Exhibit 10.2

 

IEC Electronics Corp.

Summary of 2012 Management Incentive Plan (“2012 MIP”)

 

The 2012 MIP is a cash incentive plan which links awards to performance results
and is designed to provide cash incentive awards (“Awards”) to the executive
officers (the “Participants”) of the Company: the Chief Executive Officer (the
“CEO”), the President, and the Executive Vice President of Operations (“EVP”).
The Company’s CFO is not eligible for Awards under the 2012 MIP. The 2012 MIP
was finalized by the Compensation Committee on May 23, 2012.

 

A precondition for payment of all Awards is achievement of a threshold minimum
level of company-wide Net Income Before Taxes and Incentives (“Plan Threshold”).
For purposes of the MIP, non-operating events such as acquisition escrow
clawbacks are excluded from calculation of Net Income. The Plan Threshold for
fiscal 2012 is $9,000,000.

 

If the Plan Threshold is met, each Participant is eligible to receive an Award,
if any, determined on the basis of the degree of achievement of certain
specified corporate level fiscal year performance objectives (“Performance
Goals”). For fiscal 2012, Performance Goals based upon the following
measurements were established:

 

(i) Net Income Before Taxes and Incentives (applicable to all Participants based
on company-wide results),

 

(ii) Sales (for the CEO based on company-wide results, and for the President and
EVP, based upon respective divisional results), and

 

(iii) Cash Flow from Operations (applicable only to the CEO based on
company-wide results).

 

The Compensation Committee has assigned a weighting factor, varying from 25% to
50%, to each Performance Goal for each Participant, with the total of the
weighting factors for each Participant being 100%.

 

In addition to the Plan Threshold, the Compensation Committee has established:

 

(i) minimum plan entry performance levels for each Performance Goal for each
Participant (“Performance Goal Minimum(s)”), set at a level in excess of prior
fiscal year achievement to assure that stockholders receive the first portion of
the benefit of increased value, and

 

(ii) a target goal (the “Target”) for each Performance Goal for each Participant
based on the Company budget.

 

If all Performance Goals are achieved by each respective Participant at the
Target level, Awards will be earned by that Participant equal to the following
percentages of base salary: (i) for the CEO - 60%, (ii) for the President – 55%,
and (iii) for the EVP – 55%. If, with respect to any Participant Performance
Goal, less than the applicable Target, but at least the Performance Goal
Minimum, is achieved, a payment less than the Target Award will be paid to the
applicable Participant, pro rated between a payment of 10% of base salary
applicable to achievement at exactly all Performance Goal Minimums and such
Participant’s potential Target Award. If the Target for a Participant
Performance Goal is surpassed, the Target Award will increase pro rata up to a
cap of 200% of the Target level Award. No Award will be made with respect to a
Performance Goal if the applicable Performance Goal Minimum is not achieved.

 

 

 

 

After the end of the fiscal year, the Compensation Committee will determine the
extent to which the Performance Goals have been achieved by each respective
Participant and will calculate the amount of the Award to be paid to each (the
“Calculated Award”). However, (i) based on his evaluation of the President’s or
EVP’s performance, the CEO may recommend that the Calculated Award for that
Participant be modified by plus or minus up to 25%, and (ii) the Compensation
Committee may recommend that the Calculated Award for the CEO be modified by
plus or minus up to 25%. All modifications to a Calculated Award for any
Participant must be approved by the Compensation Committee. Additionally, any
modification to the Calculated Award for the CEO must be approved by the
independent members of the Board of Directors. Use of the modification factor is
not expected to be an annual event, but is to be used sparingly, when the actual
results achieved, whether positive or negative, are not appropriately reflected
in the Calculated Award.

 

The Compensation Committee reserves the right in its discretion to modify
categories or goals. Among others, the Performance Goals set forth in the 2012
MIP are based upon the organic growth of the Company and do not reflect the
impact of any acquisitions. The Compensation Committee will separately review
the impact of acquisitions, if any.

 

Payment of any Award to a Participant will be made within fifteen (15) days
after receipt by the Company of the audited financial statements for fiscal
2012. In order to receive an Award, a Participant must be an employee of the
Company on the date such Award is to be paid.