Merger Agreement fails to contain certain provisions to protect the interests of the minority shareholders of the Company. The plaintiff seeks the same relief in the amended complaint that he sought in his original complaint. On July 24, 2014, the plaintiff filed a motion for preliminary injunction seeking to enjoin the defendants from taking any action to consummate the transaction, indicating that the reasons for his motion would be set forth in briefs and affidavits to be filed later. No briefing schedule on plaintiff's motion has been set.

        Also on June 3, 2014, a putative class action complaint was commenced against us, our directors, Cobham, and Merger Sub in the Supreme Court of the State of New York, County of Nassau (the "New York Court"). In this action, captioned Tom Turberg v. Aeroflex Holding Corp. et al., Index No. [602528/2014], the plaintiff purports to bring the action on behalf of a putative class of public stockholders of the Company, and seeks, among other relief, (i) certification of the class, (ii) naming the plaintiff as the class representative, (iii) equitable relief, (iv) to enjoin the consummation of the Merger, (v) to rescind, to the extent already implemented, the Merger or any terms thereof or granting the plaintiff and the proposed class rescissory damages, (vi) an accounting for damages allegedly sustained as a result of the conduct described in the complaint and (vii) fees and costs. Plaintiff alleges in the complaint that our directors breached their fiduciary duties because, among other things, they undervalued the Company and failed to maximize the value of the Company to its public stockholders

 

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by allegedly pursuing an inadequate sales process and agreeing to allegedly preclusive deal protection devices. The complaint further alleges that the Company, Cobham and Merger Sub aided and abetted the directors' alleged breaches of their fiduciary duties. On July 17, 2014, the parties entered into a stipulation pursuant to which the parties agreed to stay the Turberg action through the pendency of the Acevedo action and defendants would not be required to respond to the complaint until 30 days after the stay is lifted. The stipulation and proposed order were submitted to the New York Court on the same day, and on July 21, 2014, the New York Court stayed the Turberg action.

        The Company believes that the claims asserted in the Acevedo and Turberg actions are without merit.

        VGG Holding LLC ("VGG Holding"), which owns shares of Common Stock that represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014, as well as The Veritas Capital Fund III LP ("Fund III"), Golden Gate Private Equity Inc. ("Golden Gate") and GS Direct LLC (an affiliate of Goldman Sachs) ("GS Direct") and certain of their affiliates (Fund III, Golden Gate, GS Direct and certain of their affiliates, collectively, the "Significant Holders") have committed not to participate in any litigation challenging the Merger.


The Merger Agreement (Page 76)

        Upon execution of the Merger Agreement, we and our subsidiaries were required to immediately cease and cause to be terminated any discussions or negotiations with any persons that may have been ongoing with respect to any acquisition proposals, and, within two business days of May 19, 2014, request any such persons to promptly return or destroy all confidential information concerning the Company or any of our subsidiaries. Until the Effective Time or, if earlier, the termination of the Merger Agreement, we and our subsidiaries may not, and will use our and their reasonable best efforts to cause our and their representatives not to:

 

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        However, at any time prior to the time the Merger Agreement is adopted by our stockholders at a duly called stockholders' meeting, if the Company receives an unsolicited written bona fide acquisition proposal from any person or request from any person to waive any applicable prohibition with respect to the confidential submission of an acquisition proposal or amendment thereto and/or to waive any prohibition with respect to having discussions or negotiations with, and/or entering into an agreement with, one or more persons in connection with an acquisition proposal, we may:

        At any time before the Merger Agreement is adopted by our stockholders, we may terminate the Merger Agreement and enter into an alternative acquisition agreement with respect to a superior proposal, as long as we comply with certain terms of the Merger Agreement, including paying a $32 million termination fee to Cobham. See the section entitled "The Merger Agreement—Termination Fees."

        The respective obligations of the Company, Cobham and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of certain customary conditions, including (i) the adoption of the Merger Agreement by our stockholders, (ii) the adoption of the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement by Cobham's shareholders, (iii) the

 

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receipt of required antitrust approvals (or termination or expiration of applicable waiting periods), (iv) completion of the CFIUS Process, (v) receipt of approval by DSS, and (vi) the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the Merger Agreement.

        See the section entitled "The Merger Agreement—Conditions to the Merger."

        We and Cobham may, by mutual written consent, terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time, whether before or after the adoption of the Merger Agreement by our stockholders.

        The Merger Agreement may also be terminated and the Merger abandoned at any time prior to the Effective Time as follows:

        by either Cobham or the Company, whether before or after the time approval by our stockholders is obtained, if:

        by the Company:

 

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        by Cobham, if:

 

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        If the Merger Agreement is terminated in certain circumstances described under "The Merger Agreement—Termination Fees":

        Subject to our rights to equitable relief, including specific performance, in the event of termination of the Merger Agreement in accordance with its terms, any rights to the amounts discussed under "The Merger Agreement—Termination Fees" will be our sole and exclusive remedy against Cobham, Merger Sub and their respective affiliates for any losses or damages suffered as a result of any breach of any representation, warranty, covenant or agreement or the failure of the Merger to be consummated, except in the event Cobham commits a willful breach of the Merger Agreement or fraud, in which case Cobham shall be liable for uncapped damages. Although we may pursue both specific performance and the payment of a termination fee described under "The Merger Agreement—Termination Fees," under no circumstances will we be entitled to receive both remedies, which are mutually exclusive.

        Subject to Cobham's rights to equitable relief, including specific performance, in the event of termination of the Merger Agreement in accordance with its terms, Cobham's rights discussed under "The Merger Agreement—Termination Fees" will be the sole and exclusive remedy of Cobham, Merger Sub and their respective affiliates against the Company, our subsidiaries and any of our respective affiliates for any losses or damages suffered as a result of any breach of any representation, warranty, covenant or agreement or the failure of the Merger to be consummated, except in the event we commit a willful breach of the Merger Agreement or fraud, in which case we shall be liable for uncapped damages. Cobham may pursue both a grant of specific performance and the payment of a termination fee described under "The Merger Agreement—Termination Fees," but under no circumstances will Cobham be entitled to receive both remedies, which are mutually exclusive.

        The parties are entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of the Merger Agreement and to enforce the terms of the Merger Agreement in addition to any other remedy to which they are entitled at law or in equity.


The Support Agreement (Page 99)

        Concurrently with the execution of the Merger Agreement, VGG Holding, the largest holder of our Common Stock, and the Significant Holders entered into a Support Agreement, dated as of May 19, 2014, with Cobham and Merger Sub (the "Support Agreement").

        Pursuant to, and subject to the terms of, the Support Agreement, VGG Holding and the Significant Holders committed, among other things, to vote shares of Common Stock, which represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014, in favor of the adoption of the Merger Agreement. The Support Agreement terminates automatically upon the termination of the Merger Agreement. A copy of the Support Agreement is attached to this proxy statement as Annex D and incorporated by reference herein.

 

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Market Price of Our Common Stock (Page 102)

        The closing price of our Common Stock on the New York Stock Exchange LLC (the "NYSE") on May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014, was $8.26 per share. On [        ], 2014, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price of our Common Stock on the NYSE was $[        ] per share. You are encouraged to obtain current market quotations for our Common Stock in connection with voting your shares.


Delisting and Deregistration of Our Common Stock

        If the Merger is completed, the Common Stock will be delisted from the NYSE and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As such, we would no longer file periodic reports with the United States Securities and Exchange Commission (the "SEC") on account of the Common Stock.

 

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

        The following questions and answers are intended to address briefly some commonly asked questions regarding the Special Meeting, the Merger and the Merger Agreement. These questions and answers may not address all questions that may be important to you as a stockholder. Please refer to the "Summary" and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, each of which you should read carefully. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information."

Q:
Why am I receiving these proxy materials?

A:
You are receiving this proxy statement because you owned shares of our Common Stock at the close of business on [        ], 2014 (the "Record Date") and that entitles you to vote on the proposals to be considered at the Special Meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of Common Stock with respect to such matters.

Q:
When and where is the Special Meeting?

A:
The Special Meeting will be held on [        ], 2014, at [        ] a.m., Eastern Time, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022.

Q:
What am I being asked to vote on at the Special Meeting?

A:
You are being asked to vote on the following proposals:

1.
Adoption of the Merger Agreement.

2.
Approval of any adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.

Q:
What is the proposed transaction and what effects will it have on the Company?

A:
The proposed transaction is the acquisition of the Company by Cobham pursuant to the Merger Agreement. If the proposal to adopt the Merger Agreement is approved by our stockholders and the other closing conditions under the Merger Agreement have been satisfied or waived, at the Effective Time, Merger Sub will merge with and into the Company, with the Company being the surviving corporation. As a result of the Merger, the Company will become an indirect, wholly owned subsidiary of Cobham and will no longer be a publicly held corporation, our Common Stock will be delisted from the NYSE and deregistered under the Exchange Act, we will no longer file periodic reports with the SEC on account of the Common Stock and you will no longer have any interest in our future earnings or growth.

Q:
What will I be entitled to receive if the Merger is completed?

A:
Upon completion of the Merger, you will be entitled to receive $10.50 in cash (the "Per Share Merger Consideration"), without interest, less any applicable withholding taxes, for each share of Common Stock that you own, unless you have properly exercised and not withdrawn or otherwise lost your appraisal rights under the DGCL with respect to such shares. For example, if you own 100 shares of Common Stock, you will be entitled to receive $1,050.00 in cash in exchange for your shares of Common Stock, without interest and less any applicable withholding taxes. Upon completion of the Merger, you will not own any shares of the capital stock in the surviving corporation.

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Q:
What will holders of RSUs/PRSUs be entitled to receive in the Merger?

A:
At the Effective Time, each RSU and PRSU outstanding immediately prior thereto will fully vest and be cancelled and converted into the right to receive cash in an amount equal to the product of (x) the total number of shares of Common Stock subject to such RSU or PRSU, as applicable, immediately prior to the Effective Time and (y) the Per Share Merger Consideration without interest, less any applicable withholding taxes. With respect to PRSUs, the total number of shares of Common Stock subject thereto will be equal to the sum of (1) the accrued and "banked" shares plus (2) the number of shares of Common Stock subject to the fiscal year ended June 30, 2014 and prospective fiscal years assuming achievement of the applicable performance goals at the 100% level.

Q:
How does the Per Share Merger Consideration compare to the market price of the Common Stock prior to the announcement of the Merger?

A:
The Per Share Merger Consideration represents a premium of approximately 27.1%, based on the closing trading price of our Common Stock of $8.26 on May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014.

Q:
When can I expect to receive the cash Per Share Merger Consideration for my shares?
Q:
Will the Merger be a taxable transaction to me?

A:
Yes. The exchange of shares of Common Stock for cash pursuant to the Merger generally will be a taxable transaction to U.S. holders for U.S. federal income tax purposes. If you are a U.S. holder and you exchange your shares of Common Stock pursuant to the Merger, you will generally recognize gain or loss in an amount equal to the difference, if any, between the cash payments received pursuant to the Merger and your adjusted tax basis in your shares of Common Stock. Backup withholding may also apply to the cash payments made pursuant to the Merger unless the U.S. holder or other payee provides a taxpayer identification number, certifies that such number is correct and otherwise complies with the backup withholding rules. You should read "The Merger—Material U.S. Federal Income Tax Consequences of the Merger" for a more detailed discussion of the U.S. federal income tax consequences of the Merger. We encourage you to also consult your tax advisor for a complete analysis of the effect of the Merger on your federal, state, local and/or foreign taxes.

Q:
How does the Board recommend that I vote?

A:
At a meeting held on May 19, 2014, the Board determined that the Merger Agreement and the terms and conditions of the Merger are fair to, and in the best interests of, the Company and its stockholders and approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient

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Q:
What factors did the Board consider in making its recommendation?

A:
In making its recommendation, the Board took into account, among other things, the Per Share Merger Consideration to be received by holders of our Common Stock pursuant to the Merger Agreement, not only in relation to the market price as of the signing of the Merger Agreement and historical market prices of our Common Stock, but also in relation to the Board's assessment of the business, competitive position and prospects of the Company; the absence of a financing condition; our right to specific performance to require Cobham to comply with its obligations (including its obligation to consummate the Merger when required to do so under the Merger Agreement); and the terms and conditions of the Merger Agreement, including our ability under certain circumstances to furnish information to, and engage in discussions or negotiations with, a third party should we receive an unsolicited written bona fide acquisition proposal, and terminate the Merger Agreement to accept an acquisition proposal that the Board determines in good faith to be a superior proposal.

Q:
Have any stockholders already agreed to vote in favor of the adoption of the Merger Agreement?

A:
Concurrently with the execution of the Merger Agreement, Cobham and Merger Sub entered into the Support Agreement with VGG Holding, and the Significant Holders. Pursuant to the Support Agreement, subject to the terms and conditions therein, VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding to, vote in favor of the adoption of the Merger Agreement 65,000,000 shares of Common Stock held by VGG Holding, which represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014.

Q:
When do you expect the Merger to be completed?

A:
We are working to complete the Merger as quickly as possible. We currently expect to complete the Merger during the third calendar quarter of 2014, assuming that all of the conditions set forth in the Merger Agreement have been satisfied or waived. If our stockholders vote to approve the proposal to adopt the Merger Agreement, the Merger will become effective as promptly as practicable following the satisfaction or waiver of the other conditions to the Merger. See the section entitled "The Merger Agreement—Conditions to The Merger."

Q:
What happens if the Merger is not completed?

A:
If the Merger Agreement is not adopted, or if the Merger is not completed for any other reason, Merger Sub will not be merged with and into the Company and our stockholders will not be entitled to receive any payment for their shares in connection with the Merger. Instead, the Company will remain an independent public company and our Common Stock will continue to be listed and traded on the NYSE. Under specified circumstances, the Company may be required to pay, or to receive from Cobham, a fee with respect to the termination of the Merger Agreement and/or reimbursement for expenses, as applicable, as described under the section entitled "The Merger Agreement—Termination Fees."

Q:
Do any of our directors or executive officers have interests in the Merger that may differ from those of the stockholders generally?

A:
Upon consummation of the Merger, all of the Company's then outstanding RSUs, PRSUs and RSAs held by certain of our directors and executive officers will accelerate in full in connection with the Merger. Additionally, certain executive officers' employment agreements provide

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Q:
What regulatory approvals and filings are needed to complete the Merger?

A:
Under the HSR Act, the Merger may not be completed until notification and report forms describing the proposed Merger and other matters have been filed with the DOJ and the FTC, and the applicable waiting period has expired or been terminated. The waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on June 30, 2014. See the section entitled "The Merger—Regulatory Matters." Additionally, under the competition laws of Germany, the Merger may not be completed until the required merger notification filings have been made with, and the required approvals have been obtained from, the FCO. On July 2, 2014, the FCO granted clearance to the consummation of the Merger.
Q:
What will constitute a quorum at the Special Meeting?

A:
Shares representing a majority of the voting power of the outstanding shares of Common Stock entitled to vote at the Special Meeting, represented in person or by proxy, will constitute a quorum for the transaction of business at the Special Meeting.

Q:
What stockholder vote is necessary to adopt the Merger Agreement?

A:
Adoption of the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock entitled to vote thereon. Because the affirmative vote required to approve the proposal to adopt the Merger Agreement is based upon the total number of outstanding shares of Common Stock, if you fail to submit a proxy or vote in person at the Special Meeting, or abstain, or you do not provide your bank, brokerage firm or other nominee with instructions, as applicable, this will have the same effect as a vote "AGAINST" the proposal to adopt the Merger Agreement.

Q:
What stockholder vote is necessary to approve the adjournment of the Special Meeting?

A:
Approval of the adjournment the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum

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Q:
Who is entitled to vote at the Special Meeting?

A:
Only those stockholders who will have owned Common Stock at the close of business on [        ], 2014, the Record Date, are entitled to cast a vote on the proposals presented in this proxy statement. At the close of business on [        ], 2014, we had [        ] shares of Common Stock outstanding. Each outstanding share of our Common Stock entitles its holder to one vote. The names of stockholders of record entitled to vote at the Special Meeting will be available at the Special Meeting, and for ten days prior to the Special Meeting, between the hours of 9:00 a.m. and 4:30 p.m., Eastern Time, at our principal executive offices at 35 South Service Road, Plainview, New York 11803-0622.

Q:
May I vote in person?

A:
Yes. If your shares are registered in your name, you may attend the Special Meeting and vote your shares in person, rather than signing and returning your proxy card or submitting a proxy via the Internet or telephone. If your shares are held in "street name," you must obtain a proxy from your bank, brokerage firm or other nominee in order to attend the Special Meeting and vote in person. No cameras, recording devices or similar electronic devices will be permitted in the Special Meeting. Even if you plan to attend the Special Meeting in person, we urge you to complete, sign, date and return the enclosed proxy or submit a proxy via the Internet or telephone to ensure that your shares will be represented at the Special Meeting.

Q:
May I submit a proxy via the Internet or telephone?

A:
If you are a registered stockholder as of the Record Date for the Special Meeting, you may submit a proxy online at www.proxyvote.com or telephonically by calling (800) 690-6903 up until 11:59 p.m., Eastern Time, on [        ], the day before the date of the Special Meeting, or by mailing a proxy card. You may also vote in person at the Special Meeting. If you hold shares through a bank, brokerage firm or other nominee, you may vote your shares by any method specified on the voting instruction form that the bank, brokerage firm or other nominee provides. We encourage you to vote your shares as soon as possible.

Q:
What happens if I do not return my proxy card, submit a proxy via the Internet or telephone or attend the Special Meeting and vote in person?

A:
Approval of the proposal to adopt the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of our Common Stock entitled to vote at the Special Meeting. Therefore, if you do not return your proxy card, submit a proxy via the Internet or telephone, or attend the Special Meeting and vote in person, it will have the same effect as if you voted "AGAINST" adoption of the Merger Agreement. In the event that a quorum is not present at the Special Meeting, or there are not sufficient votes at the time of the Special Meeting to adopt the Merger Agreement, it is expected that the Special Meeting will be adjourned to solicit additional proxies. Approval of the proposal to adjourn the Special Meeting to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement requires the affirmative vote of the holders of shares representing a majority in voting power present, either in person or by proxy, and entitled to vote thereon. Therefore, if you do not vote in person or by proxy, your failure to vote will have no effect on the outcome of the adjournment proposal.

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Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?

A:
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, you are considered, with respect to those shares, to be the "stockholder of record." In this case, this proxy statement and your proxy card have been sent directly to you by the Company.
Q:
If my shares of Common Stock are held in "street name" by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee vote my shares of Common Stock for me?

A:
Your bank, brokerage firm or other nominee will only be permitted to vote your shares of Common Stock if you instruct your bank, brokerage firm or other nominee how to vote. You should follow the procedures provided by your bank, brokerage firm or other nominee regarding the voting of your shares of Common Stock. If you do not instruct your bank, brokerage firm or other nominee to vote your shares of Common Stock, your shares of Common Stock will not be voted and the effect will be the same as a vote "AGAINST" the proposal to adopt the Merger Agreement, but will not have an effect on the approval of the proposal to adjourn the Special Meeting.

Q:
May I revoke or change my vote?

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Q:
What is a proxy?

A:
A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of Common Stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of Common Stock is called a "proxy card."

Q:
If a stockholder gives a proxy, how are the shares voted?

A:
Regardless of the method you choose to vote, the individuals named on the enclosed proxy card, or your proxies, will vote your shares in the way that you indicate. When completing your proxy via the Internet or telephone, you may specify whether your shares should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the Special Meeting.
Q:
What should I do if I receive more than one set of voting materials?

A:
You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return (or submit via the Internet or telephone) each proxy card and voting instruction card that you receive.

Q:
What happens if I sell my shares before the Special Meeting?

A:
If you transfer your shares after the Record Date but before the Special Meeting, you will, unless special arrangements are made, retain your right to vote at the Special Meeting, but will have transferred the right to receive the Per Share Merger Consideration to be received by our stockholders pursuant to the Merger. In order to receive the Per Share Merger Consideration, you must hold your shares through completion of the Merger.

Q:
What do I need to do now?

A:
We encourage you to read this proxy statement and its annexes carefully, as well as those additional documents to which we refer you and consider how the Merger affects you. Then complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying reply envelope or grant your proxy electronically over the Internet or by telephone, so that your shares can be voted at the Special Meeting. If you hold your shares in "street name," please refer to the voting instruction forms provided by your bank, brokerage firm or other nominee to vote your shares.

Q:
Should I send in my stock certificates now?

A:
No. After the Merger is completed, you will receive a letter of transmittal containing written instructions for exchanging your shares of our Common Stock for the Per Share Merger

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Q.
Am I entitled to exercise appraisal rights under the DGCL instead of receiving the Per Share Merger Consideration for my shares of Common Stock?

A.
Yes, provided that you comply with all applicable requirements and procedures. As a holder of Common Stock, you are entitled to appraisal rights under the DGCL in connection with the Merger if you take certain actions and meet certain conditions. See the section entitled "The Merger—Appraisal Rights."

Q.
Where can I find the voting results of Special Meeting?

A.
The Company intends to announce preliminary voting results at the Special Meeting and publish final results in a Current Report on Form 8-K that will be filed with the SEC following the Special Meeting. All reports that the Company files with the SEC are publicly available when filed (see the section entitled "Where You Can Find More Information").

Q.
Who can help answer my questions?

A.
If you would like additional copies, without charge, of this proxy statement or if you have questions about the Merger, including the procedures for voting your shares, you should contact our proxy solicitor, Georgeson Inc. ("Georgeson"), toll-free at (800) 509-0976.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

        This proxy statement, and the documents to which we refer you in this proxy statement, contain forward-looking statements that involve numerous risks and uncertainties. The statements contained in this proxy statement that are not purely historical are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act, including, without limitation, statements regarding the expected benefits and closing of the proposed Merger, the management of the Company and the Company's expectations, beliefs and intentions. All forward-looking statements included in this proxy statement are based on information available to the Company on the date hereof. In some cases, you can identify forward-looking statements by terminology such as "may," "can," "will," "should," "could," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "targets," "goals," "projects," "outlook," "continue," "preliminary," "guidance," or variations of such words, similar expressions, or the negative of these terms or other comparable terminology. No assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on our results of operations or financial condition. Accordingly, actual results may differ materially and adversely from those expressed in any forward-looking statements. Neither the Company nor any other person can assume responsibility for the accuracy and completeness of forward-looking statements. There are various important factors that could cause actual results to differ materially and adversely from those in any such forward-looking statements, many of which are beyond the Company's control. These risks and uncertainties include, but are not limited to, the risks detailed in our filings with the SEC, including our most recent filings on Forms 10-Q and 10-K, factors and matters contained or incorporated by reference in this proxy statement, and the following factors:

        Consequently, all of the forward-looking statements we make in this document are qualified by the information contained or incorporated by reference herein, including, but not limited to, (a) the information contained under this heading and (b) the information contained under the headings "Risk Factors" and "Business" and in our consolidated financial statements and notes thereto included in our most recent filings on Forms 10-Q and 10-K (see the section entitled "Where You Can Find More

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Information"). Other than as required by applicable securities laws, we undertake no obligation to publicly release any revision to any forward-looking statement contained or incorporated herein to reflect any future events or occurrences.

        You should carefully consider the cautionary statements contained or referred to in this section in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.

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THE SPECIAL MEETING

        We are furnishing this proxy statement to our stockholders as part of the solicitation of proxies by the Board for use at the Special Meeting. This proxy statement and the accompanying proxy card are being mailed to stockholders on or about [        ], 2014.


Date, Time and Place of the Special Meeting

        The Special Meeting will be held on [        ], 2014, at [        ] a.m., Eastern Time, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022. The date, time and place of any adjournment or postponement of the Special Meeting, if any, will be established in accordance with our governing documents and applicable law. Directions to the Special Meeting will be posted on the Investor Relations section of the Company's website, www.aeroflex.com, and may also be obtained by contacting our Secretary, in writing, at Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 or by phone at (516) 694-6700. Information on our website is not incorporated into this proxy statement.


Purpose of the Special Meeting

        The purpose of the Special Meeting is for stockholders to consider and vote upon the following proposals:


Vote Required

        Approval of the proposal to adopt the Merger Agreement requires the affirmative vote of the holders of a majority of the outstanding shares of the Common Stock entitled to vote thereon. Abstentions will be considered present at the Special Meeting for purposes of determining a quorum and for purposes of calculating the vote, but will not be considered to have been voted in favor of the proposal. If you abstain, it will have the same effect as a vote "AGAINST" the adoption of the Merger Agreement.

        Approval of the proposal to adjourn the Special Meeting, if necessary, requires the affirmative vote of the holders of shares representing a majority in voting power present in person or represented by proxy and entitled to vote thereon. Abstentions will be considered present at the Special Meeting for purposes of determining a quorum and for purposes of calculating the vote. If you abstain, it will have the same effect as a vote "AGAINST" the approval of the adjournment of the Special Meeting.


Voting by VGG Holding and the Significant Holders

        Pursuant to the Support Agreement, subject to the terms and conditions therein, VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding, to vote 65,000,000 shares of Common Stock held by VGG Holding, which represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014, in favor of the adoption of the Merger Agreement and in favor of any other matter that could reasonably be expected to be in furtherance thereof, including any adjournment or postponement of the Special Meeting, as well as against any action (including any amendment to our Certificate of Incorporation or Bylaws, as in effect on May 19, 2014) that VGG Holding or a Significant Holder knows would, or otherwise would reasonably be expected to, frustrate the purposes of, postpone or adversely affect the consummation of the Merger.

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Recommendation of the Board

        The Board has approved the Merger Agreement and determined that the Merger Agreement and the Merger are in the best interests of the Company and its stockholders. The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.


Record Date; Stockholders Entitled to Vote

        Only those stockholders who will have owned Common Stock at the close of business on [        ], 2014 (the "Record Date"), are entitled to vote at the Special Meeting. At the close of business on [        ], 2014, we had [        ] shares of Common Stock outstanding entitled to cast a vote on the proposals presented in this proxy statement. Each outstanding share of our Common Stock entitles its holder to one vote.


Quorum

        Shares representing a majority of the voting power of the outstanding shares of Common Stock entitled to vote at the Special Meeting represented in person or by proxy will constitute a quorum for the transaction of business at the Special Meeting. Your shares will be counted for purposes of determining a quorum if you attend the Special Meeting and vote in person, or if you submit a proxy by telephone, over the Internet or by submitting a properly executed proxy card by mail. Abstentions will (but broker non-votes will not) be counted for determining whether a quorum is present for the Special Meeting.


How to Vote

        Stockholders can vote in person at the Special Meeting or by proxy. There are three ways to submit a proxy:

        Telephone and Internet proxy submission for stockholders of record will close at 11:59 p.m., Eastern Time, on [        ], 2014, the day before the date of the Special Meeting.

        If you properly complete, sign, date and return a proxy card, your shares will be voted as you specify. However, if you sign, date and return a proxy card but do not specify a vote with respect to each proposal, your shares will be voted as the Board recommends with respect to each proposal and in the proxy's discretion with respect to any other matter that may be properly considered at the Special Meeting.

        If you are a beneficial owner (that is, your shares are held in "street name" by a bank, brokerage firm or other nominee), you will receive voting instructions or a voting information form from the holder of record. You must follow the instructions of the holder of record in order for your shares to be voted.

        If you plan to attend the Special Meeting, you must present identification containing a photograph, such as a driver's license or passport. If you are a stockholder of record, your name will be verified against the list of stockholders of record on the Record Date prior to your being admitted to the Special Meeting. No cameras, recording devices or similar electronic devices will be permitted in the

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Special Meeting. If you are not a stockholder of record, but hold shares in "street name" through a bank, brokerage firm or other nominee, you should provide proof of beneficial ownership on the Record Date, such as your most recent account statement prior thereto, a copy of the voting instruction card provided to you by your bank, brokerage firm or other nominee, or other similar evidence of ownership. If you are the representative of a corporate or institutional stockholder, you must present valid photo identification along with proof that you are the representative of such stockholder.


Broker Voting and Broker Non-Votes

        Other than with respect to certain "routine" matters, banks, brokerage firms or other nominees holding shares of our Common Stock for beneficial owners must vote those shares according to the specific instructions they receive from the beneficial owners, unless the banks, brokerage firms or other nominees have been given discretionary voting power by the beneficial owners. In certain circumstances, banks, brokerage firms or other nominees holding shares for a beneficial owner may not have discretionary voting power and may not have received voting instructions from the beneficial owner of the shares. In such cases, a bank, brokerage firm or other nominee may not vote on a proposal, which is known as a "broker non-vote." These broker non-votes will not be counted for purposes of determining whether a quorum is present at the Special Meeting.

        Proposal No. 1, adoption of the Merger Agreement, and Proposal No. 2, approval of an adjournment of the Special Meeting, are not "routine" matters. Accordingly, if voting instructions are not provided to the bank, brokerage firm or other nominee with respect to Proposal Nos. 1 and 2, the bank, brokerage firm or other nominee may not exercise discretion and is prohibited from voting the stockholder's shares with respect to such proposal. A broker non-vote will have the same effect as a vote "AGAINST" the proposal to adopt the Merger Agreement. A broker non-vote will have no effect on the proposal to approve any adjournment of the Special Meeting.

        Stockholders should follow the directions provided by their banks, brokerage firms or other nominees regarding how to instruct the bank, brokerage firm or other nominee to vote their shares. Stockholders may later change or revoke the instructions given to a bank, brokerage firm or other nominee by taking the steps described in the information received from the bank, brokerage firm or other nominee.


Revocation of Proxies

        Any proxy you give pursuant to this solicitation may be revoked or changed by you at any time before it is voted. Proxies may be revoked or changed as follows:

        If you have sent a proxy directly to the Company, you may revoke it by:

        If you hold your shares in "street name" and have instructed a bank, brokerage firm or other nominee to vote your shares, you may revoke or change a previous vote only by following the procedures established by the bank, brokerage firm or other nominee.

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        Revocation of the proxy will not affect any vote previously taken. Attendance at the Special Meeting will not in itself constitute the revocation of a proxy; you must vote in person at the Special Meeting to revoke a previously delivered proxy.


Appointment of Proxy Holders; Tabulation of Proxy Votes

        The Board asks each stockholder to appoint Hugh D. Evans and John Adamovich, Jr. as proxy holders, each with the power to appoint his substitute, to vote their shares at the Special Meeting.

        Each stockholder makes this appointment by completing and returning the enclosed proxy card or otherwise using one of the voting methods described above. If appointed, the proxy holders will vote shares as directed on the matters described in this proxy statement. In the absence of stockholder direction, the proxies will vote the shares as recommended by the Board. Unless otherwise indicated on the proxy card, a stockholder authorizes the proxy holders to vote its shares on any matters not known by the Board at the time this proxy statement was printed and which, under the Company's Bylaws, may be properly presented for action at the Special Meeting.

        A representative of Broadridge Financial Solutions, Inc. will receive and tabulate the proxies. Representatives of Moomjian, Waite & Coleman LLP will act as the independent inspectors of election and will certify the voting results


Access to Proxy Materials

        A copy of this proxy statement, proxy card and Notice of Special Meeting of Stockholders (the "Notice") will be mailed to each stockholder of the Company entitled to vote at the Special Meeting. In addition, this proxy statement is available online in the Investor Relations—SEC Filings section of our website at www.aeroflex.com. The Notice contains instructions on how to access this proxy statement and our other proxy materials online and how to vote your shares.


Postponements and Adjournments

        Although it is not expected, the Special Meeting may be postponed or adjourned for, among other reasons, the purpose of soliciting additional proxies, to any other time and place. You should note that the Special Meeting could be successively postponed or adjourned to any date. If the Special Meeting is postponed or adjourned for the purpose of soliciting additional proxies, stockholders who have already sent in their proxies will be able to revoke them at any time prior to their use. Subject to the voting instructions given by a stockholder, the persons named as proxies may propose and vote for one or more adjournments of the Special Meeting, including adjournments to permit further solicitations of proxies.


Solicitation of Proxies

        The Company will pay the cost of soliciting proxies, including the expenses related to the printing and mailing of this proxy statement. In addition to solicitation by mail, proxies may be solicited personally, or by telephone or other electronic means, by our directors, executive officers or other employees without additional compensation for such services. We will pay approximately $10,000, plus $6.00 per each call made to or received from stockholders of the Company and $4.50 per each TeleVote, to Georgeson to assist with the solicitation of proxies. Georgeson may solicit proxies by telephone or other electronic means or in person. The Company will also reimburse Georgeson for routine out-of-pocket expenses in connection with this proxy solicitation. In addition, the Company will indemnify Georgeson against any losses arising out of the firm's proxy soliciting services on our behalf. The Company will also request that banking institutions, brokerage firms, custodians, trustees, nominees, fiduciaries and other like parties forward the solicitation materials to the beneficial owners

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of Common Stock held of record by such persons, and the Company will, upon request of such record holders, reimburse forwarding charges and out-of-pocket expenses.


Rights of Stockholders Who Seek Appraisal

        Stockholders are entitled to appraisal rights under the DGCL in connection with the Merger, provided that such stockholders must not vote in favor of the adoption of the Merger Agreement, must submit a written demand for appraisal prior to the stockholder vote on the adoption of the Merger Agreement and must meet all of the other conditions set forth in Section 262 of the DGCL. Stockholders who properly assert and perfect their rights to appraisal will be entitled to have the "fair value" of their shares of Common Stock determined by the Delaware Court and to receive payment based on that valuation. The ultimate amount you receive in an appraisal proceeding may be less than, equal to or more than the amount you would have received under the Merger Agreement.

        To exercise your appraisal rights, you must submit a written demand for appraisal to the Company before the vote is taken on the Merger Agreement, you must not vote in favor of the proposal to adopt the Merger Agreement and you must comply with all the other requirements of the DGCL for the exercise of appraisal rights. Your failure to follow exactly the procedures specified under the DGCL may result in the loss of your appraisal rights. See the section entitled "The Merger—Appraisal Rights" and the text of the Delaware appraisal rights statute reproduced in its entirety as Annex E to this proxy statement. If you hold your shares of the Common Stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee. In view of the complexity of the DGCL, stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.


Stockholder List

        A list of our stockholders entitled to vote at the Special Meeting will be available for examination by any stockholder at the Special Meeting. For ten days prior to the Special Meeting, this stockholder list will be available for inspection by any stockholder for any purpose germane to the Special Meeting between the hours of 9:00 a.m. and 4:30 p.m., Eastern Time, at 35 South Service Road, Plainview, New York 11803-0622.


Questions and Additional Information

        If you have questions about the matters described in this proxy statement or how to submit your proxy, or if you need additional copies of the proxy statement or the enclosed proxy card or voting instructions, you should contact Georgeson, our proxy solicitor, toll-free at (800) 509-0976.

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THE MERGER

        This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.


Parties to the Merger

        Aeroflex Holding Corp. ("Aeroflex," the "Company," "we," "us" or "our"), a Delaware corporation, is a leading global provider of radio frequency, or RF, and microwave integrated circuits, components and systems used in the design, development and maintenance of technically demanding, high-performance wireless communication systems. Our solutions include highly specialized microelectronic components and test and measurement equipment used by companies in the: (x) commercial wireless communications; (y) space, avionics and defense; and (z) medical and other markets. Aeroflex's diverse technologies allow it to design, develop, manufacture and market a broad range of test, measurement and microelectronic products. We were founded in 1937 and have proprietary technology that is based on the extensive know-how of our approximately 650 engineers and experienced management team. We maintain our principal executive offices at 35 South Service Road, Plainview, NY 11803-0622, and our telephone number is (516) 694-6700.

        Cobham plc ("Cobham"), founded in 1934 and headquartered in Dorset, England, protects lives and livelihoods with its differentiated technology and know-how, operating with a deep insight into customer needs and agility. Cobham and its subsidiaries offer an innovative range of technologies and services to solve challenging problems in harsh environments across commercial, defense and security markets, from deep space to the depths of the ocean, specializing in meeting the growing demand for data, connectivity and bandwidth. Employing more than 10,000 people on five continents, Cobham and its subsidiaries have customers and partners in over 100 countries, with leading positions in: audio, video and data communications, including satellite communications; defense electronics; air-to-air refueling; aviation services; life support and mission equipment. The principal executive offices of Cobham are located at Brook Road, Wimborne, Dorset, BH21 2BJ, United Kingdom and its telephone number is +44 12 0288 2020.

        Army Acquisition Corp. ("Merger Sub") is a Delaware corporation that is an indirect wholly-owned subsidiary of Cobham, and was formed solely for the purpose of entering into the Agreement and Plan of Merger dated as of May 19, 2014 with the Company and Cobham (the "Merger Agreement") and completing the transactions contemplated by the Merger Agreement. Upon completion of the proposed Merger, Merger Sub will cease to exist. The principal executive offices of Merger Sub are located at 10 Cobham Drive, Orchard Park, New York, 14127 and its telephone number is (716) 662-0006.


The Merger

        If adopted by our stockholders at the special meeting of stockholders (such meeting, the "Special Meeting"), the Merger Agreement provides that at the Effective Time, Merger Sub will merge with and into the Company (the "Merger"). The Company will be the surviving corporation in the Merger and will continue to do business as a wholly-owned subsidiary of Cobham. The Company will cease to be an independent publicly-traded company. You will not own any shares of the capital stock of the surviving corporation.

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The Merger Consideration

        In the Merger, each share of our common stock, par value $0.01 per share (the "Common Stock") outstanding immediately prior to the Effective Time (other than shares of Common Stock held by Cobham, Merger Sub or any other direct or indirect wholly-owned subsidiary of Cobham, and in each case not held on behalf of third parties, shares of Common Stock held by stockholders who have properly demanded appraisal rights under the General Corporation Law of the State of Delaware (the "DGCL") with respect to such shares, if any, and Common Stock owned by the Company or any of its direct or indirect wholly-owned subsidiaries, (collectively, the "Excluded Shares")), will be converted into the right to receive $10.50 in cash (the "Per Share Merger Consideration"), without interest, less any applicable withholding taxes.


Background of the Merger

        The Board of Directors of the Company (the "Board") and management periodically review and assess the various business trends and competitive factors of our business, including our resources, cost structure, products and services portfolio and overall market conditions. Additionally, the Board has from time to time discussed a variety of strategic alternatives, including, among other things, strategies to grow our business, potential strategic transactions, as well as a potential sale of our Company. From time to time over the last few years, representatives of the Company have had preliminary discussions with third parties (none including Cobham) regarding possible strategic transactions involving a sale of the Company. Except as described below, none of those approaches proceeded past preliminary discussions.

        On December 5, 2013, at the request of the outside financial advisor to Company A, Hugh D. Evans, Chairman of the Board, met with the President and Chief Executive Officer of Company A (the "Company A CEO") to discuss potential strategic alternatives involving the Company and Company A, including a potential acquisition of the Company by Company A.

        Between December 17, 2013, and December 18, 2013, the Company (with the assistance of Schulte Roth & Zabel LLP, our outside legal counsel ("SRZ")) and Company A negotiated a confidentiality agreement, that was executed by the parties on December 18, 2013.

        On December 20, 2013, Mr. Evans received a non-binding indication of interest from Company A (the "Company A Initial Indication of Interest") that contemplated Company A acquiring all of the outstanding shares of our Common Stock in a cash-and-stock merger for consideration valued, in the view of Company A, at $8.50 per share (approximately 35% of which would be paid in cash, with the balance to be paid in shares of Company A stock). In the Company A Initial Indication of Interest, Company A indicated that it envisioned a due diligence process over a four-week period during which time, on an exclusive basis, the Company would negotiate the terms of a definitive merger agreement with Company A.

        On December 23, 2013, Mr. Evans met with representatives of Goldman Sachs & Co. ("Goldman Sachs") to discuss the Company A Initial Indication of Interest and other potential strategic alternatives. Following the meeting with Goldman Sachs, Mr. Evans scheduled a special meeting of the Board for December 31, 2013, to discuss strategic alternatives, including, among other things, the Company A Initial Indication of Interest.

        On December 31, 2013, a telephonic meeting of the Board was convened to discuss the Company A Initial Indication of Interest with certain representatives of the Company's management and representatives of SRZ also in attendance. During the meeting, Mr. Evans discussed the nature of, and circumstances surrounding, the Company A Initial Indication of Interest. Mr. Evans also described his prior discussions with, respectively, the Company A CEO and Goldman Sachs. SRZ advised the Board of its fiduciary duties in connection with a review of strategic alternatives, including the review of the Company A Initial Indication of Interest. In light of the existence of the Company A Initial Indication

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of Interest, Mr. Evans stated that at its next meeting, the Board would be asked to consider retaining Goldman Sachs to act as a financial advisor to the Company and that, accordingly, Goldman Sachs would be making a presentation at that time as to its qualifications and certain financial matters in that regard.

        On January 16, 2014, a telephonic meeting of the Board was held with certain representatives of the Company's management and representatives of SRZ also in attendance. During such meeting, the Board considered the engagement of Goldman Sachs to serve as financial advisor to the Company in connection with the Company's exploration of strategic alternatives. SRZ discussed with the Board information provided by Goldman Sachs regarding certain of the relationships between its Investment Banking Division and Company A. More particularly, the Board was informed that, in the two years preceding the meeting, Goldman Sachs' Investment Banking Division had not been engaged to provide financial advisory or underwriting services to Company A for which its Investment Banking Division had received compensation, and that Goldman Sachs had concluded, based on its internal review, that, in its opinion, nothing would limit Goldman Sachs' ability to fulfill its responsibilities as financial advisor to the Company in connection with a potential negotiated sale transaction. During such meeting, the Board discussed the desire to engage a second financial advisor for fairness opinion purposes, if and when discussions with a potential third party were sufficiently advanced. After discussion, the Board approved the engagement of Goldman Sachs as financial advisor to the Company in connection with the Company's exploration of strategic alternatives. After representatives of Goldman Sachs joined the meeting, the Board then discussed the exploration of potential strategic alternatives. Such strategic alternatives included, among other things, a transaction with Company A, the possibility of reaching out to other potential interested parties and a potential sale of the Company in parts, including through a potential sale of a division, for which the Company had previously engaged Stifel, Nicolaus & Company, Inc. ("Stifel"). Goldman Sachs then gave a financial presentation about the Company and its potential strategic alternatives, including as to a potential transaction with Company A, a sale to other potential acquirers, a sale or spin-off of the Company's Microelectronic Solutions Group ("Aeroflex Microelectronics Solutions" or "AMS") or the Company's Test Solutions Group ("Aeroflex Test Solutions" or "ATS"), or other sale of the Company in parts, as well as the execution of the current management plan and certain next steps. After discussion and the financial presentation, the Board determined that it was in the best interests of the Company and its stockholders to further explore various strategic alternatives, including the Company A Initial Indication of Interest. The Board further authorized Goldman Sachs to approach, on a confidential basis, a number of potential buyers regarding a potential strategic transaction involving the Company.

        During the period from mid- to late January 2014, representatives of Goldman Sachs met with members of our senior management and certain members of the Board to determine and refine the list of potential parties for initial contact and to work on the preparation of the Company marketing materials.

        During the period from late January 2014 to early February 2014, Goldman Sachs contacted 14 potential strategic bidders, identified due to historical and/or potential interest in the Company, five of which (including Company A on January 31, 2014 and Cobham on February 4, 2014) entered into non-disclosure and standstill agreements (the "NDAs") with the Company, the NDA with Company A being more comprehensive than the confidentiality agreement that Company A had entered into with the Company in December 2013. Potential financial bidders were not contacted due to the Board's belief, after consultation with Goldman Sachs, that it would be unlikely that a financial bidder could compete on financial terms with strategic bidders, and that, in connection with a change of control transaction, potential financial bidders would have the opportunity to submit an acquisition proposal during the window-shop period following the entry into a customary definitive agreement.

        During the period from late January 2014 to early February 2014, the Company gave management presentations to the five potential buyers that executed NDAs with the Company, including Cobham

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(on February 6, 2014) and Company A (on February 10 and 11, 2014 (during which latter date, Company A gave a presentation to representatives of the Company as to Company A)).

        During the period from late February 2014 to early March 2014, the Company received non-binding indications of interest from four potential buyers, including:

        On March 7, 2014, a telephonic meeting of the Board was convened with certain representatives of the Company's management and representatives of Goldman Sachs and SRZ also in attendance. Mark H. Ronald did not attend as he recused himself from the meeting (and all subsequent meetings involving a discussion of the Company's strategic alternatives process ("Project Army")), as he was and is a member of the board of directors of Cobham. During the meeting, representatives of Goldman Sachs provided an overview of, and updated the Board concerning, the exploration of the Project Army process, including an overview of the indications of interest received to date, as well as potential next steps to be taken in furtherance thereof. The Board then determined, after discussion regarding the indications of interests and based on, among other things, the financial terms thereof, (x) to invite Cobham and Company C into the next round of the Project Army process and not to invite Companies A and B into the next round and (y) to direct Goldman Sachs to communicate to Companies A and B the Board's determination as to Companies A and B.

        On March 12, 2014, advisors to Company A contacted Goldman Sachs to present a revised indication of interest valued at $950 million, as expressed in Company A's letter dated as of March 12, 2014, contemplating an acquisition of AMS (with 80% of the transaction consideration to be paid in cash and the balance to be paid in shares of Company A stock). Based on this revised indication of interest, Company A was invited to participate in the next round of the Project Army process.

        During the period from March 2014 through early April 2014, Cobham and Company A conducted due diligence, which, among other things, consisted of a review of the Company documents and materials in the virtual data room (that had been populated and was being maintained by the Company with assistance of representatives of Goldman Sachs and SRZ), as well as in-person and telephonic meetings with our senior management and advisors and tours of many of our facilities. During this period of time, certain representatives of Company management also had telephonic meetings with Company C regarding a potential transaction.

        On April 4, 2014, drafts of the merger agreement that had been prepared by SRZ under the direction and on behalf of the Company were provided to Cobham and Company A.

        On April 9, 2014, a telephonic meeting of the Board was held to discuss the status of the Project Army process, with certain representatives of the Company's management and representatives of Goldman Sachs and SRZ also in attendance. During the meeting, representatives of Goldman Sachs updated the Board concerning the status of the Project Army process, including as to the proposed bid deadline of April 17, 2014. A representative of SRZ again reviewed for the Board the nature of its fiduciary duties in connection with the Project Army process.

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        On April 14, 2014, representatives of Company C notified Goldman Sachs that Company C would not submit a final bid.

        On April 17, 2014, the Company received "final round" bids from Company A and Cobham. The Company A bid contemplated an acquisition of AMS for consideration valued at $1.05 billion, as expressed in Company A's letter as of that date, 76% of such consideration would be paid in cash and the balance paid in shares of Company A stock (which bid was $100 million higher than Company A's prior bid of $950 million, but decreased the cash percentage of the transaction consideration by 4%, from 80% to 76%). Cobham's bid, as expressed in its letter dated as of April 17, 2014, contemplated an acquisition of all of the outstanding shares of our Common Stock in a cash merger at a price of $9.50 per share (which was at the bottom of the range of per share consideration contemplated by Cobham's previous bid). Each of the bids included a request to continue the bidder's due diligence with the expectation that the Company would not engage in negotiations with other parties and that VGG Holding LLC ("VGG Holding") as well as The Veritas Capital Fund III LP ("Fund III"), Golden Gate Private Equity Inc. ("Golden Gate") and GS Direct LLC (an affiliate of Goldman Sachs) ("GS Direct") and certain of their affiliates (Fund III, Golden Gate, GS Direct and certain of their affiliates, collectively, the "Significant Holders") would enter into a support agreement with the bidder. Company A submitted a markup of the Company's merger agreement with its bid. Cobham submitted a memorandum identifying its key issues with respect to the merger agreement.

        On April 22, 2014, a telephonic meeting of the Board was held to discuss the bids from Cobham and Company A which was also attended by certain representatives of the Company's management and representatives of Goldman Sachs and SRZ. During the meeting, at the request of the Chairman, representatives of Goldman Sachs discussed the bids from Cobham and Company A and provided a detailed financial analysis of each bid and as to the potential sale of the Company in parts. A representative of SRZ identified certain legal considerations concerning each of the bids. During such discussion, members of the Board asked questions and discussed strategy and potential next steps with the Company's financial and legal advisors. At the conclusion of the meeting, the Board directed representatives of Goldman Sachs to contact both Company A and Cobham and advise each that it needed to improve the financial terms of its bid, as well as, in the case of Company A, to reconsider certain contractual terms in Company A's markup of the merger agreement.

        After the meeting, and on April 22, 2014, consistent with the instruction of the Board, representatives of Goldman Sachs communicated to both Company A and Cobham the need for each to improve the financial terms of its bid. Later that day, representatives of Cobham contacted Goldman Sachs and presented a revised bid, pursuant to which Cobham proposed to acquire all of the outstanding shares of our Common Stock in an all cash merger at a price of $10.00 per share (increasing the per share purchase price by $0.50 from its April 17, 2014 bid of $9.50 per share).

        On April 25, 2014, representatives of Company A and representatives of Cobham separately contacted Goldman Sachs and presented revised bids. Company A increased the purchase price for the AMS division by $25 million to $1.075 billion, and Cobham increased the per share cash merger consideration by another $0.25, to $10.25.

        On April 25, 2014, a telephonic meeting of the Board was convened to discuss the revised bids made by both Cobham and Company A, which also was attended by certain representatives of the Company's management and representatives from each of Goldman Sachs and SRZ. During the meeting, at the request of the Chairman, representatives of Goldman Sachs updated the Board with regard to the latest discussions Goldman Sachs had with Company A and Cobham and outlined certain financial terms of their most recent bids. A representative of SRZ discussed certain legal considerations concerning the bids and certain proposed changes to the merger agreement. At the conclusion of the meeting, the Board requested Goldman Sachs to present at the next meeting of the Board a financial analysis of each of the bids, the potential sale of the Company in parts, and stand-alone value of the Company.

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        On April 27, 2014, a telephonic meeting of the Board was held to discuss the status of Project Army, which was also attended by certain representatives of the Company's management and representatives from each of Goldman Sachs and SRZ. During the meeting, at the request of the Chairman, representatives of Goldman Sachs updated the Board on the status of discussions with Company A and Cobham since the April 25, 2014 Board meeting. Goldman Sachs then presented its analysis of certain financial terms and certain other aspects of each bid. Goldman Sachs further informed the Board that based on the discussions it had had with each bidder, if the Board were to determine to proceed with either of Company A or Cobham, the selected bidder would require an exclusivity agreement with the Company for a limited period of time. Concluding its presentation, Goldman Sachs presented a preliminary financial analysis of each of the bids received, the stand-alone value of the Company, the value of AMS and ATS and the potential value that could be realized from the sale of the Company in parts, which preliminary financial analysis in respect of the Cobham bid was subsumed by the final financial analysis that was presented by Goldman Sachs on May 19, 2014, described below in the section entitled "The Merger—Opinion of Goldman, Sachs & Co." The preliminary financial analysis of Company A's offer performed by Goldman Sachs included the following valuation methodologies: an illustrative discounted cash flow analysis, an illustrative present value of future value analysis, and a review of enterprise value to adjusted EBITDA multiples for comparable small cap companies in the test equipment industry. Representatives of Goldman Sachs expressed their view that, based on this analysis, Cobham's offer represented a higher aggregate financial value than Company A's offer. During the ensuing discussion, representatives of Goldman Sachs and a representative of SRZ discussed potential next steps, including the need to grant exclusivity to the selected bidder. SRZ then reviewed the Board's fiduciary duties and responded to questions from the Board. Those members of the Board present at the meeting unanimously determined that proceeding with Cobham's offer was in the best interests of the Company's stockholders. The Board's determination was based on the Board's belief that Cobham's offer was more favorable from a financial point of view to the Company's stockholders than Company A's offer. To that end, having decided to proceed with Cobham's offer, the Board instructed Mr. Evans to inform the Chief Executive Officer of Cobham that the Board was prepared to agree to negotiate a potential transaction exclusively with Cobham for a limited period of time if Cobham were to increase the per share cash merger consideration in its bid by another $0.25, from $10.25 to $10.50.

        On April 28, 2014, consistent with the Board's authorization, Mr. Evans informed the Chief Executive Officer of Cobham that the Board was prepared to grant Cobham exclusivity for a limited period of time if Cobham increased the per share cash merger consideration in its bid to $10.50. Later that day, advisors to Cobham contacted representatives of Goldman Sachs to present a revised bid to acquire all of the outstanding shares of the Company's Common Stock in a cash merger at a price of $10.50 per share, as a result of which the Company agreed to negotiate exclusively with Cobham for a limited period of time, memorialized in a definitive exclusivity agreement.

        On or about April 28, 2014, management of the Company began discussions with Stifel regarding retaining Stifel as a co-financial advisor to the Company in connection with the potential transaction with Cobham.

        On April 29, 2014, the Company, with the assistance from SRZ and Richards, Layton & Finger, P.A., special Delaware outside legal counsel to the Company ("RLF"), and Cobham, with the assistance of its outside legal counsel, Skadden, Arps, Slate, Meagher & Flom LLP ("Skadden Arps"), entered into an exclusivity agreement (the "Exclusivity Agreement"), pursuant to which the Company agreed to negotiate exclusively with Cobham until 11:59 p.m., Eastern Time, on May 15, 2014. The Exclusivity Agreement required Cobham to deliver its first draft of the merger agreement to the

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Company no later than 12:00 p.m., Eastern Time, on May 1, 2014, and allowed the Company to terminate the exclusivity period under the following circumstances:

        On the evening of April 29, 2014, Company A submitted a revised non-binding proposal contemplating an acquisition of all of the outstanding shares of our Common Stock in a cash-and-stock merger for consideration valued, as expressed in Company A's letter, at "up to $12.00 per share", including $7.00 per share in cash and the remainder in shares of Company A stock. Company A's non-binding proposal was conditioned upon the Company entering into an agreement with an unidentified third party that would, concurrently with the acquisition of the Company by Company A, acquire ATS. Company A further requested a release from Company A's obligations under its January 31, 2014 NDA with the Company to seek such a third-party buyer. Following review of Company's A proposal, the Company determined, after discussion with representatives of SRZ and RLF, that discussions with Company A during the Company's exclusivity period with Cobham would be inconsistent with the Exclusivity Agreement with Cobham. In connection with its review of Company A's proposal, the Company noted, among other things, (x) the conditional nature of Company A's non-binding proposal in that a transaction with Company A would require Company A to negotiate and enter into a definitive agreement with a third party which it had not yet identified, (y) Company A's letter did not state a specific price per share for the Company's outstanding stock but instead stated that Company A would pay "up to $12.00 a share" with $7.00 per share in cash and an unspecified remaining amount of value (up to $5.00 per share) in the form of Company A stock and (z) Cobham's bid was $10.50 per share in cash and was not contingent on Cobham entering into a definitive agreement with a third party.

        On April 30, 2014, representatives of Skadden Arps on behalf of Cobham provided a markup of the merger agreement. During the period between April 30, 2014 and May 19, 2014, SRZ and Skadden Arps exchanged multiple drafts and otherwise continued to negotiate the terms of the merger agreement, the Company disclosure schedules and the support agreement.

        On May 13, 2014, a regularly scheduled meeting of the Board was convened at the offices of SRZ, which was attended by certain representatives of the Company's management and representatives of Goldman Sachs, Stifel, SRZ and RLF. During the meeting, the Board received an update as to developments in the Project Army process. SRZ reviewed for the Board the terms of the latest drafts of the proposed merger agreement (including the per share cash merger consideration of $10.50) and the proposed support agreement, copies of which, together with summaries of both and the latest version of the Company disclosure schedules to the merger agreement, were provided to the Board in advance of the meeting. Based on its previous experience with Stifel, Stifel's familiarity with the Company, and following a presentation about Stifel's qualifications to serve in such capacity, the Board formally engaged Stifel to act as a financial advisor to the Company in connection with the Merger and provide its opinion to the Board as to the fairness, from a financial point of view, of the consideration to be paid to the stockholders of the Company (other than holders of Excluded Shares) in the Merger.

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SRZ then reviewed the Board's fiduciary duties and additionally discussed with the Board, among other things, the interests of certain directors and executive officers in connection with the Merger. RLF made a presentation regarding certain legal considerations in connection with the transactions and provided guidance with regard to the treatment of alternative acquisition proposals under the pertinent provisions of the proposed merger agreement. Goldman Sachs and Stifel each presented a financial analysis of the Company and the Cobham bid.

        On May 15, 2014, the Company and Cobham entered into a letter agreement extending the exclusivity period under the Exclusivity Agreement until 11:59 p.m., Eastern Time, on May 19, 2014.

        By May 19, 2014, the parties reached agreement on all of the material open issues in the draft merger agreement, Company disclosure schedules and the support agreement. The Board then convened a meeting on that date, which was attended by certain representatives of the Company's management and representatives of Goldman Sachs, Stifel and SRZ. SRZ reviewed the terms of the revised merger agreement (in which form we refer to as the Merger Agreement) and the support agreement (in which form we refer to as the Support Agreement) with the Board, copies of which, together with updated summaries of the Merger Agreement and the Support Agreement and the revised versions of the Company disclosure schedules to the Merger Agreement, were made available to the Board. At the request of the Board, each of Goldman Sachs and Stifel then rendered to the Board its oral opinion, subsequently confirmed in writing, that as of May 19, 2014, based upon and subject to the factors, assumptions and limitations set forth in each such opinion, the Per Share Merger Consideration to be paid to the holders (other than Cobham and its affiliates (in the case of the Goldman Sachs opinion)) of shares of our Common Stock (other than Excluded Shares (in the case of the Stifel opinion)) was fair from a financial point of view to such holders. The full text of the opinions of Goldman Sachs and Stifel, each dated as of May 19, 2014, and attached hereto as Annexes B and C, respectively, set forth, among other things, the assumptions made, procedures followed, matters considered and limitations of the review undertaken by Goldman Sachs and Stifel, respectively, in connection with such opinions. SRZ reviewed the Board's fiduciary duties and discussed related topics. Following such presentations, and after further review and discussion, the members of the Board at the meeting unanimously voted to approve the Merger Agreement and related matters and resolved to recommend that our stockholders adopt the Merger Agreement, which is attached hereto as Annex A. Later that evening, the Merger Agreement and Support Agreement were executed and delivered by the parties. The execution of the Merger Agreement was publicly announced on May 20, 2014, prior to the opening of trading of our Common Stock on the New York Stock Exchange (the "NYSE").

        Subsequently, the Board received letters from Company A dated, respectively, May 27, 2014 and June 2, 2014, requesting that the Board waive the prohibitions under its NDA with the Company concerning Company A's ability to make Acquisition Proposals (as defined in the Merger Agreement) with respect to the Company and to engage in discussions with potential third-party buyers of ATS regarding a sale of ATS. Company A also requested that the Company make available to Company A and up to three potential buyers of ATS to be identified by Company A, all due diligence information regarding the Company, AMS and ATS that the Company had made available to Cobham and its representatives, as well as such other due diligence information that Company A might subsequently request. In the June 2, 2014 letter, Company A informed the Board that it had already had discussions with at least four potential ATS acquirers.

        On June 2, 2014, a telephonic meeting of the Board was convened to discuss the requests made by Company A in its May 27, 2014 and June 2, 2014 letters, which was attended by certain representatives of the Company's management and representatives of Goldman Sachs, SRZ and RLF. After discussion of the letters with the Company's outside legal advisors (RLF and SRZ), the members of the Board in attendance determined unanimously not to approve Company A's requests. It was noted in this regard that the Company's NDA with Company A permits Company A to make an Acquisition Proposal privately to the Board, that Company A already had discussions with at least four potential ATS acquirers, and that unless and until the Company received an Acquisition Proposal from Company A after May 19, 2014, under the pertinent provisions of the Merger Agreement, the Company could not provide the due diligence access that Company A was requesting. Consistent with the Board's instruction to SRZ and RLF to communicate the Board's determination in writing to Company A, SRZ did so by letter dated June 3, 2014, addressed to Company A's outside counsel.

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Reasons for the Merger; Recommendation of the Board

        At a special meeting of the Board on May 19, 2014, the Board determined that the Merger Agreement and the terms and conditions of the Merger and the Merger Agreement are fair to, and in the best interests of, the Company and its stockholders and approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. All of the Board members present at the special meeting approved the Merger Agreement. Mark Ronald, a member of the Board, recused himself from the special meeting and did not attend due to his membership on the board of directors of Cobham. The Board recommends that you vote "FOR" the proposal to adopt the Merger Agreement and "FOR" the proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Merger Agreement.

        In the course of reaching its decision to approve the Merger Agreement and to recommend that the Company's stockholders vote to adopt the Merger Agreement, the Board consulted with our senior management, Goldman Sachs and Stifel. The Board also consulted with SRZ and RLF regarding its fiduciary duties and the terms of the Merger Agreement and related agreements. The following discussion includes the material reasons and factors considered by the Board in making its recommendation, but is not, and is not intended to be, exhaustive (and is not in any relative order of importance):

        Merger Consideration.    The Board considered the following with respect to the Per Share Merger Consideration to be received by the Company's stockholders:

        Prospects in Remaining Independent and Market Conditions.    The Board considered the possibility of continuing to operate the Company as an independent public company, including the perceived risks and uncertainties of remaining an independent public company. In considering the alternative of pursuing growth as an independent company, the Board considered management's and the Board's

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understanding of the business, operations, financial condition, competitive position, business strategy, succession planning, earnings and prospects of the Company, including the prospects of the Company as an independent entity and the related Financial Forecasts prepared by the Company's management as more fully described in the section entitled "Financial Forecasts."

        Opinions of Goldman, Sachs & Co. and Stifel, Nicolaus & Company, Incorporated.    The Board considered the financial analysis presented by representatives of each of Goldman Sachs and Stifel, as well as the opinions of each of Goldman Sachs and Stifel to the Board that, as of May 19, 2014, and based upon and subject to the factors and assumptions set forth in each opinion, as applicable, the Per Share Merger Consideration to be paid to the holders (other than Cobham and its affiliates (in the case of the Goldman Sachs opinion)) of Common Stock (other than Excluded Shares (in the case of the Stifel opinion)) pursuant to the Merger Agreement was fair from a financial point of view to such holders, as more fully described in the sections entitled "The Merger—Opinion of Goldman, Sachs & Co" and "The Merger—Opinion of Stifel, Nicolaus & Company, Incorporated."

        Terms of the Merger Agreement.    The Board considered the terms and conditions of the Merger Agreement and the course of negotiations thereof, including:

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        Financing.    The Board considered the following factors with respect to the financing commitments obtained by Cobham and Merger Sub:

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        Strategic Alternatives.    The Board considered the following factors with respect to strategic alternatives:

        Support Agreement.    The Board considered the fact that, concurrently with the execution and delivery of the Merger Agreement, VGG Holding and the Significant Holders, entered into the Support Agreement. Pursuant to, and subject to the terms of, the Support Agreement, VGG Holding, among other things, committed to vote all of the shares of Common Stock held by it (which represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014) in favor of the adoption of the Merger Agreement. The Support Agreement terminates automatically upon the termination of the Merger Agreement and, therefore, does not impede the ability of the Company's stockholders to vote in favor of a superior proposal.

        Appraisal Rights.    The Board also considered the availability of appraisal rights to our stockholders who comply with all of the required procedures under Delaware law, which allows such stockholders to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery (the "Delaware Court").

        The Board also considered in its deliberations a variety of risks and other potentially negative factors relating to the Merger Agreement and the Merger, including the following material factors (not in any relative order of importance):

        Risks of Announcement and Failure to Close.    The Board considered:

        Limitations on the Company's Business.    The Board considered the restrictions on the conduct of our business prior to the completion of the Merger, which could delay or prevent us from undertaking business opportunities that may arise pending completion of the Merger.

        Effect of the Merger on Our Stockholders.    The Board considered the fact that the Per Share Merger Consideration is cash and, as a consequence, our stockholders will cease to participate in our future

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earnings or growth. In addition, income realized as a result of the Merger generally will be taxable to our stockholders.

        Terms of the Merger Agreement.    The Board considered the following risks and other countervailing factors with respect to the Merger Agreement:

        Interests of Directors and Officers.    The Board considered the fact that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, our stockholders generally (see the section entitled "The Merger—Interests of Certain Persons in the Merger").

        In light of the variety of factors considered in connection with its evaluation of the Merger and the complexity of these matters, the Board did not find it practicable to, and did not, quantify or otherwise attempt to assign relative weights to the various factors considered in reaching its determination, and individual directors may have given different weight to different factors. In addition, the Board did not reach any specific conclusion with respect to any of the factors or reasons considered. Instead, the Board conducted an overall analysis of the factors and reasons described above and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of approving the Merger Agreement and accordingly recommends that our stockholders vote "FOR" the adoption of the Merger Agreement.


Opinion of Goldman, Sachs & Co.

        Goldman Sachs delivered its opinion to the Company's Board (the "Goldman Sachs Opinion") that, as of May 19, 2014, and based upon and subject to the factors and assumptions set forth therein, the $10.50 in cash per share to be paid to the holders (other than Cobham and its affiliates) of shares of Common Stock pursuant to the Merger Agreement was fair from a financial point of view to such holders.

        The full text of the Goldman Sachs Opinion, dated May 19, 2014, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection

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with the Goldman Sachs Opinion, is attached as Annex B. Goldman Sachs provided the Goldman Sachs Opinion for the information and assistance of the Company's Board in connection with its consideration of the Merger. The Goldman Sachs Opinion is not a recommendation as to how any holder of the Company's Common Stock should vote with respect to the Merger, or any other matter.

        In connection with rendering the Goldman Sachs Opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

        Goldman Sachs also held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition and future prospects of the Company; compared certain financial and stock market information for the Company with similar information for certain other companies whose securities are publicly traded; reviewed the financial terms of certain recent business combinations in the semiconductor and test equipment industries and in other industries; and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

        For purposes of rendering the Goldman Sachs Opinion, Goldman Sachs, with the Company's consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, it, without assuming any responsibility for independent verification thereof. In that regard, Goldman Sachs assumed, with the Company's consent, that the Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of the Company or any of its subsidiaries and it was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the expected benefits of the Merger in any way meaningful to its analysis. Goldman Sachs has also assumed that the Merger will be consummated on the terms set forth in the Merger Agreement, without the waiver or modification of any term or condition thereof, the effect of which would be in any way meaningful to its analysis.

        The Goldman Sachs Opinion does not address the underlying business decision of the Company to engage in the Merger, or the relative merits of the Merger as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. The Goldman Sachs Opinion addresses only the fairness from a financial point of view to holders (other than Cobham and its affiliates) of shares of Common Stock of the Company, as of the date of the Goldman Sachs Opinion, of the $10.50 in cash per share to be paid to such holders pursuant to the Merger Agreement. Goldman Sachs does not express any view on, and the Goldman Sachs Opinion does not address, any other term or aspect of the Merger Agreement or the Merger or

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any term or aspect of any other agreement or instrument contemplated by the Merger Agreement or entered into or amended in connection with the Merger, including the fairness of the Merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons, in connection with the Merger, whether relative to the $10.50 in cash per share to be paid to the holders (other than Cobham and its affiliates) of shares of Common Stock pursuant to the Merger Agreement or otherwise. The Goldman Sachs Opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of, the date of the Goldman Sachs Opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of the Goldman Sachs Opinion. In addition, Goldman Sachs did not express any opinion as to the impact of the Merger on the solvency or viability of the Company or Cobham or the ability of the Company or Cobham to pay their respective obligations when they come due. The Goldman Sachs Opinion was approved by a fairness committee of Goldman Sachs.

        The following is a summary of the material financial analyses delivered by Goldman Sachs to the Board in connection with rendering the Goldman Sachs Opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs' financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014 and is not necessarily indicative of current market conditions.

        Implied Premium Based on Historical Stock Trading Analysis.    Goldman Sachs reviewed the historical trading prices and volumes for the Company's Common Stock for the three-year period ended May 16, 2014. In addition, Goldman Sachs analyzed the $10.50 in cash per share to be paid to the holders of the Company's Common Stock pursuant to the Merger Agreement in relation to the volume weighted average market prices of shares of the Company's Common Stock for the one-month, three-month, six-month, one-year, two-year and three-year periods ended May 16, 2014. Goldman Sachs also analyzed the $10.50 in cash per share to be paid to the holders of the Company's Common Stock pursuant to the Merger Agreement in relation to the 52-week high and low market prices for shares of the Company's Common Stock.

        This analysis indicated that $10.50 in cash per share to be paid to the holders of the Company's Common Stock pursuant to the Merger Agreement represented:

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        Selected Companies Analysis.    Goldman Sachs reviewed and compared certain financial information for the Company to corresponding financial information, ratios and public market multiples for the following publicly traded corporations in the semiconductor and test equipment industries (collectively referred to as the selected companies):

        Semiconductor companies:

        Test equipment companies:

        Although none of the selected companies is directly comparable to the Company, the companies included were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of the Company.

        Goldman Sachs also calculated and compared various financial multiples and ratios based on financial data as of May 16, 2014, information it obtained from filings with the United States Securities and Exchange Commission (the "SEC") and Institutional Brokers' Estimate System ("IBES") estimates. The multiples and ratios of the Company were calculated using the closing price of shares of Common Stock on May 16, 2014. The multiples and ratios of the Company were based on the Forecasts and IBES estimates. The multiples and ratios for each of the selected companies were based

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on the most recent publicly available information. With respect to the selected companies, Goldman Sachs calculated:

        The results of these analyses are summarized as follows:

 
  Selected Companies    
   
   
 
Enterprise Value as a
multiple of Revenue:
  Median
Semiconductor (per
IBES estimates)
  Semiconductor
Range
(per IBES
estimates)
  Median Test
Equipment
(per IBES
estimates)
  Test Equipment
Range (per IBES
estimates)
  Aeroflex (per
IBES
estimates)
  Aeroflex (per
Forecasts)
  Merger
Consideration
(Implied)
 

CY2013A

    4.5x           2.7x           2.0x     2.0x     2.3x  

CY2014E

    4.1x     2.2x - 7.0x     2.4x     1.3x - 2.7x     2.0x     1.9x     2.2x  

CY2015E

    3.9x     2.0x - 6.4x     2.1x     1.2x - 2.6x     1.9x     1.7x     2.0x  

2014/'14-'15 Growth

    0.64x           0.23x           0.73x     0.22x     0.26x  

 

 
  Selected Companies    
   
   
 
Enterprise Value as a
multiple of Adjusted
EBITDA:
  Median
Semiconductor (per
IBES estimates)
  Semiconductor
Range
(per IBES
estimates)
  Median Test
Equipment
(per IBES
estimates)
  Test Equipment
Range (per IBES
estimates)
  Aeroflex (per
IBES
estimates)
  Aeroflex (per
Forecasts)
  Merger
Consideration
(Implied)
 

CY2013A

    15.3x           12.8x           9.7x     10.2x     11.8x  

CY2014E

    12.1x     8.8x - 19.0x     12.0x     6.0x - 23.0x     9.2x     8.9x     10.3x  

CY2015E

    11.0x     7.2x - 12.8x     10.9x     4.9x - 12.4x     N/A     7.6x     8.8x  

2014/'14-'15 Growth

    1.07x           0.57x           N/A     0.54x     0.62x  

        Goldman Sachs also calculated the selected companies' calendar year 2013 and estimated calendar years 2014 and 2015 price/earnings ratios to the results for the Company. The following table presents the results of this analysis:

 
  Selected Companies    
   
   
 
Non-GAAP
Price-to-earnings ratio:
  Median
Semiconductor (per
IBES estimates)
  Semiconductor
Range
(per IBES
estimates)
  Median Test
Equipment
(per IBES
estimates)
  Test Equipment
Range (per IBES
estimates)
  Aeroflex (per
IBES
estimates)
  Aeroflex (per
Forecasts)
  Merger
Consideration
(Implied)
 

CY2013A

    20.9x           18.9x           14.1x     13.2x     16.8x  

CY2014E

    18.4x     10.1x - 24.4x     16.2x     12.6x - 34.8x     12.5x     11.0x     14.0x  

CY2015E

    15.9x     8.1x - 21.7x     15.8x     11.7x - 25.1x     11.6x     8.9x     11.4x  

2014/'14-'15 Growth

    1.26x           1.15x           1.65x     0.47x     0.60x  

        Based on its review of the foregoing calculations and based on its professional judgment:

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        Illustrative Discounted Cash Flow Analysis.    Goldman Sachs performed an illustrative discounted cash flow analysis for the Company based on the Forecasts to determine a range of per share equity values for the Company. Goldman Sachs calculated indications of net present value of free cash flows for the Company for the years 2014 through 2018 using discount rates ranging from 10.0% to 11.0%, reflecting estimates of the Company's weighted average cost of capital. Goldman Sachs calculated illustrative value indications per share for the Company using the Forecasts and illustrative terminal value indications in the year 2018 based on a perpetuity growth rates ranging from 2.5% to 3.5% (which analysis implied Enterprise Value / Adjusted EBITDA multiples ranging from 6.9x to 9.1x) and discounting these illustrative terminal values to illustrative present values using discount rates ranging from 10.0% to 11.0%. This analysis resulted in a range of illustrative value indications of $7.76 to $11.54 per share of Common Stock.

        Illustrative Present Value of Future Share Price Analysis.    Goldman Sachs performed an illustrative analysis of the implied present value of the future price per share of the Company's Common Stock, which is designed to provide an indication of the present value of a theoretical future value of a company's equity as a function of such company's estimated future adjusted EBITDA and earnings and its assumed enterprise value to adjusted EBITDA multiple and price to future earnings per share. For this analysis, Goldman Sachs used the Forecasts for each of the fiscal years 2014 to 2017. Goldman Sachs first calculated the implied values per share of Common Stock as of May 16, 2014 for each of the fiscal years 2014 to 2017 by applying price to forward earnings per share multiples of 10.0x to 13.0x earnings per share of Common Stock estimates and enterprise value to forward adjusted EBITDA multiples of 8.0x to 9.0x to adjusted EBITDA estimates for each of the fiscal years 2014 to 2017, and then discounted the 2017 values back three years using an illustrative discount rate of 13.50%, reflecting an estimate of the Company's cost of equity. This analysis resulted in a range of implied present values of $7.04 to $10.94 per share of Common Stock.

        Illustrative Leveraged Buyout Analysis.    Goldman Sachs performed an illustrative leveraged buyout analysis to determine the range of illustrative prices per share of Common Stock a hypothetical financial buyer would be willing to pay to acquire the Company. For purposes of this analysis, Goldman Sachs assumed a target exit of June 2019, an annual internal rate of equity returns ranging from 20.0% to 25.0% to be realized upon exit, an illustrative leverage level at entry of 6.0x fiscal year 2014 adjusted EBITDA and an exit Enterprise Value / one-year forward adjusted EBITDA multiple ranging from 8.5x to 9.5x. This analysis resulted in illustrative prices that a hypothetical buyer would be willing to pay ranging from $7.70 to $9.80 per share.

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        Selected Transactions Analysis.    Goldman Sachs analyzed certain information relating to the following selected transactions in the semiconductor and test equipment industries since 2009 and 2006, respectively:

        Semiconductor industry:

Announcement Date
  Acquiror   Target
April 2014   Cirrus Logic, Inc.   Wolfson Microelectronics plc

February 2014

 

RF Micro Devices, Inc.

 

TriQuint Semiconductor, Inc.

December 2013

 

Avago Technologies Limited

 

LSI Corporation

November 2013

 

Veritas Capital Fund Management

 

Anaren, Inc.

August 2013

 

Maxim Integrated Products, Inc.

 

Volterra Semiconductor Corporation

May 2012

 

Microchip Technology Incorporated

 

Standard Microsystems Corporation

July 2011

 

Microsemi Corporation

 

Zarlink Semiconductor, Inc.

May 2011

 

Skyworks Solutions, Inc.

 

Advanced Analogic Technologies, Inc.

April 2011

 

Texas Instruments, Inc.

 

National Semiconductor Corporation

February 2011

 

CSR plc

 

Zoran Corporation

February 2011

 

Golden Gate Capital Partners

 

Conexant Systems, Inc.

January 2011

 

Qualcomm Incorporated

 

Atheros Communications, Inc.

December 2010

 

Teledyne Technologies Incorporated

 

DALSA Corporation

October 2010

 

Microsemi Corporation

 

Actel Corporation

September 2010

 

Zoran Corporation

 

Microtune, Inc.

March 2010

 

Microsemi Corporation

 

White Electronic Designs Corporation

March 2010

 

Intersil Corporation

 

Techwell, Inc.

February 2010

 

Microchip Technology Incorporated

 

Silicon Storage Technology, Inc.

December 2009

 

ON Semiconductor Corporation

 

California Micro Devices Corporation

Source: Publicly available information

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Table of Contents

        Test equipment industry:

Announcement Date
  Acquiror   Target
April 2014   Ametek, Inc.   Zygo Corporation

May 2012

 

Teledyne Technologies Incorporated

 

LeCroy Corporation

December 2010

 

Advantest Corporation

 

Verigy Ltd.

September 2010

 

Danaher Corporation

 

Keithley Instruments, Inc.

September 2008

 

Teradyne, Inc.

 

Eagle Test Systems, Inc.

June 2008

 

Orbotech Ltd.

 

Photon Dynamics, Inc.

June 2008

 

LTX Corporation

 

Credence Systems Corporation

February 2008

 

KLA-Tencor Corporation

 

ICOS Vision Systems Corporation N.V.

December 2007

 

Teradyne, Inc.

 

Nextest Systems Corporation

October 2007

 

Danaher Corporation

 

Tektronix, Inc.

January 2007

 

KLA-Tencor Corporation

 

Therma-Wave, Inc.

February 2006

 

KLA-Tencor Corporation

 

ADE Corporation

Source: Publicly available information

        For each of the selected transactions, Goldman Sachs calculated and compared, based on information it obtained from SEC filings, press releases and IBES estimates, the implied enterprise value of the target company based on the announced transaction price, as a multiple of estimated one-year forward revenue and net income. While none of the companies that participated in the selected transactions are directly comparable to the Company, the companies that participated in the selected transactions are companies with operations that, for the purposes of analysis, may be considered similar to certain of the Company's results, market size and product profile.

        The following table presents the results of this analysis:

 
  Semiconductor Industry Transactions  
 
  Premium over
Undisturbed Price
  Premium over
52 Week High
  Announced
Enterprise Value
as a Multiple of
1-year Forward
Revenue
  Announced Equity
Value as a Multiple of
1-year Forward Net
Income
 

High

    77.7 %   72.9 %   4.2x     99.7x  

Mean

    37.5 %   17.4 %   2.0x     31.9x  

Median

    31.6 %   21.7 %   1.7x     22.7x  

Low

    11.7 %   (53.6 )%   0.5x     14.9x  

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  Test Equipment Industry Transactions  
 
  Premium over
Undisturbed Price
  Premium over
52 Week High
  Announced
Enterprise Value
as a Multiple of
1-year Forward
Revenue
  Announced Equity
Value as a Multiple of
1-year Forward Net
Income
 

High

    74.3 %   73.4 %   3.6x     32.8x  

Mean

    42.4 %   7.4 %   1.9x     20.5x  

Median

    34.4 %   8.5 %   1.6x     17.4x  

Low

    7.0 %   (57.4 )%   0.4x     13.5x  

        Based on its review of the foregoing calculations and applying its professional judgment:

        Public Deal Premia Review.    Goldman Sachs reviewed the implied premia paid in all transactions involving U.S. public companies having transaction enterprise values between $1 billion and $2 billion since 2000. For each of the transactions, Goldman Sachs compared, based on information it obtained from Thomson SDC, the implied premium paid in such transaction represented by the per share acquisition price as compared to the acquired company's closing share price one trading day prior to announcement, one week prior to the announcement and four weeks prior to the announcement each for transactions categorized as "All Transactions," "Technology Transactions," "Cash Transactions" and "Stock Transactions." Goldman Sachs also reviewed global technology deals with transaction values greater than $100 million from 2002 through May 16, 2014 and excluding premia higher than 150% of the undisturbed share price. For each of these transactions, Goldman Sachs compared, based on the information it obtained from SDC, Capital IQ and Thomson Financial Securities Data, the implied premium paid in such transactions represented by the per share acquisition price as compared to the acquired company's closing share price four weeks prior to announcement for the corresponding comparable percentage of 52-week high, the overall tech average and the last twelve months tech average. The following tables present the results of this review:

 
  All Transactions  
Transaction Premia
  Average
Premium
  Median
Premium
 

One Day

    29.1 %   24.8 %

One Week

    31.6 %   29.2 %

Four Weeks

    35.9 %   30.5 %

 

 
  Technology
Transactions
 
Transaction Premia
  Average
Premium
  Median
Premium
 

One Day

    29.3 %   23.8 %

One Week

    30.6 %   26.2 %

Four Weeks

    40.1 %   32.9 %

 

 
  Cash Transactions  
Transaction Premia
  Average
Premium
  Median
Premium
 

One Day

    31.3 %   26.0 %

One Week

    33.8 %   30.6 %

Four Weeks

    37.8 %   31.4 %

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  Stock Transactions  
Transaction Premia
  Average
Premium
  Median
Premium
 

One Day

    23.2 %   19.3 %

One Week

    24.7 %   23.1 %

Four Weeks

    31.9 %   25.4 %

 

 
  Global Tech
M&A Since 2002
 
Transaction Premia
  Average
Premium
 

90 - 100% of 52 week high

    23.0 %

Overall Tech Average

    36.0 %

LTM Tech Average

    30.0 %

        The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying the Goldman Sachs Opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to the Company or the contemplated transaction.

        Goldman Sachs prepared these analyses for the purpose of providing the Goldman Sachs Opinion to the Board as to the fairness from a financial point of view of the $10.50 in cash per share to be paid to the holders (other than Cobham and its affiliates) of shares of Common Stock pursuant to the Merger Agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of the Company, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

        The Per Share Merger Consideration was determined through arm's-length negotiations between the Company and Cobham and was approved by the Board. Goldman Sachs provided advice to the Company during these negotiations. Goldman Sachs did not, however, recommend any specific amount of consideration to the Company or the Board or that any specific amount of consideration constituted the only appropriate consideration for the Merger.

        As described above, the Goldman Sachs Opinion was one of many factors taken into consideration by the Board in making its determination to approve the Merger Agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the Goldman Sachs Opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex B.

        Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other

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financial instruments of the Company, Cobham, any of their respective affiliates and third parties, including Veritas Capital Management LLC ("Veritas") and Golden Gate, each a Significant Holder, or any currency or commodity that may be involved in the transaction contemplated by the Merger Agreement. Goldman Sachs has acted as financial advisor to the Company in connection with, and has participated in certain of the negotiations leading to, the Merger. Goldman Sachs has provided certain financial advisory and/or underwriting services to the Company and/or its affiliates from time to time. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Golden Gate and/or its affiliates and portfolio companies from time to time for which Goldman Sachs' Investment Banking Division has received, and may receive, compensation, including having acted as joint lead arranger with respect to a revolver (aggregate principal amount $40 million) and term loan facility (aggregate principal amount $1.50 billion) for Attachmate Group Inc., a portfolio company of Golden Gate, in April 2012; as joint bookrunner in connection with the financing (aggregate principal amount $5.505 billion) of the acquisition of BMC Software, Inc. by a consortium co-led by Golden Gate in May 2013; and as joint bookrunner with respect to the issuance by Boxer Parent Company Inc., a holding company of BMC Software Finance, Inc. and a portfolio company of Golden Gate, of 9.000%/9.750% Senior Contingent Cash Pay Notes due 2019 (aggregate principal amount $750 million) in April 2014. Goldman Sachs also has provided certain financial advisory and/or underwriting services to Veritas and/or its affiliates and portfolio companies from time to time. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to the Company, Cobham, any of the Significant Holders, and their respective affiliates and portfolio companies for which Goldman Sachs' Investment Banking Division may receive compensation. Bradley J. Gross, a Managing Director of Goldman Sachs, is a director of the Company. GS Direct (an affiliate of Goldman Sachs) currently owns, in the aggregate, approximately 16% of the outstanding shares of Common Stock and has entered into the Support Agreement in connection with the Merger. Affiliates of Goldman Sachs also may have co-invested with the Significant Holders and their affiliates from time to time and may have invested in limited partnership units of affiliates of the Significant Holders from time to time and may do so in the future.

        The Board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Merger. Pursuant to a letter agreement dated May 2, 2014, the Company engaged Goldman Sachs to act as its financial advisor in connection with the Merger. Pursuant to the terms of this engagement letter, the Company has agreed to pay Goldman Sachs a transaction fee of approximately $14 million, all of which is payable upon consummation of the Merger. In addition, the Company has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys' fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.


Opinion of Stifel, Nicolaus & Company, Incorporated

        The Board requested Stifel's opinion, as an investment bank, as to the fairness, from a financial point of view of the Per Share Merger Consideration to be received by holders of the Company's Common Stock (other than Excluded Shares). On May 19, 2014, Stifel delivered to the Board its written opinion (the "Stifel Opinion") that, as of the date of the Stifel Opinion and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the Stifel Opinion, the Per Share Merger Consideration to be received by holders of Shares of Company Common Stock other than Excluded Shares from Cobham in the Merger pursuant to the Merger Agreement is fair to such stockholders, from a financial point of view.

        The Board did not impose any limitations on Stifel with respect to the investigations made or procedures followed in rendering the Stifel Opinion. In selecting Stifel, the Board considered, among

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other things, the fact that Stifel is a reputable investment banking firm with substantial experience advising companies in the test and measurement and microelectronics industries and in providing strategic advisory services in general, as well as Stifel's familiarity with the Company and its business. Stifel, as part of its investment banking business, is regularly engaged in the independent valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes.

        The full text of the Stifel Opinion is attached to this proxy statement as Annex C and is incorporated herein by reference. The summary of the Stifel Opinion contained in this proxy statement is qualified in its entirety by reference to the full text of the Stifel Opinion. Stockholders are urged to read the Stifel Opinion carefully and in its entirety for a discussion of the procedures followed, assumptions made, other matters considered and limits of the review undertaken by Stifel in connection with the Stifel Opinion.

        In rendering the Stifel Opinion, Stifel, among other things:

        In rendering the Stifel Opinion, Stifel relied upon and assumed, without independent verification, the accuracy and completeness of all of the financial and other information that was provided to Stifel by or on behalf of the Company, or that was otherwise reviewed by Stifel, and did not assume any responsibility for independently verifying any of such information. With respect to the financial forecasts supplied to Stifel by the Company, Stifel assumed, at the direction of the Company, that they were reasonably prepared on the basis reflecting the best currently available estimates and judgments of the management of the Company as to the future operating and financial performance of the Company and that they provided a reasonable basis upon which Stifel could form its opinion. The Stifel Opinion

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states that such forecasts and projections were not prepared with the expectation of public disclosure, that all such projected financial information is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions, and that, accordingly, actual results could vary significantly from those set forth in such projected financial information. Stifel relied on this projected information without independent verification or analyses and did not in any respect assume any responsibility for the accuracy or completeness thereof.

        Stifel also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of the Company since the date of the last financial statements of the Company made available to Stifel. Stifel did not make or obtain any independent evaluation, appraisal or physical inspection of the Company's assets or liabilities, nor had Stifel been furnished with any such evaluation or appraisal. The Stifel Opinion states that estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold and that, because such estimates are inherently subject to uncertainty, Stifel assumes no responsibility for their accuracy.

        Stifel assumed, with the Board's consent, that there are no factors that will materially delay or subject to any material adverse conditions any necessary regulatory or governmental approval and that all conditions to the Merger will be satisfied and not waived. In addition, Stifel assumed that the definitive Merger Agreement would not differ materially from the draft Stifel reviewed. Stifel also assumed that the Merger will be consummated substantially on the terms and conditions described in the Merger Agreement, without any waiver of material terms or conditions by the Company or any other party, and that obtaining any necessary regulatory approvals or satisfying any other conditions for consummation of the Merger will not have an adverse effect on the Company, Cobham or the Merger. Stifel assumed that the Merger will be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), and all other applicable federal and state statutes, rules and regulations. Stifel also assumed that the Company relied upon the advice of its counsel, independent accountants and other advisors (other than Stifel) as to all legal, financial reporting, tax, accounting and regulatory matters with respect to the Company, the Merger and the Merger Agreement.

        The Stifel Opinion is limited to whether the Per Share Merger Consideration is fair to holders of Common Stock other than Excluded Shares, from a financial point of view, and does not address any other terms, aspects or implications of the Merger, including, without limitation, the form or structure of the Merger, any consequences of the Merger on the Company, its stockholders, creditors or otherwise, or any terms, aspects or implications of any voting, support, stockholder or other agreements, arrangements or understandings contemplated or entered into in connection with the Merger or otherwise. The Stifel Opinion also does not consider, address or include: (i) any other strategic alternatives then (or which were or may have been) contemplated by the Board or the Company; (ii) the legal, tax or accounting consequences of the Merger on the Company or the holders of Common Stock; (iii) the fairness of the amount or nature of any compensation to any of the Company's officers, directors or employees, or class of such persons, relative to the compensation to the holders of the Company's securities; (iv) the effect of the Merger on, or the fairness of the consideration to be received by, holders of any class of securities of the Company other than the Common Stock, or any class of securities of any other party to any transaction contemplated by the Merger Agreement; (v) whether Cobham has sufficient cash, available lines of credit or other sources of funds to enable it to pay the Merger Consideration; or (vi) any advice or opinions provided by Goldman Sachs & Co. or any other advisor to the Company or Cobham. Furthermore, the Stifel Opinion does not express any opinion as to the prices, trading range or volume at which the Company's or Cobham's securities will trade following public announcement or consummation of the Merger.

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        The Stifel Opinion is necessarily based on economic, market, financial and other conditions as they existed on, and on the information made available to Stifel by or on behalf of the Company or its advisors, or information otherwise reviewed by Stifel, as of the date of the Stifel Opinion. The Stifel Opinion states that subsequent developments may affect the conclusion reached in the Opinion and that Stifel does not have any obligation to update, revise or reaffirm the Stifel Opinion, except in accordance with the terms and conditions of Stifel's engagement letter agreement with the Company.

        The Stifel Opinion was approved by Stifel's fairness committee. The Stifel Opinion was solely for the information of, and directed to, the Board for its information and assistance in connection with its consideration of the financial terms of the Merger. The Stifel Opinion does not constitute a recommendation to the Board as to how the Board should vote on the Merger or to any stockholder of the Company as to how any such stockholder should vote at any stockholders' meeting at which the Merger is considered, or whether or not any stockholder of the Company should enter into a voting, support, stockholders', or affiliates' agreement with respect to the Merger, or exercise any dissenters' or appraisal rights that may be available to such stockholder. In addition, the Stifel Opinion does not compare the relative merits of the Merger with any other alternative transactions or business strategies which may have been available to the Company and does not address the underlying business decision of the Board or the Company to proceed with or effect the Merger. Stifel was not requested to, and did not, explore alternatives to the Merger or solicit the interest of any other parties in pursuing transactions with the Company.

        The Stifel Opinion states that Stifel is not a legal, tax, regulatory or bankruptcy advisor. Stifel did not consider any potential legislative or regulatory changes then being considered or recently enacted by the United States Congress, the SEC, or any other regulatory bodies, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the SEC or the Financial Accounting Standards Board.

        The Stifel Opinion states that it is not a solvency opinion and does not in any way address the solvency or financial condition of the Company, Cobham, Merger Sub or any other party.

        The following represents a brief summary of the material financial analyses performed by Stifel in connection with the Stifel Opinion. Some of the summaries of financial analyses performed by Stifel include information presented in tabular format. In order to fully understand the financial analyses performed by Stifel, you should read the tables together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the information set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Stifel.

        Except as otherwise noted, the information utilized by Stifel in its analyses, to the extent that it was based on market data, is based on market data as it existed on or before May 19, 2014 and is not necessarily indicative of current market conditions. The analyses described below do not purport to be indicative of actual future results, or to reflect the prices at which any securities may trade in the public markets, which may vary depending upon various factors, including changes in interest rates, dividend rates, market conditions, economic conditions and other factors that influence the price of securities.

        Selected Company Analysis.    Stifel compared the Company, from a financial point of view, to 16 publicly traded companies in the test and measurement and microelectronics industries that Stifel, on the basis of its experience and knowledge of companies in the relevant industries, deemed to be relevant based on their business and financial profiles, as well as the business models, product offerings, operating margin profiles and end market exposure of such companies. Stifel compared the Company's last 12 months ("LTM"), estimated calendar year 2014 and 2015 financial metrics, as provided by management, to LTM, estimated calendar year 2014 and 2015 financial metrics, obtained from available

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public sources, of the 16 selected companies. Based on this information, Stifel calculated and compared the following multiples for the Company and the selected companies:

        Stifel believes that the companies listed below have business models similar to those of the Company, but noted that none of these companies have the same management, composition, size, operations, financial profile, or combination of businesses as the Company:

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        The following table sets forth the multiples indicated by this analysis. The range of multiples relative to the selected companies reflects the first quartile to third quartile metrics of such companies:

Multiple:
  Range of
Multiples Utilized
in the Analysis
  1st Quartile   Median   Average   3rd Quartile   Proposed
Transaction
 

LTM EV/Revenues

    1.8x - 3.1x     1.8x     2.5x     2.7x     3.1x     2.3x  

CY 2014 EV/Revenues

    1.6x - 2.8x     1.6x     2.3x     2.5x     2.8x     2.2x  

CY 2015 EV/Revenues

    1.5x - 2.4x     1.5x     1.9x     2.2x     2.4x     2.0x  

LTM EV/EBITDA

    9.4x - 12.2x     9.4x     11.2x     10.9x     12.2x     11.4x  

CY 2014 EV/EBITDA

    7.9x - 11.1x     7.9x     9.9x     9.6x     11.1x     10.3x  

CY 2015 EV/EBITDA

    6.5x - 9.7x     6.5x     7.9x     7.9x     9.7x     8.8x  

LTM P/E

    16.3x - 22.5x     16.3x     18.3x     19.8x     22.5x     18.0x  

CY 2014 P/E

    12.9x - 18.7x     12.9x     15.3x     16.2x     18.7x     13.2x  

CY 2015 P/E

    11.0x - 15.7x     11.0x     12.3x     13.2x     15.7x     11.4x  

        No company utilized in the selected company analysis is identical to the Company. Accordingly, an analysis of the results of the foregoing is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the Company or companies involved in the selected company analysis. In evaluating companies, Stifel made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, such as the impact of competition, industry growth and the absence of any adverse material change in the financial condition of the Company or the companies involved in the selected company analysis and prospects or the industry or in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using peer group data.

        Selected Transactions Analysis.    Based on public and other information available to Stifel, Stifel calculated and compared the multiples of EV to LTM and next 12 months ("NTM") revenues and LTM and NTM EBITDA implied in the Merger for the Company to the corresponding multiples

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implied in the following 22 selected acquisitions of companies in the test and measurement and microelectronics industries:

Announce Date
  Acquirer   Target
2/24/14   RF Micro Devices, Inc.   TriQuint Semiconductor, Inc.
2/10/14   AMETEK, Inc.   VTI Instruments
12/16/13   Avago Technologies Limited   LSI Corporation
11/5/13   M/A-COM Technology Solutions Holdings, Inc.   Mindspeed Technologies, Inc.
11/4/13   Veritas Capital Fund Management, L.L.C.   Anaren, Inc.
10/23/12   AMETEK, Inc.   Micro-Poise Measurement Systems
5/29/12   Teledyne Technologies Incorporated   LeCroy Corporation
9/22/11   Microsemi Corporation   Zarlink Semiconductor Inc.
9/14/11   Teradyne, Inc.   LitePoint Corporation
6/14/11   Ericsson   Telcordia
3/28/11   API Technologies Corp.   Spectrum Control, Inc.
2/22/11   Golden Gate Capital   Tollgrade Communications, Inc.
10/4/10   Microsemi Corporation   Actel Corporation
9/29/10   Danaher Corporation   Keithley Instruments Inc.
2/10/10   JDS Uniphase Corporation   Agilent Technologies, Inc.'s Network Solutions Business
5/11/09   Ixia   Catapult Communications Corporation
5/4/09   HEICO Corporation   VPT, Inc.
3/31/09   GaAs Labs LLC   M/A-COM Technology Solutions Holdings, Inc.
3/26/09   Ascom Holding Ltd.   Ericsson's TEMS Mobile Test Business
10/1/08   Spectris plc   SPX Corp's LDS Test & Measurement Business
5/13/08   Cobham plc   M/A-COM Technology Solutions Holdings, Inc.
3/9/08   TriQuint Semiconductor, Inc.   WJ Communications, Inc.

        Stifel selected the precedent transactions based upon its experience and knowledge of companies in the test and measurement and microelectronic industries. Although none of the transactions is directly comparable to the Merger, Stifel selected transactions involving target companies with similar characteristics to the characteristics identified above in the selected company analysis.

        The following table sets forth the multiples indicated by this analysis and the multiples implied by the Merger. The range of multiples reflects the first quartile to third quartile metrics of the selected transactions:

Multiple:
  Range of
Multiples Utilized
in the Analysis
  1st Quartile   Median   Average   3rd Quartile   Proposed
Transaction
 

LTM EV/Revenues

    1.4x - 2.0x     1.4x     1.6x     1.8x     2.0x     2.3x  

NTM EV/Revenues

    1.3x - 2.0x     1.3x     1.6x     1.7x     2.0x     2.1x  

LTM EV/EBITDA

    6.4x - 13.1x     6.4x     9.0x     9.5x     13.1x     11.4x  

NTM EV/EBITDA

    6.3x - 9.5x     6.3x     8.4x     8.3x     9.5x     9.8x  

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        No transaction used in the selected transactions analyses is identical to the Merger. Accordingly, an analysis of the results of the foregoing is not mathematical; rather, it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the Company or the companies involved in the selected transactions which in turn, affect the enterprise value and equity value of the transactions to which the Merger is being compared. In evaluating the precedent transactions, Stifel made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, such as the impact of competition, industry growth and the absence of any adverse material change in the financial condition of the Company or the companies involved in the selected transactions or the industry or in the financial markets in general, which could affect the public trading value of the companies involved in the selected transactions which in turn, affect the enterprise value and equity value of the transactions to which the Merger is being compared.

        Discounted Cash Flow Analysis.    Stifel used financial forecasts of the Company for the fourth fiscal quarter of 2014 through fiscal year 2018, as provided by the Company's management, to perform two discounted cash flow analyses: (i) one based on the terminal multiple method and (ii) the second based on the perpetuity growth method. In conducting these analyses, Stifel assumed that the Company would perform in accordance with these forecasts. The projections and estimates supplied to and utilized by Stifel are set forth below in "The Merger—Company Financial Forecasts."

        Terminal Multiple Method.    Stifel first estimated the terminal value of the projected cash flows by applying a range of terminal multiples Stifel deemed relevant to the Company's estimated fiscal year 2018 EBITDA, which multiples ranged from 8.0x to 10.0x, and were derived from the results of the selected company and selected transactions analyses described above, applying Stifel's professional judgment. Stifel calculated projected unlevered free cash flow from the fourth fiscal quarter of 2014 through fiscal year 2018 using management's projections and discounted these cash flows and the terminal value to present values using discount rates of 11.0% to 13.0%, based on the Company's weighted average cost of capital. This analysis indicated a range of enterprise values which Stifel then decreased by the Company's net debt to calculate a range of equity values. These equity values were then divided by fully-diluted shares outstanding using the treasury stock method to calculate implied equity values per share ranging from $8.15 to $10.85. Stifel noted that the Per Share Merger Consideration to be received by holders of the Company's Common Stock pursuant to the Merger Agreement of $10.50 is at the high end of such range.

        Perpetuity Growth Method.    Stifel first estimated the terminal value of the projected cash flows by applying a range of perpetuity growth rates Stifel deemed relevant to the Company's estimated fiscal year 2018 free cash flow, which growth rates ranged from 2.0% to 4.0%. Stifel calculated projected unlevered free cash flow from the fourth fiscal quarter of 2014 through fiscal year 2018 using management's projections and discounted these cash flows and the terminal value to present values using discount rates of 11.0% to 13.0%, based on the Company's weighted average cost of capital. This analysis indicated a range of enterprise values which Stifel then decreased by the Company's net debt to calculate a range of equity values. These equity values were then divided by fully-diluted shares outstanding using the treasury stock method to calculate implied equity values per share ranging from $4.96 to $7.12. Stifel noted that the Per Share Merger Consideration to be received by holders of the Company's Common Stock pursuant to the Merger Agreement of $10.50 is above such range.

        The foregoing description is only a summary of the material financial analyses performed by Stifel in arriving at the Stifel Opinion. The summary alone does not constitute a complete description of the financial analyses Stifel employed in reaching its conclusions. None of the analyses performed by Stifel were assigned a greater significance by Stifel than any other, nor does the order of analyses described represent relative importance or weight given to those analyses by Stifel. No individual methodology

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employed by Stifel can be viewed individually, and if viewed in isolation could create a misleading or incomplete view of the financial analyses performed by Stifel. Additionally, no company or transaction used in any analysis as a comparison is identical to the Company or the Merger, and they all differ in material ways. Accordingly, an analysis of the results described above is not mathematical; rather it involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading value of the selected companies or transactions to which they are being compared. Stifel used these analyses to determine the impact of various operating metrics on the implied enterprise value of the Company. Each of these analyses yielded a range of implied enterprise values, and therefore, such implied enterprise value ranges developed from these analyses were viewed by Stifel collectively and not individually. Stifel made its determination as to the fairness, from a financial point of view, of the Per Share Merger Consideration to be received by holders (other than Excluded Shares) of Common Stock from Cobham in the Merger pursuant to the Merger Agreement on the basis of its experience and professional judgment after considering the results of all of the analyses performed.

        Based upon the foregoing analyses and the assumptions and limitations set forth in full in the text of Stifel's Opinion, Stifel was of the opinion that, as of the date of the Stifel Opinion, and subject to and based on the assumptions made, procedures followed, matters considered, limitations of the review undertaken and qualifications contained in the Stifel Opinion, the Per Share Merger Consideration to be received by holders (other than Excluded Shares) of Common Stock from Cobham in the Merger pursuant to the Merger Agreement is fair to such stockholders, from a financial point of view.

        The preparation of a fairness opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at the Stifel Opinion, Stifel considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered by it. Stifel believes that the summary provided and the analyses described above must be considered as a whole and that selecting portions of these analyses, without considering all of them, would create an incomplete view of the process underlying Stifel's analyses and the Stifel Opinion; therefore, the range of valuations resulting from any particular analysis described above should not be taken to be Stifel's view of the actual value of the Company.

        The Company agreed to pay Stifel a fee of $1 million upon delivery of the Opinion and to reimburse it for its reasonable out-of-pocket expenses. Stifel's fee is not contingent, and it otherwise will not receive any other or additional payment or compensation, upon the successful consummation of the Merger. The Company also has agreed to indemnify Stifel and its affiliates and their respective officers, directors, employees and agents, and any persons controlling Stifel or any of its affiliates within the meaning of Section 15 of the Securities Act, as amended, or Section 20 of the Exchange Act, for certain liabilities arising out of its engagement and for certain specific liabilities under the federal securities laws.

        In June 2012 and December 2013, Stifel was engaged to serve as financial adviser on the sale of certain of the Company's business divisions. Both engagements have been terminated with no continuing obligations other than customary expense reimbursement or indemnification obligations thereunder.

        Stifel may seek to provide investment banking services to Cobham or its affiliates in the future, for which Stifel would seek customary compensation. In the ordinary course of business, Stifel and its clients may transact in the equity securities of each of the Company and Cobham and may at any time hold a long or short position in such securities.


Company Financial Forecasts

        Our management does not prepare prospective financial information for multiple upcoming fiscal years in the ordinary course of business. However, our management shared with Goldman Sachs and

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Stifel for purposes of the opinions described above and for the Board for purposes of evaluating the Merger (x) certain prospective financial information concerning the Company, including projected revenues and Adjusted EBITDA and (y) certain prospective financial information used by Goldman Sachs and Stifel to calculate unlevered free cash flow, which information is shown in the table below under the heading "Summary of the Financial Forecasts" and is referred to as the "Financial Forecasts." The Company provided to Cobham the Financial Forecasts shown in the table through fiscal year 2016.

        The Financial Forecasts were prepared for internal use and not with a view toward public disclosure or toward complying with generally accepted accounting principles in the United States ("GAAP"), the published guidelines of the SEC regarding forecasts or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. The Financial Forecasts included in this proxy statement were prepared by, and are the responsibility of, our management (other than the unlevered free cash flow calculations, which were calculated by Goldman Sachs and Stifel from certain prospective financial information, which information was prepared by, and which is the responsibility of, our management). The Financial Forecasts do not take into account any circumstances or events occurring after the date they were prepared, including the transactions contemplated by the Merger Agreement, including the Merger. Further, the Financial Forecasts do not take into account the effect of any failure of the Merger to occur and should not be viewed as accurate or continuing in that context.

        The Financial Forecasts reflect numerous estimates and assumptions made by the Company with respect to industry performance, general business, economic, regulatory, geopolitical, market and financial conditions and other future events, as well as matters specific to the Company's business, all of which are difficult to predict and many of which are beyond the Company's control. The Financial Forecasts reflect subjective judgment in many respects and thus are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. As such, the Financial Forecasts constitute forward-looking information and are subject to risks and uncertainties that could cause actual results to differ materially and adversely from the results forecasted in the Financial Forecasts, including, but not limited to, the Company's performance, industry performance, general business and economic conditions, customer requirements, competition, adverse changes in applicable laws, regulations or rules, geopolitical risks and the various risks set forth in the Company's reports filed with the SEC. There can be no assurance that the Financial Forecasts will be realized or that actual results will not be significantly higher or lower than forecast. The Financial Forecasts cover multiple years and such information by its nature becomes less reliable with each successive year. In addition, the Financial Forecasts will be affected by the Company's ability to achieve strategic goals, objectives and targets over the applicable periods. The assumptions upon which the Financial Forecasts were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company's control. The Financial Forecasts reflect assumptions as to certain business decisions that are subject to change. The Financial Forecasts cannot, therefore, be considered a guarantee of future operating results, and this information should not be relied on as such. The inclusion of the Financial Forecasts should not be regarded as an indication that the Company, Cobham, the Board, any of their respective financial advisors or anyone who received this information then considered, or now considers, them a reliable prediction of future events, and this information should not be relied upon as such. None of the Company, Cobham, the Board or any of their financial advisors or any of their affiliates intend to, and each of them disclaims any obligation to, update, revise or correct the Financial Forecasts if they are or become inaccurate.

        The summary of such information below is included solely to give stockholders access to the information that was made available and is not included in this proxy statement in order to influence

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any stockholder to make any investment decision with respect to the Merger, including whether or not to seek appraisal rights with respect to the shares of Common Stock.

        The inclusion of the summary of the Financial Forecasts herein should not be deemed an admission or representation by the Company or the Board that they are viewed by the Company or the Board as material information of the Company, and, in fact, the Company and the Board view the Financial Forecasts as non-material because of the inherent risks and uncertainties associated with such long range forecasts. The Financial Forecasts should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding the Company contained in the Company's public filings with the SEC. In light of the foregoing factors and the uncertainties inherent in the Financial Forecasts, stockholders are cautioned not to place undue, if any, reliance on the Financial Forecasts.

        Neither the Company's independent auditors, nor any other independent accountants of the Company, have compiled, examined, or performed any procedures with respect to the prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the Financial Forecasts.

        Certain information set forth in the Financial Forecasts are non-GAAP financial measures. These non-GAAP financial measures are not calculated in accordance with, or as a substitute for financial measures calculated in accordance with, GAAP and may be different from non-GAAP financial measures used by other companies. Furthermore, there are limitations inherent in non-GAAP financial measures, in that they exclude a variety of charges and credits that are required to be included in a GAAP presentation. Accordingly, these non-GAAP financial measures should be considered together with, and not as an alternative to, GAAP basis financial measures.

        EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE FEDERAL SECURITIES LAWS, BY INCLUDING IN THIS PROXY STATEMENT A SUMMARY OF ITS INTERNAL FINANCIAL FORECASTS, THE COMPANY UNDERTAKES NO OBLIGATIONS AND EXPRESSLY DISCLAIMS ANY RESPONSIBILITY TO UPDATE OR REVISE, OR PUBLICLY DISCLOSE ANY UPDATE OR REVISION TO, THESE FINANCIAL FORECASTS TO REFLECT CIRCUMSTANCES OR EVENTS, INCLUDING UNANTICIPATED EVENTS, THAT MAY HAVE OCCURRED OR THAT MAY OCCUR AFTER THE PREPARATION OF THESE FINANCIAL FORECASTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE FINANCIAL FORECASTS ARE SHOWN TO BE IN ERROR OR CHANGE.


Summary of the Financial Forecasts

 
  Fiscal Year(1)
(dollars in millions)
 
 
  FQ4
2014
  2015E   2016E   2017E   2018E  

Company

                               

Revenues

  $ 212.8   $ 710.7   $ 753.6   $ 791.3   $ 822.9  

Adjusted EBITDA(2)(3)

  $ 61.7   $ 155.9   $ 175.4   $ 184.2   $ 191.5  

Unlevered Free Cash Flow (as calculated by Goldman Sachs)(4)

  $ 31.5   $ 75.4   $ 97.4   $ 103.0   $ 108.1  

Unlevered Free Cash Flow (as calculated by Stifel)(5)

  $ 35.2   $ 73.5   $ 95.7   $ 100.5   $ 104.5  

(1)
Fiscal Year ending June 30.

(2)
Adjusted EBITDA is defined as EBITDA (net income (loss) before interest expense, income taxes, depreciation and amortization), adjusted to add back or subtract certain non-cash, non-recurring

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(3)
The forecasted revenues of $212.8 million and Adjusted EBITDA amount of $61.7 million in respect of Q4 2014 were prepared by the Company in late January 2014. In the Company's press release dated May 7, 2014, which was filed as an exhibit to the Form 8-K filed by the Company with the SEC on May 7, 2014, the Company disclosed a range of forecasted revenues of $186 million to $196 million and Adjusted EBITDA for Q4 2014 of $48 million to $52 million. The difference in forecasts is due to subsequent developments since late January 2014, primarily political conditions in Crimea and the resulting impact of embargoes of sales to Russia.

(4)
Unlevered Free Cash Flow was calculated by Goldman Sachs from certain prospective financial information using earnings before interest and taxes, adding (a) depreciation and amortization and (b) changes in working capital, and subtracting (a) taxes, (b) capital expenditures and (c) deferred taxes and others, as provided by Company management.

(5)
Unlevered Free Cash Flow was calculated by Stifel from certain prospective financial information using earnings before interest and taxes, adding (a) depreciation and amortization and (b) changes in working capital, and subtracting (a) taxes and (b) capital expenditures, as provided by Company management. The difference between the unlevered free cash flow of the Company calculated by each of Goldman Sachs and Stifel is due to different assumptions used by Goldman Sachs and Stifel as to the Company's tax expense and stock-based compensation expense, including the fact that Goldman Sachs treated stock-based compensation expense as a cash expense and Stifel treated stock-based compensation expense as a non-cash expense.


Financing of the Merger

        Cobham is financing the Merger, including the refinancing of existing debt facilities of Aeroflex, through (x) the entrance into a $1.30 billion senior unsecured bridge loan facility (the "Facility") from Bank of America Merrill Lynch International Limited and The Royal Bank of Scotland plc (collectively, the "Lenders") pursuant to a facility agreement (the "Facility Agreement") and (y) the placement of 60 million new Cobham shares for gross proceeds of approximately £180 million (equivalent to approximately $303.8 million as of May 23, 2014) (the "Placing").

        Closing of the Placing and admission of the new Cobham shares to trading on the main market of the London Stock Exchange occurred on May 23, 2014.

        The Facility will be made available to Cobham following the satisfaction of certain conditions precedent for the purpose of partially financing Cobham's payment obligations under the Merger Agreement and repayment of certain financial indebtedness of Aeroflex and its subsidiaries. As a result, up to the full amount of the Facility is expected to be funded to complete the Merger.

        The obligations of the Lenders to make the Facility available to Cobham are subject to the satisfaction of certain conditions which are customary for a facility of this type, including:

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Interests of Certain Persons in the Merger

        In considering the recommendation of the Board that you vote to adopt the Merger Agreement, you should be aware that certain of our directors and executive officers may have interests in the Merger that may be different from, or in addition to, the interests of stockholders. These interests may be different from, or in conflict with, your interests as a stockholder generally. The members of the Board were made aware of the material facts as to these additional interests, and considered them, before they approved the Merger Agreement. For the purposes of all of the agreements and plans described below, the completion of the transactions contemplated by the Merger Agreement will constitute a change in control.

        Under the terms of the Merger Agreement, each restricted stock unit ("RSU") and each performance restricted stock unit ("PRSU") granted under the Company's 2011 Omnibus Incentive Plan (the "Stock Plan") outstanding immediately prior to the Effective Time that are held by our directors and executive officers (as well as those held by our other employees) will accelerate and vest in full at the Effective Time. Each RSU and PRSU will entitle the holder to an amount equal to the product of (i) the total number of shares subject to such RSU or PRSU immediately prior to the Effective Time and (ii) the Per Share Merger Consideration; provided that with respect to the PRSUs, the total number of shares subject thereto shall be equal to the sum of (x) the accrued and "banked" shares plus (y) the numbers of shares subject to the fiscal year ended June 30, 2014 and prospective fiscal years assuming achievement of the applicable performance goals at the one-hundred percent (100%) level. Under the terms of the Merger Agreement, each restricted share ("RSA") granted under the Stock Plan outstanding immediately prior to the Effective Time that is held by our directors will accelerate and vest in full at the Effective Time and each holder of an RSA shall receive the Per Share Merger Consideration for each RSA. The holder and the amount that each such director and executive

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officer is entitled to receive with respect to his RSUs, PRSUs and RSAs varies, as indicated in the table below. These payments are as follows:

Name
  Number of
PRSUs(1)
  Number of
RSUs(1)
  Number of
Earned & Banked
PRSUs(1)
  Number of
RSAs(1)
  Total
Amount Entitled to be
Received with Respect
to RSUs, PRSUs and/or
RSAs at the Effective
Time(2)
 

Leonard Borow

    258,144     172,096     36,036     0   $ 4,895,898  

John Buyko

    172,296     114,864     24,024     0   $ 3,267,432  

John Adamovich, Jr. 

    118,230     78,820     15,015     0   $ 2,226,683  

Andrew F. Kaminsky

    110,828     80,749     12,387     0   $ 2,141,622  

Edward S. Wactlar

    107,194     79,538     12,387     0   $ 2,090,750  

Charles Badlato

    58,531     39,021     7,883     0   $ 1,107,068  

Richard N. Nottenburg

    0     0     0     5,764   $ 60,522  

Charles S. Ream

    0     0     0     5,764   $ 60,522  

Mark H. Ronald

    0     0     0     5,764   $ 60,522  

Peter J. Schoomaker

    0     0     0     5,764   $ 60,522  

(1)
As of July 1, 2014.

(2)
Based on the Per Share Merger Consideration of $10.50 per share.

        For a discussion of the Common Stock ownership of our directors and executive officers, please see the section entitled "Security Ownership of Certain Beneficial Owners and Management."

        Each of the executive officers indicated below will be entitled to a cash severance payment if the Merger is consummated and, following the consummation of the Merger, the executive officer's employment is terminated by the Company without "cause" or by the executive officer for "good reason." The severance payments are outlined in the following table, using an assumed termination date of September 30, 2014:

Name
  Base
Salary
  Target
Bonus
  Target
Bonus
  CIC Payment   CIC
Amount(1)(2)
  Pro Rata
Target
Bonus in
Termination
Year(3)
 

Leonard Borow

  $ 650,000     100.00 % $ 650,000   2x Base & Target Bonus   $ 2,600,000   $ 162,500  

John Buyko

  $ 520,000     100.00 % $ 520,000   2x Base & Target Bonus   $ 2,080,000   $ 130,000  

John Adamovich, Jr.(4)

  $ 440,000     66.67 % $ 293,333   2.5x Base & Target Bonus   $ 1,833,333   $ 73,333  

Andrew F. Kaminsky

  $ 375,000     66.67 % $ 250,000   2x Base & Target Bonus   $ 1,250,000   $ 62,500  

Edward S. Wactlar

  $ 375,000     66.67 % $ 250,000   3x Base & Target Bonus   $ 1,875,000   $ 62,500  

Charles Badlato

  $ 315,000     54.00 % $ 170,100   2x Base & Target Bonus   $ 970,200   $ 42,525  

(1)
These amounts are based on an assumed termination of employment within 18 months (24 months in the case of Mr. Adamovich) following a change in control, and assumes, as required by the terms of the Merger Agreement, that the base salary for each executive officer will remain at its current level.

(2)
The executive officers are also entitled to continued health benefits (i) for life with respect to Mr. Borow, (ii) until December 31 of the second calendar year following the calendar year of termination of employment with respect to Mr. Adamovich, (iii) for three (3) years with respect to Mr. Wactlar and (iv) for eighteen (18) months with respect to Messrs. Buyko, Kaminsky and Badlato.

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(3)
Pro Rata Target Bonus based on the numbers of days elapsed in the fiscal year through the date of the termination of employment with an assumed termination of employment of September 30, 2014.

(4)
Mr. Adamovich is also entitled to a deferred compensation payment of $433,884, assuming a termination date of September 30, 2014.

        The information set forth in the table below is intended to comply with Item 402(t) of Regulation S-K, which requires disclosure of information about certain compensation for each of the Company's named executive officers that is based on or otherwise relates to the transactions contemplated under the Merger Agreement. The Company's named executive officers are Leonard Borow, President and Chief Executive Officer, John Buyko, Executive Vice President and President of Aeroflex Microelectronic Solutions, John Adamovich, Jr., Senior Vice President and Chief Financial Officer, Andrew F. Kaminsky, Senior Vice President-Corporate Development, Investor Relations & Human Resources, and Edward S. Wactlar, Senior Vice President, General Counsel and Secretary.

        Each of the named executive officers will be entitled to receive certain compensation if the Merger is consummated and, following the consummation of the Merger, the executive officer's employment is terminated by the Company without "cause" or by the executive officer for "good reason."

        Please note that the amounts indicated below are estimates based on the material assumptions described in the notes to the table below, including an assumed date of termination of employment for each named executive officer of September 30, 2014, which may or may not actually occur. Some of these assumptions are based on information currently available and, as a result, the actual amounts, if any, that may become payable to a named executive officer may differ in material respects from the amounts set forth below.

Name
  Cash
Severance
($)(1)
  Equity
($)(2)
  Perquisites/
Benefits ($)(3)
  Pro Rata Target
Bonus in
Termination Year(4)
  Total ($)  

Leonard Borow

  $ 2,600,000   $ 4,895,898   $ 258,902   $ 162,500   $ 7,917,300  

John Buyko

  $ 2,080,000   $ 3,267,432   $ 12,474   $ 130,000   $ 5,489,906  

John Adamovich, Jr. 

  $ 1,833,333   $ 2,226,683   $ 468,579   $ 73,333   $ 4,601,928  

Andrew F. Kaminsky

  $ 1,250,000   $ 2,141,622   $ 36,792   $ 62,500   $ 3,490,914  

Edward S. Wactlar

  $ 1,875,000   $ 2,090,750   $ 3,024   $ 62,500   $ 4,031,274  

(1)
Represents the severance payments set forth above assuming a termination of employment without cause or for good reason within 18 months (24 months in the case of Mr. Adamovich) following a change in control, and assumes that the base salary for each executive officer will remain at its current level. This amount does not include the pro-rata bonus the executives shall be entitled to upon such termination of employment.

(2)
Based on the Per Share Merger Consideration of $10.50 per share.

(3)
Mr. Adamovich is entitled to a deferred compensation payment of $433,884 and the executive officers are also entitled to continued health benefits (i) for life with respect to Mr. Borow, (ii) until December 31 of the second calendar year following the calendar year of termination of employment with respect to Mr. Adamovich, (iii) for three (3) years with respect to Mr. Wactlar and (iv) for eighteen (18) months with respect to Messrs. Buyko and Kaminsky. The table reflects estimated costs of continued health benefits.

(4)
Pro Rata Target Bonus based on the numbers of days elapsed in the fiscal year through the date of the termination of employment with an assumed termination of employment of September 30, 2014.

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        From and after the Effective Time, Cobham will, or will cause the surviving corporation to, indemnify and hold harmless (and Cobham or the surviving corporation will advance expenses to) our present and former executive officers and directors against any costs, expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages or liabilities incurred in connection with any claim, action, suit, proceeding or investigation, arising out of or related to such executive officer's or director's service as a director or officer of the Company or its subsidiaries (or services performed at our request) at or prior to the Effective Time (including in connection with the Merger Agreement or the transactions contemplated thereby) to the fullest extent permitted by law. Any person to whom any funds are advanced are required to provide a written undertaking to repay such advances if it is determined by a body of competent authority that such person is not entitled to indemnification.

        We are required to (and if we are unable to do so, Cobham will cause the surviving corporation to) obtain a six-year "tail" policy with respect to the currently existing executive officers' and directors' liability insurance policy and fiduciary liability insurance policy. Such policy must contain terms, conditions, retentions and limits of liability that are at least as favorable as the Company's existing policies and must be obtained from an insurance carrier with the same or better credit rating as our current insurance carrier with respect to directors' and executive officers' liability insurance and fiduciary liability insurance. This obligation is subject per each annual premium to a cap of 300% of the last annual premium amount we are currently paying.

        If we fail to purchase such "tail" policies, then Cobham has agreed to cause the surviving corporation to continue to maintain the current policies in place or to use reasonable best efforts to purchase comparable policies, in each case, for the six-year period following the Effective Time. Cobham's obligation to provide this insurance will be capped per each annual premium at 300% of the last annual premium amount we are currently paying. If annual premiums for such coverage exceed the cap, the surviving corporation must obtain a policy with as much coverage as is reasonably available for a premium price not exceeding the 300% cap per annum.

        The present and former directors and executive officers of the Company will have the right, and third party beneficiaries thereof, to enforce the provisions of the Merger Agreement relating to their indemnification.

        As of the date of this proxy statement, no members of our current management have entered into any agreement, arrangement or understanding with Cobham, Merger Sub or their affiliates regarding employment with, or the right to convert into or reinvest or participate in the equity of, the surviving corporation or any of its subsidiaries. Moreover, as of the date of this proxy statement, no discussions have occurred between members of our current management and representatives of Cobham with respect to any such agreement, arrangement or understanding. Although certain members of our current management team subsequently may enter into such arrangements with Cobham or its affiliates regarding employment (and severance arrangements) with, and the right to purchase or participate in the equity of, Cobham (and/or a subsidiary of Cobham), they would not become effective, in any event, until after the Merger is completed.

        Except as disclosed in this proxy statement, there is no present or proposed material agreement, arrangement, understanding or relationship between Cobham, Merger Sub, or any of their respective executive officers, directors, controlling persons or subsidiaries, on the one hand, and the Company or any of its executive officers, directors, controlling persons or subsidiaries, on the other hand.

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Regulatory Matters

        In connection with the Merger, we are required to make certain filings with, and comply with certain laws of, various federal and state governmental agencies, including:

        Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the related rules and regulations that have been issued by the Federal Trade Commission (the "FTC"), certain transactions having a value above specified thresholds may not be consummated until specified information and documentary material have been furnished to the FTC and the Antitrust Division of the Department of Justice (the "DOJ") and certain waiting period requirements have been satisfied. The requirements of the HSR Act apply to the acquisition of shares of Common Stock in the Merger. The initial waiting period is 30 days following the filing of the notification and report forms by the parties, but this period may be shortened if the reviewing agency grants "early termination" of the waiting period, or it may be extended if either (x) the acquiring person voluntarily withdraws and re-files to allow a second 30-day waiting period, and/or (y) the reviewing agency issues a formal request for additional information and documentary material (a "Second Request"). If during the initial waiting period, either the FTC or the DOJ issues a Second Request, the waiting period with respect to the acquisition of shares of Common Stock in the Merger would be extended until 30 calendar days following the date of substantial compliance with that request, unless the FTC or the DOJ terminates the additional waiting period before its expiration. The expiration of this additional 30 calendar day waiting period may be extended with the parties' consent or by court order obtained by the FTC or the DOJ. In practice, complying with a Second Request can take a significant period of time. The "ultimate parent entities" (as defined in the HSR Act) of the Company and Cobham filed the notification and report forms under the HSR Act with the FTC and the Antitrust Division of the DOJ on May 30, 2014. The waiting period under the HSR Act expired at 11:59 p.m. Eastern Time on June 30, 2014.

        Based on a review of the information currently available about the respective businesses in which the Company and certain of its subsidiaries and affiliates and certain affiliates of Cobham are engaged, the Company and Cobham have determined that closing of the Merger requires clearance from the German Federal Cartel Office ("FCO") under the competition laws of Germany. The parties submitted a pre-merger notification to the FCO on June 18, 2014. On July 2, 2014, the FCO granted clearance to the consummation of the Merger.

        At any time before or after closing of the Merger, notwithstanding the expiration or termination of required waiting periods and the receipt of any other required approvals, the Antitrust Division of the DOJ, the FTC or state or foreign antitrust and competition authorities could take such action under applicable antitrust or competition laws as each deems necessary or desirable in the public interest, including seeking to enjoin the closing of the Merger or seeking divestiture or licensing of substantial assets and businesses, including assets and businesses of the Company and/or Cobham or their respective affiliates. Private parties may also seek to take legal action under the antitrust and competition laws under certain circumstances.

        Under the terms of the Merger Agreement, the parties to the Merger are required to submit a joint voluntary notice of the Merger to the Committee on Foreign Investment in the United States ("CFIUS"). CFIUS is an interagency committee of the U.S. government that evaluates transactions in which a foreign entity acquires control of a U.S. business to determine whether national security will be adversely affected and, if so, what mitigation might be required. The parties submitted a joint voluntary notice which was accepted for review by CFIUS on June 13, 2014. Completion of the transaction is

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conditioned on completion of the CFIUS Process, which is defined as (x) written notice from CFIUS that, after review of the Merger contemplated by the Merger Agreement, it determined that there are no unresolved national security concerns with respect to the Merger and that action under Section 721 of the Defense Production Act of 1950, as amended, has been concluded; (y) a conclusion by CFIUS that the Merger is not a covered transaction and not subject to review under applicable law; or (z) CFIUS shall have sent a report to the President of the United States requesting the President's decision on the joint voluntary notice and either (i) the period during which the President may announce his decision to take action to suspend, prohibit or place any limitations on the Merger shall have expired without any such action being threatened, announced or taken or (ii) the President shall have announced a decision not to take any action to suspend, prohibit or place any limitations on the Merger. The timing of any decision by CFIUS is wholly within the control of CFIUS, with certain statutory constraints. There can be no assurance that CFIUS will clear the Merger or that it will not impose mitigation measures that would preclude the applicable closing conditions in the Merger Agreement from being satisfied. See the discussion of the CFIUS Condition in "The Merger Agreement—Conditions to the Merger" below.

        The parties to the Merger Agreement have provided notice of the Merger to the Defense Security Service ("DSS"), which is the agency with cognizance over the facility security clearances held by the Company. In order to maintain a facility security clearance, DSS regulations require, prior to completion of the Merger, that a cleared U.S. company subject to Foreign Ownership Control or Influence ("FOCI") submit an acceptable FOCI action plan and agree to interim measures that address any FOCI issues pending formal execution of a FOCI mitigation or negation agreement. The parties jointly submitted a proposed FOCI action plan on June 27, 2014. The timing of any decision by DSS is wholly within the control of DSS. There can be no assurance that DSS will determine that the proposed FOCI action plan is acceptable or that it will not impose unacceptable mitigation measures that would preclude the applicable closing conditions in the Merger Agreement from being satisfied. See the discussion of the DSS Condition in "The Merger Agreement—Conditions to the Merger" below.

        Section 122.4(b) of the International Traffic in Arms Regulations (the "ITAR") requires companies that are registered with the U.S. Department of State, Directorate of Defense Trade Controls ("DDTC") to notify the DDTC at least 60 days in advance of any intended sale or transfer to a foreign person of ownership or control of the registrant or any entity thereof. The Company is registered under the ITAR, and thus has provided the DDTC with the notification required by ITAR Section 122.4(b). The Company and Cobham submitted notices to DDTC on June 3 and 4, 2014, respectively.

        Paragraph 5 of the Consent Agreement, dated August 6, 2013, by and between the U.S. Department of State and Aeroflex Incorporated (the "Consent Agreement") required Aeroflex Incorporated to notify Cobham in writing that the terms and conditions of the Consent Agreement apply to Aeroflex Incorporated and its successors and to require Cobham to acknowledge in writing, prior to the sale, that Cobham will be bound by the terms and conditions of the Consent Agreement unless the DDTC determines otherwise. The Company provided the required notice to Cobham, and Cobham provided the required acknowledgement in writing to the DDTC.


Cobham Shareholders' Approval of the Merger

        Pursuant to the Merger Agreement, Cobham is required to prepare and file with the United Kingdom's Financial Conduct Authority (the "FCA"), a shareholder circular to be sent to Cobham's shareholders in connection with the Merger. Subject to the qualifications described below in "The Merger Agreement—Cobham Shareholders' General Meeting", Cobham's proxy circular must include its recommendation that Cobham shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. On June 16, 2014, Cohbam filed with and

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obtained approval from the FCA of the shareholder circular. The shareholder circular was mailed to Cobham's shareholders on June 16, 2014, following the receipt of FCA approval.

        Unless the Merger Agreement is terminated in accordance with its terms, Cobham is required to take, in accordance with the U.K. Companies Act 2006 and the Listing Rules and its constitution, all action necessary to give notice of and hold a general meeting of its shareholders as promptly as reasonably practicable after the mailing of its proxy circular to consider and vote on the approval of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Cobham held a general meeting of its shareholders on July 2, 2014, and obtained the requisite votes from its shareholders to approve the Merger Agreement.


Accounting Treatment of the Merger

        The Merger will be accounted for as a "purchase transaction" for financial accounting purposes.


Material U.S. Federal Tax Consequences of the Merger

        The following is a summary of the material U.S. federal income tax consequences of the Merger to U.S. holders (as defined below) whose shares of Common Stock are converted into the right to receive cash pursuant to the Merger. This summary does not address the consequences of the Merger under the tax laws of any state, local or foreign jurisdiction and does not address all of the U.S. federal income tax consequences that might be relevant to a particular holder of our Common Stock, including holders who, in light of their particular circumstances, may be subject to special rules, including, for example:

        This discussion applies only to U.S. holders of our Common Stock who, on the date the Merger is completed, hold their shares as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based on the Code, the Treasury Regulations and other administrative and judicial authorities in effect as of the date of this proxy statement, all of which are subject to change. Any such change could apply retroactively and could change the consequences described below.

        If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds Common Stock, the tax treatment of a partner in that partnership generally will depend on the status of the partner and the activities of the partnership. A partner of a partnership holding Common Stock is encouraged to consult the partner's tax advisor regarding the U.S. federal income tax consequences of the Merger to that partner.

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        This discussion is based on current law, which is subject to change, possibly with retroactive effect. For purposes of this discussion, a "U.S. holder" means a beneficial owner of shares of our Common Stock that is for U.S. federal income tax purposes:

        The exchange of shares of our Common Stock for cash pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, a U.S. holder whose shares of Common Stock are converted into the right to receive cash in the Merger will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder's adjusted tax basis in such shares. A U.S. holder's adjusted tax basis will generally equal the price the U.S. holder paid for such shares. Gain or loss will be determined separately for each block of shares of Common Stock (i.e., shares of Common Stock acquired at the same cost in a single transaction). Such gain or loss will be long-term capital gain or loss if the U.S. holder's holding period for such shares of Common Stock is more than 12 months at the time of the completion of the Merger. Long-term capital gains of non-corporate U.S. holders are eligible for reduced rates of taxation. There are limitations on the deductibility of capital losses.

        A stockholder who perfects appraisal rights will generally recognize gain or loss with respect to his shares of Common Stock equal to the difference between the amount of cash received and his basis in such shares. Gain or loss will be calculated separately for each block of shares (i.e. shares acquired at the same cost in a single transaction), and will be a long-term capital gain or losses provided the shares were held for more than 12 months prior to the disposition of the shares.

        Backup withholding of tax (at the rate of 28%) may apply to cash payments to which a non-corporate U.S. holder is entitled under the Merger Agreement, unless the U.S. holder or other payee provides a taxpayer identification number, certifies that such number is correct, and otherwise complies with the backup withholding rules. Each of our U.S. holders should complete and sign, under penalty of perjury, the Form W—9 included as part of the letter of transmittal and return it to the paying agent, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the paying agent.

        Backup withholding is not an additional tax. Any amounts withheld from cash payments to a U.S. holder pursuant to the Merger under the backup withholding rules will be allowable as a refund or a credit against such U.S. holder's U.S. federal income tax liability provided the required information is timely furnished to the Internal Revenue Service.

        Cash payments made pursuant to the Merger will also be subject to information reporting unless an exemption applies.

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        The U.S. federal income tax consequences described above are not intended to constitute a complete description of all tax consequences relating to the Merger. Because individual circumstances may differ, each stockholder is encouraged to consult the stockholder's tax advisor regarding the applicability of the rules discussed above to the stockholder and the particular tax effects to the stockholder of the Merger in light of such stockholder's particular circumstances, the application of state, local and foreign tax laws, and, if applicable, the tax consequences of the receipt of cash in connection with the cancellation of RSUs and PRSUs, including the transactions described in this proxy statement relating to our other equity compensation and benefit plans.


Conduct of Our Business if the Merger is Not Completed

        In the event that the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, our stockholders would not receive the Per Share Merger Consideration for their shares of our Common Stock. Instead, we would remain an independent publicly-traded company and our Common Stock would continue to be listed and traded on the NYSE. In addition, we expect that management will operate our business in a manner similar to that in which it is currently being operated and our stockholders would continue to be subject to the same risks and opportunities as they currently are with respect to their ownership of our Common Stock.

        If the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of our shares, including the risk that the market price of our Common Stock may decline to the extent that the current market price of our Common Stock reflects a market assumption that the Merger will be completed. From time to time, the Board would evaluate and review our business operations, properties, dividend policy and capitalization and, among other things, make such changes as are deemed appropriate. In addition, the Board may seek to identify strategic alternatives to maximize stockholder value. If the Merger Agreement is not adopted by our stockholders or if the Merger is not completed for any other reason, we cannot guarantee that any other transaction acceptable to us would be offered or that our business, prospects or results of operations would not be adversely impacted.

        If the Merger Agreement is terminated, under certain circumstances, we will be obligated to pay a termination fee of $32 million to Cobham or to reimburse Cobham and Merger Sub for their reasonable, documented out-of-pocket fees and expenses incurred in connection with the Merger Agreement, up to an aggregate of $5 million, if the Merger Agreement shall not have been approved by our stockholders at a duly convened stockholders meeting. For a description of the circumstances triggering payment of the termination fee and expense reimbursement, see the section entitled "The Merger Agreement—Termination Fees."


Market Price of Our Common Stock

        Our Common Stock is listed for trading on the NYSE under the symbol "ARX". The closing price of our Common Stock on the NYSE on May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014 was $8.26 per share. On [        ], 2014, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price of our Common Stock on the NYSE was $[        ] per share. You are encouraged to obtain current market quotations for our Common Stock in connection with voting your shares.


Appraisal Rights

        Holders of shares of Common Stock who do not vote in favor of the adoption of the Merger Agreement, properly demand appraisal of their shares and otherwise comply with applicable statutory procedures will be entitled to appraisal rights in connection with the Merger under Section 262 of the DGCL.

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        The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety by the full text of Section 262 which is attached to this proxy statement as Annex E. The following summary does not constitute any legal or other advice nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262.

        Under Section 262, holders of shares of Common Stock who do not vote in favor of the adoption of the Merger Agreement, who continuously are the record holders of such shares through the Effective Time of the Merger and who otherwise follow the procedures set forth in Section 262 will be entitled to have their shares appraised by the Delaware Court and to receive payment in cash of the "fair value" of the shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Court, together with interest, if any, to be paid upon the amount determined to be the fair value.

        Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement shall constitute such notice, and the full text of Section 262 is attached to this proxy statement as Annex E. Any holder of Common Stock who wishes to exercise appraisal rights, or who wishes to preserve such holder's right to do so, should review the following discussion and Annex E carefully because failure to timely and properly comply with the procedures specified will result in the loss of appraisal rights. A stockholder who loses appraisal rights will be entitled to receive the Per Share Merger Consideration. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of Common Stock, the Company believes that if a stockholder considers exercising such rights, such stockholder should seek the advice of legal counsel.

        Filing Written Demand.    Any holder of Common Stock wishing to exercise appraisal rights must deliver to the Company, before the vote on the adoption of the Merger Agreement at the Special Meeting at which the proposal to adopt the Merger Agreement will be submitted to the stockholders, a written demand for the appraisal of the stockholder's shares, and that stockholder must not vote in favor of the adoption of the Merger Agreement. A holder of shares of Common Stock wishing to exercise appraisal rights must hold of record the shares on the date the written demand for appraisal is made and must continue to hold the shares of record through the effective date of the Merger, since appraisal rights will be lost if the shares are transferred prior to the effective date of the Merger. The holder must not vote in favor of the adoption of the Merger Agreement. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the Merger Agreement, and it will constitute a waiver of the stockholder's right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the Merger Agreement or abstain from voting on the adoption of the Merger Agreement. Neither voting against the adoption of the Merger Agreement, nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement, will in and of itself constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the Merger Agreement. The demand must reasonably inform the Company of the identity of the holder as well as the intention of the holder to demand an appraisal of the "fair value" of the shares held by the holder. A stockholder's failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement at the Special Meeting of stockholders will constitute a waiver of appraisal rights.

        Only a holder of record of shares of Common Stock is entitled to demand an appraisal of the shares registered in that holder's name. A demand for appraisal in respect of shares of Common Stock

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should be executed by or on behalf of the holder of record, fully and correctly, as the holder's name appears on the holder's stock certificates, should specify the holder's name and mailing address and the number of shares registered in the holder's name and must state that the person intends thereby to demand appraisal of the holder's shares in connection with the Merger. If the shares are owned of record in a fiduciary capacity, such as by a broker, dealer, commercial bank, trustee, guardian, custodian or other nominee, execution of the demand for appraisal should be made in that capacity, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners. If the shares are held in "street name" by a broker, dealer, commercial bank, trustee, guardian, custodian or other nominee, such party may exercise appraisal rights with respect to the shares held for one or more beneficial owners while not exercising the rights with respect to the shares held for other beneficial owners; in such case, however, the written demand should set forth the number of shares as to which appraisal is sought and where no number of shares is expressly mentioned the demand will be presumed to cover all shares of Common Stock held in the name of the record owner. Stockholders who hold their shares in an account with a broker, dealer, commercial bank, trustee, guardian, custodian or other nominee and who wish to exercise appraisal rights are urged to consult with such nominees to determine the appropriate procedures for the making of a demand for appraisal.

        All written demands for appraisal pursuant to Section 262 should be sent or delivered to the Company at its corporate offices located at 35 South Service Road, P.O. Box 6022, Plainview, NY 11803-0622.

        At any time within 60 days after the effective date of the Merger, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to the Company, as the surviving corporation, a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective date of the Merger will require written approval of the Company, as the surviving corporation. No appraisal proceeding in the Delaware Court will be dismissed as to any stockholder without the approval of the Delaware Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however, that any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement within 60 days after the effective date of the Merger. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or, except with respect to any stockholder who withdraws such stockholder's right to appraisal in accordance with the proviso in the immediately preceding sentence, if the Delaware Court does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value determined in any such appraisal proceeding, which value could be less than, equal to or more than the consideration being offered pursuant to the Merger Agreement.

        Notice by the Surviving Corporation.    Within ten days after the effective date of the Merger, the Company, as the surviving corporation, must notify each holder of Common Stock who has made a written demand for appraisal pursuant to Section 262, and who has not voted in favor of the adoption of the Merger Agreement, that the Merger has become effective.

        Filing a Petition for Appraisal.    Within 120 days after the effective date of the Merger, but not thereafter, the Company, as the surviving corporation, or any holder of Common Stock who has complied with Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court, with a copy served on the surviving

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corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all dissenting holders. If no such petition is filed, appraisal rights will be lost for all such holders who had previously demanded appraisal of their shares. The Company is under no obligation, and has no present intention, to file such a petition and holders should not assume that the Company will file such a petition. Accordingly, it is the obligation of the holders of Common Stock to initiate all necessary action to perfect their appraisal rights in respect of shares of Common Stock within the time prescribed in Section 262. Within 120 days after the effective date of the Merger, any holder of Common Stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Company, as the surviving corporation, a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within ten days after a written request therefor has been received by the Company, as the surviving corporation, or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later. Notwithstanding the foregoing, a person who is the beneficial owner of shares of Common Stock held either by a broker, dealer, commercial bank, trust company, voting trust or by a nominee on behalf of such person may, in such person's own name, file a petition or request from the Company the statement described in this paragraph.

        If a petition for an appraisal is timely filed by a holder of shares of Common Stock and a copy thereof is served upon the Company, as the surviving corporation, the Company will then be obligated within 20 days to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to appraisal rights thereunder. The Delaware Court may require the stockholders who demanded an appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceeding; and if any stockholder fails to comply with the direction, the Delaware Court may dismiss the proceedings as to the stockholder.

        Determination of Fair Value.    After the Delaware Court determines the holders of Common Stock entitled to appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Delaware Court, including any rules specifically governing appraisal proceedings. Through such proceeding, the Delaware Court shall determine the "fair value" of the shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the Merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the Merger and the date of payment of the judgment.

        In determining fair value, the Delaware Court will take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that "proof of value by any techniques or methods that are generally considered acceptable in the financial community and otherwise admissible in court" should be considered, and that "fair price obviously requires consideration of all relevant factors involving the value of a company." The Delaware Supreme Court stated that, in making this determination of fair value, the Court must consider "market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts which were known or which could be ascertained as of the date of the merger and which throw any light on future prospects of the merged corporation." Section 262 provides that fair value is to be "exclusive of any element of value arising

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from the accomplishment or expectation of the merger." In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a "narrow exclusion [that] does not encompass known elements of value," but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Supreme Court of Delaware also stated that "elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered."

        Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined could be more than, the same as or less than the Per Share Merger Consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that an investment banking opinion as to fairness from a financial point of view is not necessarily an opinion as to fair value under Section 262. Although the Company believes that the Per Share Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Per Share Merger Consideration. Neither Cobham nor the Company anticipate offering more than the Per Share Merger Consideration to any stockholder of the Company exercising appraisal rights, and reserve the right to assert, in any appraisal proceeding, that for purposes of Section 262, the "fair value" of a share of Common Stock is less than the Per Share Merger Consideration. In addition, the Delaware courts have decided that the statutory appraisal remedy, depending on factual circumstances, may or may not be a dissenting stockholder's exclusive remedy.

        If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of an appraisal proceeding (which do not include attorneys' fees or the fees and expenses of experts) may be determined by the Delaware Court and taxed upon the parties as the Delaware Court deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court may order all or a portion of the expenses incurred by a stockholder in connection with an appraisal proceeding, including, without limitation, reasonable attorneys' fees and the fees and expenses of experts utilized in the appraisal proceeding, to be charged pro rata against the value of all the shares entitled to be appraised.

        If any stockholder who demands appraisal of shares of Common Stock under Section 262 fails to perfect, successfully withdraws or loses such holder's right to appraisal, the stockholder's shares of Common Stock will be deemed to have been converted at the effective date of the Merger into the right to receive the Per Share Merger Consideration pursuant to the Merger Agreement. A stockholder will fail to perfect, or effectively lose, the holder's right to appraisal if, among other things, no petition for appraisal is filed within 120 days after the effective date of the Merger. In addition, as indicated above, a stockholder may deliver to the Company a written notice to withdraw his, her or its demand for appraisal in accordance with Section 262 and accept the Per Share Merger Consideration offered pursuant to the Merger Agreement. Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL will result in the loss of a stockholder's statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is urged to consult legal counsel before attempting to exercise those rights.


Litigation Relating to the Merger

        On June 3, 2014, a putative class action complaint was commenced against us, our directors, Cobham and Merger Sub in the Delaware Court. In this action, captioned Ramon Acevedo v. Aeroflex Holding Corp. et al., C.A. No. 9730—VCL, the plaintiff purports to bring the action on behalf of a putative class of public stockholders of the Company, and seeks, among other relief: (i) certification of the class, (ii) equitable relief, (iii) to enjoin the consummation of the Merger, (iv) an accounting for damages allegedly sustained as a result of the conduct described in the complaint, and (v) fees and costs. Plaintiff alleges in the complaint that our directors breached their fiduciary duties because,

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among other things, they undervalued the Company and failed to maximize the value of the Company to its public stockholders by allegedly pursuing a flawed sales process and agreeing to allegedly preclusive deal protection devices. The complaint further alleges that the Company, Cobham and Merger Sub aided and abetted the directors' alleged breaches of their fiduciary duties. On June 18, 2014, the Company, our directors and Merger Sub filed an answer that denied the material substantive allegations of the complaint. On July 14, 2014, the plaintiff filed an amended putative class action complaint, which includes the allegations set forth above and, among others, adds allegations (i) of deficiencies in the sales process and selection of Goldman Sachs as a financial advisor in connection with the transaction, (ii) of disclosure violations in the preliminary proxy statement the Company filed on July 3, 2014, and (iii) that the Merger Agreement fails to contain certain provisions to protect the interests of the minority shareholders of the Company. The plaintiff seeks the same relief in the amended complaint that he sought in his original complaint. On July 24, 2014, the plaintiff filed a motion for preliminary injunction seeking to enjoin the defendants from taking any action to consummate the transaction, indicating that the reasons for his motion would be set forth in briefs and affidavits to be filed later. No briefing schedule on plaintiff's motion has been set.

        Also on June 3, 2014, a putative class action complaint was commenced against us, our directors, Cobham, and Merger Sub in the Supreme Court of the State of New York, County of Nassau (the "New York Court"). In this action, captioned Tom Turberg v. Aeroflex Holding Corp. et al., Index No. [602528/2014], the plaintiff purports to bring the action on behalf of a putative class of public stockholders of the Company, and seeks, among other relief, (i) certification of the class, (ii) naming the plaintiff as the class representative, (iii) equitable relief, (iv) to enjoin the consummation of the Merger, (v) to rescind, to the extent already implemented, the Merger or any terms thereof or granting the plaintiff and the proposed class rescissory damages, (vi) an accounting for damages allegedly sustained as a result of the conduct described in the complaint and (vii) fees and costs. Plaintiff alleges in the complaint that our directors breached their fiduciary duties because, among other things, they undervalued the Company and failed to maximize the value of the Company to its public stockholders by allegedly pursuing an inadequate sales process and agreeing to allegedly preclusive deal protection devices. The complaint further alleges that the Company, Cobham and Merger Sub aided and abetted the directors' alleged breaches of their fiduciary duties. On July 17, 2014, the parties entered into a stipulation pursuant to which the parties agreed to stay the Turberg action through the pendency of the Acevedo action and defendants would not be required to respond to the complaint until 30 days after the stay is lifted. The stipulation and proposed order were submitted to the New York Court on the same day, and on July 21, 2014, the New York Court stayed the Turberg action.

        The Company believes that the claims asserted in the Acevedo and Turberg actions are without merit.

        VGG Holding, which owns shares of Common Stock that represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014, and the Significant Holders have committed not to participate in any litigation challenging the Merger.

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THE MERGER AGREEMENT

        This section describes the material terms of the Merger Agreement. The description of the Merger Agreement in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy of which is attached to this proxy statement as Annex A. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read the Merger Agreement carefully and in its entirety. This section is not intended to provide you with any factual information about the Company. Such information can be found elsewhere in this proxy statement and in the public filings we make with the SEC, as described in the section entitled, "Where You Can Find More Information." Terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement.


Explanatory Note Regarding the Merger Agreement

        The Merger Agreement is attached hereto to provide you with information regarding its terms. Factual disclosures about the Company contained in this proxy statement or in the Company's public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the Merger Agreement. The representations, warranties and covenants made in the Merger Agreement by the Company, Cobham and Merger Sub were qualified and subject to important limitations agreed to by the Company, Cobham and Merger Sub in connection with negotiating the terms of the Merger Agreement. In particular, in your review of the representations and warranties contained in the Merger Agreement and described in this summary, it is important to bear in mind that the representations and warranties were not intended by the parties to the Merger Agreement to be characterizations of the actual state of facts, but rather were negotiated with the principal purposes of establishing the circumstances in which a party to the Merger Agreement may have the right not to close the Merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the Merger Agreement, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by disclosures that were made by each party to the other, which disclosures were not reflected in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the Merger Agreement, May 19, 2014. For the foregoing reasons, you should read the representations and warranties given by the parties in the Merger Agreement, or any description thereof, in conjunction with the other information contained in the reports, statements, and filings that the Company publicly files with the SEC.


Effects of the Merger; Directors and Executive Officers; Certificate of Incorporation; Bylaws

        The Merger Agreement provides for the Merger of Merger Sub with and into the Company upon the terms, and subject to the conditions, set forth in the Merger Agreement. As the surviving corporation, the Company will continue to exist following the Merger.

        The board of directors of the surviving corporation will, from and after the Effective Time, consist of the directors of Merger Sub in office immediately prior to the Effective Time, which directors will continue to hold office until their successors have been duly elected or appointed and qualified or until their earlier death, incapacitation, retirement, resignation or removal. The executive officers of the Company at the Effective Time will, from and after the Effective Time, be the executive officers of the surviving corporation to serve in such capacities until their successors have been duly elected or appointed and qualified or until their earlier death, incapacitation, retirement, resignation or removal.

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        The certificate of incorporation of the Company will be amended and restated as set forth in Annex B to the Merger Agreement, and as so amended and restated will be the certificate of incorporation of the surviving corporation, until thereafter amended and/or restated in accordance with its terms and the DGCL (subject to the indemnification obligations of the surviving corporation as discussed in "The Merger—Interests of Certain Persons in the Merger"). The bylaws of Merger Sub as in effect immediately prior to the Effective Time will be the bylaws of the surviving corporation until thereafter amended and/or restated in accordance with their terms, the certificate of incorporation or the DGCL (subject to the indemnification obligations of the surviving corporation as discussed in "The Merger—Interests of Certain Persons in the Merger").

        Following the completion of the Merger, we expect our Common Stock to be delisted from the NYSE and deregistered under the Exchange Act, and to cease to be publicly traded.


Closing and Effective Time; Marketing Period

        The closing of the Merger will, unless otherwise mutually agreed in writing between the Company and Cobham, take place on the third business day following the day on which the last of the conditions to closing of the Merger (described under "The Merger Agreement—Conditions to the Merger") have been satisfied or waived (other than the conditions that by their nature are to be satisfied by actions to be taken at the closing of the Merger, but subject to the fulfillment or waiver of those conditions).

        The Effective Time will occur upon the filing and effectiveness of a certificate of merger with the Secretary of State of the State of Delaware (or at such later date as we and Cobham may agree in writing and specify in the certificate of merger).


Treatment of Common Stock and Restricted Stock Units

        At the Effective Time, each share of Common Stock issued and outstanding immediately prior thereto (other than the Excluded Shares) will convert into the right to receive the Per Share Merger Consideration. Shares of Common Stock owned by Cobham, Merger Sub or any other direct or indirect wholly-owned subsidiary of Cobham (in each case not held on behalf of third parties) and shares of Common Stock owned by the Company or any of its wholly-owned subsidiaries will be cancelled without payment of consideration. Shares of Common Stock owned by stockholders who have perfected and not withdrawn a demand for, or lost the right to, appraisal rights under the DGCL will be cancelled without payment of consideration. Such stockholders will instead be entitled to the appraisal rights provided under Section 262 of the DGCL as described under "The Merger—Appraisal Rights."

        At the Effective Time, each of the Company's RSUs, PRSUs and RSAs outstanding immediately prior thereto will fully vest and be cancelled and converted into the right to receive cash in an amount equal to the product of (x) the total number of shares of Common Stock subject to such RSU, PRSU or RSA, as applicable, immediately prior to the Effective Time and (y) the Per Share Merger Consideration, less any applicable withholding taxes. With respect to PRSUs, the total number of shares of Common Stock subject thereto will be equal to the sum of (i) the accrued and "banked" shares plus (ii) the number of shares of Common Stock subject to the fiscal year ended June 30, 2014 and prospective fiscal years assuming achievement of the applicable performance goals at the 100% level.

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Exchange and Payment Procedures

        At or prior to the Effective Time, Cobham will deposit, or will cause to be deposited, with a paying agent selected by Cobham with the Company's prior approval (not to be unreasonably withheld, conditioned or delayed) a cash amount in immediately available funds necessary for the paying agent to make payment of the aggregate Per Share Merger Consideration to the holders of shares of our Common Stock (other than the Excluded Shares) and any additional funds necessary to make payments to such stockholders who fail to perfect, withdraw their demand for, or otherwise lose their appraisal rights pursuant to the DGCL in an amount equal to the product of (x) the number of dissenting shares for which dissenting stockholders have failed to perfect, withdrawn their demand for, or lost their appraisal rights pursuant to Section 262 of the DGCL and (y) the Per Share Merger Consideration.

        Reasonably promptly (and in any event, within three business days) after the Closing Date, the paying agent will be instructed to mail to each record holder of shares of Common Stock (other than the Excluded Shares) a letter of transmittal and instructions describing how such holder may exchange his, her or its shares of Common Stock for the Per Share Merger Consideration.

        You should not return your stock certificates with the enclosed proxy card, and you should not forward your stock certificates to the paying agent without a letter of transmittal.

        You will not be entitled to receive the Per Share Merger Consideration until you deliver a duly completed and validly executed letter of transmittal to the paying agent. If your shares are certificated, you must also surrender your stock certificate or certificates to the paying agent for cancellation thereof (or affidavit of loss in lieu thereof). If ownership of your shares is not registered in your name in the transfer records of the Company, a check for any cash to be delivered in respect of such shares will only be issued if the applicable letter of transmittal is accompanied by all documents reasonably required by the paying agent to evidence and effect transfer and to evidence that any applicable stock transfer taxes have been paid or are not applicable.

        No interest will be paid or accrued on the cash payable as the Per Share Merger Consideration as provided above. Cobham, the surviving corporation and the paying agent will be entitled to deduct and withhold such amounts as it reasonably believes it is required to deduct and withhold in respect of any applicable taxes on the payment of the Per Share Merger Consideration. Any sum that is withheld will be deemed to have been paid to the record holder with regard to whom such deduction or withholding was made.

        Prior to the Effective Time, we and Cobham will cooperate in good faith to establish customary procedures with the paying agent and the Depository Trust Company ("DTC") to ensure that the paying agent transmit to DTC or its nominee a cash amount in immediately available funds equal to the aggregate Per Share Merger Consideration for the shares of Common Stock held of record by DTC or such nominee immediately prior to the Effective Time. If the Closing occurs prior to 11:30 a.m. (New York time) on the Closing Date, such payment will be made on the Closing Date; otherwise, it will be made on the first business day following the Closing Date.

        From and after the Effective Time, our stock transfer books will be closed and there will be no transfers on our stock transfer books of shares of Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, any person presents to the surviving corporation, Cobham or the paying agent any certificates or any transfer instructions relating to shares cancelled in the Merger, such person will be given a copy of the letter of transmittal and related instructions and told to comply with the instructions in that letter of transmittal in order to receive the Per Share Merger Consideration to which such person is entitled.

        Any portion of the Per Share Merger Consideration deposited with the paying agent that remains undistributed to former record holders of shares of Common Stock for 12 months after the Effective Time will be delivered to the surviving corporation. Record holders of shares of Common Stock who

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have not complied with the exchange and payment procedures described herein and set forth in the letter of transmittal and Article IV of the Merger Agreement will thereafter only look to the surviving corporation (subject to abandoned property, escheat or similar laws) for payment of the Per Share Merger Consideration. None of the surviving corporation, Cobham, the paying agent or any other person will be liable to any former record holders of shares of Common Stock for any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar laws. If any shares of Common Stock are not surrendered immediately prior to the date on which any cash payable in respect thereof would otherwise escheat to or become the property of any governmental entity, such cash will (to the extent permitted by applicable law) become the property of the surviving corporation, free and clear of all claims or interest of any person previously entitled thereto.

        If you have lost a certificate or certificates representing your shares of Common Stock, or if it has been stolen, mutilated or destroyed, then before you will be entitled to receive the Per Share Merger Consideration, you will have to make an affidavit satisfactory to the paying agent, acting reasonably, of the loss, theft, mutilation or destruction, and if required by the paying agent or Cobham, to post a bond in a customary amount and upon such terms as may be required by the paying agent of Cobham as indemnity against any claim that may be made against it or the surviving corporation with respect to such certificate. These procedures will be described in the letter of transmittal that you will receive, which you should read carefully in its entirety.


Company Financing Cooperation

        Cobham has represented that it will have at the Closing funds sufficient to pay the aggregate Per Share Merger Consideration, repay all indebtedness of the Company contemplated in the Merger Agreement or otherwise required in connection with the Merger, pay all fees and expenses required to be paid by Cobham and/or Merger Sub in connection with the transactions contemplated by the Merger Agreement and satisfy all other payment obligations of Cobham and/or Merger Sub contemplated under the Merger Agreement. Please see the discussion of Cobham's proposed financing as described under "Financing of the Merger."

        Cobham and Merger Sub acknowledge in the Merger Agreement that the obtaining of the financing is not a condition to the consummation of the Merger.

        We have agreed to provide (at Cobham's sole expense) all cooperation reasonably requested by Cobham and Merger Sub in connection with obtaining financing for the Merger, so long as such cooperation does not unreasonably interfere with the ongoing operations of the Company and our subsidiaries. Such cooperation includes providing certain financial information and other pertinent information regarding the Company, participating in certain meetings with third parties; assisting Cobham in the preparation of customary offering memoranda, bank information memoranda, authorization letters, confirmations and undertakings, rating agency presentations and lender presentations; providing and executing customary documents as reasonably requested by Cobham; using commercially reasonable efforts to satisfy conditions precedent set forth in the definitive documentation relating to the financing to the extent satisfaction of conditions requires our cooperation or is within our control; using commercially reasonable efforts to cooperate with the financing sources' due diligence investigation (to the extent it does not unreasonably interfere with our business); using commercially reasonable efforts to obtain accountant's comfort letters and consents, and legal opinions reasonably requested by Cobham and customary to such financings; cooperating with respect to matters relating to pledges of collateral to take effect at the Effective Time in connection with the financing; making available appropriate personnel of the Company and our subsidiaries to prospective lenders on a customary and reasonable basis and upon reasonable notice; and assisting in the obtaining of customary payoff letters and instruments of discharge to be delivered at the Closing to allow for the payoff, discharge and termination in full on the Closing Date of all amounts payable under the Existing Credit Facility. Notwithstanding the foregoing, none of the obligations referenced in this paragraph

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shall require the Company's, its subsidiaries' or their respective representatives' cooperation prior to the Effective Time to the extent it would require it to pay any commitment fee or similar fee, enter into any definitive documentation or have any liability or obligation under any document related to the financing, incur any other expenses in connection with the financing (unless promptly reimbursed by Cobham) or take any action in his or her capacity as a director of the Company or our subsidiaries with respect to the financing.


Representations and Warranties

        We made representations and warranties in the Merger Agreement that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement or in the disclosure schedules the Company delivered in connection therewith. These representations and warranties relate to, among other things:

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        Many of our representations and warranties are qualified by, among other things, exceptions relating to the absence of a "Company material adverse effect," which means an effect, development, change, event or occurrence that, individually or in the aggregate, (x) has had or would reasonably be expected to result in a material adverse effect on the condition, business or results of operations of the Company and its subsidiaries taken as a whole or (y) prevents or would reasonably be expected to prevent or materially delay or impede the consummation of the transactions contemplated by the Merger Agreement; provided, however, that none of the following will constitute or be taken into account in determining whether a "Company material adverse effect" has occurred:

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        However, notwithstanding any of the foregoing, (x) changes, events, circumstances, occurrences or effects set forth in clause (i)(A), (i)(B), (ii)(A), (ii)(C) or (ii)(D) above may be taken into account in determining whether there has been or is a Company material adverse effect to the extent such changes, developments, events, circumstances, occurrences or effects have a materially disproportionate adverse effect on us and our subsidiaries, taken as a whole, as compared to other participants in the industries in which we and our subsidiaries operate, and (y) the exceptions in clauses (ii)(F), (ii)(H) and (ii)(I) above shall not prevent or otherwise affect a determination that the underlying cause of any decline, change or failure referred to therein (if not otherwise falling within any of the exceptions provided by clause (i) or clauses (ii)(A) through (I) above) is a Company material adverse effect.


Conduct of Our Business Pending the Merger

        Under the Merger Agreement, we have agreed that, subject to certain exceptions in the Merger Agreement and disclosure schedules we delivered in connection with the Merger Agreement, between the date of the Merger Agreement and the Effective Time, unless Cobham gives its written approval (which cannot be unreasonably withheld, delayed or conditioned), we and our subsidiaries will cause our businesses to be conducted in the ordinary course consistent with past practice and, to the extent consistent therewith, we and our subsidiaries will use our reasonable efforts to preserve our business organizations intact and maintain existing relations and goodwill with governmental entities, customers, suppliers, officers, employees, lenders and business associates.

        Subject to certain exceptions set forth in the Merger Agreement and disclosure schedules we delivered in connection with the Merger Agreement, we will not, and we will not permit our subsidiaries to, take any of the following actions without Cobham's written approval (which cannot be unreasonably withheld, delayed or conditioned):

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Solicitation of Acquisition Proposals

        Except as permitted by the terms of the Merger Agreement described below, we have agreed in the Merger Agreement that the Board will not fail to recommend adoption of the Merger Agreement to our stockholders (we refer to such recommendation by the Board of the adoption of the Merger Agreement as the Company recommendation) or withhold, withdraw, qualify, change or modify (or publicly propose or resolve to do so), in a manner adverse to Cobham, the Company recommendation, or fail to include the Company recommendation in this proxy statement or adopt, approve or recommend to propose to adopt, approve or recommend (publicly or otherwise) an acquisition proposal, take formal action or make any recommendation or public statement in connection with a tender offer or exchange offer other than a recommendation against such offer or other permitted communications, cause or permit the Company to enter into any alternative acquisition agreement relating to any acquisition proposal, or take any action to terminate the Merger Agreement in connection with a superior proposal.

        Upon execution of the Merger Agreement, we and our subsidiaries were required to immediately cease and cause to be terminated any discussions or negotiations with any persons that may have been ongoing with respect to any acquisition proposals, and, within two business days of May 19, 2014, request any such persons to promptly return or destroy all confidential information concerning the Company or any of our subsidiaries and immediately terminate all physical and electronic data room access previously granted to any such persons or its representatives, and we agreed to notify Cobham of any proposals or offers with respect to an acquisition proposal, any requests for non-public information, or requests to initiate or continue discussions or negotiations and any status updates with respect to the same promptly, and, in any event, within 36 hours. Until the Effective Time or, if earlier, the

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termination of the Merger Agreement, we and our subsidiaries may not, and will use our and their reasonable best efforts to cause our and their representatives not to:

        However, at any time prior to the time the Merger Agreement is adopted by our stockholders at a duly-called stockholders' meeting, if the Company receives an unsolicited written bona fide acquisition proposal from any person or request from any person to waive any applicable prohibition with respect to the confidential submission of an acquisition proposal or amendment thereto and/or to waive any prohibition with respect to having discussions or negotiations with, and/or entering into an agreement with, one or more persons in connection with an acquisition proposal, we may:

        At any time before the Merger Agreement is adopted by our stockholders, we may terminate the Merger Agreement and enter into an alternative acquisition agreement with respect to a superior proposal, as long as we comply with certain terms of the Merger Agreement, including paying a

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$32 million termination fee to Cobham. See the section entitled "The Merger Agreement—Termination Fees" below.

        Prior to the time the Merger Agreement is adopted by our stockholders at a duly-called stockholders' meeting, the Board may withhold, withdraw, qualify, change or modify (or publicly propose to withhold, withdraw, qualify, change or modify) the Company recommendation or fail to include the Company recommendation in this proxy statement (in each case, whether or not related to a superior proposal or an acquisition proposal), or adopt, approve, recommend or otherwise declare advisable any superior proposal made or received after the date hereof, if and only if, prior to taking such action the Board determines in good faith, after consultation with its outside legal counsel, that failure to do so would reasonably be expected to be inconsistent with its fiduciary duties under applicable law (we refer to such action or failure to act by the Board as a Company change of recommendation). However, prior to effecting any Company change of recommendation or termination of the Merger Agreement by us to enter into an alternative acquisition agreement with respect to a superior proposal:

        Notwithstanding the foregoing, if the intended Company change of recommendation is the result of a superior proposal, in the event of any material revisions to such superior proposal, we must deliver a new written notice to Cobham and Merger Sub and to comply with the requirements set forth in the bullet points above with respect to such new written notice, except that the deadline for such new written notice will be two business days rather than four business days.

        Nothing in the provisions of the Merger Agreement relating to acquisition proposals prevents us from complying with our disclosure obligations under U.S. federal or state law with regard to an acquisition proposal, including taking and disclosing to our stockholders a position contemplated by Rule 14d—9 or 14e—2(a) under the Exchange Act or making any similar communication to our stockholders, or making any "stop-look-and-listen" or similar communication to the stockholders of the Company pursuant to Rule 14d—9(f) under the Exchange Act, provided that, in each, we can only make a Company change in recommendation in accordance with the procedures discussed above.

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        In this proxy statement we refer to (x) any bona fide proposal or offer with respect to a Merger, joint venture, partnership, consolidation, tender offer, recapitalization, share exchange, business combination or similar transaction or series of transactions involving the direct or indirect acquisition of more than 20% of the total voting power of the capital stock or other ownership interests, or more than 20% of the consolidated assets, of the Company and our subsidiaries or (y) any other proposal or offer which, if consummated, would result in a direct or indirect acquisition of more than 20% of the total voting power of the capital stock or other ownership interests, or more than 20% of the consolidated assets, of the Company and our subsidiaries, in one transaction or a series of transactions, in each case other than the transactions contemplated by the Merger Agreement, as an "acquisition proposal."

        In this proxy statement we refer to a written acquisition proposal involving more than 50% of the total voting power of the capital stock or other ownership interests, or more than 50% of the consolidated assets, of the Company and our subsidiaries that the Board has determined in its good faith judgment, after consultation with its outside financial and legal advisors, (x) is reasonably likely to be consummated in accordance with its terms, taking into account all legal, regulatory and financial aspects of the proposal that it deems relevant and the person making the proposal and (y) if consummated, would result in a transaction more favorable to our stockholders taking into account all relevant factors the Board, acting in a manner consistent with its fiduciary duties, deems relevant than the transaction contemplated by the Merger Agreement (taking into account any adjustment or revisions made by Cobham in response to such acquisition proposal in accordance with the procedures described above) as a "superior proposal."


Company Stockholders Special Meeting

        Unless the Merger Agreement is terminated in accordance with its terms, we are required to take all action necessary to duly call, give notice of, convene and hold a meeting of our stockholders as promptly as reasonably practicable after the mailing of this proxy statement to consider and vote on the adoption of the Merger Agreement. We may postpone or adjourn the stockholders meeting (w) with the written consent of Cobham, (x) due to the absence of a quorum, (y) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Board has determined in good faith after consultation with outside counsel and Cobham is necessary under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by our stockholders prior to the stockholders meeting, or (z) in the event we have provided timely written notice to Cobham and Merger Sub of our intention to effect a Company change of recommendation or terminate the Merger Agreement in light of a superior proposal and the deadline with respect to such notice has not been reached. Subject to the provisions of the Merger Agreement discussed above under "The Merger Agreement—Solicitation of Acquisition Proposals," the Board is required to recommend that our stockholders vote to adopt the Merger Agreement and is required to use its reasonable best efforts to solicit votes in favor of the adoption of the Merger Agreement.


Cobham Shareholders' General Meeting

        Pursuant to the Merger Agreement, Cobham is required to prepare and file with the FCA, a shareholder circular to be sent to Cobham's shareholders in connection with the Merger. Subject to the qualifications referenced below, Cobham's proxy circular must include its recommendation that Cobham shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Cobham is required to procure that its board of directors shall not withhold, withdraw, qualify, change or modify (or publicly propose to withhold, withdraw, qualify, change or modify), in a manner adverse to us, such recommendation or omit to include such recommendation in Cobham's proxy circular and make such recommendation at Cobham's shareholder meeting, and Cobham is not permitted to adopt, approve or recommend to propose to adopt, approve

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or recommend (publicly or otherwise) any proposal or resolution that would be inconsistent with, or adverse to, consummation of the Merger (a "Cobham change of recommendation") unless Cobham's board of directors determines in good faith, after consultation with its outside legal counsel, that failure to do so would reasonably be expected to be inconsistent with the directors' fiduciary duties under applicable law. However, prior to effecting any Cobham change of recommendation:

        Unless the Merger Agreement is terminated in accordance with its terms, Cobham is required to take, in accordance with the U.K. Companies Act 2006 and the Listing Rules and its constitution, all action necessary to give notice of and hold a general meeting of its shareholders as promptly as reasonably practicable after the mailing of its proxy circular to consider and vote on the approval of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement. Cobham may postpone or adjourn its shareholder meeting (i) with our written consent, (ii) due to the absence of a quorum, (iii) if, in the good faith opinion of the chairman of the meeting or Cobham's board of directors, it would reasonably facilitate the conduct of the business of such meeting, (iv) to protect the safety of any person attending the shareholder meeting or ensure that its business is conducted in an orderly manner, (v) if so directed by its shareholders at such meeting, or (vi) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which Cobham's board of directors has determined in good faith after consultation with outside legal counsel and the Company is necessary under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by its shareholders prior to the shareholders meeting. Subject to the provisions of the Merger Agreement discussed in the preceding paragraph, Cobham's board of directors is required to recommend that its shareholders approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and is required to use its reasonable best efforts to solicit votes in favor of approval of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.


Filings; Other Actions; Notification

        We and Cobham will cooperate and use our respective reasonable best efforts to take or cause to be taken all actions and do or cause to be done all things reasonably necessary, proper or advisable to consummate the Merger and the other transactions contemplated by the Merger Agreement as soon as reasonably practicable, including preparing and filing as promptly as practicable all documentation to effect all necessary notices and the regulatory filings described under "The Merger—Regulatory Matters" and to obtain as promptly as practicable all consents, registrations, approvals, permits and authorizations necessary, proper or advisable to be obtained from any third party or any governmental entity in order to consummate the Merger or any of the other transactions contemplated by the Merger Agreement, including under the HSR Act, any other applicable antitrust laws, any notice or other filings with CFIUS and any notice or submission to the DSS pursuant to the NISPOM. Nothing in the

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Merger Agreement shall require us, Cobham or our respective subsidiaries to take or agree to take any action with respect to our business or operations unless the effectiveness of such agreement or action is conditioned upon the Closing.

        We and Cobham have agreed, subject to certain exceptions, to:

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        In addition, we agreed to cooperate with Cobham and use our reasonable best efforts to obtain governmental entity approvals to allow certain proscribed information arrangements identified by Cobham to be performed by the North America SSA or subsidiaries to be placed within the North America SSA without any modification to such North America SSA or requiring the creation of a proxy agreement or voting trust agreement structure to perform such proscribed information arrangements. We also agreed to cooperate and use our reasonable best efforts to take all actions reasonably deemed necessary, proper or advisable by Cobham to facilitate communications with customers related to the proscribed information arrangements. However, none of the obligations described in this paragraph shall require us or any of our subsidiaries to enter into any agreement that imposes, prior to Closing, material obligations on us or any of our subsidiaries or otherwise incur any material costs, expenses or liabilities prior to Closing.


Stockholder Litigation

        We have agreed to give Cobham the opportunity to participate in the defense or settlement of any stockholder litigation against us and/or our directors arising after May 19, 2014 as a result of the transactions contemplated by the Merger Agreement or the Support Agreement, and unless such settlement is solely for monetary damages entirely paid for with proceeds of insurance (other than the deductible under insurance policy or policies in effect as of May 19, 2014), no such settlement will be agreed to without Cobham's prior written consent (which will not be unreasonably withheld, conditioned or delayed).

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Employee Benefit Matters

        After the completion of the Merger, the surviving corporation will:

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Conditions to the Merger

        The respective obligations of the Company, Cobham and Merger Sub to consummate the Merger are subject to the satisfaction or waiver of the following conditions:

        The Merger Agreement provides that neither the CFIUS Condition nor the DSS Condition shall be deemed satisfied if either is conditioned in any respect on the imposition of any mitigation measure that would require altering the composition of the board of directors of Cobham Defense Systems, Inc. as specified in the North America SSA or a proxy agreement or voting trust agreement pursuant to the NISPOM, unless such a mitigation measure is required as a result of Cobham taking or permitting any of its affiliates to take any action that would reasonably be expected to adversely effect, prevent or

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delay in any material respect the CFIUS Condition or DSS Condition having been satisfied, in which case the mitigation measure shall be disregarded for purposes of the foregoing closing conditions.

        The obligations of Cobham and Merger Sub to effect the Merger are also subject to the satisfaction or waiver by Cobham at or prior to the Effective Time of the following additional conditions:

        Our obligation to effect the Merger is subject to the satisfaction or waiver by us at or prior to the Effective Time of the following additional conditions:

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        None of the Company, Cobham or Merger Sub may rely on the failure of any condition described above to be satisfied if such failure was caused by such party's material breach of any provision of the Merger Agreement or breach of the requirement to use efforts.

        The conditions to each of the parties' obligations to complete the Merger are for the sole benefit of such party and may be waived by such party in whole or in part (to the extent permitted by applicable laws).


Termination

        We and Cobham may, by mutual written consent, terminate the Merger Agreement and abandon the Merger at any time prior to the Effective Time, whether before or after the adoption of the Merger Agreement by our stockholders.

        The Merger Agreement may also be terminated and the Merger abandoned at any time prior to the Effective Time as follows:

        by either Cobham or the Company, whether before or after the time approval by our stockholders is obtained, if:

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        by the Company:

        by Cobham, if:

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Termination Fees

        We will be required to pay a termination fee equal to $32 million if:

        We will be required to reimburse Cobham and Merger Sub for their reasonable, documented out-of-pocket fees and expenses incurred in connection with the Merger Agreement, up to an aggregate of $5 million (which amount will be credited against the $32 million termination fee if such fee is required to be paid as discussed above), if the Merger Agreement shall not have been approved by our stockholders at a duly convened stockholders meeting.

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        Cobham must pay us a fee of $20 million if we exercise our right to terminate the Merger Agreement at any time prior to the approval of the Merger Agreement by Cobham's shareholders because Cobham's board of directors shall have made a Cobham change of recommendation. In addition, Cobham must pay us a fee of $5 million if the Merger Agreement is terminated by either us or Cobham because Cobham's shareholders shall not have approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement at a duly held shareholders meeting.


Expenses

        Except with respect to the payment of a fee described under "The Merger Agreement—Termination Fees," all costs and expenses incurred in connection with the Merger Agreement, the Support Agreement and the Merger and the other transactions contemplated by the Merger Agreement and the Support Agreement shall be paid by the party incurring such expense, except that Cobham will reimburse and indemnify us and our subsidiaries in connection with our cooperation discussed under "The Merger Agreement—Company Cooperation" above.


Remedies

        The parties are entitled to an injunction, specific performance and other equitable relief to prevent breaches or threatened breaches of the Merger Agreement and to enforce the terms of the Merger Agreement in addition to any other remedy to which they are entitled at law or in equity.

        Subject to our rights to equitable relief, including specific performance, in the event of termination of the Merger Agreement in accordance with its terms, any rights to the amounts discussed under "The Merger Agreement—Termination Fees" will be our sole and exclusive remedy against Cobham, Merger Sub and their respective affiliates for any losses or damages suffered as a result of any breach of any representation, warranty, covenant or agreement or the failure of the Merger to be consummated, except in the event Cobham commits a willful breach of the Merger Agreement or fraud, in which case Cobham shall be liable for uncapped damages. Although, initially, we may seek both to specifically enforce the terms of the Merger Agreement and to recover the payment of a termination fee described under "The Merger Agreement—Termination Fees," because the same are mutually exclusive, we would not be entitled ultimately to both remedies.

        Subject to Cobham's rights to equitable relief, including specific performance, in the event of termination of the Merger Agreement in accordance with its terms, Cobham's rights discussed under "The Merger Agreement—Termination Fees" will be the sole and exclusive remedy of Cobham, Merger Sub and their respective affiliates against the Company, our subsidiaries and any of our respective affiliates for any losses or damages suffered as a result of any breach of any representation, warranty, covenant or agreement or the failure of the Merger to be consummated, except in the event we commit a willful breach of the Merger Agreement or fraud, in which case we shall be liable for uncapped damages. Cobham may pursue both a grant of specific performance and the payment of a termination fee described under "The Merger Agreement—Termination Fees," but under no circumstances will Cobham be entitled to receive both a grant of specific performance and the payment of any termination fee.


Indemnification; Directors' and Officers' Insurance

        For a description of our directors' and executive officers' insurance and indemnification, see the section entitled "The Merger—Interests of Certain Persons in the Merger—Indemnification and Insurance."

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Modification or Amendment

        At any time prior to the Effective Time, the parties to the Merger Agreement may modify or amend the Merger Agreement (whether before or after our stockholder approval of the proposal to adopt the Merger Agreement or Cobham's shareholder approval of the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement), by written agreement executed and delivered by duly authorized executive officers of the respective parties. However, following our stockholder approval or Cobham's shareholder approval, the parties may not amend the provisions in the Merger Agreement in any manner that would require further approval under applicable law by our stockholders or Cobham's shareholders, as applicable, without such further approval.


Vote Required for Adoption of the Merger Agreement

        For the adoption of the Merger Agreement, you may vote in favor of the proposal, against the proposal or abstain from voting. Approval of the proposal requires the affirmative vote of a majority of the outstanding shares of the Common Stock entitled to vote at the Special Meeting. Abstentions, but not broker non-votes, will be considered present at the Special Meeting for purposes of determining a quorum. Abstentions and broker non-votes will be considered for purposes of calculating the vote, but will not be considered to have been voted in favor of the proposal.

AFTER CONSIDERATION THE BOARD RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE "FOR" THE PROPOSAL TO ADOPT THE MERGER AGREEMENT.

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THE SUPPORT AGREEMENT

        Concurrently with the execution of the Merger Agreement, Cobham and Merger Sub entered into the Support Agreement with VGG Holding, the largest holder of our Common Stock, and the Significant Holders.

        In connection with the execution and delivery of the Support Agreement, neither Cobham nor Merger Sub have paid or will pay VGG Holding or the Significant Holders any consideration in addition to the Per Share Merger Consideration they may receive pursuant to the Merger Agreement in respect of the shares of Common Stock held by VGG Holding. The description of the Support Agreement in this section and elsewhere in this proxy statement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Support Agreement, a copy of which is attached to this proxy statement as Annex D.

        Pursuant to the Support Agreement, subject to the terms and conditions therein, VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding, among other things, to vote the 65,000,000 shares of Common Stock held by VGG Holding, which represented, in the aggregate, approximately 76.28% of the outstanding voting power in the Company as of May 19, 2014: (i) in favor of the adoption of the Merger Agreement and in favor of any other matter submitted for a vote of the Company's stockholders that could reasonably be expected to be in furtherance thereof, including any adjournment or postponement of the Special Meeting to a later date if there are not then sufficient votes for adoption of the Merger Agreement; and (ii) against (1) any action (including any amendment to our certificate of incorporation or bylaws, as in effect on May 19, 2014), agreement, understanding or transaction that VGG Holding or a Significant Holder knows would, or otherwise would reasonably be expected to, among other things, frustrate the purposes of, postpone or adversely affect the consummation of the transactions contemplated by the Merger Agreement, including the Merger; (2) any change in the majority of the Board; (3) any change in the capitalization of the Company or the Company's corporate structure; (4) any Acquisition Proposal (as defined in the Merger Agreement) and any action with the intention to further any Acquisition Proposal; (5) any merger, acquisition, sale, consolidation, reorganization, recapitalization, extraordinary dividend, dissolution, liquidation, sale of a material amount of assets, winding up of or by the Company or any other extraordinary transaction involving the Company (other than the Merger); (6) any action, proposal, transaction or agreement intended to result in a material breach of our representations or obligations under the Merger Agreement or of VGG Holding or the Significant Holders under the Support Agreement; and (7) any other action, proposal, transaction or agreement that would reasonably be expected to result in the failure of any condition to the Merger (described under "The Merger Agreement—Conditions to the Merger") to be satisfied. In addition, for so long as the Support Agreement remains in effect, VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding, not to deliver (or cause to be delivered) a written consent in favor of the matters described in clauses (1)—(7) above.

        VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding, to waive and not exercise any appraisal or similar rights in connection with the Merger. VGG Holding further agreed not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, including derivative claims, against (i) the Company or any of its directors, officers, employees, affiliates or representatives, relating to the negotiation, execution or delivery of the Merger Agreement or the consummation of the Merger, including any claim (1) challenging the validity of, or seeking to enjoin the operation of, any provision of the Merger Agreement or (2) alleging a breach of any fiduciary duty of any person in connection with the Merger Agreement or the transactions contemplated thereby, including the Merger; or (ii) Cobham or Merger Sub challenging the validity of, or seeking to enjoin the operation of, any provision of the Support Agreement. VGG Holding also agreed, and the Significant Holders agreed to cause VGG Holding, to irrevocably appoint Cobham or any of its designees as its proxy and attorney-in-fact (with full power of substitution) to, among other things, vote the shares as described in the preceding paragraph.

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        VGG Holding also agreed, and the Significant Holders agreed to cause VGG Holding, not to, directly or indirectly, transfer, sell or encumber its shares of Common Stock (other than pursuant to the existing margin loan agreement, which we refer to as the VGG Holding Loan Agreement, with Credit Suisse AG, Cayman Islands Branch, which we refer to as VGG Holding Lender, and the related security-and-pledge agreement of VGG Holding), and to promptly (and in any event within 36 hours) notify Cobham of (i) any additional shares of which VGG Holding acquires record or beneficial ownership after the execution of the Support Agreement, which after acquired shares shall be subject to the Support Agreement, and (ii) receipt of any Acquisition Proposal (including copies of any documents relating to such Acquisition Proposal). If an event of default under the VGG Holding Loan Agreement occurs at any time prior to the adoption of the Merger Agreement by our stockholders, VGG Holding agreed, and the Significant Holders agreed to cause VGG Holding, to (i) promptly notify Cobham in writing upon receipt of notice from the VGG Holding Lender of such event of default; and (ii) cure such event of default promptly (but in any event before the VGG Holding Lender forecloses on any of shares of Common Stock held by VGG Holding).

        VGG Holding and the Significant Holders also agreed to comply with the obligations applicable to the Company's "Representatives" under the non-solicitation provisions of the Merger Agreement (described under "The Merger Agreement—Solicitation of Acquisition Proposals") as if they were "Representatives" thereunder; provided that VGG Holding and the Significant Holders are permitted to take such actions as the Company would be permitted to take under such provisions of the Merger Agreement (so long as VGG Holding and/or the Significant Holders complied in all material respects and did not intentionally breach their obligations under the Support Agreement to comply with such non-solicitation provisions of the Merger Agreement as if they were "Representatives" thereunder).

        The Support Agreement and all obligations of VGG Holding and the Significant Holders under the Support Agreement will automatically terminate upon the earlier to occur of: (i) the termination of the Merger Agreement in accordance with its terms; (ii) the Effective Time; (iii) the written agreement of all parties to the Support Agreement to terminate the Support Agreement; and (iv) at the option of any of VGG Holding or a Significant Holder (but only with respect to VGG Holding or such Significant Holder, as applicable), upon written notice to Cobham following any amendment, waiver or modification of the Merger Agreement that changes the form of or decreases the amount of the Per Share Merger Consideration or materially delays the timing of the payment thereof.

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APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING

Adjournment

        If it becomes necessary to solicit additional proxies to establish a quorum or to approve the adoption of the Merger Agreement, a motion may be made to adjourn the Special Meeting to a later time to permit further solicitation of proxies. If such a motion to adjourn is made, it will require the affirmative vote of the holders of shares representing a majority in voting power present, either in person or by proxy, at the Special Meeting and entitled to vote thereon. The Board believes this proposal to be in the best interests of the Company's stockholders because it gives the Company the flexibility to solicit the vote of additional holders of the Company's voting securities to vote on matters the Board deems important to the Company.


Vote Required and Recommendation of the Board

        For the proposal to approve the adjournment of the Special Meeting, you may vote in favor of the proposal, vote against the proposal or abstain from voting. Approval of the proposal requires the affirmative vote of the holders of shares representing a majority in voting power present, either in person or by proxy, at the Special Meeting and entitled to vote thereon. Abstentions will (but broker non-votes will not) be considered present at the Special Meeting for purposes of determining a quorum. Abstentions will have the impact of a vote "AGAINST" the proposal to adjourn the Special Meeting, and broker-non votes will not have an impact on the outcome of the proposal to adjourn the Special Meeting.

THE BOARD RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ADJOURN THE SPECIAL MEETING, IF NECESSARY.

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MARKET PRICE OF OUR COMMON STOCK

General

        Our Certificate of Incorporation provides that we may issue up to 350,000,000 shares of stock, consisting of: (i) 50,000,000 shares of preferred stock, $0.01 par value per share (the "Preferred Stock"), and (ii) 300,000,000 shares of Common Stock. As of [        ], 2014, there were [        ] shares of Common Stock outstanding and no shares of Preferred Stock outstanding.


Principal Trading Market; High and Low Sales Prices

        Our Common Stock is listed for trading on the NYSE under the symbol "ARX". The closing price of our Common Stock on the NYSE on May 16, 2014, the last trading day prior to the date of the Board's approval of the Merger Agreement on May 19, 2014), was $8.26 per share. On [        ], 2014, the most recent practicable date before this proxy statement was mailed to our stockholders, the closing price of our Common Stock on the NYSE was $[        ], 2014 per share. You are encouraged to obtain current market quotations for our Common Stock in connection with voting your shares.

        The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share, as reported on the NYSE composite tape, for our Common Stock.

 
  High   Low  

Fiscal Year 2015

             

Fiscal quarter ending:

             

September 30, 2014 (through [        ], 2014)

  $ [        ]   $ [        ]  

Fiscal Year 2014

   
 
   
 
 

Fiscal quarter ending:

             

June 30, 2014

  $ 10.69   $ 7.57  

March 31, 2014

  $ 8.91   $ 6.13  

December 31, 2013

  $ 8.03   $ 6.21  

September 30, 2013

  $ 8.40   $ 6.88  

Fiscal Year 2013

   
 
   
 
 

Fiscal quarter ended:

             

June 30, 2013

  $ 8.55   $ 7.07  

March 31, 2013

  $ 9.25   $ 6.99  

December 31, 2012

  $ 7.00   $ 5.25  

September 30, 2012

  $ 7.35   $ 5.50  

Fiscal Year 2012

   
 
   
 
 

Fiscal quarter ended:

             

June 30, 2012

  $ 11.47   $ 5.74  

March 31, 2012

  $ 13.49   $ 10.65  

December 31, 2011

  $ 11.43   $ 8.50  

September 30, 2011

  $ 18.69   $ 7.69  

        The following table sets forth the closing sales prices per share of our Common Stock, as reported on the NYSE on May 16, 2014, the last trading day prior to the date of the Board's approval of the

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Merger Agreement on May 19, 2014 and on [        ], 2014,the latest practicable date before this proxy statement was mailed to our stockholders.

 
  Common Stock
Closing Price
 

May 16, 2014

  $ 8.26  

[        ], 2014

  $ [        ]  

        There are no shares of the Company's Preferred Stock outstanding or listed for trading on any market. Following the Merger there will be no further market for the Common Stock and our Common Stock will be delisted from the NYSE and deregistered under the Exchange Act.


Dividends

        We do not intend to pay, and the Merger Agreement does not permit us to pay, cash dividends on our Common Stock in the foreseeable future.


Transfer Agent and Registrar

        The transfer agent and registrar for our Common Stock is American Stock Transfer & Trust Company, the telephone number of which is (212) 936-5100.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following information, including stock ownership, is submitted with respect to our directors and each named executive officer and for all executive officers and directors as a group, and, based solely on Schedule 13D and 13G filings with the SEC, for each holder of more than five percent of Common Stock as of [        ], 2014, the most recent practicable date prior to the filing of this proxy statement.

Name and Address of Beneficial Owner(1)
  Common Stock
Beneficially
Owned
  Percent
of Class
 

VGG Holding(2)

    65,000,000     76.3 %

Cobham plc(3)

    65,000,000     76.3 %

Merger Sub(3)

    65,000,000     76.3 %

Veritas Capital Partners III, L.L.C.(2)(4)

    26,668,241     31.3 %

Entities Affiliated with Golden Gate Capital(2)(5)

    15,504,791     18.2 %

GS Direct(2)(6)

    13,024,025     15.3 %

Leonard Borow(7)(8)

    2,940,719     3.5 %

John Buyko(8)

    1,737,063     2.0 %

John Adamovich, Jr.(8)

    326,856     *  

Edward S. Wactlar(8)

    103,881     *  

Andrew F. Kaminsky(8)

    103,522     *  

Hugh Evans(4)

         

Prescott Ashe(5)

         

Joe Benavides(4)

         

Bradley J. Gross(6)

         

John D. Knoll(5)

         

Ramzi M. Musallam(4)

         

Richard N. Nottenburg

    27,563     *  

Benjamin M. Polk(4)

         

Charles S. Ream

    27,063     *  

Mark H. Ronald

    20,063     *  

Peter J. Schoomaker

    22,358     *  

All directors and executive officers as a group (17 persons)

    5,440,005     6.4 %

*
Denotes beneficial ownership of less than 1%.

(1)
Except as otherwise indicated, the address for each of the named beneficial owners is 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622.

(2)
All of the issued and outstanding Common Stock is held by VGG Holding. Veritas Capital Partners III, L.L.C. is the general partner of The Veritas Capital Fund III, L.P., which owns 28.0% of the Class A membership interests of VGG Holding. AX Holding LLC, an affiliate of Veritas Capital Partners III, L.L.C., owns 13.1% of the Class A membership interests of VGG Holding. Affiliates of Golden Gate Private Equity, Inc. own 23.9% of the Class A membership interests of VGG Holding. GS Direct owns 20.0% of the Class A membership interests of VGG Holding. Accordingly, certain stockholders' holdings reflected in the table above reflect indirect beneficial ownership in the Company held through membership interests in VGG Holding. Class A membership interests represent 91.0% of the membership interests of VGG Holding. The Veritas Capital Fund III, L.P., AX Holding LLC, the affiliates of Golden Gate Private Equity, Inc. party to the limited liability company agreement of VGG Holding and GS Direct (collectively, the "Sponsor Holders") have a drag-along right pursuant to the

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(3)
On May 28, 2014, Cobham and Merger Sub filed a Schedule 13D with the SEC in respect of 65,000,000 shares of our Common Stock. As a result of the terms of the Support Agreement, Cobham and Merger Sub may be deemed to have certain shared power to vote and shared power to direct the disposition of the 65,000,000 shares that are the subject of the Support Agreement. Cobham expressly disclaims beneficial ownership of such shares.

(4)
The address for Veritas Capital Partners III, L.L.C. and Messrs. Evans, Benavides, Musallam and Polk is c/o Veritas Capital Fund Management, L.L.C., 590 Madison Avenue, New York, New York 10022. Includes Class A membership interests held by Veritas Capital Partners III, L.L.C. and AX Holding LLC, beneficial ownership of which may be deemed to be held by one or more directors designated by affiliates of those entities. Messrs. Evans, Benavides, Musallam and Polk disclaim beneficial ownership over any Class A membership interests held by Veritas Capital Partners III, L.L.C. and its affiliates, except to the extent of their pecuniary interest therein.

(5)
The address for Golden Gate Private Equity, Inc., its affiliates and Messrs. Ashe and Knoll is One Embarcadero Center, 39th Floor, San Francisco, California 94111. The Class A membership interests are beneficially owned by (a) Golden Gate Capital Investment Fund II, L.P., (b) Golden Gate Capital Investment Annex Fund II, L.P., (c) Golden Gate Capital Investment Fund II (AI), L.P., (d) Golden Gate Capital Investment Annex Fund II (AI), L.P., (e) Golden Gate Capital Associates II-QP, LLC, (f) Golden Gate Capital Associates II-AI, LLC, (g) CCG AV, LLC—Series A, (h) CCG AV, LLC—Series C, (i) CCG AV, LLC—Series I and (j) CCG AV, LLC—Series E (collectively, the "Golden Gate Entities"). The entities listed in clauses (a) through (f) are managed by Golden Gate Capital Management II, L.L.C. ("GGCM II"), and the entities listed in clauses (g) through (j) are managed by Golden Gate Capital Management, L.L.C. ("GGCM," and together with GGCM II, "Golden Gate"). Each of Messrs. Ashe and Knoll is a Managing Director of Golden Gate, and each may be deemed to be the beneficial owner of the interests owned by the Golden Gate Entities. Each of Messrs. Ashe and Knoll disclaims beneficial ownership of any securities owned by the Golden Gate Entities or Golden Gate, except, in each case, to the extent of his pecuniary interest therein.

(6)
Mr. Gross is a managing director of Goldman, Sachs & Co. Goldman, Sachs & Co. is a wholly-owned subsidiary of The Goldman Sachs Group, Inc., a publicly traded company. The Goldman Sachs Group, Inc. and Goldman, Sachs & Co. may be deemed to beneficially own indirectly, in the aggregate, the Class A membership interests of VGG Holding and the shares of Common Stock of the Company that are beneficially owned directly by GS Direct. GS Direct is a wholly-owned subsidiary of The Goldman Sachs Group, Inc. Goldman, Sachs & Co., as the manager of GS Direct, has sole voting and investment power with respect to Class A membership interests of VGG Holding that are beneficially owned directly by GS Direct. The Goldman Sachs Group, Inc., Goldman,

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(7)
The address for Mr. Borow is 3030 S. Horseshoe Drive, Naples, Florida 34104.

(8)
All of the interests in us owned by Messrs. Borow, Buyko, Adamovich, Wactlar and Kaminsky represent indirect interests in us held through Class A, Class B and Class B-1 membership interests in VGG Holding; except that Mr. Borow directly owns 34,907 of the shares beneficially owned by him, Mr. Buyko directly owns 20,190 of the shares beneficially owned by him, Mr. Adamovich directly owns 12,619 of the shares beneficially owned by him, Mr.Wactlar directly owns 38,881 of the shares beneficially owned by him, and Mr. Kaminsky directly owns 38,522 of the shares beneficially owned by him. Mr. Borow owns a 1.5% Class A membership interest and a 3.0% Class B membership interest in VGG Holding, Mr. Buyko owns less than a 1% Class A membership interest and a 2.5% Class B membership interest in VGG Holding and each of Messrs. Adamovich, Kaminsky and Wactlar owns less than a 1% Class A, Class B and/or Class B-1 membership interest in VGG Holding.

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STOCKHOLDER PROPOSALS

        If the Merger is completed, we will not have public stockholders and there will be no public participation in any future meetings of stockholders. However, if the Merger is not completed or if we are otherwise required to do so under applicable law, we would hold a 2014 annual meeting of stockholders. The Company does not currently expect to hold a 2014 annual meeting of stockholders. If the Merger Agreement is terminated and such a meeting is held in 2014, stockholders may propose matters to be presented at the 2014 annual meeting of stockholders and may also nominate a person or persons for election to the Board, in each case in accordance with the requirements stated below.

        A stockholder who wished to introduce a proposal for consideration at the 2014 annual meeting, if such a meeting is held, may have sought to have that proposal included in our proxy statement and proxy card pursuant to Rule 14a-8 under the Exchange Act. For stockholders who wished to present a proposal to be considered for inclusion in our proxy statement and for consideration at the 2014 annual meeting, pursuant to Rule 14a-8 under the Exchange Act, the proposal must have been delivered in writing to Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 no later than June 6, 2014. The proposal must have otherwise satisfied the requirements of Rule 14a-8. The submission of a stockholder proposal does not guarantee that it will be included.

        Under the Company's Bylaws, for stockholders who wish to present a proposal for nominations or other business for consideration at the 2014 annual meeting, if such a meeting is held, but who do not intend for the proposal to be included in our proxy statement, in compliance with applicable state law and our Bylaws, the proposal must be delivered in writing to Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 no earlier than July 18, 2014 and no later than August 17, 2014, or at such times otherwise determined in accordance with the Company's Bylaws, and otherwise comply with the procedures set forth in Section 1.9 of the Company's Bylaws.

        Notwithstanding the foregoing, in the event that the date of the 2014 annual meeting is more than 30 days before or more than 70 days after the first anniversary of the preceding year's annual meeting, the proposal must be in writing and delivered to Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the Company.

        A copy of the Bylaws may be obtained on the SEC's website at http://www.sec.gov.

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HOUSEHOLDING OF SPECIAL MEETING MATERIALS

        Unless we have received contrary instructions, we may send a single copy of this proxy statement and Notice to any household at which two or more stockholders reside if we believe the stockholders are members of the same family. Each stockholder in the household will continue to receive a separate proxy card. This process, known as "householding," reduces the volume of duplicate information received at your household and helps to reduce our expenses.

        If you would like to receive your own set of our disclosure documents this year or in future years, follow the instructions described below. Similarly, if you share an address with another stockholder and together both of you would like to receive only a single set of our disclosure documents, follow these instructions.

        If your shares are registered in your own name, please contact us at our executive offices at Aeroflex Holding Corp., 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622; Attn: Investor Relations or by phone at 516-694-6700, to inform us of your request. If a bank, brokerage firm or other nominee holds your shares, please contact your bank, brokerage firm or other nominee directly.


WHERE YOU CAN FIND MORE INFORMATION

        You may obtain additional information about the Company from documents filed with the SEC. We file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy such material at the SEC's Public Reference Room located at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of such material from the SEC at prescribed rates by writing to the Public Reference Room of the SEC, 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You can also find the Company's SEC filings at the SEC's website at http://www.sec.gov. You may also obtain copies of this proxy statement and any other reports or information that we file with the SEC, free of charge, by written request to Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 or by calling (516) 694-6700.

        Our website is http://aeroflex.com. The information contained on our website is not incorporated into this proxy statement. The following documents can also be obtained from us by written request to Aeroflex Holding Corp., Attn: Secretary, 35 South Service Road, P.O. Box 6022, Plainview, New York 11803-0622 or by calling (516) 694-6700:

Our Executive Code of Ethics, Corporate Governance Guidelines and Code of Business Conduct & Corporate Ethics Policy and the charters of each of our standing Board committees, the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee can also be obtained from the Investor Relations section of our website at http://aeroflex.com.

        THIS PROXY STATEMENT DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH PROXY SOLICITATION IN THAT JURISDICTION. YOU SHOULD

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RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROXY STATEMENT TO VOTE YOUR SHARES OF COMMON STOCK AT THE SPECIAL MEETING. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT IS CONTAINED IN THIS PROXY STATEMENT. THIS PROXY STATEMENT IS DATED [        ], 2014. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROXY STATEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THAT DATE, AND THE MAILING OF THIS PROXY STATEMENT TO STOCKHOLDERS DOES NOT CREATE ANY IMPLICATION TO THE CONTRARY.

        The SEC allows us to "incorporate by reference" into this proxy statement documents we file with the SEC, meaning that we are disclosing important information to you by referring you to another document filed separately with the SEC. Information that we file later with the SEC, prior to the closing of the Merger, will automatically update and supersede the previously filed information and be incorporated by reference into this proxy statement.

        This proxy statement incorporates by reference the documents set forth below that have been previously filed with the SEC:

We also incorporate by reference any documents that may be filed with the SEC between the date of this proxy statement and prior to the date of the Special Meeting. These include periodic reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements (except for information furnished to the SEC that is not deemed to be "filed" for purposes of the Exchange Act).

        Any person, including any beneficial owners, to whom this proxy statement is delivered may request copies of reports, proxy statements or other information concerning us, without charge. Please contact our proxy solicitor, Georgeson, toll-free at (800) 509-0976. If you would like to request documents, please do so by [        ], 2014, in order to receive them by the Special Meeting. In addition, these documents may also be obtained through our website at http://aeroflex.com.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
AEROFLEX HOLDING CORP.

109



ANNEX A

EXECUTION VERSION


AGREEMENT AND PLAN OF MERGER

among

AEROFLEX HOLDING CORP.,

COBHAM PLC

and

ARMY ACQUISITION CORP.

Dated as of May 19, 2014



TABLE OF CONTENTS

 
   
  Page  

Article I

 

The Merger; Closing; Effective Time

 

1.1

 

The Merger

   
A-1
 

1.2

 

Closing

    A-1  

1.3

 

Effective Time

    A-1  

Article II

 

Certificate of Incorporation and Bylaws of the Surviving Corporation

 

2.1

 

The Certificate of Incorporation

   
A-2
 

2.2

 

The Bylaws

    A-2  

Article III

 

Directors and Officers of the Surviving Corporation

 

3.1

 

Directors

   
A-2
 

3.2

 

Officers

    A-2  

Article IV

 

Effect of the Merger on Capital Stock; Exchange of Certificates

 

4.1

 

Effect on Capital Stock

   
A-2
 

4.2

 

Payment

    A-3  

4.3

 

Restricted Stock Units

    A-6  

4.4

 

Adjustments to Prevent Dilution

    A-6  

Article V

 

Representations and Warranties

 

5.1

 

Representations and Warranties of the Company

   
A-6
 

5.2

 

Representations and Warranties of Parent and Merger Sub

    A-26  

Article VI

 

Covenants

 

6.1

 

Interim Operations

   
A-29
 

6.2

 

Acquisition Proposals

    A-32  

6.3

 

Proxy Statement; Parent Shareholder Circular

    A-36  

6.4

 

Company Stockholders Meeting

    A-38  

6.5

 

Parent Shareholders Meeting

    A-38  

6.6

 

Filings; Other Actions; Notification

    A-39  

6.7

 

Access and Reports

    A-42  

6.8

 

Stock Exchange De-listing; Exchange Act Deregistration

    A-43  

6.9

 

Publicity

    A-43  

6.10

 

Employee Benefits

    A-43  

6.11

 

Expenses

    A-45  

6.12

 

Indemnification; Directors' and Officers' Insurance

    A-45  

6.13

 

Takeover Statutes

    A-46  

6.14

 

Financing Cooperation

    A-47  

A-i


 
   
  Page  

6.15

 

Rule 16b-3

    A-48  

6.16

 

Stockholder Litigation

    A-48  

6.17

 

Director Resignations

    A-48  

6.18

 

Control of Operations

    A-48  

6.19

 

Further Assurances

    A-48  

Article VII

 

Conditions

 

7.1

 

Conditions to Each Party's Obligation to Effect the Merger

   
A-49
 

7.2

 

Conditions to Obligations of Parent and Merger Sub

    A-50  

7.3

 

Conditions to Obligation of the Company

    A-51  

7.4

 

Frustration of Closing Conditions

    A-51  

Article VIII

 

Termination

 

8.1

 

Termination by Mutual Consent

   
A-51
 

8.2

 

Termination by Either Parent or the Company

    A-51  

8.3

 

Termination by the Company

    A-52  

8.4

 

Termination by Parent

    A-53  

8.5

 

Effect of Termination and Abandonment

    A-53  

Article IX

 

Miscellaneous and General

 

9.1

 

Survival

   
A-56
 

9.2

 

Modification or Amendment

    A-56  

9.3

 

Waiver of Conditions

    A-56  

9.4

 

Counterparts; Effectiveness

    A-56  

9.5

 

Governing Law and Venue; Waiver of Jury Trial; Remedies

    A-56  

9.6

 

Notices

    A-58  

9.7

 

Entire Agreement

    A-59  

9.8

 

No Third Party Beneficiaries

    A-59  

9.9

 

Obligations of Parent and of the Company

    A-60  

9.10

 

Transfer Taxes

    A-60  

9.11

 

Definitions

    A-60  

9.12

 

Severability

    A-60  

9.13

 

Interpretation; Construction

    A-60  

9.14

 

Assignment

    A-60  

9.15

 

No Recourse

    A-61  

Annex A

 

Table of Defined Terms

       

Annex B

 

Form of Surviving Corporation Certificate of Incorporation

       

Annex C

 

Form of Support Agreement

       

A-ii



AGREEMENT AND PLAN OF MERGER

        THIS AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"), dated as of May 19, 2014, among Aeroflex Holding Corp., a Delaware corporation (the "Company"), Cobham plc, a public limited company organized under the laws of England and Wales ("Parent"), and Army Acquisition Corp., a Delaware corporation and an indirect wholly-owned subsidiary of Parent ("Merger Sub").


RECITALS

        WHEREAS, the board of directors of the Company (the "Company Board") and the respective boards of directors of Parent (the "Parent Board") and Merger Sub have approved the merger of Merger Sub with and into the Company, with the Company as the surviving corporation in the merger (the "Merger") upon the terms and subject to the conditions set forth in this Agreement and have approved and declared advisable this Agreement.

        WHEREAS, the Company, Parent and Merger Sub desire to make certain representations, warranties, covenants and agreements specified herein in connection with this Agreement.

        WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to the willingness of Parent and Merger Sub to enter into this Agreement, Parent and VGG Holding LLC, a Delaware limited liability company, is entering into a voting and support agreement (the "Support Agreement"), the form of which is attached hereto as Annex A.

        NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows:


ARTICLE I

THE MERGER; CLOSING; EFFECTIVE TIME

        1.1    The Merger.     Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company, in accordance with the provisions of the Delaware General Corporation Law, as amended (the "DGCL"), and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (sometimes hereinafter referred to as the "Surviving Corporation"), and the separate corporate existence of the Company, with all its rights, privileges, immunities, powers and franchises, shall continue under the DGCL unaffected by the Merger, except as set forth in Article II. The Merger shall have the effects set forth in this Agreement and in the applicable provisions of the DGCL.


        1.2
    Closing.     Unless otherwise mutually agreed in writing between the Company and Parent, the closing of the Merger (the "Closing") shall take place at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York, at 9:00 a.m. (New York time) on the third (3rd) business day (the "Closing Date") following the day on which the last to be satisfied or waived (to the extent permitted by applicable Law) of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied by actions to be taken at the Closing, but subject to the fulfillment or waiver (to the extent permitted by applicable Law) of those conditions) shall be satisfied or waived in accordance with this Agreement. For purposes of this Agreement, the term "business day" shall mean any day other than a Saturday or Sunday or a day on which banks are required or authorized by Law or executive order to close in New York, New York or London, England.


        1.3
    Effective Time.     Subject to the provisions of this Agreement, at the Closing, the Company shall cause the Merger to be consummated by causing a certificate of merger (the "Certificate of Merger") to be executed, acknowledged and filed with the Secretary of State of the State of Delaware

A-1


in accordance with Section 251 of the DGCL, and shall make all other filings, recordings or publications required under the DGCL in connection with the Merger. The Merger shall become effective at the time when the Certificate of Merger has been duly filed with, and accepted for record by, the office of the Secretary of State of the State of Delaware in accordance with the DGCL, or at such later time or date as the Company and Parent shall agree in writing and specify in the Certificate of Merger in accordance with applicable Law (the effective time of the Merger being hereinafter referred to as the "Effective Time").


ARTICLE II

CERTIFICATE OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION

        2.1    The Certificate of Incorporation.     The certificate of incorporation of the Company shall be amended in the Merger to be identical to that set forth on Annex B attached hereto (the "Charter") and, as so amended, shall be the certificate of incorporation of the Surviving Corporation until thereafter amended as provided therein and in accordance with the applicable provisions of the DGCL (subject to Section 6.12).


        2.2
    The Bylaws.     The by-laws of Merger Sub in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation (the "Bylaws"), until thereafter amended as provided therein and in accordance with the applicable provisions of the DGCL (subject to Section 6.12).


ARTICLE III

DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION

        3.1    Directors.     The parties hereto shall take, and cause to be taken, all actions necessary so that the directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be the initial directors of the Surviving Corporation, each to hold office until their respective successors have been duly elected or appointed and qualified or until their earlier death, incapacitation, retirement, resignation or removal in accordance with the Charter and the Bylaws.


        3.2
    Officers.     The officers of the Company at the Effective Time shall, from and after the Effective Time, be the initial officers of the Surviving Corporation, each to hold office until their respective successors shall have been duly elected or appointed and qualified or until their earlier death, incapacitation, retirement, resignation or removal in accordance with the Charter and the Bylaws.


ARTICLE IV

EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES

        4.1    Effect on Capital Stock.     At the Effective Time, as a result of the Merger and without any action on the part of the Company, Merger Sub, the holder of any capital stock of the Company or the sole stockholder of Merger Sub:

A-2



        4.2
    Payment.     

A-3


A-4


A-5



        4.3
    Restricted Stock Units.     At the Effective Time, each restricted stock unit granted under the Stock Plan (an "RSU") and each performance restricted stock unit granted under the Stock Plan (a "PRSU"), in each case that is outstanding immediately prior to the Effective Time, shall fully vest and be cancelled and shall only entitle the holder thereof to receive, as soon as reasonably practicable after the Effective Time (but in any event no later than three (3) business days after the Effective Time), an amount in cash equal to the product of (x) the total number of Shares subject to such RSU or PRSU, as applicable, immediately prior to the Effective Time and (y) the Per Share Merger Consideration, less applicable Taxes required to be withheld with respect to such payment; provided, that, with respect to the PRSUs, the total number of Shares subject thereto for purposes of this sentence shall be equal to the sum of (i) the accrued and "banked" shares plus (ii) the number of shares subject to the current fiscal year and prospective fiscal years assuming achievement of the applicable performance goals at the one-hundred percent (100%) level. At or prior to the Effective Time, the Company, the Company Board and the compensation committee of the Company Board (or another committee duly authorized by the Company Board for such purpose), as applicable, shall (i) adopt any resolutions as may be necessary to implement the provisions of this Section 4.3 and (ii) if requested by Parent, adopt any resolutions as may be necessary to terminate the Stock Plan, effective as of the Effective Time, and (iii) if determined by Parent in good faith to be necessary to effectuate the treatment set forth herein, use reasonable best efforts to obtain the written consent of each holder of a RSU or PRSU to the treatment set forth herein; provided that the Company shall provide Parent with a reasonable advance opportunity to review any resolutions or other documents in respect of the actions described in this sentence and will implement any reasonable comments that are timely provided by Parent in respect hereof.


        4.4
    Adjustments to Prevent Dilution.     In the event that the Company changes the number of Shares issued and outstanding prior to the Effective Time, including as a result of a reclassification, stock split (including a reverse stock split), stock dividend or distribution, recapitalization, merger, issuer tender or exchange offer or other similar transaction, the Per Share Merger Consideration shall be equitably adjusted to reflect such change and as so adjusted shall, from and after the date of such event, be the Per Share Merger Consideration. Nothing in this Section 4.4 shall be construed to permit any party to take any action that is otherwise prohibited or restricted by any other provision of this Agreement.


ARTICLE V

REPRESENTATIONS AND WARRANTIES

        5.1    Representations and Warranties of the Company.     Except as set forth in the Company Reports (as defined in Section 5.1(e), but excluding any risk factor disclosures contained under the heading "Risk Factors", any disclosure of risks included or referenced in any "forward-looking statements" disclaimer or any other forward-looking or precautionary statements of risk) filed with the Securities and Exchange Commission (the "SEC") on or after July 1, 2011 and prior to the date of this

A-6


Agreement or in the corresponding sections or subsections of the disclosure letter delivered to Parent by the Company prior to entering into this Agreement (the "Company Disclosure Schedule") (it being agreed that disclosure of any item in any section or subsection of the Company Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection only to the extent the applicability of such disclosure is reasonably apparent on its face), the Company hereby represents and warrants to Parent and Merger Sub that:

A-7


A-8


A-9


A-10


A-11


A-12


A-13


A-14


A-15


A-16


A-17


A-18


A-19


A-20


A-21


A-22


A-23


A-24


A-25



        5.2
    Representations and Warranties of Parent and Merger Sub.     Parent and Merger Sub each hereby represent and warrant to the Company that:

A-26


A-27


A-28



ARTICLE VI

COVENANTS

        6.1    Interim Operations.     

A-29


A-30


A-31



        6.2
    Acquisition Proposals.     

A-32


A-33


A-34


A-35



        6.3
    Proxy Statement; Parent Shareholder Circular.     

A-36


A-37


        6.4    Company Stockholders Meeting.    Unless this Agreement has been terminated pursuant to Article VIII, the Company will take, in accordance with applicable Law and its certificate of incorporation and bylaws and the rules of the NYSE, all action necessary to duly call, give notice of, convene and hold a meeting of holders of Shares (the "Company Stockholders Meeting") as promptly as reasonably practicable after the date of mailing of the Proxy Statement for the purpose of obtaining the Requisite Company Vote, with the record date and meeting date of the Company Stockholders Meeting to be selected after reasonable consultation with Parent; provided, however, for the avoidance of doubt, the Company may postpone or adjourn the Company Stockholders Meeting solely (i) with the written consent of Parent; (ii) due to the absence of a quorum; (iii) to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Company Board has determined in good faith after consultation with outside counsel and Parent is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by the Company's stockholders prior to the Company Stockholders Meeting; or (iv) if the Company has provided a written notice to Parent and Merger Sub pursuant to Section 6.2(d)(A) or the proviso immediately following Section 6.2(d)(C) hereof and the time period contemplated by Section 6.2(d)(A) or such proviso with respect to such notice has not yet expired. Subject to Section 6.2, the Company Board shall recommend such adoption and shall use its reasonable best efforts to solicit the Requisite Company Vote.


        6.5
    Parent Shareholders Meeting.     Unless this Agreement has been terminated pursuant to Article VIII, Parent will take, in accordance with the U.K. Companies Act 2006 and the Listing Rules and its constitution, all action necessary to give notice of and hold a general meeting of its shareholders (the "Parent Shareholders Meeting") as promptly as reasonably practicable after the date of mailing of the Parent Shareholder Circular for the purpose of obtaining the Requisite Parent Vote, with the record date and meeting date of the Parent Shareholders Meeting to be selected after reasonable consultation with the Company; provided, however, for the avoidance of doubt, Parent may postpone or adjourn the Parent Shareholders Meeting only (i) with the written consent of the Company, (ii) due to the absence of a quorum, (iii) if, in the good faith opinion of the chairman of the Parent Shareholders Meeting or the Parent Board, it would reasonably facilitate the conduct of the business of the Parent

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Shareholders Meeting, (iv) to protect the safety of any person attending the Parent Shareholder Meeting or ensure that its business is conducted in an orderly manner, (v) if directed to do so by the Parent Shareholders Meeting, or (vi) to allow a reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Parent Board has determined in good faith after consultation with outside legal counsel and the Company is necessary under applicable Law and for such supplemental or amended disclosure to be disseminated and reviewed by Parent's shareholders prior to the Parent Shareholders Meeting. Subject to Section 6.3(g), the Parent Board shall make the Parent Recommendation at the Parent Shareholders Meeting and shall use its reasonable best efforts to solicit the Requisite Parent Vote.


        6.6
    Filings; Other Actions; Notification.     

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        6.7
    Access and Reports.     

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        6.8
    Stock Exchange De-listing; Exchange Act Deregistration.     Prior to the Effective Time, the Company shall cooperate with Parent and use its commercially reasonable efforts to take, or cause to be taken, all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of the NYSE and SEC to enable the de-listing by the Surviving Corporation of the Common Stock from the NYSE and the deregistration of the Common Stock under the Exchange Act as promptly as practicable after the Effective Time.


        6.9
    Publicity.     The Company and Parent each shall consult with each other prior to issuing any press releases or otherwise making public announcements (unless and until a Company Change of Recommendation or a Parent Change of Recommendation has occurred or in connection with Section 6.2(d)) with respect to the Merger and the other transactions contemplated by this Agreement and prior to making any filings with any third party and/or any Governmental Entity (including any national securities exchange) with respect thereto, and, to the extent practicable, none of the parties or their Affiliates shall issue any such press release or make any such public announcement or such filing prior to obtaining the other party's written consent (which consent shall not be unreasonably withheld, conditioned or delayed), except that no such consent shall be required to the extent prohibited by applicable Law or by obligations pursuant to any listing agreement with or rules of any national securities exchange or by the written request of any Governmental Entity.


        6.10
    Employee Benefits.     

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        6.11
    Expenses.     Except as otherwise provided in Section 8.5, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement, the Support Agreement and the Merger and the other transactions contemplated by this Agreement and the Support Agreement shall be paid by the party incurring such expense, except (a) Parent's reimbursement obligations pursuant to Section 6.14 and (b) Parent's indemnification obligations pursuant to Sections 6.14. Any amounts that may be owed by Parent for reimbursement pursuant to clauses (a) and (b) of the preceding sentence shall be payable in one lump-sum following final calculation and documentation (in a manner reasonably satisfactory to Parent) of the total amount of such fees and expenses incurred.


        6.12
    Indemnification; Directors' and Officers' Insurance.     

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        6.13
    Takeover Statutes.     If any Takeover Statute is or may become applicable to the Merger or the other transactions contemplated by this Agreement or the Support Agreement, the Company and the Company Board shall grant such approvals and take such actions as are necessary so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement and the Support Agreement and otherwise act to eliminate or minimize the effects of such statute or regulation on such transactions.

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        6.14
    Financing Cooperation.     Prior to the Closing, the Company shall, and shall cause its Subsidiaries to, use commercially reasonable efforts to provide to Parent and Merger Sub, at Parent's sole expense, all cooperation reasonably requested by Parent in connection with obtaining financing in connection with the Merger (so long as such cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries), including

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        6.15
    Rule 16b-3.     Prior to the Effective Time, the Company shall take such steps as may be reasonably requested by any party hereto to cause dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated hereby by each individual who is a director or officer of the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.


        6.16
    Stockholder Litigation.     The Company shall give Parent the opportunity to participate in the defense or settlement of any stockholder litigation against the Company and/or its directors arising after the date hereof as a result of the transactions contemplated by this Agreement or the Support Agreement, and unless such settlement is solely for monetary damages entirely paid for with proceeds of insurance (other than the deductible under insurance policy(ies) in effect as of the date hereof), no such settlement shall be agreed to without Parent's prior written consent (such consent not to be unreasonably withheld, conditioned or delayed, it being understood that, in determining whether to consent, Parent is required only to consider its own interests relating to such settlement).


        6.17
    Director Resignations.     Prior to the Closing, the Company shall deliver to Parent written resignations executed by each director of the Company in office immediately prior to the Effective Time, which resignations shall be effective at the Effective Time and which resignations shall not have been revoked.


        6.18
    Control of Operations.     Nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company's operations prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.


        6.19
    Further Assurances.     At and after the Effective Time, the officers and directors of the Surviving Corporation shall be authorized to execute and deliver, in the name and on behalf of the Company or Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company or Merger Sub, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Corporation any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Corporation as a result of, or in connection with, the Merger.

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ARTICLE VII

CONDITIONS

        7.1    Conditions to Each Party's Obligation to Effect the Merger.     The respective obligations of each party to effect the Merger are subject to the satisfaction or waiver (in writing by Parent and the Company) at or prior to the Effective Time of each of the following conditions:

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        7.2
    Conditions to Obligations of Parent and Merger Sub.     The obligations of Parent and Merger Sub to effect the Merger are also subject to the satisfaction or waiver (in writing by Parent) at or prior to the Effective Time of the following conditions:

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        7.3
    Conditions to Obligation of the Company.     The obligations of the Company to effect the Merger are also subject to the satisfaction or waiver (in writing by the Company) at or prior to the Effective Time of the following conditions:


        7.4
    Frustration of Closing Conditions.     None of the Company, Parent or Merger Sub may rely on the failure of any condition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be satisfied if such failure was caused by such party's material breach of any provision of this Agreement or breach of the requirement to use efforts, including as required by and subject to Sections 6.6.


ARTICLE VIII

TERMINATION

        8.1    Termination by Mutual Consent.     This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the time the Requisite Company Vote is obtained, by mutual written consent of the Company and Parent by action of their respective boards of directors.


        8.2
    Termination by Either Parent or the Company.     This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the time the Requisite Company Vote is obtained, by action of either the Parent board of directors or the Company Board if:

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        8.3
    Termination by the Company.     This Agreement may be terminated and the Merger may be abandoned by the Company by action of the Company Board:

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        8.4
    Termination by Parent.     This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by action of the board of directors of Parent:


        8.5
    Effect of Termination and Abandonment.     

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ARTICLE IX

MISCELLANEOUS AND GENERAL

        9.1    Survival.     This Article IX and the agreements of the Company, Parent and Merger Sub contained in Article IV and Sections 6.11 (Expenses) and 6.12 (Indemnification; Directors' and Officers' Insurance) and the indemnification obligations of Parent pursuant to Section 6.14 (Financing) shall survive the consummation of the Merger. This Article IX and the agreements of the Company, Parent and Merger Sub contained in Section 6.11 (Expenses), the indemnification and reimbursement provisions of Section 6.14 (Financing) and Section 8.5 (Effect of Termination and Abandonment) and the Confidentiality Agreement shall survive the termination of this Agreement (in the case of the Confidentiality Agreement, subject to the terms thereof). All other representations, warranties, covenants and agreements in this Agreement shall not survive the consummation of the Merger or the termination of this Agreement.


        9.2
    Modification or Amendment.     Subject to the provisions of the applicable Laws, at any time prior to the Effective Time, the parties hereto may modify or amend this Agreement, by written agreement executed and delivered by duly authorized officers of the respective parties, whether before or after Parent shareholder approval or Company stockholder approval hereof; provided, however, after Parent shareholder approval or Company stockholder approval hereof, no amendment shall be made which by Law requires the further approval of such shareholders or stockholders, as applicable, without such further approval.


        9.3
    Waiver of Conditions.     The conditions to each of the parties' obligations to consummate the Merger are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable Laws.


        9.4
    Counterparts; Effectiveness.     This Agreement may be executed in counterparts (including by facsimile, by electronic mail in "portable document format" (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document), each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. This Agreement shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy, facsimile, electronic mail, .pdf or otherwise as authorized by the prior sentence) to the other parties.


        9.5
    Governing Law and Venue; Waiver of Jury Trial; Remedies.     

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        9.6
    Notices.     Any notice, request, instruction, service of process or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, first-class postage prepaid (with return receipt requested), by facsimile, by reliable overnight courier or by electronic mail (including by .pdf format attachment):

If to Parent or Merger Sub:

 

Cobham plc
Brook Road
Wimborne, Dorset, BH21 2BJ, UK

  Attention:   Company Secretary

  Facsimile:   +44 (0) 1202 840523

  Email:   Lyn.colloff@cobham.com

with a copy to (which shall not constitute notice):

 

Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036

  Attention:   Peter Allan Atkins, Esq.
Eric L. Cochran, Esq.

  Facsimile:   (212) 735-2000

  Email:   Peter.Atkins@Skadden.com
Eric.Cochran@Skadden.com

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If to the Company:

 

Aeroflex Holding Corp.
35 South Service Road
Plainview, New York 11803

  Attention:   Edward S. Wactlar, Senior Vice President and General Counsel

  Facsimile:   (516) 694-0658

  Email:   edward.wactlar@aeroflex.com

with a copy to (which shall not constitute notice):

 

Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022

  Attention:   John M. Pollack

  Facsimile:   (212) 593-5955

  Email:   John.Pollack@srz.com

or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above. Any notice, request, instruction or other document given as provided above shall be deemed given to the receiving party upon actual receipt, if delivered personally; three (3) business days after deposit in the mail, if sent by registered or certified mail; upon confirmation of successful transmission if sent by facsimile or electronic mail (provided that, if given by facsimile or electronic mail, such notice, request, instruction or other document shall be followed up within one (1) business day by dispatch pursuant to one of the other methods described herein); or on the next business day after deposit with an overnight courier, if sent by an overnight courier.


        9.7
    Entire Agreement.     This Agreement (including any exhibits hereto), the Company Disclosure Schedule and the letter agreement, dated February 4, 2014, as amended to date, between Parent and the Company (the "Confidentiality Agreement"), constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereof.


        9.8
    No Third Party Beneficiaries.     This Agreement is not intended to, and shall not, confer upon any other Person any rights or remedies hereunder, except (a) as set forth in or contemplated by the terms and provisions of Section 6.12, and (b) from and after the Effective Time, the rights of Record Holders to receive the Per Share Merger Consideration set forth in Article IV. Except as provided above in this Section 9.8 or as set forth in or contemplated by the terms and provisions of Section 6.12, Parent, Merger Sub and the Company hereby agree that their respective representations, warranties and covenants set forth herein are solely for the benefit of the other party hereto, in accordance with and subject to the terms of this Agreement, and this Agreement is not intended to, and does not, confer upon any Person (including any Person claiming any rights arising from or through the parties hereto) other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties and covenants set forth herein. The parties hereto further agree that the rights of third party beneficiaries under clause (b) of this Section 9.8 and Section 6.12 shall not arise unless and until the Effective Time occurs. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

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        9.9
    Obligations of Parent and of the Company.     Whenever this Agreement requires a Subsidiary of Parent to take any action, such requirement shall be deemed to include an undertaking on the part of Parent to cause such Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of the Company to take any action, such requirement shall be deemed to include an undertaking on the part of the Company to cause such Subsidiary to take such action and, after the Effective Time, on the part of the Surviving Corporation to cause such Subsidiary to take such action.


        9.10
    Transfer Taxes.     All transfer, documentary, sales, use, stamp, registration and other such similar Taxes and fees (including penalties and interest) incurred in connection with the Merger shall be paid by Parent and Merger Sub when due.


        9.11
    Definitions.     For convenience of reference only, each of the terms set forth in Annex C is defined in the Section of this Agreement set forth opposite such term.


        9.12
    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. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.


        9.13
    Interpretation; Construction.     


        9.14
    Assignment.     Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this Agreement to Parent or to any direct or indirect wholly-owned subsidiary of Parent and Parent and Merger Sub may so assign to any parties providing debt financing to the Surviving Corporation for purposes of creating a security interest herein or otherwise assigning as collateral in respect of such debt financing, but no such assignment shall relieve the assigning party of its obligations hereunder. Subject to the preceding

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sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, and any assignee thereof, to perform its obligations under this Agreement and shall be responsible for any failure of Merger Sub or such assignee to comply with any representation, warranty, covenant or other provision required to be performed on or prior to the Closing, under this Agreement. Any purported assignment in violation of this Agreement is void.


        9.15
    No Recourse.     This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto (including any third party beneficiaries hereto) and none of (a) Parent's or any of its Affiliates' stockholders, members, managers, directors, officers, employees, agents, representatives, financing sources or assignees of any of the foregoing (collectively, the "Parent Related Parties") or (b) the Company's or any of its Affiliates' stockholders, members, managers, directors, officers, employees, agents, representatives, financing sources or assignees of any of the foregoing (collectively, the "Company Related Parties"), in each case, shall have any liability for any obligations or liabilities of the other parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any oral representations made or alleged to be made in connection herewith, except in each case as pursuant to the Support Agreement. Without limiting the rights of the parties hereunder against the other parties to the Agreement, in no event shall (i) the Company or any of its Affiliates, and the Company agrees not to and to cause its Affiliates not to, seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Parent Related Party, or (ii) Parent, Merger Sub or any of their respective Affiliates, and Parent and Merger Sub agree not to and to cause their respective Affiliates not to, seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Company Related Party, except pursuant to the Support Agreement.

[Signature page follows]

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        IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first written above.

    AEROFLEX HOLDING CORP.

 

 

By:

 

/s/ LEONARD BOROW

        Name:   Leonard Borow
        Title:   President and Chief Executive Officer

 

 

COBHAM PLC

 

 

By:

 

/s/ BOB MURPHY

        Name:   Bob Murphy
        Title:   Chief Executive Officer

 

 

ARMY ACQUISITION CORP.

 

 

By:

 

/s/ SIMON NICHOLLS

        Name:   Simon Nicholls
        Title:   President

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Annex A

DEFINED TERMS

2014 Bonus   6.10(f)
Acquisition Proposal   8.5(b)(i), 6.2(c)
Affiliate   5.1(a)(ii)
Agreement   Preamble
Alternative Acquisition Agreement   6.2(d)(iii)
Anti-Bribery Acts   5.1(j)(i)
Antitrust Law   6.6(a)
Applicable Date   5.1(e)(i)
Bankruptcy and Equity Exception   5.1(c)(i)
Benefit Plans   5.1(h)(i)
Bid   5.1(t)
Bonus Administrator   6.10(f)
business day   1.2
Bylaws   2.2
Certificate   4.1(a)
Certificate of Merger   1.3
CFIUS   6.6(a)
Charter   2.1
Chosen Courts   9.5(a)
Closing   1.2
Closing Date   1.2
Code   4.2(g)
Collective Bargaining Agreement   5.1(i)
Common Stock   4.1(a)
Company   Preamble
Company Adverse Recommendation Change   6.2(d)(ii)
Company Board   Recitals
Company Change of Recommendation   6.2(d)(v)
Company Disclosure Schedule   5.1
Company Group   5.1(h)(i)
Company Material Adverse Effect   5.1(a)(ii)
Company Recommendation   5.1(c)(ii)
Company Related Parties   9.15
Company Reports   5.1(e)(i)
Company Stockholders Meeting   6.4
Company Termination Fee   8.5(b)(iv)
Completion of CFIUS Process   7.1(c)(iii)
Confidentiality Agreement   9.7
Contract   5.1(d)(i)
control   5.1(a)(ii)
Copyrights   5.1(n)(ii)
D&O Insurance   6.12(c)
DGCL   1.1
Dissenting Shares   4.2(f)
Dissenting Stockholders   4.2(f)
DSS   6.6(a)
DTC   4.2(b)(iii)

Annex A-1


DTC Payment   4.2(b)(iii)
Effective Time   1.3
Employees   5.1(h)(i)
Environmental Law   5.1(l)(vi)
Environmental Permits   5.1(l)(ii)
ERISA   5.1(h)(i)
Exchange Act   5.1(d)(ii)
Exchange Fund   4.2(a)
Excluded Share   4.1(a)
Excluded Shares   4.1(a)
Existing Credit Facility   6.14(j)
FCA   5.2(c)(ii)
FCPA   5.1(j)(i)
Fiscal 2015 Bonus Plans   6.10(e)
Foreign Antitrust Laws   5.1(d)(ii)
GAAP   5.1(e)(v)
Government Contract   5.1(t)
Governmental Entity   5.1(d)(ii)
Hazardous Substance   5.1(l)(vi)
HSR Act   5.1(d)(ii)
Indebtedness   5.1(s)(i)
Indemnified Parties   6.12(a)
Insurance Policies   5.1(o)
Intellectual Property   5.1(n)(ii)
IRS   5.1(h)(ii)
Joint Notice   6.6(e)(i)
Knowledge   5.1(g)(iii)
Laws   5.1(j)(i)
Lease   5.1(q)(ii)
Leases   5.1(q)(ii)
Licenses   5.1(j)(i)
Lien   5.1(b)(i)
Listing Rules   6.3(b)
Material Contract   5.1(s)(i)
Merger   Recitals
Merger Sub   Preamble
NISPOM   5.1(j)(i)
Non-U.S. Benefit Plan   5.1(h)(i)
North America SSA   6.6(e)(i)
NYSE   5.1(d)(ii)
OFAC   5.1(j)(iii)
Order   7.1(d)
Other Service Providers   5.1(h)(i)
Owned Real Property   5.1(q)(i)
Parent   Preamble
Parent Board   Recitals
Parent Change of Recommendation   6.3(g)
Parent Change of Recommendation Termination Fee   8.5(c)
Parent Expenses   8.5(f)
Parent Recommendation   5.2(b)(ii)
Parent Related Parties   9.15

Annex A-2


Parent Shareholder Circular   5.2(c)(ii)
Parent Shareholders Meeting   6.5
Parent Termination Fees   8.5(c)
Parent Vote Termination Fee   8.5(c)
Patents   5.1(n)(ii)
Paying Agent   4.2(a)
Per Share Merger Consideration   4.1(a)
Permitted Liens   5.1(q)(iv)
Person   4.2(d)
Preferred Stock   5.1(b)(i)
Proscribed Information Arrangements   5.1(u)
Proxy Statement   6.3(a)
PRSU   4.3
Qualifying Proposal   8.5(b)(i)
Record Holder   4.1(b)
Registered Intellectual Property   5.1(n)(i)
Representatives   6.2(a)
Requisite Company Vote   5.1(c)(i)
Requisite Merger Sub Vote   5.2(b)(i)
Requisite Parent Vote   5.2(b)(i)
RSU   4.3
Sarbanes-Oxley Act   5.1(e)(i)
SDNs   5.1(j)(iv)
SEC   5.1
Securities Act   5.1(b)(i)
Share   4.1(a)
Shares   4.1(a)
Stock Plan   5.1(b)(i)
Subsidiary   5.1(a)(ii)
Superior Proposal   6.2(c)
Surviving Corporation   1.1
Takeover Statutes   5.1(k)(i)
Tax   5.1(m)(viii)
Tax Authority   5.1(m)(viii)
Tax Law   5.1(m)(viii)
Tax Return   5.1(m)(viii)
Taxes   5.1(m)(viii)
Termination Date   8.2(a)
Trade Secrets   5.1(n)(ii)
Trademarks   5.1(n)(ii)
U.S. Benefit Plans   5.1(h)(ii)
Support Agreement   1

Annex A-3



Annex B

CERTIFICATE OF INCORPORATION
OF
AEROFLEX HOLDING CORP.

        FIRST:    The name of the Corporation is Aeroflex Holding Corp. (the "Corporation").

        SECOND:    The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, 19808. The name of its registered agent at that address is The Corporation Service Company.

        THIRD:    The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the "DGCL").

        FOURTH:    The total number of shares of stock which the Corporation shall have authority to issue is One Hundred (100) shares of Common Stock, each having a par value of one cent ($0.01).

        FIFTH:    The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

        SIXTH:    Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation may be kept (subject to any provision contained in the DGCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.

        SEVENTH:    The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

Annex B-1



Annex C

SUPPORT AGREEMENT

        This SUPPORT AGREEMENT (this "Agreement"), dated as of May 19, 2014, by and among Cobham plc, a public limited company organized under the laws of England and Wales ("Parent"), Army Acquisition Corp., a Delaware corporation and an indirect wholly owned Subsidiary of Parent ("Merger Sub"), VGG Holding LLC, a Delaware limited liability company (the "Stockholder"), and each of the Persons listed on Annex I hereto (such Persons listed on Annex I hereto, collectively, the "Significant Holders"). Capitalized terms used but not defined herein have the meanings assigned to them in that certain Agreement and Plan of Merger, dated as of the date of this Agreement (the "Merger Agreement"), by and among Parent, Merger Sub and Aeroflex Holding Corp., a Delaware corporation (the "Company").


RECITALS

        WHEREAS, as of the date hereof, Stockholder is the record and beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of 65,000,000 shares of common stock, par value $0.01 per share, of the Company (the "Shares") (all such Shares which are outstanding as of the date hereof and which may hereafter be acquired pursuant to acquisition by purchase, transfer, assignment, stock dividend, distribution, stock split, split-up, combination, merger, consolidation, reorganization, recapitalization, combination or similar transaction, being referred to herein as the "Subject Shares"), which shares represent approximately 76.28% of the outstanding voting power in the Company;

        WHEREAS, as of the date hereof, the Significant Holders collectively own equity interests in Stockholder representing 83.5% of the outstanding ownership interests in Stockholder;

        WHEREAS, concurrently with the execution and delivery of this Agreement, Parent, Merger Sub and the Company are entering into the Merger Agreement, a copy of which has been made available to Stockholder and the Significant Holders, which provides for, among other things, the merger of Merger Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth therein; and

        WHEREAS, as a condition to Parent's and Merger Sub's willingness to enter into the Merger Agreement, Parent and Merger Sub have required that Stockholder and the Significant Holders, and in order to induce Parent and Merger Sub to enter into the Merger Agreement, Stockholder and the Significant Holders have agreed to, enter into this Agreement.

        NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:


ARTICLE I

AGREEMENTS OF STOCKHOLDER AND SIGNIFICANT HOLDERS

        1.1    Voting of Subject Shares.     Stockholder irrevocably and unconditionally agrees that Stockholder shall, and the Significant Holders shall cause Stockholder to, (x) not call, or cause the Company to call, any special meeting of the holders of Shares (or any adjournment thereof) and (y) at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) or any action by written consent without a meeting of the holders of Shares, however called (each, a "Company Stockholders Meeting"):

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        1.2
    No Inconsistent Agreements.     Stockholder and the Significant Holders hereby covenant and agree as follows: Stockholder has not, except for this Agreement, the Amended and Restated Loan Agreement, dated as of December 23, 2013, between Stockholder and Credit Suisse AG, Cayman Islands Branch (as successor in interest to Credit Suisse AG, New York Branch (the "Lender") (as in effect as of the date hereof, the "Loan Agreement"), the Amended and Restated Security and Pledge Agreement, dated as of December 23, 2013, between Stockholder and the Lender (as in effect as of the date hereof, the "Security and Pledge Agreement"), and except as may be explicitly permitted by Section 1.8(b) of this Agreement, (a) entered into, and shall not, and the Significant Holders shall cause Stockholder not to, enter into any voting agreement or voting trust with respect to the Subject Shares with respect to any of the matters described in Section 1.1(b) (the "Section 1.1(b) Matters"), (b) granted, and shall not, and the Significant Holders shall cause Stockholder not to, grant, a proxy, consent or power of attorney with respect to the Subject Shares with respect to any of the Section 1.1(b) Matters, or (c) taken, and shall not, and the Significant Holders shall cause Stockholder not to, take any action that would make any representation or warranty of Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling Stockholder from performing any of its obligations under this Agreement.

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        1.3
    No Proxies for, Transfer of or Encumbrances on Subject Shares.     


        1.4
    Stock Dividends, etc.     In the event of a stock split, stock dividend or distribution, or any change in the Shares by reason of any split-up, reverse stock split, recapitalization, combination, reclassification, reincorporation, exchange of shares or the like, the term "Subject Shares" shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.


        1.5
    Disclosure of Information.     The Significant Holders and Stockholder hereby (a) consent to and authorize the publication and disclosure by Parent or the Company of such Person's identity and record or beneficial ownership of Subject Shares, the nature of Stockholder's and the Significant Holders' commitments, arrangements and understandings under this Agreement and any other information, in each case, to the extent it is required to be disclosed by applicable Law in any press release, proxy statement, information statement, shareholder circular or any other disclosure document in connection with the Merger and the transactions contemplated by the Merger Agreement; and (b) agree promptly to provide Parent and the Company with any information that in the reasonable determination of Parent or the Company is required for inclusion in any such disclosure documents (provided that the foregoing shall not require Stockholder or any Significant Holder, as applicable, to disclose (i) any information, that in its reasonable judgment, would result in the disclosure of any trade secrets of third parties or violate any of its confidentiality obligations owed to third parties; or (ii) any information that would, in its reasonable judgment, waive the protection of attorney-client privilege if Stockholder or such Significant Holder, as applicable, shall have used reasonable best efforts to disclose such information in a way that would not waive such privilege. Parent hereby (x) consents to and

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authorizes the publication and disclosure by Stockholder, any Significant Holder or the Company of Parent's identity, the nature of Parent's commitments, arrangements and understandings under this Agreement and any other information, in each case, solely to the extent it is required to be disclosed by applicable Law in any press release, proxy statement, information statement, shareholder circular or any other disclosure document in connection with the Merger and the transactions contemplated by the Merger Agreement and (y) agrees promptly to provide Stockholder, any Significant Holder and the Company with any information that in the reasonable determination of such Person is required for inclusion in any such disclosure documents (provided that the foregoing shall not require Parent or Merger Sub to disclose (i) any information, that in the reasonable judgment of Parent, would result in the disclosure of any trade secrets of third parties or violate any of its confidentiality obligations owed to third parties; or (ii) any information that would, in the reasonable judgment of Parent, waive the protection of attorney-client privilege if Parent shall have used reasonable best efforts to disclose such information in a way that would not waive such privilege. Parent agrees to use commercially reasonable efforts to promptly notify Stockholder, the Significant Holders and the Company, and Stockholder and each Significant Holder agree to use commercially reasonable efforts to promptly notify Parent and the Company, in writing of any required corrections with respect to any information supplied by such Person specifically for use in any such disclosure document, if and to the extent that any such information shall have become false or misleading in any material respect. Unless and until a Company Change of Recommendation or Parent Change of Recommendation has occurred (in each case, pursuant to the Merger Agreement) or in connection with Section 6.2(d) of the Merger Agreement, Stockholder and the Significant Holders, on the one hand, and Parent and Merger Sub, on the other hand, shall consult with each other prior to making any public announcements with respect to this Agreement, the Merger Agreement, and the transactions contemplated hereby or thereby, and, to the extent practicable, shall not make any such public announcement prior to obtaining the non-disclosing party's prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), except that no such consent shall be required to the extent prohibited by applicable Law.


        1.6
    Irrevocable Proxy.     Stockholder hereby revokes (or agrees to cause to be revoked), and the Significant Holders shall cause Stockholder to revoke (or agree to revoke, as applicable), any proxies in respect of the Subject Shares given by Stockholder prior to the date hereof. Stockholder hereby irrevocably appoints, and the Significant Holders shall cause Stockholder to irrevocably appoint, Parent, and any individual designated in writing by Parent, and each of them individually, as attorney-in-fact (with full power of substitution) and proxy for and on behalf of Stockholder, for and in the name, place and stead of Stockholder, to: (a) attend any and all Company Stockholders Meetings; and (b) vote or issue instructions to the record holder to vote such Subject Shares in accordance with the provisions of Section 1.1 in connection with any such Company Stockholder Meeting; provided, however, that (i) Stockholder's grant of the proxy contemplated hereby shall be effective if, and only if, Stockholder has not delivered to the Secretary of the Company at least ten (10) business days prior to such meeting a duly executed proxy card, previously approved by Parent, voting the Subject Shares in the manner specified in Section 1.1 or in the event such proxy card has been thereafter modified or revoked or otherwise fails to provide evidence of Stockholder's compliance with its obligations under Section 1.1 in form and substance reasonably acceptable to Parent; and (ii) Stockholder and the Significant Holders hereby affirm that (A) the irrevocable proxy set forth in this Section 1.6, if it becomes effective pursuant to clause (i), is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Stockholder under this Agreement; and (B) this irrevocable proxy is coupled with an interest; (C) such irrevocable proxy, if it becomes effective pursuant to clause (i), is executed and intended to be irrevocable in accordance with the provisions of Section 212(e) of the General Corporation Law of the State of Delaware; and (D) the proxy set forth in this Section 1.6 is given in connection with and granted in consideration of and as an inducement to Parent and Merger Sub to enter into the Merger Agreement and that such proxy is given to secure the obligations of the Stockholder under Section 1.1. Parent (or its designee) agrees not

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to exercise the proxy granted herein for any purpose other than the purposes described in this Agreement. Stockholder authorizes, and the Significant Holders shall cause Stockholder to authorize, such attorney and proxy to substitute any other Person to act hereunder, to revoke any substitution and to file this proxy and any substitution or revocation with the secretary of the Company.


        1.7
    Waiver of Appraisal and Dissenters' Rights; Stockholder Litigation.     Stockholder hereby (i) irrevocably waives and agrees not to, and the Significant Holders agree to cause Stockholder not to, exercise or assert any rights of appraisal or similar rights under Section 262 of the Delaware General Corporation Law or other applicable Law in connection with the Merger Agreement and the transactions contemplated thereby and (ii) agrees not to commence or participate in, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against (A) the Company or any of its directors, officers, employees, Affiliates or Representatives, relating to the negotiation, execution or delivery of the Merger Agreement or the consummation of the Merger, including any claim (1) challenging the validity of, or seeking to enjoin the operation of, any provision of the Merger Agreement or (2) alleging a breach of any fiduciary duty of any Person in connection with the Merger Agreement or the transactions contemplated thereby; or (B) Parent or Merger Sub challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement.


        1.8
    No Solicitations.     


        1.9
    Notice of Additional Shares and Acquisition Proposals.     Stockholder shall, and the Significant Holders shall cause Stockholder to, promptly (and in any event within thirty-six (36) hours) notify Parent in writing of (a) the number of Shares, if any, as to which Stockholder acquires record or beneficial ownership after the date hereof (which, for the avoidance of doubt, shall be Subject Shares) and (b) receipt of any Acquisition Proposal (which notice shall include copies of any documents relating to such Acquisition Proposal).


        1.10
    Further Assurances.     Each party agrees to execute and deliver, or cause to be executed and delivered, all further documents and instruments as the other party shall reasonably request and use commercially reasonable efforts to take, or cause to be taken, all reasonably necessary actions, consistent with applicable Laws and regulations, to perform, in a timely expeditious manner, their respective obligations under this Agreement.


        1.11
    Notices of Certain Events.     Parent shall promptly notify Stockholder and each Significant Holder, and Stockholder and each Significant Holder shall promptly notify Parent, in writing of any development occurring after the date hereof that causes, or that would reasonably be expected to cause, a material breach of any of the representations and warranties or covenants or obligations of such Persons set forth in this Agreement. If an Event of Default (as defined in the Loan Agreement) occurs at any time prior to the receipt of the Requisite Company Vote in accordance with the Merger Agreement, Stockholder agrees, and the Significant Holders shall cause Stockholder, to (1) promptly notify Parent in writing upon receipt of notice from Lender (as defined in the Loan Agreement) of such Event of Default and (2) cure such Event of Default promptly (but in any event before Lender forecloses on any of the Subject Shares).

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ARTICLE II

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER AND THE SIGNIFICANT HOLDERS

        Stockholder and each Significant Holder hereby, severally as to itself only and not jointly, represent and warrant to Parent and Merger Sub as follows:


        2.1
    Organization.     Stockholder and each Significant Holder is a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization.


        2.2
    Authorization.     Stockholder and each Significant Holder has full power and authority and has taken all action necessary in order to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance by Stockholder and each Significant Holder of this Agreement and the consummation by Stockholder and each Significant Holder of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Stockholder and each Significant Holder.


        2.3
    Due Execution and Delivery; Binding Agreement.     This Agreement has been duly executed and delivered by Stockholder and each Significant Holder and, assuming the authorization, execution and delivery hereof by Parent, constitutes a valid and binding agreement of Stockholder and each Significant Holder enforceable against Stockholder and each Significant Holder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles.


        2.4
    No Violation.     


        2.5
    Ownership of Subject Shares.     As of the date hereof, Stockholder is, and at all times during the term of this Agreement will be, the record and beneficial owner of, and has, and at all times during the term of this Agreement will have, good and marketable title to, the Subject Shares with no restrictions on Stockholder's rights of disposition pertaining thereto and free and clear of any Lien and proxy, except for any Liens arising pursuant to the express terms of this Agreement and except for such

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transfer restrictions of general applicability as may be provided under the Securities Act and the "blue sky" laws of the various states of the United States. Other than as provided in this Agreement, as of the date hereof, Stockholder has, and at all times during the term of this Agreement will have, with respect to the Subject Shares, the sole power, directly or indirectly, to vote, dispose of, exercise and convert, as applicable, such Subject Shares, and to demand or waive any appraisal rights or issue instructions pertaining to such Subject Shares with respect to the matters set forth in this Agreement, in each case with no limitations, qualifications or restrictions on such rights, and, as such, has, and at all times during the term of this Agreement will have, the complete and exclusive power to, directly or indirectly (a) issue (or cause the issuance of) instructions with respect to the matters set forth in Section 1.6 hereof and (b) agree to all matters set forth in this Agreement. Except to the extent of any Subject Shares acquired, directly or indirectly, after the date hereof (which, for clarity, shall become Subject Shares upon that acquisition), the number of Shares owned by Stockholder referenced above are the only Shares owned beneficially or of record by Stockholder as of the date of this Agreement and, the Significant Holders do not, other than as are owned by Stockholder, directly or indirectly, own beneficially or of record any Shares. Other than the Subject Shares held by Stockholder (the number of which is set forth in the recitals to this Agreement), neither Stockholder nor any Significant Holder owns, directly or indirectly, beneficially or of record, any warrants, calls, options to purchase or rights to subscribe for or otherwise acquire any securities of the Company and has no interest in or voting rights with respect to any securities of the Company. Other than as provided in this Agreement, no Person has any contractual or other right or obligation to purchase or otherwise acquire, and neither Stockholder nor any Significant Holder has any contractual obligation to transfer, any of the Subject Shares.


        2.6
    No Other Proxies.     None of the Subject Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares, except as provided hereunder. Any and all proxies in respect of the Subject Shares given by such Stockholder prior to the date hereof are revocable.


        2.7
    Absence of Litigation.     As of the date hereof, there are no civil, criminal or administrative actions, suits, claims, hearings, arbitrations, investigations or other proceedings pending or, to the knowledge of Stockholder and the Significant Holders, threatened against, or otherwise affecting, Stockholder or any of Stockholder's or the Significant Holders' properties or assets (including the Subject Shares) that would reasonably be expected to impair in any material respect the ability of Stockholder and the Significant Holders to perform Stockholder's and the Significant Holders' obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.


        2.8
    Opportunity to Review; Reliance.     Stockholder and each of the Significant Holders has had the opportunity to review the Merger Agreement and this Agreement with adequate counsel of such Person's own choosing. Stockholder and each of the Significant Holders understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon such Person's execution, delivery and performance of this Agreement.


        2.9
    Finders' Fees.     Except for the arrangements with Goldman Sachs & Co. and Stifel, Nicolaus & Company, Incorporated disclosed to Parent and Merger Sub pursuant to the Merger Agreement, no broker, finder, financial advisor or investment banker is entitled to any brokerage, finder's or other fee or commission or expense reimbursement in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of Stockholder or a Significant Holder for which the Company, Parent or Merger Sub has or will have any responsibility.


        2.10
    Loan Agreement and Security and Pledge Agreement.     Stockholder has, prior to the date hereof, made available to Parent complete and correct copies of the Loan Agreement and the Security and Pledge Agreement, and each as so made available is in full force and effect. Stockholder is not in breach or default under the Loan Agreement or the Security and Pledge Agreement, and neither

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Stockholder nor any Significant Holder has taken any action or failed to take any action which, with or without notice, lapse of time or both, would constitute such a breach or default under the Loan Agreement or the Security and Pledge Agreement.


        2.11
    Reliance by Parent and Merger Sub.     Stockholder and the Significant Holders understand and acknowledge that Parent and Merger Sub are entering into the Merger Agreement in reliance upon Stockholder's and the Significant Holders' execution and delivery of this Agreement and the representations and warranties of Stockholder and the Significant Holders contained herein. Stockholder and the Significant Holders understand and acknowledge that the Merger Agreement governs the terms of the Merger and the other transactions contemplated thereby.


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

        Each of Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Stockholder that:


        3.1
    Organization.     Parent and Merger Sub are each a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization.


        3.2
    Authorization.     Each of Parent and Merger Sub has full power and authority and has taken all action necessary in order to execute, deliver and, insofar as can be taken as of the date hereof, perform its obligations under this Agreement. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Parent and Merger Sub.


        3.3
    Due Execution and Delivery; Binding Agreement.     This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming the authorization, execution and delivery hereof by Stockholder and the Significant Holders, constitutes a valid and binding agreement of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles.


ARTICLE IV

MISCELLANEOUS

        4.1    Notices.     All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or electronic mail) and shall be given (i) if to Parent or Merger Sub, in accordance with the provisions of the Merger Agreement and (ii) if to Stockholder or the Significant Holders, to Stockholder's and the Significant Holders' address, facsimile number or electronic mail address set forth on a signature page hereto, or to such other address, facsimile number or email address as such party may hereafter specify for such purpose by notice to each other party hereto.


        4.2
    Termination.     This Agreement shall terminate automatically, without any notice or other action by any Person, (a) upon the earlier of (i) termination of the Merger Agreement in accordance with its terms and (ii) the Effective Time; (b) by the written agreement of the parties hereto to terminate this Agreement; or (c) at the option of Stockholder or a Significant Holder (but only with respect to Stockholder or such Significant Holder, as applicable), upon written notice by Stockholder or such Significant Holder to Parent from and after the effectiveness of any amendment, waiver or modification to the terms of the Merger Agreement that changes the form of, or decreases the amount of, the Per Share Merger Consideration from what is set forth in the Merger Agreement as in effect as

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of the date hereof, or that materially delays the timing of payment (from what is set forth in Section 4.2 of the Merger Agreement as in effect as of the date hereof). Upon termination of this Agreement, no party shall have any further obligations or liabilities under this Agreement; provided, however, that (x) nothing set forth in this Section 4.2 shall relieve any party for liability for breach of this Agreement and (y) Section 1.7 the provisions of this Article IV, and any provision hereof related to the enforcement of any surviving rights under this Agreement shall survive any such termination of this Agreement.


        4.3
    Amendments.     Subject to the provisions of applicable Laws, at any time prior to the termination of this Agreement in accordance with its terms, the parties hereto may modify or amend this Agreement, by written agreement executed and delivered by duly authorized officers of the respective parties.


        4.4
    Expenses.     Whether or not the Merger is consummated, and subject to the express terms of this Agreement, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring or required to incur such costs or expenses.


        4.5
    Binding Effect; Assignment.     Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve the assigning party of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, and the Significant Holders shall cause Stockholder, and any assignee thereof, as applicable, to perform its respective obligations under this Agreement and shall be responsible for any failure of Merger Sub, Stockholder or such applicable assignee, as applicable, to comply with any representation, warranty, covenant or other provision required to be performed under this Agreement. Any purported assignment in violation of this Agreement is void.


        4.6
    GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.     

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        4.7
    Counterparts; Effectiveness.     This Agreement may be executed in counterparts (including by facsimile, by electronic mail in "portable document format" (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document), each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. This Agreement shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy, facsimile, electronic mail, .pdf or otherwise as authorized by the prior sentence) to the other parties.


        4.8
    Entire Agreement; Third Party Beneficiaries.     This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.


        4.9
    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. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.


        4.10
    Specific Performance.     The parties hereto agree that each of Parent and Merger Sub would be irreparably damaged in the event that Stockholder or any Significant Holder fails to perform any of Stockholder's or a Significant Holder's obligations under this Agreement. Accordingly, each of Parent and Merger Sub shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by Stockholder or a Significant Holder and to specific performance of the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at Law or in equity.


        4.11
    Several Liability.     The obligations of Stockholder and each Significant Holder under this Agreement shall be several and not joint, and in no event shall a Significant Holder be liable for any breach of this Agreement by any other Significant Holder.


        4.12
    No Ownership Interest.     Nothing contained in this Agreement shall be deemed to vest in Parent or Merger Sub any direct or indirect ownership or incidence of ownership of or with respect to any Subject Shares. All rights, ownership and economic benefits of and relating to the Subject Shares shall remain vested in and belong to Stockholder, and Parent and Merger Sub shall have no authority

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to manage, direct, superintend, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct Stockholder in the voting or disposition of any of the Subject Shares, except as otherwise provided herein. Nothing in this Agreement shall be interpreted as (a) obligating Stockholder to exercise any warrants, options, conversion of convertible securities or otherwise to acquire Common Stock; or (b) creating or forming a "group" with any other Person, including Parent, for purposes of Rule 13d-5(b)(1) of the Exchange Act or any other similar provision of applicable Law.


        4.13
    No Impairment of Lender Rights.     Each of Parent and Merger Sub agree not to bring any claim, suit, action or any other proceeding seeking to assert that this Agreement impairs or modifies any rights or remedies of the Lender under the Loan Agreement or the Security and Pledge Agreement or otherwise applies to the Lender.


        4.14
    Action by Stockholder Capacity Only.     Each of Parent and Merger Sub acknowledges that Stockholder and the Significant Holders have entered into this Agreement solely in their capacity as the record and/or beneficial owners of the Subject Shares. To the extent that any Stockholder's or any Significant Holder's Affiliate or designee is an officer or director of the Company, nothing herein shall limit or affect any actions taken by any such officer or director in their capacities as such, or require such Affiliate or designee to take any action, in each case, in such Affiliate's or designee's capacity as a director or officer of the Company, including to disclose information acquired solely in such Affiliate's or designee's capacity as a director or officer of the Company, and any actions taken (whatsoever), or failure to take any actions (whatsoever), by such Affiliate or designee in such capacity as a director or officer of the Company shall not be deemed to constitute a breach of this Agreement.


        4.15
    Interpretation.     Where a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. The definitions contained in this Agreement (including those incorporated from the Merger Agreement pursuant to the first paragraph of this Agreement) are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

[Signature Page Next]

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        IN WITNESS WHEREOF, Parent, Merger Sub, Stockholder and each of the Significant Holders have caused this Agreement to be duly executed and delivered as of the date first written above.

  COBHAM PLC

 

By:

 

  


      Name:    

      Title:    

  ARMY ACQUISITION CORP.

 

By:

 

  


      Name:    

      Title:    

   

[Support Agreement Signature Page]


  VGG HOLDING LLC

 

By:

 

  


      Name:    

      Title:    

  VGG Holding LLC
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

  THE VERITAS CAPITAL FUND III, L.P.

 

By:

 

  


      Name:    

      Title:    

  The Veritas Capital Fund III, L.P.
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

   

[Support Agreement Signature Page]


  AX HOLDING LLC

 

By:

 

  


      Name:    

      Title:    

  AX Holding LLC
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  Golden Gate Capital Investment Fund II, L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT ANNEX FUND II, L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  Golden Gate Capital Investment Annex Fund II, L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT FUND II (AI), L.P

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  Golden Gate Capital Investment Fund II (AI), L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT ANNEX FUND II (AI), L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  Golden Gate Capital Investment Fund II (AI), L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


    GOLDEN GATE CAPITAL ASSOCIATES II-QP, LLC

 

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

  Golden Gate Capital Associates II-QP, LLC
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


    GOLDEN GATE CAPITAL ASSOCIATES II-AI, LLC

 

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

  Golden Gate Capital Associates II-AI, LLC
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


    CCG AV, LLC—SERIES A

 

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

  CCG AV, LLC—Series A
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


    CCG AV, LLC—SERIES C

 

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

 

By:

 

 

 

 
       
 
        Name:    
        Title:    

  CCG AV, LLC—Series C
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES I

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  CCG AV, LLC—Series I
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES E

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

  


      Name:    

      Title:    

 

  CCG AV, LLC—Series E
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


    GS DIRECT, L.L.C.

 

 

By:

 

  

        Name:    
        Title:    

 

    GS Direct, L.L.C.
200 West Street
New York, NY 10282
    Attention:   Bradley Gross
    Facsimile No.:   (212) 357-5505
    E-mail:   bradley.gross@gs.com

   

[Support Agreement Signature Page]



Annex I

The Veritas Capital Fund III, L.P.
AX Holding LLC
Golden Gate Capital Investment Fund II, L.P.
Golden Gate Capital Investment Annex Fund II, L.P.
Golden Gate Capital Investment Fund II (AI), L.P.
Golden Gate Capital Investment Annex Fund II (AI), L.P.
Golden Gate Capital Associates II-QP, LLC
Golden Gate Capital Associates II-AI, LLC
CCG AV, LLC-Series A
CCG AV, LLC-Series C
CCG AV, LLC-Series I
CCG AV, LLC-Series E
GS Direct, L.L.C.

I-1


ANNEX B

GRAPHIC

PERSONAL AND CONFIDENTIAL

May 19, 2014

Board of Directors
Aeroflex Holding Corp.
35 South Service Road
Plainview, NY 11803-0622

Gentlemen:

You have requested our opinion as to the fairness from a financial point of view to the holders (other than Cobham plc ("Cobham") and its affiliates) of the outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Aeroflex Holding Corp. (the "Company") of the $10.50 in cash per Share to be paid to such holders pursuant to the Agreement and Plan of Merger, dated as of May 19, 2014 (the "Agreement"), by and among Cobham, Army Acquisition Corp., an indirect wholly owned subsidiary of Cobham, and the Company.

Goldman, Sachs & Co. and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman, Sachs & Co. and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of the Company, Cobham, any of their respective affiliates and third parties, including Veritas Capital Management ("Veritas") and Golden Gate Capital ("Golden Gate"), significant stockholders of the Company (together "Significant Stockholders") or any currency or commodity that may be involved in the transaction contemplated by the Agreement (the "Transaction"). We have acted as financial advisor to the Company in connection with, and have participated in certain of the negotiations leading to, the Transaction. We expect to receive fees for our services in connection with the Transaction, all of which are contingent upon consummation of the Transaction, and the Company has agreed to reimburse certain of our expenses arising, and indemnify us against certain liabilities that may arise, out of our engagement. We have provided certain financial advisory and/or underwriting services to the Company and/or its affiliates from time to time. We also have provided certain financial advisory and/or underwriting services to Golden Gate and/or its affiliates and portfolio companies from time to time for which our Investment Banking Division has received, and may receive, compensation, including having acted as joint lead arranger with respect to a revolver (aggregate principal amount $40,000,000) and term loan facility (aggregate principal amount $1,500,000,000) for Attachmate Group Inc., a portfolio company of Golden Gate, in April 2012; as joint bookrunner in connection with the financing (aggregate principal amount $5,505,000,000) of the acquisition of BMC Software, Inc. by a consortium co-led by Golden Gate in May 2013; and as joint bookrunner with respect to the issuance by Boxer Parent Company Inc., a holding company of BMC Software Finance, Inc. and a portfolio company of Golden Gate, of 9.000%/9.750% Senior Contingent

B-1


Cash Pay Notes due 2019 (aggregate principal amount $750,000,000) in April 2014. We also have provided certain financial advisory and/or underwriting services to Veritas and/or its affiliates and portfolio companies from time to time. We may also in the future provide financial advisory and/or underwriting services to the Company, Cobham, any of the Significant Stockholders, and their respective affiliates and portfolio companies for which our Investment Banking Division may receive compensation. Bradley J. Gross, a Managing Director of Goldman, Sachs & Co., is a director of the Company. An Affiliate of Goldman, Sachs & Co. currently owns, in the aggregate, approximately 16% of the outstanding Shares and has entered into a voting and support agreement in connection with the Transaction. Affiliates of Goldman, Sachs & Co. also may have co-invested with the Significant Stockholders and their affiliates from time to time and may have invested in limited partnership units of affiliates of the Significant Stockholders from time to time and may do so in the future.

In connection with this opinion, we have reviewed, among other things, the Agreement; Registration Statement on Form S-1, including the prospectus contained therein dated November 18, 2010 relating to the Company's initial public offering; annual reports to stockholders and Annual Reports on Form 10-K of the Company for the three fiscal years ended June 30, 2013; certain interim reports to stockholders and Quarterly Reports on Form 10-Q of the Company; certain other communications from the Company to its stockholders; certain publicly available research analyst reports for the Company; and certain internal financial analyses and forecasts for the Company prepared by its management, as approved for our use by the Company (the "Forecasts"). We have also held discussions with members of the senior management of the Company regarding their assessment of the past and current business operations, financial condition and future prospects of the Company; compared certain financial and stock market information for the Company with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the semiconductor and test equipment industries and in other industries; and performed such other studies and analyses, and considered such other factors, as we deemed appropriate.

For purposes of rendering this opinion, we have, with your consent, relied upon and assumed the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by, us, without assuming any responsibility for independent verification thereof. In that regard, we have assumed with your consent that the Forecasts have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company. We have not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance sheet assets and liabilities) of the Company or any of its subsidiaries and we have not been furnished with any such evaluation or appraisal. We have assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction will be obtained without any adverse effect on the expected benefits of the Transaction in any way meaningful to our analysis. We have assumed that the Transaction will be consummated on the terms set forth in the Agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to our analysis.

Our opinion does not address the underlying business decision of the Company to engage in the Transaction, or the relative merits of the Transaction as compared to any strategic alternatives that may be available to the Company; nor does it address any legal, regulatory, tax or accounting matters. This opinion addresses only the fairness from a financial point of view to the holders (other than Cobham and its affiliates) of Shares, as of the date hereof, of the $10.50 in cash per Share to be paid to such holders pursuant to the Agreement. We do not express any view on, and our opinion does not address, any other term or aspect of the Agreement or Transaction or any term or aspect of any other agreement or instrument contemplated by the Agreement or entered into or amended in connection with the Transaction, including, the fairness of the Transaction to, or any consideration received in

B-2


connection therewith by, the holders of any other class of securities, creditors, or other constituencies of the Company; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of the Company, or class of such persons, in connection with the Transaction, whether relative to the $10.50 in cash per Share to be paid to the holders (other than Cobham and its affiliates) of Shares pursuant to the Agreement or otherwise. We are not expressing any opinion as to the impact of the Transaction on the solvency or viability of the Company or Cobham or the ability of the Company or Cobham to pay their respective obligations when they come due. Our opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to us as of, the date hereof and we assume no responsibility for updating, revising or reaffirming this opinion based on circumstances, developments or events occurring after the date hereof. Our advisory services and the opinion expressed herein are provided for the information and assistance of the Board of Directors of the Company in connection with its consideration of the Transaction and such opinion does not constitute a recommendation as to how any holder of Shares should vote with respect to such Transaction or any other matter. This opinion has been approved by a fairness committee of Goldman, Sachs & Co.

Based upon and subject to the foregoing, it is our opinion that, as of the date hereof, the $10.50 in cash per Share to be paid to the holders (other than Cobham and its affiliates) of Shares pursuant to the Agreement is fair from a financial point of view to such holders.

Very truly yours,

/s/ GOLDMAN, SACHS & CO.

   
(GOLDMAN, SACHS & CO.)    

B-3


ANNEX C

LOGO

May 19, 2014

Board of Directors
Aeroflex Holding Corp.
35 South Service Road
Plainview, New York 11803

Members of the Board:

Stifel, Nicolaus & Company, Incorporated ("Stifel" or "we") has been advised that Aeroflex Holding Corp., a Delaware corporation (the "Company"), is considering entering into an Agreement and Plan of Merger (the "Merger Agreement") with Cobham plc, a public limited company organized under the laws of England and Wales ("Buyer"), and a Delaware corporation that is a newly-formed, wholly-owned subsidiary of Buyer ("Merger Sub"), pursuant to which, among other things, (i) Merger Sub will be merged with and into the Company with the Company continuing as the surviving corporation (the "Merger"), and (ii) each issued and outstanding share (the "Shares") of Common Stock, par value $0.01 per share, of the Company (the "Company Common Stock") other than (x) Shares owned by Buyer, Merger Sub or any other direct or indirect wholly-owned subsidiary of Buyer, in each case not held on behalf of third parties, (y) Dissenting Shares (as defined in the Merger Agreement), and (z) Shares owned by the Company or any direct or indirect wholly-owned Subsidiary of the Company (collectively, "Excluded Shares") will be converted into the right to receive $10.50 in cash (the "Merger Consideration"). The terms and conditions of the Merger are more fully set forth in the Merger Agreement (the "Merger").

The Board of Directors of the Company (the "Board") has requested Stifel's opinion, as investment bankers, as to the fairness, from a financial point of view, to the holders of Shares of Company Common Stock other than Excluded Shares of the Merger Consideration to be received by such holders of Shares from Buyer in the Merger pursuant to the Merger Agreement (the "Opinion").

In rendering our Opinion, we have, among other things:

(i)
discussed the Merger and related matters with the Company's counsel and reviewed a draft copy of the Merger Agreement, dated May 12, 2014;

(ii)
reviewed the audited consolidated financial statements of the Company contained in its Annual Report on Form 10-K for the year ended June 30, 2013 and unaudited consolidated financial statements of the Company contained in its Quarterly Report on Form 10-Q for the quarter and nine months ended March 31, 2014;

(iii)
reviewed and discussed with the Company's management certain other publicly available information concerning the Company;

(iv)
reviewed certain non-publicly available information concerning the Company, including internal financial analyses and forecasts prepared by its management and held discussions with the Company's senior management regarding recent developments;

(v)
reviewed and analyzed certain publicly available financial and stock market data relating to selected public companies that we deemed relevant to our analysis; GRAPHIC

(vi)
reviewed and analyzed certain publicly available information concerning the terms of selected merger and acquisition transactions that we considered relevant to our analysis;

   

C-1


(vii)
reviewed the reported prices and trading activity of the equity securities of the Company;

(viii)
performed a discounted cash flow analysis;

(ix)
conducted such other financial studies, analyses and investigations and considered such other information as we deemed necessary or appropriate for purposes of our opinion; and

(x)
took into account our assessment of general economic, market and financial conditions and our experience in other transactions, as well as our experience in securities valuations and our knowledge of the Company's industry generally.

In rendering our Opinion, we have relied upon and assumed, without independent verification, the accuracy and completeness of all of the financial and other information that was provided to Stifel by or on behalf of the Company, or that was otherwise reviewed by Stifel, and have not assumed any responsibility for independently verifying any of such information. With respect to the financial forecasts supplied to us by the Company, we have assumed, at the direction of the Company, that they were reasonably prepared on the basis reflecting the best currently available estimates and judgments of the management of the Company as to the future operating and financial performance of the Company and that they provided a reasonable basis upon which we could form our opinion. Such forecasts and projections were not prepared with the expectation of public disclosure. All such projected financial information is based on numerous variables and assumptions that are inherently uncertain, including, without limitation, factors related to general economic and competitive conditions. Accordingly, actual results could vary significantly from those set forth in such projected financial information. Stifel has relied on this projected information without independent verification or analyses and does not in any respect assume any responsibility for the accuracy or completeness thereof.

We also assumed that there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of the Company since the date of the last financial statements of the Company made available to us. We did not make or obtain any independent evaluation, appraisal or physical inspection of the Company's assets or liabilities, nor have we been furnished with any such evaluation or appraisal. Estimates of values of companies and assets do not purport to be appraisals or necessarily reflect the prices at which companies or assets may actually be sold. Because such estimates are inherently subject to uncertainty, Stifel assumes no responsibility for their accuracy.

We have assumed, with your consent, that there are no factors that would materially delay or subject to any material adverse conditions any necessary regulatory or governmental approval and that all conditions to the Merger will be satisfied and not waived. In addition, we have assumed that the definitive Merger Agreement will not differ materially from the draft we reviewed. We have also assumed that the Merger will be consummated substantially on the terms and conditions described in the Merger Agreement, without any waiver of material terms or conditions by the Company or any other party, and that obtaining any necessary regulatory approvals or satisfying any other conditions for consummation of the Merger will not have an adverse effect on the Company, Buyer or the Merger. We have assumed that the Merger will be consummated in a manner that complies with the applicable provisions of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all other applicable federal and state statutes, rules and regulations. We have further assumed that the Company has relied upon the advice of its counsel, independent accountants and other advisors (other than Stifel) as to all legal, financial reporting, tax, accounting and regulatory matters with respect to the Company, the Merger and the Merger Agreement.

Our Opinion is limited to whether the Merger Consideration is fair to the holders of Shares of Company Common Stock other than Excluded Shares, from a financial point of view, and does not address any other terms, aspects or implications of the Merger, including, without limitation, the form or structure of the Merger, any consequences of the Merger on the Company, its stockholders,

C-2


creditors or otherwise, or any terms, aspects or implications of any voting, support, stockholder or other agreements, arrangements or understandings contemplated or entered into in connection with the Merger or otherwise. Our Opinion also does not consider, address or include: (i) any other strategic alternatives currently (or which have been or may be) contemplated by the Board or the Company; (ii) the legal, tax or accounting consequences of the Merger on the Company or the holders of Company Common Stock; (iii) the fairness of the amount or nature of any compensation to any of the Company's officers, directors or employees, or class of such persons, relative to the compensation to the holders of the Company's securities; (iv) the effect of the Merger on, or the fairness of the consideration to be received by, holders of any class of securities of the Company other than the Shares, or any class of securities of any other party to any transaction contemplated by the Merger Agreement; (v) whether Buyer has sufficient cash, available lines of credit or other sources of funds to enable it to pay the Merger Consideration; or (viii) any advice or opinions provided by Goldman Sachs & Co. or any other advisor to the Company or Buyer. Furthermore, we are not expressing any opinion herein as to the prices, trading range or volume at which the Company's or Buyer's securities will trade following public announcement or consummation of the Merger.

Our Opinion is necessarily based on economic, market, financial and other conditions as they exist on, and on the information made available to us by or on behalf of the Company or its advisors, or information otherwise reviewed by Stifel, as of the date of this Opinion. It is understood that subsequent developments may affect the conclusion reached in this Opinion and that Stifel does not have any obligation to update, revise or reaffirm this Opinion, except in accordance with the terms and conditions of Stifel's engagement letter agreement with the Company. Our Opinion is solely for the information of, and directed to, the Board for its information and assistance in connection with its consideration of the financial terms of the Merger. Our Opinion does not constitute a recommendation to the Board as to how the Board should vote on the Merger or to any stockholder of the Company or Buyer as to how any such stockholder should vote at any stockholders' meeting at which the Merger is considered, or whether or not any stockholder of the Company should enter into a voting, support, stockholders', or affiliates' agreement with respect to the Merger, or exercise any dissenters' or appraisal rights that may be available to such stockholder. In addition, the Opinion does not compare the relative merits of the Merger with any other alternative transactions or business strategies which may have been available to the Company and does not address the underlying business decision of the Board or the Company to proceed with or effect the Merger. We were not requested to, and we did not, explore alternatives to the Merger or solicit the interest of any other parties in pursuing transactions with the Company.

We are not legal, tax, regulatory or bankruptcy advisors. We have not considered any potential legislative or regulatory changes currently being considered or recently enacted by the United States Congress, the Securities and Exchange Commission (the "SEC"), or any other regulatory bodies, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the SEC or the Financial Accounting Standards Board. Our Opinion is not a solvency opinion and does not in any way address the solvency or financial condition of the Company, Buyer, Merger Sub or any other party.

Stifel, as part of its investment banking services, is regularly engaged in the independent valuation of businesses and securities in connection with mergers, acquisitions, underwritings, sales and distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. We will receive a fee upon the delivery of this Opinion that is not contingent upon consummation of the Merger. We will not receive any other significant payment or compensation contingent upon the successful consummation of the Merger. In addition, the Company has agreed to indemnify us for certain liabilities arising out of our engagement. In June 2012 and December 2013, Stifel was engaged to serve as financial advisor on the sales of the Company's European and Wireless Test Businesses and the Company's subsidiary, Aeroflex Weinschel, Inc. Both engagements have been

C-3


terminated with no continuing obligations other than customary expense reimbursement or indemnification obligations thereunder. Stifel may seek to provide investment banking services to Buyer or its affiliates in the future, for which we would seek customary compensation. In the ordinary course of business, Stifel and our clients may transact in the equity securities of each of the Company and Buyer and may at any time hold a long or short position in such securities.

Stifel's Fairness Opinion Committee has approved the issuance of this Opinion. Our Opinion may not be published or otherwise used or referred to, nor shall any public reference to Stifel be made, without our prior written consent, except in accordance with the terms and conditions of Stifel's engagement letter agreement with the Company.

Based upon and subject to the foregoing, we are of the opinion, as investment bankers, that, as of the date hereof, the Merger Consideration to be received by holders of Shares of Company Common Stock other than Excluded Shares from Buyer in the Merger pursuant to the Merger Agreement is fair to such holders of Shares, from a financial point of view.

Very truly yours,

/s/ STIFEL, NICOLAUS & COMPANY, INCORPORATED

   
STIFEL, NICOLAUS & COMPANY, INCORPORATED    

C-4



ANNEX D

Execution Version

SUPPORT AGREEMENT

        This SUPPORT AGREEMENT (this "Agreement"), dated as of May 19, 2014, by and among Cobham plc, a public limited company organized under the laws of England and Wales ("Parent"), Army Acquisition Corp., a Delaware corporation and an indirect wholly owned Subsidiary of Parent ("Merger Sub"), VGG Holding LLC, a Delaware limited liability company (the "Stockholder"), and each of the Persons listed on Annex I hereto (such Persons listed on Annex I hereto, collectively, the "Significant Holders"). Capitalized terms used but not defined herein have the meanings assigned to them in that certain Agreement and Plan of Merger, dated as of the date of this Agreement (the "Merger Agreement"), by and among Parent, Merger Sub and Aeroflex Holding Corp., a Delaware corporation (the "Company").


RECITALS

        WHEREAS, as of the date hereof, Stockholder is the record and beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of 65,000,000 shares of common stock, par value $0.01 per share, of the Company (the "Shares") (all such Shares which are outstanding as of the date hereof and which may hereafter be acquired pursuant to acquisition by purchase, transfer, assignment, stock dividend, distribution, stock split, split-up, combination, merger, consolidation, reorganization, recapitalization, combination or similar transaction, being referred to herein as the "Subject Shares"), which shares represent approximately 76.28% of the outstanding voting power in the Company;

        WHEREAS, as of the date hereof, the Significant Holders collectively own equity interests in Stockholder representing 83.5% of the outstanding ownership interests in Stockholder;

        WHEREAS, concurrently with the execution and delivery of this Agreement, Parent, Merger Sub and the Company are entering into the Merger Agreement, a copy of which has been made available to Stockholder and the Significant Holders, which provides for, among other things, the merger of Merger Sub with and into the Company (the "Merger"), upon the terms and subject to the conditions set forth therein; and

        WHEREAS, as a condition to Parent's and Merger Sub's willingness to enter into the Merger Agreement, Parent and Merger Sub have required that Stockholder and the Significant Holders, and in order to induce Parent and Merger Sub to enter into the Merger Agreement, Stockholder and the Significant Holders have agreed to, enter into this Agreement.

        NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:


ARTICLE I

AGREEMENTS OF STOCKHOLDER AND SIGNIFICANT HOLDERS

        1.1    Voting of Subject Shares.     Stockholder irrevocably and unconditionally agrees that Stockholder shall, and the Significant Holders shall cause Stockholder to, (x) not call, or cause the Company to call, any special meeting of the holders of Shares (or any adjournment thereof) and (y) at any meeting (whether annual or special and whether or not an adjourned or postponed meeting) or any action by written consent without a meeting of the holders of Shares, however called (each, a "Company Stockholders Meeting"):

D-1



        1.2
    No Inconsistent Agreements.     Stockholder and the Significant Holders hereby covenant and agree as follows: Stockholder has not, except for this Agreement, the Amended and Restated Loan Agreement, dated as of December 23, 2013, between Stockholder and Credit Suisse AG, Cayman Islands Branch (as successor in interest to Credit Suisse AG, New York Branch (the "Lender") (as in effect as of the date hereof, the "Loan Agreement"), the Amended and Restated Security and Pledge Agreement, dated as of December 23, 2013, between Stockholder and the Lender (as in effect as of the date hereof, the "Security and Pledge Agreement"), and except as may be explicitly permitted by Section 1.8(b) of this Agreement, (a) entered into, and shall not, and the Significant Holders shall cause Stockholder not to, enter into any voting agreement or voting trust with respect to the Subject Shares with respect to any of the matters described in Section 1.1(b) (the "Section 1.1(b) Matters"), (b) granted, and shall not, and the Significant Holders shall cause Stockholder not to, grant, a proxy, consent or power of attorney with respect to the Subject Shares with respect to any of the Section 1.1(b) Matters, or (c) taken, and shall not, and the Significant Holders shall cause Stockholder not to, take any action that would make any representation or warranty of Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling Stockholder from performing any of its obligations under this Agreement.

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        1.3
    No Proxies for, Transfer of or Encumbrances on Subject Shares.     


        1.4
    Stock Dividends, etc.     In the event of a stock split, stock dividend or distribution, or any change in the Shares by reason of any split-up, reverse stock split, recapitalization, combination, reclassification, reincorporation, exchange of shares or the like, the term "Subject Shares" shall be deemed to refer to and include such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction.


        1.5
    Disclosure of Information.     The Significant Holders and Stockholder hereby (a) consent to and authorize the publication and disclosure by Parent or the Company of such Person's identity and record or beneficial ownership of Subject Shares, the nature of Stockholder's and the Significant Holders' commitments, arrangements and understandings under this Agreement and any other information, in each case, to the extent it is required to be disclosed by applicable Law in any press release, proxy statement, information statement, shareholder circular or any other disclosure document in connection with the Merger and the transactions contemplated by the Merger Agreement; and (b) agree promptly to provide Parent and the Company with any information that in the reasonable determination of Parent or the Company is required for inclusion in any such disclosure documents (provided that the foregoing shall not require Stockholder or any Significant Holder, as applicable, to disclose (i) any information, that in its reasonable judgment, would result in the disclosure of any trade secrets of third parties or violate any of its confidentiality obligations owed to third parties; or (ii) any information that would, in its reasonable judgment, waive the protection of attorney-client privilege if Stockholder or such Significant Holder, as applicable, shall have used reasonable best efforts to disclose such information in a way that would not waive such privilege. Parent hereby (x) consents to and

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authorizes the publication and disclosure by Stockholder, any Significant Holder or the Company of Parent's identity, the nature of Parent's commitments, arrangements and understandings under this Agreement and any other information, in each case, solely to the extent it is required to be disclosed by applicable Law in any press release, proxy statement, information statement, shareholder circular or any other disclosure document in connection with the Merger and the transactions contemplated by the Merger Agreement and (y) agrees promptly to provide Stockholder, any Significant Holder and the Company with any information that in the reasonable determination of such Person is required for inclusion in any such disclosure documents (provided that the foregoing shall not require Parent or Merger Sub to disclose (i) any information, that in the reasonable judgment of Parent, would result in the disclosure of any trade secrets of third parties or violate any of its confidentiality obligations owed to third parties; or (ii) any information that would, in the reasonable judgment of Parent, waive the protection of attorney-client privilege if Parent shall have used reasonable best efforts to disclose such information in a way that would not waive such privilege. Parent agrees to use commercially reasonable efforts to promptly notify Stockholder, the Significant Holders and the Company, and Stockholder and each Significant Holder agree to use commercially reasonable efforts to promptly notify Parent and the Company, in writing of any required corrections with respect to any information supplied by such Person specifically for use in any such disclosure document, if and to the extent that any such information shall have become false or misleading in any material respect. Unless and until a Company Change of Recommendation or Parent Change of Recommendation has occurred (in each case, pursuant to the Merger Agreement) or in connection with Section 6.2(d) of the Merger Agreement, Stockholder and the Significant Holders, on the one hand, and Parent and Merger Sub, on the other hand, shall consult with each other prior to making any public announcements with respect to this Agreement, the Merger Agreement, and the transactions contemplated hereby or thereby, and, to the extent practicable, shall not make any such public announcement prior to obtaining the non-disclosing party's prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), except that no such consent shall be required to the extent prohibited by applicable Law.


        1.6
    Irrevocable Proxy.     Stockholder hereby revokes (or agrees to cause to be revoked), and the Significant Holders shall cause Stockholder to revoke (or agree to revoke, as applicable), any proxies in respect of the Subject Shares given by Stockholder prior to the date hereof. Stockholder hereby irrevocably appoints, and the Significant Holders shall cause Stockholder to irrevocably appoint, Parent, and any individual designated in writing by Parent, and each of them individually, as attorney-in-fact (with full power of substitution) and proxy for and on behalf of Stockholder, for and in the name, place and stead of Stockholder, to: (a) attend any and all Company Stockholders Meetings; and (b) vote or issue instructions to the record holder to vote such Subject Shares in accordance with the provisions of Section 1.1 in connection with any such Company Stockholder Meeting; provided, however, that (i) Stockholder's grant of the proxy contemplated hereby shall be effective if, and only if, Stockholder has not delivered to the Secretary of the Company at least ten (10) business days prior to such meeting a duly executed proxy card, previously approved by Parent, voting the Subject Shares in the manner specified in Section 1.1 or in the event such proxy card has been thereafter modified or revoked or otherwise fails to provide evidence of Stockholder's compliance with its obligations under Section 1.1 in form and substance reasonably acceptable to Parent; and (ii) Stockholder and the Significant Holders hereby affirm that (A) the irrevocable proxy set forth in this Section 1.6, if it becomes effective pursuant to clause (i), is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Stockholder under this Agreement; and (B) this irrevocable proxy is coupled with an interest; (C) such irrevocable proxy, if it becomes effective pursuant to clause (i), is executed and intended to be irrevocable in accordance with the provisions of Section 212(e) of the General Corporation Law of the State of Delaware; and (D) the proxy set forth in this Section 1.6 is given in connection with and granted in consideration of and as an inducement to Parent and Merger Sub to enter into the Merger Agreement and that such proxy is given to secure the obligations of the Stockholder under Section 1.1. Parent (or its designee) agrees not

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to exercise the proxy granted herein for any purpose other than the purposes described in this Agreement. Stockholder authorizes, and the Significant Holders shall cause Stockholder to authorize, such attorney and proxy to substitute any other Person to act hereunder, to revoke any substitution and to file this proxy and any substitution or revocation with the secretary of the Company.


        1.7
    Waiver of Appraisal and Dissenters' Rights; Stockholder Litigation.     Stockholder hereby (i) irrevocably waives and agrees not to, and the Significant Holders agree to cause Stockholder not to, exercise or assert any rights of appraisal or similar rights under Section 262 of the Delaware General Corporation Law or other applicable Law in connection with the Merger Agreement and the transactions contemplated thereby and (ii) agrees not to commence or participate in, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against (A) the Company or any of its directors, officers, employees, Affiliates or Representatives, relating to the negotiation, execution or delivery of the Merger Agreement or the consummation of the Merger, including any claim (1) challenging the validity of, or seeking to enjoin the operation of, any provision of the Merger Agreement or (2) alleging a breach of any fiduciary duty of any Person in connection with the Merger Agreement or the transactions contemplated thereby; or (B) Parent or Merger Sub challenging the validity of, or seeking to enjoin the operation of, any provision of this Agreement.


        1.8
    No Solicitations.     


        1.9
    Notice of Additional Shares and Acquisition Proposals.     Stockholder shall, and the Significant Holders shall cause Stockholder to, promptly (and in any event within thirty-six (36) hours) notify Parent in writing of (a) the number of Shares, if any, as to which Stockholder acquires record or beneficial ownership after the date hereof (which, for the avoidance of doubt, shall be Subject Shares) and (b) receipt of any Acquisition Proposal (which notice shall include copies of any documents relating to such Acquisition Proposal).


        1.10
    Further Assurances.     Each party agrees to execute and deliver, or cause to be executed and delivered, all further documents and instruments as the other party shall reasonably request and use commercially reasonable efforts to take, or cause to be taken, all reasonably necessary actions, consistent with applicable Laws and regulations, to perform, in a timely expeditious manner, their respective obligations under this Agreement.


        1.11
    Notices of Certain Events.     Parent shall promptly notify Stockholder and each Significant Holder, and Stockholder and each Significant Holder shall promptly notify Parent, in writing of any development occurring after the date hereof that causes, or that would reasonably be expected to cause, a material breach of any of the representations and warranties or covenants or obligations of such Persons set forth in this Agreement. If an Event of Default (as defined in the Loan Agreement)

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occurs at any time prior to the receipt of the Requisite Company Vote in accordance with the Merger Agreement, Stockholder agrees, and the Significant Holders shall cause Stockholder, to (1) promptly notify Parent in writing upon receipt of notice from Lender (as defined in the Loan Agreement) of such Event of Default and (2) cure such Event of Default promptly (but in any event before Lender forecloses on any of the Subject Shares).


ARTICLE II

REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER AND THE SIGNIFICANT HOLDERS

        Stockholder and each Significant Holder hereby, severally as to itself only and not jointly, represent and warrant to Parent and Merger Sub as follows:


        2.1
    Organization.     Stockholder and each Significant Holder is a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization.


        2.2
    Authorization.     Stockholder and each Significant Holder has full power and authority and has taken all action necessary in order to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance by Stockholder and each Significant Holder of this Agreement and the consummation by Stockholder and each Significant Holder of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Stockholder and each Significant Holder.


        2.3
    Due Execution and Delivery; Binding Agreement.     This Agreement has been duly executed and delivered by Stockholder and each Significant Holder and, assuming the authorization, execution and delivery hereof by Parent, constitutes a valid and binding agreement of Stockholder and each Significant Holder enforceable against Stockholder and each Significant Holder in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles.


        2.4
    No Violation.     

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        2.5
    Ownership of Subject Shares.     As of the date hereof, Stockholder is, and at all times during the term of this Agreement will be, the record and beneficial owner of, and has, and at all times during the term of this Agreement will have, good and marketable title to, the Subject Shares with no restrictions on Stockholder's rights of disposition pertaining thereto and free and clear of any Lien and proxy, except for any Liens arising pursuant to the express terms of this Agreement and except for such transfer restrictions of general applicability as may be provided under the Securities Act and the "blue sky" laws of the various states of the United States. Other than as provided in this Agreement, as of the date hereof, Stockholder has, and at all times during the term of this Agreement will have, with respect to the Subject Shares, the sole power, directly or indirectly, to vote, dispose of, exercise and convert, as applicable, such Subject Shares, and to demand or waive any appraisal rights or issue instructions pertaining to such Subject Shares with respect to the matters set forth in this Agreement, in each case with no limitations, qualifications or restrictions on such rights, and, as such, has, and at all times during the term of this Agreement will have, the complete and exclusive power to, directly or indirectly (a) issue (or cause the issuance of) instructions with respect to the matters set forth in Section 1.6 hereof and (b) agree to all matters set forth in this Agreement. Except to the extent of any Subject Shares acquired, directly or indirectly, after the date hereof (which, for clarity, shall become Subject Shares upon that acquisition), the number of Shares owned by Stockholder referenced above are the only Shares owned beneficially or of record by Stockholder as of the date of this Agreement and, the Significant Holders do not, other than as are owned by Stockholder, directly or indirectly, own beneficially or of record any Shares. Other than the Subject Shares held by Stockholder (the number of which is set forth in the recitals to this Agreement), neither Stockholder nor any Significant Holder owns, directly or indirectly, beneficially or of record, any warrants, calls, options to purchase or rights to subscribe for or otherwise acquire any securities of the Company and has no interest in or voting rights with respect to any securities of the Company. Other than as provided in this Agreement, no Person has any contractual or other right or obligation to purchase or otherwise acquire, and neither Stockholder nor any Significant Holder has any contractual obligation to transfer, any of the Subject Shares.


        2.6
    No Other Proxies.     None of the Subject Shares is subject to any voting trust or other agreement or arrangement with respect to the voting of such Shares, except as provided hereunder. Any and all proxies in respect of the Subject Shares given by such Stockholder prior to the date hereof are revocable.


        2.7
    Absence of Litigation.     As of the date hereof, there are no civil, criminal or administrative actions, suits, claims, hearings, arbitrations, investigations or other proceedings pending or, to the knowledge of Stockholder and the Significant Holders, threatened against, or otherwise affecting, Stockholder or any of Stockholder's or the Significant Holders' properties or assets (including the Subject Shares) that would reasonably be expected to impair in any material respect the ability of Stockholder and the Significant Holders to perform Stockholder's and the Significant Holders' obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.


        2.8
    Opportunity to Review; Reliance.     Stockholder and each of the Significant Holders has had the opportunity to review the Merger Agreement and this Agreement with adequate counsel of such Person's own choosing. Stockholder and each of the Significant Holders understands and acknowledges that Parent and Merger Sub are entering into the Merger Agreement in reliance upon such Person's execution, delivery and performance of this Agreement.


        2.9
    Finders' Fees.     Except for the arrangements with Goldman Sachs & Co. and Stifel, Nicolaus & Company, Incorporated disclosed to Parent and Merger Sub pursuant to the Merger Agreement, no broker, finder, financial advisor or investment banker is entitled to any brokerage, finder's or other fee or commission or expense reimbursement in connection with the transactions contemplated by this Agreement based upon arrangements made by and on behalf of Stockholder or a Significant Holder for which the Company, Parent or Merger Sub has or will have any responsibility.

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        2.10
    Loan Agreement and Security and Pledge Agreement.     Stockholder has, prior to the date hereof, made available to Parent complete and correct copies of the Loan Agreement and the Security and Pledge Agreement, and each as so made available is in full force and effect. Stockholder is not in breach or default under the Loan Agreement or the Security and Pledge Agreement, and neither Stockholder nor any Significant Holder has taken any action or failed to take any action which, with or without notice, lapse of time or both, would constitute such a breach or default under the Loan Agreement or the Security and Pledge Agreement.


        2.11
    Reliance by Parent and Merger Sub.     Stockholder and the Significant Holders understand and acknowledge that Parent and Merger Sub are entering into the Merger Agreement in reliance upon Stockholder's and the Significant Holders' execution and delivery of this Agreement and the representations and warranties of Stockholder and the Significant Holders contained herein. Stockholder and the Significant Holders understand and acknowledge that the Merger Agreement governs the terms of the Merger and the other transactions contemplated thereby.


ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

        Each of Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Stockholder that:


        3.1
    Organization.     Parent and Merger Sub are each a legal entity duly organized, validly existing and in good standing (with respect to jurisdictions that recognize the concept of good standing) under the Laws of the jurisdiction of its organization.


        3.2
    Authorization.     Each of Parent and Merger Sub has full power and authority and has taken all action necessary in order to execute, deliver and, insofar as can be taken as of the date hereof, perform its obligations under this Agreement. The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary action on the part of Parent and Merger Sub.


        3.3
    Due Execution and Delivery; Binding Agreement.     This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming the authorization, execution and delivery hereof by Stockholder and the Significant Holders, constitutes a valid and binding agreement of Parent and Merger Sub enforceable against Parent and Merger Sub in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors' rights and to general equity principles.


ARTICLE IV

MISCELLANEOUS

        4.1    Notices.     All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or electronic mail) and shall be given (i) if to Parent or Merger Sub, in accordance with the provisions of the Merger Agreement and (ii) if to Stockholder or the Significant Holders, to Stockholder's and the Significant Holders' address, facsimile number or electronic mail address set forth on a signature page hereto, or to such other address, facsimile number or email address as such party may hereafter specify for such purpose by notice to each other party hereto.


        4.2
    Termination.     This Agreement shall terminate automatically, without any notice or other action by any Person, (a) upon the earlier of (i) termination of the Merger Agreement in accordance with its terms and (ii) the Effective Time; (b) by the written agreement of the parties hereto to terminate this Agreement; or (c) at the option of Stockholder or a Significant Holder (but only with

D-8


respect to Stockholder or such Significant Holder, as applicable), upon written notice by Stockholder or such Significant Holder to Parent from and after the effectiveness of any amendment, waiver or modification to the terms of the Merger Agreement that changes the form of, or decreases the amount of, the Per Share Merger Consideration from what is set forth in the Merger Agreement as in effect as of the date hereof, or that materially delays the timing of payment (from what is set forth in Section 4.2 of the Merger Agreement as in effect as of the date hereof). Upon termination of this Agreement, no party shall have any further obligations or liabilities under this Agreement; provided, however, that (x) nothing set forth in this Section 4.2 shall relieve any party for liability for breach of this Agreement and (y) Section 1.7 the provisions of this Article IV, and any provision hereof related to the enforcement of any surviving rights under this Agreement shall survive any such termination of this Agreement.


        4.3
    Amendments.     Subject to the provisions of applicable Laws, at any time prior to the termination of this Agreement in accordance with its terms, the parties hereto may modify or amend this Agreement, by written agreement executed and delivered by duly authorized officers of the respective parties.


        4.4
    Expenses.     Whether or not the Merger is consummated, and subject to the express terms of this Agreement, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring or required to incur such costs or expenses.


        4.5
    Binding Effect; Assignment.     Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of Law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this Agreement to Parent or to any direct or indirect wholly owned subsidiary of Parent, but no such assignment shall relieve the assigning party of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, and the Significant Holders shall cause Stockholder, and any assignee thereof, as applicable, to perform its respective obligations under this Agreement and shall be responsible for any failure of Merger Sub, Stockholder or such applicable assignee, as applicable, to comply with any representation, warranty, covenant or other provision required to be performed under this Agreement. Any purported assignment in violation of this Agreement is void.


        4.6
    GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.     

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        4.7
    Counterparts; Effectiveness.     This Agreement may be executed in counterparts (including by facsimile, by electronic mail in "portable document format" (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document), each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. This Agreement shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy, facsimile, electronic mail, .pdf or otherwise as authorized by the prior sentence) to the other parties.


        4.8
    Entire Agreement; Third Party Beneficiaries.     This Agreement constitutes the entire agreement, and supersedes all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter hereof. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.


        4.9
    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. If any provision of this Agreement, or the application thereof to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application thereof, in any other jurisdiction.


        4.10
    Specific Performance.     The parties hereto agree that each of Parent and Merger Sub would be irreparably damaged in the event that Stockholder or any Significant Holder fails to perform any of Stockholder's or a Significant Holder's obligations under this Agreement. Accordingly, each of Parent and Merger Sub shall be entitled to an injunction or injunctions to prevent breaches of this Agreement by Stockholder or a Significant Holder and to specific performance of the terms and provisions hereof in any court of competent jurisdiction, this being in addition to any other remedy to which they are entitled at Law or in equity.

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        4.11
    Several Liability.     The obligations of Stockholder and each Significant Holder under this Agreement shall be several and not joint, and in no event shall a Significant Holder be liable for any breach of this Agreement by any other Significant Holder.


        4.12
    No Ownership Interest.     Nothing contained in this Agreement shall be deemed to vest in Parent or Merger Sub any direct or indirect ownership or incidence of ownership of or with respect to any Subject Shares. All rights, ownership and economic benefits of and relating to the Subject Shares shall remain vested in and belong to Stockholder, and Parent and Merger Sub shall have no authority to manage, direct, superintend, restrict, regulate, govern, or administer any of the policies or operations of the Company or exercise any power or authority to direct Stockholder in the voting or disposition of any of the Subject Shares, except as otherwise provided herein. Nothing in this Agreement shall be interpreted as (a) obligating Stockholder to exercise any warrants, options, conversion of convertible securities or otherwise to acquire Common Stock; or (b) creating or forming a "group" with any other Person, including Parent, for purposes of Rule 13d-5(b)(1) of the Exchange Act or any other similar provision of applicable Law.


        4.13
    No Impairment of Lender Rights.     Each of Parent and Merger Sub agree not to bring any claim, suit, action or any other proceeding seeking to assert that this Agreement impairs or modifies any rights or remedies of the Lender under the Loan Agreement or the Security and Pledge Agreement or otherwise applies to the Lender.


        4.14
    Action by Stockholder Capacity Only.     Each of Parent and Merger Sub acknowledges that Stockholder and the Significant Holders have entered into this Agreement solely in their capacity as the record and/or beneficial owners of the Subject Shares. To the extent that any Stockholder's or any Significant Holder's Affiliate or designee is an officer or director of the Company, nothing herein shall limit or affect any actions taken by any such officer or director in their capacities as such, or require such Affiliate or designee to take any action, in each case, in such Affiliate's or designee's capacity as a director or officer of the Company, including to disclose information acquired solely in such Affiliate's or designee's capacity as a director or officer of the Company, and any actions taken (whatsoever), or failure to take any actions (whatsoever), by such Affiliate or designee in such capacity as a director or officer of the Company shall not be deemed to constitute a breach of this Agreement.


        4.15
    Interpretation.     Where a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. The definitions contained in this Agreement (including those incorporated from the Merger Agreement pursuant to the first paragraph of this Agreement) are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

[Signature Page Next]

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        IN WITNESS WHEREOF, Parent, Merger Sub, Stockholder and each of the Significant Holders have caused this Agreement to be duly executed and delivered as of the date first written above.

  COBHAM PLC



 

By:

 

/s/ BOB MURPHY

      Name:   Bob Murphy

      Title:   Chief Executive Officer



 

ARMY ACQUISITION CORP.



 

By:

 

/s/ SIMON NICHOLLS

      Name:   Simon Nicholls

      Title:   President

   

[Support Agreement Signature Page]


  VGG HOLDING LLC

 

By:

 

/s/ RAMZI MUSALLAM


      Name:   Ramzi Musallam

      Title:   Authorized Signatory

 

  VGG Holding LLC
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

  THE VERITAS CAPITAL FUND III, L.P.

 

By:

 

/s/ RAMZI MUSALLAM


      Name:   Ramzi Musallam

      Title:   Authorized Signatory

 

  The Veritas Capital Fund III, L.P.
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

   

[Support Agreement Signature Page]


  AX HOLDING LLC

 

By:

 

/s/ RAMZI MUSALLAM


      Name:   Ramzi Musallam

      Title:   Authorized Signatory

 

  AX Holding LLC
c/o Veritas Capital Fund Management, L.L.C.
590 Madison Avenue
New York, New York 10022

  Attention:   Ramzi M. Musallam

  Facsimile:   (212) 688-9411

  Email:   rmusallam@veritascapital.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT FUND II, L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  Golden Gate Capital Investment Fund II, L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT ANNEX FUND II, L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

    Golden Gate Capital Investment Annex Fund II, L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111
    Attention:   Prescott Ashe
John Knoll
    Facsimile No.:   (415) 627-1338
    E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT FUND II (AI), L.P

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

    Golden Gate Capital Investment Fund II (AI), L.P.

c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111
    Attention:   Prescott Ashe
John Knoll
    Facsimile No.:   (415) 627-1338
    E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL INVESTMENT ANNEX FUND II (AI), L.P.

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

    Golden Gate Capital Investment Fund II (AI), L.P.
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111
    Attention:   Prescott Ashe
John Knoll
    Facsimile No.:   (415) 627-1338
    E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL ASSOCIATES II-QP, LLC

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

    Golden Gate Capital Associates II-QP, LLC
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111
    Attention:   Prescott Ashe
John Knoll
    Facsimile No.:   (415) 627-1338
    E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GOLDEN GATE CAPITAL ASSOCIATES II-AI, LLC

 

By:

 

Golden Gate Capital Management II, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  Golden Gate Capital Associates II-AI, LLC
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES A

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  CCG AV, LLC—Series A
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES C

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  CCG AV, LLC—Series C
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES I

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  CCG AV, LLC—Series I
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  CCG AV, LLC—SERIES E

 

By:

 

Golden Gate Capital Management, LLC, its Authorized Signatory

 

By:

 

/s/ DAVID DOMINIK


      Name:   David Dominik

      Title:   Managing Director

 

  CCG AV, LLC—Series E
c/o Golden Gate Private Equity, Inc.
One Embarcadero Center, 33rd Floor
San Francisco, California 94111

  Attention:   Prescott Ashe
John Knoll

  Facsimile No.:   (415) 627-1338

  E-mail:   pashe@goldengatecap.com
jknoll@goldengatecap.com

   

[Support Agreement Signature Page]


  GS DIRECT, L.L.C.

 

By:

 

/s/ BRADLEY J. GROSS


      Name:   Bradley J. Gross

      Title:   Vice President

 

  GS Direct, L.L.C.
200 West Street
New York, NY 10282

  Attention:   Bradley Gross

  Facsimile No.:   (212) 357-5505

  E-mail:   bradley.gross@gs.com

   

[Support Agreement Signature Page]



Annex I

The Veritas Capital Fund III, L.P.
AX Holding LLC
Golden Gate Capital Investment Fund II, L.P.
Golden Gate Capital Investment Annex Fund II, L.P.
Golden Gate Capital Investment Fund II (AI), L.P.
Golden Gate Capital Investment Annex Fund II (AI), L.P.
Golden Gate Capital Associates II-QP, LLC
Golden Gate Capital Associates II-AI, LLC
CCG AV, LLC-Series A
CCG AV, LLC-Series C
CCG AV, LLC-Series I
CCG AV, LLC-Series E
GS Direct, L.L.C.



ANNEX E

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

§ 262. Appraisal rights.

        (a)   Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of the stockholder's shares of stock under the circumstances described in subsections (b) and (c) of this section. As used in this section, the word "stockholder" means a holder of record of stock in a corporation; the words "stock" and "share" mean and include what is ordinarily meant by those words; and the words "depository receipt" mean a receipt or other instrument issued by a depository representing an interest in 1 or more shares, or fractions thereof, solely of stock of a corporation, which stock is deposited with the depository.

        (b)   Appraisal rights shall be available for the shares of any class or series of stock of a constituent corporation in a merger or consolidation to be effected pursuant to § 251 (other than a merger effected pursuant to § 251(g) of this title and, subject to paragraph (b)(3) of this section, § 251(h) of this title), § 252, § 254, § 255, § 256, § 257, § 258, § 263 or § 264 of this title:

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        (c)   Any corporation may provide in its certificate of incorporation that appraisal rights under this section shall be available for the shares of any class or series of its stock as a result of an amendment to its certificate of incorporation, any merger or consolidation in which the corporation is a constituent corporation or the sale of all or substantially all of the assets of the corporation. If the certificate of incorporation contains such a provision, the procedures of this section, including those set forth in subsections (d) and (e) of this section, shall apply as nearly as is practicable.

        (d)   Appraisal rights shall be perfected as follows:

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        (e)   Within 120 days after the effective date of the merger or consolidation, the surviving or resulting corporation or any stockholder who has complied with subsections (a) and (d) of this section hereof and who is otherwise entitled to appraisal rights, may commence an appraisal proceeding by filing a petition in the Court of Chancery demanding a determination of the value of the stock of all such stockholders. Notwithstanding the foregoing, at any time within 60 days after the effective date of the merger or consolidation, any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party shall have the right to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or consolidation. Within 120 days after the effective date of the merger or consolidation, any stockholder who has complied with the requirements of subsections (a) and (d) of this section hereof, upon written request, shall be entitled to receive from the corporation surviving the merger or resulting from the consolidation a statement setting forth the aggregate number of shares not voted in favor of the merger or consolidation and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. Such written statement shall be mailed to the stockholder within 10 days after such stockholder's written request for such a statement is received by the surviving or resulting corporation or within 10 days after expiration of the period for delivery of demands for appraisal under subsection (d) of this section hereof, whichever is later. Notwithstanding subsection (a) of this section, a person who is the beneficial owner of shares of such stock held either in a voting trust or by a nominee on behalf of such person may, in such person's own name, file a petition or request from the corporation the statement described in this subsection.

        (f)    Upon the filing of any such petition by a stockholder, service of a copy thereof shall be made upon the surviving or resulting corporation, which shall within 20 days after such service file in the office of the Register in Chancery in which the petition was filed a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached by the surviving or resulting corporation. If the petition shall be filed by the surviving or resulting corporation, the petition shall be accompanied by such a duly verified list. The Register in Chancery, if so ordered by the Court, shall give notice of the time and place fixed for the hearing of such petition by registered or certified mail to

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the surviving or resulting corporation and to the stockholders shown on the list at the addresses therein stated. Such notice shall also be given by 1 or more publications at least 1 week before the day of the hearing, in a newspaper of general circulation published in the City of Wilmington, Delaware or such publication as the Court deems advisable. The forms of the notices by mail and by publication shall be approved by the Court, and the costs thereof shall be borne by the surviving or resulting corporation.

        (g)   At the hearing on such petition, the Court shall determine the stockholders who have complied with this section and who have become entitled to appraisal rights. The Court may require the stockholders who have demanded an appraisal for their shares and who hold stock represented by certificates to submit their certificates of stock to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings; and if any stockholder fails to comply with such direction, the Court may dismiss the proceedings as to such stockholder.

        (h)   After the Court determines the stockholders entitled to an appraisal, the appraisal proceeding shall be conducted in accordance with the rules of the Court of Chancery, including any rules specifically governing appraisal proceedings. Through such proceeding the Court shall determine the fair value of the shares exclusive of any element of value arising from the accomplishment or expectation of the merger or consolidation, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining such fair value, the Court shall take into account all relevant factors. Unless the Court in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective date of the merger and the date of payment of the judgment. Upon application by the surviving or resulting corporation or by any stockholder entitled to participate in the appraisal proceeding, the Court may, in its discretion, proceed to trial upon the appraisal prior to the final determination of the stockholders entitled to an appraisal. Any stockholder whose name appears on the list filed by the surviving or resulting corporation pursuant to subsection (f) of this section and who has submitted such stockholder's certificates of stock to the Register in Chancery, if such is required, may participate fully in all proceedings until it is finally determined that such stockholder is not entitled to appraisal rights under this section.

        (i)    The Court shall direct the payment of the fair value of the shares, together with interest, if any, by the surviving or resulting corporation to the stockholders entitled thereto. Payment shall be so made to each such stockholder, in the case of holders of uncertificated stock forthwith, and the case of holders of shares represented by certificates upon the surrender to the corporation of the certificates representing such stock. The Court's decree may be enforced as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.

        (j)    The costs of the proceeding may be determined by the Court and taxed upon the parties as the Court deems equitable in the circumstances. Upon application of a stockholder, the Court may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorney's fees and the fees and expenses of experts, to be charged pro rata against the value of all the shares entitled to an appraisal.

        (k)   From and after the effective date of the merger or consolidation, no stockholder who has demanded appraisal rights as provided in subsection (d) of this section shall be entitled to vote such stock for any purpose or to receive payment of dividends or other distributions on the stock (except dividends or other distributions payable to stockholders of record at a date which is prior to the effective date of the merger or consolidation); provided, however, that if no petition for an appraisal shall be filed within the time provided in subsection (e) of this section, or if such stockholder shall deliver to the surviving or resulting corporation a written withdrawal of such stockholder's demand for

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an appraisal and an acceptance of the merger or consolidation, either within 60 days after the effective date of the merger or consolidation as provided in subsection (e) of this section or thereafter with the written approval of the corporation, then the right of such stockholder to an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court of Chancery shall be dismissed as to any stockholder without the approval of the Court, and such approval may be conditioned upon such terms as the Court deems just; provided, however that this provision shall not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder's demand for appraisal and to accept the terms offered upon the merger or consolidation within 60 days after the effective date of the merger or consolidation, as set forth in subsection (e) of this section.

        (l)    The shares of the surviving or resulting corporation to which the shares of such objecting stockholders would have been converted had they assented to the merger or consolidation shall have the status of authorized and unissued shares of the surviving or resulting corporation.

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AEROFLEX HOLDING CORP. ATTN: ANDREW KAMINSKY 35 SOUTH SERVICE ROAD PLAINVIEW, NY 11803-0622 Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 John Sample 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 SUBMIT A PROXY BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. SUBMIT A PROXY BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. SUBMIT A PROXY BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. CONTROL # 000000000000 NAME THE COMPANY NAME INC. - COMMON THE COMPANY NAME INC. - CLASS A THE COMPANY NAME INC. - CLASS B THE COMPANY NAME INC. - CLASS C THE COMPANY NAME INC. - CLASS D THE COMPANY NAME INC. - CLASS E THE COMPANY NAME INC. - CLASS F THE COMPANY NAME INC. - 401 K SHARES 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 PAGE 1 OF 2 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: . KEEP THIS PORTION FOR YOUR RECORDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

 


DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS LISTED BELOW. Vote On Proposals For Against Abstain 1. To adopt the Agreement and Plan of Merger, dated as of May 19, 2014, as it may be amended from time to time, by and among Aeroflex Holding Corp., Cobham plc and Army Acquisition Corp. (the "Agreement and Plan of Merger"). 2 . To approve any adjournment of the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of the Special Meeting to constitute a quorum or to adopt the Agreement and Plan of Merger. I certify that I, or my organization, was a stockholder of record of the number of shares of Common Stock of Aeroflex Holding Corp. described below, as of [.], 2014 and that I am duly authorized to vote such shares as set forth above. IF YOU SIGN YOUR PROXY CARD WITHOUT INDICATING YOUR VOTE, YOUR SHARES WILL BE VOTED "FOR" THE ADOPTION OF THE AGREEMENT AND PLAN OF MERGER AND "FOR" THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES, AND IN ACCORDANCE WITH RECOMMENDATIONS OF THE BOARD OF DIRECTORS ON ANY OTHER BUSINESS PROPERLY BROUGHT BEFORE THE SPECIAL MEETING, OR AT ANY ADJOURNMENT OR POSTPONEMENT THEREOF. For address changes and/or comments, please check this box and write them on the back where indicated. Please indicate if you plan to attend this meeting. Yes No These items of business are more fully described in the proxy statement. The record date for the Special Meeting is [.], 2014. Only stockholders of record at the close of business on that date may vote at the Special Meeting or any adjournment or postponement thereof.

 


Important Notice Regarding the Availability of Proxy Materials for the Special Meeting: The Notice & Proxy Statement is/are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — AEROFLEX HOLDING CORP. Special Meeting of Stockholders [.], 2014 [.] AM Eastern Time This proxy is solicited by the Board of Directors The undersigned stockholder(s) of Aeroflex Holding Corp. (the "Company") hereby acknowledge(s) receipt of the Notice of Special Meeting of Stockholders and Proxy Statement for the Company's Special Meeting of Stockholders to be held at [.] AM Eastern Time on [.], 2014 (the "Special Meeting"). The stockholder(s) hereby appoint(s) Hugh D. Evans and John Adamovich, Jr., or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of AEROFLEX HOLDING CORP. that the stockholder(s) is/are entitled to vote at the Special Meeting of Stockholders, to be held at [.] AM Eastern Time on [.], 2014, at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022, and at any adjournments or postponements thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted "FOR" the adoption of the Agreement and Plan of Merger and "FOR" the adjournment of the Special Meeting, if necessary, to solicit additional proxies, and in accordance with the Board of Directors' recommendations on any other business properly brought before the Special Meeting, or at any adjournment or postponement thereof. Continued and to be signed on reverse side

 

 



Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘PRER14A’ Filing    Date    Other Filings
3/15/15
12/31/14
9/30/14
8/17/14
Filed on:7/28/14
7/24/14
7/21/14
7/18/14
7/17/14
7/14/14
7/3/14PREM14A
7/2/14
7/1/144
6/30/14
6/27/14
6/18/14
6/16/14
6/13/14
6/6/14
6/3/14
6/2/14
5/30/14SD
5/28/14SC 13D
5/27/14
5/23/14
5/20/148-K,  DEFA14A
5/19/148-K
5/16/14
5/15/14
5/13/14
5/12/14
5/7/1410-Q,  8-K
5/2/14
5/1/14
4/30/14
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4/27/14
4/25/14
4/22/14
4/17/14
4/14/14
4/9/14
4/4/14
3/31/1410-Q
3/12/14
3/7/14
2/6/14
2/4/14
1/31/14
1/16/14
12/31/1310-Q,  SD
12/23/13
12/20/13
12/18/13
12/17/13
12/5/13
11/18/138-K
10/3/13DEF 14A,  DEFA14A
9/30/1310-Q
8/6/13
6/30/1310-K
5/29/138-K
3/31/1310-Q
12/31/1210-Q,  4
12/24/12
9/30/1210-Q
6/30/1210-K,  10-K/A
5/24/128-K
3/31/1210-Q
12/31/1110-Q
9/30/1110-Q
7/1/11
6/30/1110-K
5/9/11
11/18/103,  8-A12B
10/11/01
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