8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) January 4, 2010

Breeze-Eastern Corporation

(Exact Name of Registrant as Specified in Charter)

Delaware	1-7872	95-4062211
(State or Other Jurisdiction	(Commission	(IRS Employer
Of Incorporation)	File Number)	Identification No.)

700 Liberty Avenue, Union, New Jersey	07083
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code (908) 688-2440

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers

As previously announced by the Company on December 21, 2009, Robert L. G. White, President, Chief Executive Officer and a Director, has retired from his positions with the Company effective January 4, 2010. Mr. White, 68, joined the Company in 1994.

Michael Harlan, 53, has been appointed by the Board of Directors to succeed Mr. White as President and Chief Executive Officer effective January 4, 2010. Mr. Harlan has served as Executive Vice President and Chief Operating Officer since joining the company in August, 2009. The Board of Directors also elected Mr. Harlan as a Director effective January 4, 2010, filling the vacancy created by the retirement of Mr. White.

Prior to joining the Company, Mr. Harlan served as Chief Executive Officer of Nomad Innovations, LLC, a business developing turnkey wireless broadband systems. In addition, Mr. Harlan was formerly President and Chief Operating Officer of Conforma Clad, Inc., a manufacturer of high performance industrial wear protection. Mr. Harlan was also previously employed by AlliedSignal Inc., and McKinsey & Company, Inc.

In connection with the appointment, the Company entered into an employment letter agreement with Mr. Harlan effective August 17, 2009. The agreement provides for an annual base salary of $300,000 for Mr. Harlan’s position as President and Chief Executive Officer, which will be reviewed annually by the board of directors, and for a minimum bonus of $78,000 for the Company’s current fiscal year ending March 31, 2010. The agreement provides that 15% of the bonus will be paid in common stock of the Company. Mr. Harlan has received an option to purchase 100,000 shares of the Company’s common stock at the closing price on the date immediately preceding the effective date of his employment agreement, with one-third of the option grant becoming exercisable on each of the first, second and third anniversaries of his employment agreement; the term of the option is 10 years, subject to earlier termination in the event of certain conditions. Mr. Harlan will be eligible to participate in the Company’s incentive and benefit plans under the same terms and conditions applicable to other executives of the Company.

If Mr. Harlan’s employment is terminated by the Company without cause at any time within the first two years of employment, he will be entitled to receive severance pay equal to one year’s base salary, exclusive of bonuses, and the continuation of employee benefits for a period of one year. In the event of a change in control and termination or resignation for good reason in connection therewith within 24 months of the change in control, Mr. Harlan will be entitled to receive a cash payment equal to two years’ base salary and the average of any bonuses for two years. In addition, the vesting of all stock options and restricted shares granted would accelerate upon a change in control.

Copies of Mr. Harlan’s employment letter agreement and stock option agreement are attached hereto as Exhibit 10.36 and Exhibit 10.37, respectively.

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On January 6, 2010, the Company announced that Mr. Joseph Spanier, Executive Vice President, Chief Financial Officer and Treasurer had retired from his positions with the Company effective January 6, 2010. Mr. Spanier, age 63, had served as Chief Financial Officer since 1996.

The Board of Directors has named Mr. Mark D. Mishler, 51, to succeed Mr. Spanier as Senior Vice President, Chief Financial Officer and Treasurer effective January 6, 2010.

Mr. Mishler most recently served as Chief Financial Officer of Vital Signs, Inc., a $400 million, NASDAQ-listed manufacturer of medical devices that was acquired by General Electric in 2008. From 2005 to 2007, Mr. Mishler was the Corporate Controller and CIO at Fedders Corporation. Prior to 2005, Mr. Mishler was Corporate Controller and CIO of Amcast Industrial Corporation. He is a Certified Public Accountant and Certified Management Accountant. A graduate of Indiana University, he earned his MBA from the University of Michigan.

In connection with the appointment, the Company entered into an employment letter agreement with Mr. Mishler effective January 6, 2010. The agreement provides for an annual base salary of $230,000, which will be reviewed annually by the board of directors, and for a one-time cash signing bonus of $40,000, paid in four equal installments of $10,000 each. Mr. Mishler will participate in the Company’s Annual Incentive Compensation Plan with a target award of 40% of his base salary for the Company’s current fiscal year ending March 31, 2010. The agreement provides that 15% of the bonus will be paid in common stock of the Company. Mr. Mishler will also receive an option to purchase 14,000 shares of the Company’s common stock at the closing price on the date immediately preceding the effective date of his employment agreement, with one-third of the option grant becoming exercisable on each of the first, second and third anniversaries of his employment agreement; the term of the option is 10 years, subject to earlier termination in the event of certain conditions. Mr. Mishler will also receive an option to purchase 26,000 shares of the Company’s common stock effective April 1, 2010. Mr. Mishler will be eligible to participate in the Company’s incentive and benefit plans under the same terms and conditions applicable to other executives of the Company.

If Mr. Mishler’s employment is terminated by the Company without cause at any time after the first 90 days of employment, he will be entitled to receive severance pay equal to six month’s base salary, exclusive of bonuses, and the continuation of employee benefits for the same period. In the event of a change in control and termination or resignation for good reason in connection therewith within 24 months of the change in control, Mr. Mishler will be entitled to receive a cash payment equal to one years’ base salary and the average of any bonuses for the prior two years. In addition, the vesting of all stock options and restricted shares granted would accelerate upon a change in control.

A copy of Mr. Mishler’s employment letter agreement is attached hereto as Exhibit 10.38.

Reference is made to the Company’s press release, dated January 6, 2010 and attached hereto as Exhibit 99.1 to this Form 8-K, the subject of which is the appointment of Mr. Mishler as Senior Vice President, Chief Financial Officer and Treasurer of the Company and the retirement of Mr. Joseph Spanier as Executive Vice President, Chief Financial Officer and Treasurer of the Company.

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ITEM 9.01 Financial Statements and Exhibits.

     (a) Financial Statements of Business Acquired. None

     (b) Pro Forma Financial Information. None

     (c) Shell Company Transactions. Not applicable.

     (d) Exhibits

Exhibit	Description
10.36	Letter Agreement between Mr. Harlan and the Company dated July 24, 2009.
10.37	Stock Option Agreement between Mr. Harlan and the Company dated August 17, 2009.
10.38	Letter Agreement between Mr. Mishler and the Company dated December 10, 2009.
99.1	Press Release of the Company dated January 6, 2010.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BREEZE-EASTERN CORPORATION
By:	/s/ Gerald C. Harvey
	Gerald G. Harvey, Executive Vice President,
	General Counsel and Secretary

Date: January 7, 2010

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EX-10.36

Exhibit 10.36

July 24, 2009

Mr. Donald Michael Harlan, Jr.
1321 Leighton Circle
Louisville, KY 40222

Dear Mr. Harlan:

     In accord with previous conversations, we are pleased to offer to you the permanent full-time position of Executive Vice President and Chief Operating Officer of Breeze-Eastern Corporation (the “Company”) in accordance with the following terms.

Position:	Executive Vice President and Chief Operating Officer, effective August 17, 2009 (“Company Hire Date”). In this capacity, you shall devote your best efforts and your full business time and attention to the performance of the services customarily incident to such office and position and to such other services of a senior executive nature as may be reasonably requested by the Board of Directors (the “Board”) of the Company which may include services for one or more subsidiaries or affiliates of the Company. You shall report to the Chief Executive Officer of the Company or at such time as you are elected to the position of Chief Executive Officer you shall report to the Board.
Salary:	Effective your Company Hire Date, $260,000 per year. At such time as the Board elects you to the position of Chief Executive Officer (“CEO”), your annual salary shall increase to $300,000. It is the current expectation of the Board that you will be elected CEO effective April 1, 2010. Your salary will be paid biweekly in arrears. Commencing Fiscal Year 2012, which begins April 1, 2011, you will be eligible for periodic salary increases subject to the Company’s policies on employee evaluation and compensation and the approval of the Board.
Bonus:	You will participate as provided herein in the Breeze-Eastern FY’ 10 Annual Incentive Compensation Plan (“Annual Plan”), provided that for Fiscal Year 2010, which ends March 31, 2010, you will be awarded a minimum bonus of $78,000, fifteen (15%) percent of which shall be paid in shares of the common stock of the Company (“Company Shares”). Under the Annual Plan the

	percentage of your base salary that will be your target award will be 60% if the EBITDA established in the Tactical Plan as approved by the Board is achieved. Subject to the minimum established for FY10, your bonus will be adjusted up or down commensurate with the bonus schedule attached to the Annual Plan and subsequent plans approved by the Board. The bonus under the Annual Plan will be payable in June 2010. You will be eligible to participate in subsequent fiscal year bonus plans as may be established by the Board of Directors of the Company. In subsequent bonus years and following your election as CEO, your bonus target will be 70% of the annual bonus, fifteen (15%) percent of which shall be paid in Company Shares.
Stock Options:	Upon commencement of employment with the Company, you will be awarded options to purchase 100,000 shares of the Company’s common stock at the closing price on the day before your Company Hire Date. These options vest 1/3 on each of the subsequent anniversary dates of the grant and shall be subject to the provisions of the form of option agreement established by the Company pursuant to the stock option plan approved by the shareholders (the “Stock Option Agreement”). In subsequent years, you shall be eligible for stock option awards as determined by the Incentive & Compensation Committee of the Board of Directors and based on an evaluation of your performance.
Severance:	In the event you are terminated by the Company without cause at any time during your first two years of employment you will receive severance pay equal to one year’s base annual salary in effect at the time of termination, but exclusive of bonuses, and the continuation of employee benefits for a period of one (1) year. The foregoing severance is in lieu of the Company’s Corporate Severance Pay Plan and shall be subject to changes, if any, approved by the Board which provide for greater severance benefits than provided under this letter agreement.
Change of Control:	In the event of a change of control, which shall be defined as set out in the Stock Option Agreement, and your termination or resignation for good reason, as hereinafter defined, within 24 months of the change of control, you would receive a cash payment equal to two years base pay and the average of your bonuses for two years. In addition, the vesting of all stock options and restricted shares would accelerate upon a change in control. Payments received upon a change of control and your termination or resignation for good reason would be in lieu of any and all payments you would receive upon severance. Termination shall

	mean a termination that is not voluntary or is other than for cause and resignation for good reason shall mean a resignation following a reduction in compensation, benefits or responsibilities or failure by the Company to obtain an agreement from any successor or assignee legal entity to assume and perform the obligations set out in this paragraph.
Relocation:	With respect to relocation of your principal residence, to be completed within twelve months of your Company Hire Date, the Company will reimburse you for reasonable and customary (as agreed between the Company and you): moving expenses, closing costs incurred in connection with the purchase of your new primary residence, and a temporary living allowance prior to your relocation. In addition, the Company will reimburse you for the cost of economy air fare for trips twice monthly to your pre-relocation residence for a maximum of twelve months.
	The Company will make a tax gross-up for the expenses reimbursed to the extent permissible under applicable law. In the event that you voluntarily terminate your employment with the Company within 12 months of relocation, all amounts reimbursed must be repaid to the Company.
401(k):	As a Company employee, you will be eligible to participate in the Breeze-Eastern Retirement Savings Plan in accordance with the provisions of the plan. The plan requires that an employee have one month of service before he or she is eligible to contribute to the plan. Company contributions require one year of service.
Medical/Dental:	You will be entitled to the normal benefits accorded the Company’s salaried employees, which currently include major medical, hospitalization, dental and prescriptions. The specifics of these benefits are subject to modification or termination at any time.
Vacation:	Four (4) weeks. You will also receive four personal days and six sick days per year in accordance with Company policies. The Company does not offer sabbaticals and there is no policy for comp time for corporate officers.
Off-Site Support:	You will be provided with the use of a Company-owned laptop computer comparable to those used by other corporate officers.
Other Benefits:	The Company’s policy manual contains illustrations of other benefits, such as tuition reimbursement, travel insurance, etc. which are available to all Company employees.

Stock Ownership: During the period of your employment, you shall acquire and thereafter maintain ownership of Company Shares as provided herein. Not later than December 31, 2009, you shall, subject to the availability of Company trading windows for Company insiders, purchase on the open market Company Shares having a value of not less than $50,000. Subsequent thereto you shall pursue a program to acquire additional Company Shares so that your aggregate holdings of Company Shares shall equal your then current base salary (your “Minimum Stock Ownership Commitment”). As a minimum, beginning calendar year 2010, you shall acquire each year an additional $50,000 of Company Shares towards your Minimum Stock Ownership Commitment. Company Shares received through the Company’s annual incentive compensation plan shall be credited towards your Minimum Stock Ownership Commitment. In the event that in any year Company Shares received under the then annual plan have a value of less than $50,000, you shall purchase on the open market Company Shares aggregating at least the amount necessary to equal $50,000 for that year. From the date that you have achieved your Minimum Stock Ownership Commitment, you shall, within 6 months of receiving a raise in your base salary, increase as may be necessary your ownership of Company Shares to meet your then applicable Minimum Stock Ownership Commitment.

     The Company maintains an “employment at will” policy, and by acceptance of employment with the Company you acknowledge and agree to such policy. The Company reserves the right to amend or change any of its benefit programs at its discretion. Terms of your employment, including the at-will policy, may not be modified by any oral or implied agreement with any officer of the Company or by a writing unless approved by the Board. As an officer of Breeze-Eastern Corporation, you will be subject to certain SEC requirements and restrictions upon your ability to buy and sell securities of the Company. You will be considered a Section 16(b) employee, subject to SEC reporting of your holdings, and changes thereto, of Company stock.

     As a condition of your employment, you agree to become familiar with and comply with the provisions of the Company’s policies and procedures and you agree to sign and agree to comply with any non-disclosure of confidential information/trade secret agreements and any patent and invention assignment agreements specified in such policies and procedures. These policies may be, and are, modified from time to time. It is your responsibility to maintain an up to date knowledge of these policies and procedures.

     In recognition of the risks and obligations you will undertake in accepting a

position as an officer in the Company, Breeze-Eastern Corporation will enter into an indemnification agreement with you relative to claims brought against you in your capacity as an officer of the Company. This agreement will be provided under separate cover. The Company maintains a Directors and Officers Insurance policy as added protection.

     Your employment and election to the officer position noted above is contingent upon the Board of Directors of Breeze-Eastern Corporation approving such appointment, your receipt of any necessary governmental security clearances, and appropriate credential confirmation. Your appointment pursuant to this offer of employment is on the agenda of the July 29, 2009 meeting of the Board.

     If the above offer is acceptable to you, please sign both copies of this letter, keep one copy for your files and return the other copy to me. If you have any questions about any of the items noted above, please do not hesitate to call me. This offer will expire, unless accepted, at the close of business on August 3, 2009.

     We are very enthusiastic about having you join our team. Breeze-Eastern Corporation is poised to begin another exciting chapter in its quest for growth and achievement of its goals. I, along with the other members of our management group, am sure that you will make a significant addition to our team as we pursue the challenges and opportunities facing us.

Very truly yours,

Robert L. G. White
President and
Chief Executive Officer

Agreed and Accepted

Donald Michael Harlan, Jr.

EX-10.37

Exhibit 10.37

BREEZE-EASTERN CORPORATION

INCENTIVE STOCK OPTION AGREEMENT

     Agreement dated as of August 17, 2009 between Breeze-Eastern Corporation, a Delaware corporation (the “Company”), and Donald Michael Harlan, Jr. (“Optionee”), residing at 1321 Leighton Circle, Louisville, KY 40222.

     Whereas, the Board of Directors of the Company has approved a letter agreement between the Company and Optionee providing for, among others, the employment of Optionee by the Company and, in connection therewith, the granting to Optionee of a stock option to purchase shares of common stock of the Company upon the terms and conditions hereinafter stated.

     NOW THEREFORE, in consideration of the covenants herein set forth, the parties agree as follows:

1.	Shares & Price. The Company grants to Optionee the right to purchase, upon and subject to the terms and conditions herein stated, all or any part of 100,000            shares of common stock ($.01 par value) of the Company (the “Shares”), for cash at the price of $6.05 per share.
2.	Term of Option. This option shall expire on August 17, 2019.
3.	Installments. Subject to the provisions hereof, this option shall become exercisable in one or more installments set forth below. Each installment shall be for the numbers of Shares and exercisable (in whole or in part) upon and after the dates set forth.

DATE	NUMBER OF SHARES
August 17, 2010	33,333 Shares
August 17, 2011	33,333 Shares
August 17, 2012	33,334 Shares

The installments shall be cumulative; i.e., this option may be exercised, as to any or all shares covered by an installment, at any time after an installment becomes exercisable and until expiration or termination of this option.

4.	Exercise. This option may only be exercised by delivery to the Company of (i) a written notice of exercise, in form acceptable to the Company, stating the number of Shares then being purchased hereunder, and (ii) a check or cash, in the amount of the purchase price of such shares (or, at the discretion of the Board of Directors, with Shares of the Company with a market value equal to the purchase price at date of exercise).
5.	Termination of Employment. If Optionee ceases to be employed by the Company or a subsidiary thereof for any reason other than his death, disability or Retirement (as defined in Paragraph 7(a) below), either Optionee or the person entitled to succeed to his rights hereunder shall have the right, at any time within three (3) months after such termination of employment and prior to the expiration of this option pursuant to Paragraph 2 hereof, to exercise this option to the extent, but only to the extent, that this option was exercisable and had not previously been exercised at the date of such termination of employment; provided, however, that all rights under this option shall expire in any event on the day specified in Paragraph 2 hereof or three (3) months after the employment of Optionee terminates, whichever first occurs.
6.	Death of Optionee & No Assignment. The option shall not be assignable or transferable except by will or by the laws of descent and distribution and shall be exercisable during his lifetime only by the Optionee. If Optionee shall become disabled or die while in the employ of the Company, the Optionee or the person entitled to succeed to his rights hereunder may exercise this option until the first to occur of (i) the date one year from the date of the Optionee’s disability or death, or (ii) the date such option expires pursuant to Paragraph 2 hereof to the extent that Optionee was entitled to exercise this Option at the date of his disability or death.
7.	Retirement. (a) “Retirement” and “Retire(s)” are defined to mean that the Optionee ceases to be employed by the Company for other than cause after reaching sixty (60) years of age and having not less than ten (10) years of service with the Company.

          (b) Notwithstanding any other provision of this agreement, if Optionee Retires, then if this option was granted to Optionee more than six (6) months prior to Optionee’s Retirement, this option shall be deemed to be fully vested and immediately exercisable at the date of Retirement.

          (c) Optionee, or any person entitled to succeed to his rights hereunder, shall have the right, at any time within three (3) years after Retirement and prior to the expiration of this option, to exercise this option to the extent, but only to the extent, that this option was exercisable and

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had not previously been exercised at the date of Retirement (after giving effect to the provisions of Paragraph 7(b) above).

          (d) Provided, however, that all rights under this option shall expire in any event on the day specified herein as the date of option expiration or three (3) years after the date of Optionee’s Retirement, whichever first occurs.

8.	Employment of Optionee. In consideration of the granting of this option by the Company, the Optionee agrees to render faithful and efficient services to the Company or a subsidiary thereof, with such duties and responsibilities as the Company or such subsidiary shall from time to time prescribe, for a period of at least one year from the date this option is granted or until Optionee Retires as defined in Paragraph 7(a) above, whichever first occurs. Nothing in this Agreement shall confer upon the Optionee any right to continue in the employ of the Company or any subsidiary thereof or shall interfere with or restrict in any way the rights of the Company, and its subsidiaries, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without good cause.
9.	No Rights as Stockholder. Optionee shall have no rights as a stockholder with respect to the Shares covered by the option until the date of the issuance of stock certificates to him. No adjustment will be made for dividends or other rights for which the record date is prior to the date such stock certificates are issued pursuant to the exercise of options granted hereunder.
10.	Shares Purchased for Investment. Optionee represents and agrees that if he exercises this option in whole or in part, he shall acquire the Shares upon such exercise for the purpose of investment and not with a view to their resale or distribution. The Company reserves the right to include a legend on each certificate representing Shares subject to this option, stating in effect that such shares have not been registered under the Securities Act of 1933, as amended.
11.	Change of Control. In the event of a “Change in Control” of the Company, as defined in Exhibit A hereto, notwithstanding anything in this Agreement to the contrary, all stock options granted hereunder then outstanding shall become fully exercisable as of the date of the Change in Control.
12.	Gender. Unless the context otherwise requires, the masculine gender includes the feminine.
13.	Notices. Any notices or other communication required or permitted hereunder shall be sufficiently given if delivered personally or sent by

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registered or certified mail, postage prepaid, to the Company at its corporate headquarters, and to the Optionee at the address above, or to such other address as shall be furnished in writing by either party to the other party, and shall be deemed to have been given as of the date so delivered or deposited in the United States mail, as the case may be.

     IN WITNESS WHEREOF, the parties hereto have executed this agreement.

BREEZE-EASTERN CORPORATION
(“COMPANY”)
Name:	Robert L.G. White
Title:	President and Chief Executive Officer
	Donald Michael Harlan, Jr.

Grant Number: 002278

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Exhibit A to Stock Option Agreement

Definition of “Change in Control,” as referenced in Section 11 of the Stock Option Agreement:

“Change in Control” means the occurrence of any one (or more) of the following events:

1. Any one person, or more than one person acting as a group, as defined in Section 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), acquires ownership of Common Stock that, together with the Common Stock already held by such person or group, constitutes more than 50% of the total Fair Market Value or the total voting power of the stock of the Company;

2. Any one person, or more than one person acting as a group, as defined in Section 13(d)(3) of the Exchange Act, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company that possesses 35% or more of the total voting power of the stock of the Company;

3. A majority of the members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors prior to the date of such appointment or election;

4. A change in ownership of a portion of the assets of the Company, which portion of the assets has a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the Company’s assets which shall be deemed to be equal to the total Fair Market Value of all the Company Stock;

5. The stockholders of the Company shall approve an agreement providing either for a transaction in which the Company will cease to be an independent publicly owned Company or for a sale or other disposition of all or substantially all of the assets of the Company; or

6. A tender offer or exchange offer is made by any person, including a group as defined in Section 13(d)(3) of the Exchange Act, for such amount of shares representing a majority of the voting power of the Company with respect to the election of the Company’s Board of Directors, and at least such amount of shares of Common Stock are acquired pursuant to such tender offer.

With respect to the foregoing provision, the following definition shall apply:

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“Fair Market Value” means the fair market value of the Shares determined as follows:

• if the Shares are publicly traded and are then listed on a national securities exchange, the closing price on the date of determination on the principal national securities exchange on which the Shares are listed or admitted to trading;

• if such Shares are quoted on the NASDAQ National Market, its closing price on the NASDAQ National Market on the date of determination;

• if such Shares are publicly traded but are not listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices for the Shares on the date of determination; or

• if none of the foregoing is applicable, the weighted average of the mean selling price of the Shares on the nearest date before and the nearest date after the determination date.

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EX-10.38

Exhibit 10.38

December 10, 2009

Mr. Mark D. Mishler
16 Corn Hill Drive
Morristown, NJ 07960

Dear Mark:

     We are pleased to invite you to join our Leadership Team and offer you the full-time position of Senior Vice President, Chief Financial Officer and Treasurer of Breeze-Eastern Corporation (the “Company”) in accordance with the following terms.

Position:	Senior Vice President, Chief Financial Officer and Treasurer, effective January 6, 2010 (your “Company Hire Date”). In this capacity, you shall devote your best efforts and your full business time and attention to the performance of the services customarily incident to such office and position and to such other services of a senior executive nature as may be reasonably requested by the Chief Executive Officer, Chief Operating Officer, or Board of Directors (the “Board”) of the Company which may include services for one or more subsidiaries or affiliates of the Company. You shall report to the Chief Executive Officer of the Company. You will not be a member of the Board of Directors but will be asked to attend most meetings of the Board.
Salary:	$230,000 per year, effective starting on your Company Hire Date. Your salary will be paid biweekly in arrears. You will be eligible for periodic salary increases subject to the Company’s policies on employee evaluation and compensation and the approval of the Board.
Bonus:	Also effective on your Company Hire Date you shall become eligible to receive a one-time cash signing bonus of $40,000 which shall be paid to you in four equal monthly installments of $10,000 each, less applicable taxes and other withholdings, commencing the first pay period following your Company Hire Date.
	You will participate as provided herein in the Breeze-Eastern FY’ 10 Annual Incentive Compensation Plan (“Annual Plan”), with a target award of 40% of your base salary as of the end of the corresponding Fiscal Year.

Mr. Mark D. Mishler
December 10, 2009
Page 2

     The Annual Plan is conditional on achieving at least 85% of the Tactical Plan (TacPlan) EBITDA. The Annual Plan award increases corresponding to achievement of more than that threshold and up to 120% of the TacPlan EBTIDA.

     For FY10, your award (payable in June 2010) will be the greater of:

• Your award amount prorated to one-quarter, representing the portion of the fiscal year you will have been employed by the Company, or

• $24,000

In accordance with the Annual Plan, all awards are paid out 85% in cash and 15% in Restricted Stock, paid in common stock of the Company (“Company Shares”).

You will be eligible to participate in subsequent fiscal year bonus plans as may be established by the Board of Directors of the Company.

Stock Options:

Upon commencement of employment with the Company, you will be awarded options to purchase 14,000 shares of the Company’s common stock at the closing price on the day before your Company Hire Date. On April 1, 2010, you will receive additional options to purchase 26,000 shares of the Company’s common stock at the closing price on the day before your Company Hire Date. These options vest 1/3 on each of the subsequent anniversary dates of your Company Hire Date and shall be subject to the provisions of the form of option agreement established by the Company pursuant to the stock option plan approved by the shareholders (the “Stock Option Agreement”). In subsequent years, you shall be eligible for stock option awards as determined by the Incentive & Compensation Committee of the Board of Directors and based on an evaluation of your performance.

Severance:

In the event you are terminated by the Company without cause at any time after the first 90 days of employment, you will receive severance pay equal to six month’s annual salary in effect at the time of termination, but exclusive of bonuses, and the continuation of employee benefits for the same period. The foregoing severance is in lieu of the Company’s Corporate Severance Pay Plan and shall be subject to changes, if any, approved by the Board which provide for greater severance benefits than provided under this letter agreement.

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Mr. Mark D. Mishler
December 10, 2009
Page 3

Change of Control:	In the event of a change of control, which shall be defined as set out in the Stock Option Agreement, and your termination or resignation for good reason, as hereinafter defined, within 24 months of the change of control, you would receive a cash payment equal to one year’s base pay and the average of your bonuses for prior two years (or 40% of your salary if you have not yet received two bonuses). In addition, the vesting of all stock options and restricted shares would accelerate upon a change in control. Payments received upon a change of control and your termination or resignation for good reason would be in lieu of any and all payments you would receive upon severance. “Termination” shall mean a termination that is not voluntary or is other than for cause and “resignation for good reason” shall mean a resignation following a reduction in compensation, benefits or responsibilities, reporting to anybody other than the CEO, or failure by the Company to obtain an agreement from any successor or assignee legal entity to assume and perform the obligations set out in this paragraph.
401(k):	As a Company employee, you will be eligible to participate in the Breeze-Eastern Retirement Savings Plan in accordance with the provisions of the plan. The plan requires that an employee have one month of service before he or she is eligible to contribute to the plan. Company contributions require one year of service.
Medical/Dental:	You will be entitled to the normal benefits accorded the Company’s salaried employees, which currently include major medical, hospitalization, dental and prescriptions. The specifics of these benefits are subject to modification or termination at any time.
Vacation:	Three (3) weeks. You will also receive four personal days and six sick days per year in accordance with Company policies.
Off-Site Support:	You will be provided a Company-owned laptop computer comparable to those used by other company executives.
Other Benefits:	The Company’s policy manual contains illustrations of other benefits, such as tuition reimbursement, travel insurance, etc. which are available to all Company employees.
Stock Ownership:	During the period of your employment, you shall acquire and thereafter maintain ownership of Company Shares as provided herein. Not later than December 31, 2010, you shall, subject to the availability of Company trading windows for Company insiders,

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Mr. Mark D. Mishler
December 10, 2009
Page 4

purchase on the open market Company Shares having a value of not less than $40,000. Subsequent thereto, you shall pursue a program to acquire additional Company Shares so that your aggregate holdings of Company Shares shall equal your then current base salary (your “Minimum Stock Ownership Commitment”). As a minimum, beginning calendar year 2011, you shall acquire each year an additional $40,000 of Company Shares towards your Minimum Stock Ownership Commitment. Company Shares received through the Company’s annual incentive compensation plan shall be credited towards your Minimum Stock Ownership Commitment. In the event that in any year Company Shares received under the then annual plan have a value of less than $40,000, you shall purchase on the open market Company Shares aggregating at least the amount necessary to equal $40,000 for that year. From the date that you have achieved your Minimum Stock Ownership Commitment, you shall, within 6 months of receiving a raise in your base salary, increase as may be necessary your ownership of Company Shares to meet your then applicable Minimum Stock Ownership Commitment.

     The Company maintains an “employment at will” policy, and by acceptance of employment with the Company you acknowledge and agree to such policy. The Company reserves the right to amend or change any of its benefit programs at its discretion. Terms of your employment, including the at-will policy, may not be modified by any oral or implied agreement with any officer of the Company or by a writing unless approved by the Board. As an officer of Breeze-Eastern Corporation, you will be subject to certain SEC requirements and restrictions upon your ability to buy and sell securities of the Company. You will be considered a Section 16(b) employee, subject to SEC reporting of your holdings, and changes thereto, of Company stock.

     As a condition of your employment, you agree to become familiar with and comply with the provisions of the Company’s policies and procedures and you agree to sign and agree to comply with any non-disclosure of confidential information/trade secret agreements and any patent and invention assignment agreements specified in such policies and procedures. These policies may be, and are, modified from time to time. It is your responsibility to maintain an up to date knowledge of these policies and procedures.

     In recognition of the risks and obligations you will undertake in accepting a position as an officer in the Company, Breeze-Eastern Corporation will enter into an indemnification agreement with you relative to claims brought against you in your capacity as an officer of the Company. This agreement will be provided under separate cover. The Company maintains a Directors and Officers Insurance policy as added

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Mr. Mark D. Mishler
December 10, 2009
Page 5

protection.

     Your employment and election to the officer position noted above is contingent upon the Board of Directors of Breeze-Eastern Corporation approving such appointment and appropriate credential confirmation. Upon your employment, you will be expected to secure promptly any necessary governmental security clearances.

     If the above offer is acceptable to you, please sign both copies of this letter, keep one copy for your files and return the other copy to me. If you have any questions about any of the items noted above, please do not hesitate to call me. This offer will expire, unless accepted, at the close of business on December 18, 2009.

     We are very enthusiastic about having you join our team. Breeze-Eastern Corporation is poised to begin another exciting chapter in its quest for growth and achievement of its goals. I, along with the other members of our leadership team, am sure that you will make a significant contribution to our team as we pursue the challenges and opportunities facing us.

Very truly yours,

Mike Harlan
Executive Vice President and
Chief Operating Officer

Agreed and Accepted

                                                            
Mark D. Mishler

700 Liberty Ave. Union, New Jersey 07083 Phone: (908) 206-37058 Fax: (908) 688-4212

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EX-99.1

Exhibit 99.1

PRESS RELEASE

FOR IMMEDIATE DISTRIBUTION

Contact:	Mike Harlan
	President and CEO
	Phone: 973/602-1023

BREEZE-EASTERN CORPORATION APPOINTS MARK MISHLER CFO SUCCEEDING JOSEPH SPANIER

WHIPPANY, NJ — January 6, 2010 Breeze-Eastern Corporation (NYSE Amex:BZC) today announced the appointment of Mark Mishler as Senior Vice President, Chief Financial Officer, and Treasurer of the Company and the retirement of Joseph Spanier as Executive Vice President, Chief Financial Officer, and Treasurer, effective January 6, 2010. Mr. Spanier, 63, has served as Chief Financial Officer since 1996.

Mr. Mishler, 51, most recently served as Chief Financial Officer of Vital Signs, Inc., a $400 million, NASDAQ-listed manufacturer of medical products that was acquired by General Electric in 2008. Mr. Mishler previously was Corporate Controller and CIO at Fedders Corporation and Amcast Industrial Corporation. He is a Certified Public Accountant and Certified Management Accountant. A graduate of Indiana University, he earned his MBA from the University of Michigan.

Mike Harlan, President and Chief Executive Officer of the Company, stated, “We welcome Mark as a member of the senior management team of the Company. He brings a wealth of U.S. and international experience in financial reporting and internal expense controls, implementing ERP systems and IT-based processes, public company finance and reporting, creditor relationship management and investor relations. Mark is a hands-on leader who will help improve the financial practices and discipline throughout our entire organization. We are very glad to have him join our team and are looking forward to the significant contributions he will make to our Company.”

Mr. Harlan continued, “On behalf of the Company, I would like to express our deep gratitude to Joseph Spanier for his many years of service as Chief Financial Officer of Breeze-Eastern Corporation. Joe was instrumental in rebuilding our balance sheet over the last 5 years, during a very challenging period in our Company’s history. He has

35 Melanie Lane • Whippany • New Jersey 07981
Tel. 973.602.1001 • Fax 973.739.9333 • www.breeze-eastern.com

Breeze-Eastern Corporation – January 6, 2010
Breeze-Eastern Corporation Appoints Mark Mishler CFO Succeeding Joseph Spanier
Page 2 of 2

made important contributions in many areas and he will be missed by his colleagues and staff at the Company. We wish him all the best in his well-deserved retirement.”

Breeze-Eastern Corporation (http://www.breeze-eastern.com) is the world’s leading designer and manufacturer of sophisticated lifting and pulling devices for military and civilian aircraft, including rescue hoists, cargo hooks, and weapons-lifting systems. The Company, which employs approximately 180 people at its facilities in Union and Whippany, New Jersey, reported sales of $75.4 million in the fiscal year ended March 31, 2009.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

Certain statements in this press release constitute “forward-looking statements” within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Acts”). Any statements contained herein that are not statements of historical fact are deemed to be forward-looking statements.

The forward-looking statements in this press release are based on current beliefs, estimates and assumptions concerning the operations, future results, and prospects of the Company. As actual operations and results may materially differ from those assumed in forward-looking statements, there is no assurance that forward-looking statements will prove to be accurate. Forward-looking statements are subject to the safe harbors created in the Acts.

Any number of factors could affect future operations and results, including, without limitation, competition from other companies; changes in applicable laws, rules and regulations affecting the Company in the locations in which it conducts its business; interest rate trends; a decrease in United States government defense spending, changes in spending allocation or the termination, postponement, or failure to fund one or more significant contracts by the United States government or other customers; determination by the Company to dispose of or acquire additional assets; general industry and economic conditions; events impacting the U.S. and world financial markets and economies; and those specific risks that are discussed in the Company’s previously filed Annual Report on Form 10-K for the fiscal year ended March 31, 2009 and quarterly report on Form 10-Q for the period ended September 27, 2009.

The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information or future events.

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