Exhibit 10.1
Compensation Arrangements with Certain Executive Officers
The following table sets forth the 2010 base salary for the Company’s current
executive officers identified by name pursuant to Item 11 of the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009, and in the
compensation disclosures in the Company’s Proxy Statement for its 2010 Annual
Meeting of Shareholders that is incorporated by reference into such Item 11.
Because the Company instituted a salary freeze for the first half of 2010, the
specified base salaries are unchanged from those in effect at the end of 2009,
but are subject to review as of the third quarter of 2010. The table also sets
forth each such officer’s 2010 incentive compensation target under the Company’s
Executive Annual Incentive Compensation Plan (the “EAICP”), as a percentage of
salary.

                              2010       2010     Incentive       Base    
Compensation       Salary     Target(1)  
 
               
Neilson A. Mackay
  $ 400,000       80 %
President and CEO
               
 
               
Gary B. Shell
  $ 252,000       50 %
Senior Vice President, Chief Financial Officer and Treasurer
               
 
               
Stephen M. Newell
  $ 205,000       40 %
Vice President and General Manager, LXE
               
 
               
Timothy C. Reis
  $ 216,300       45 %
Vice President & General Counsel
               
 
               
David M. Sheffield
  $ 195,700       30 %
Vice President, Finance and Chief Accounting Officer
               

 

      (1)   Actual incentive compensation payment under the EAICP is determined
based on Company or divisional performance during 2010, primarily with reference
to actual operating income and EPS compared with targets based on the Company’s
2010 operating plans as determined in March 2010. For the CEO, CFO, VP & General
Counsel, and VP, Finance, the determination is weighted 40% based on performance
against a corporate operating income target and 40% based on performance against
an EPS target. The remaining 20% is based on achievement against individual
objectives as set and evaluated by the CEO (the Board in the case of the CEO).
For Mr. Newell, the determination is weighted 30% based on performance of the
LXE division against its operating income target, 50% based on corporate
performance against consolidated operating income target, and 20% based on
performance against individual objectives as specified and evaluated by the CEO.

 

 

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          For 2010, our corporate and divisional targets have been set at 110%
of our internal baseline operating plans, in order to emphasize to management
the importance of identifying and taking advantage of opportunities to improve
on those plans, particularly through greater cooperation among and integration
of the various divisions. As a result, the targets are consistent with the
higher side of the annual earnings guidance we released in March 2010. While we
believe that these “stretch” targets are achievable, they will require excellent
execution by each division of its business plan, plus additional revenues or
cost savings that we believe can be obtained.       In general, no incentive
compensation based on financial targets is paid under the EAICP if actual
performance is at 80% or less of targeted performance. Performance above target
would normally result in a 2-for-1 percentage increase in incentive
compensation, except that the maximum payment based on divisional performance is
150% of target. The Committee retains the right to modify, either up or down,
the incentive compensation otherwise payable based on the factoring process, to
take into account individual or Company/division performance on non-financial or
supplemental financial objectives. The Committee and Board also have the right
to make other discretionary awards, outside the EAICP, based on factors they
believe to be appropriate in the circumstances.       For 2010, the Compensation
Committee and Board concluded that one-third of amounts earned and awarded under
the EAICP should be subject to deferral for one year. During that year, the
deferred amounts will be treated as phantom stock units based on the market
price of the common shares when the award is determined, and paid to the
executive a year later based on the market price at that time. The purpose of
this approach is to emphasize the importance of long-term Company performance,
and to reduce incentives for short-term results at the expense of results in
subsequent periods.

Each officer participates in the EMS Performance Bonus Plan on the same terms as
all other full-time employees. Under this Plan, which was initiated in 2008 and
partially replaces funding previously devoted to the Company’s qualified
Retirement Benefit Plan, each employee receives a cash bonus equal to 4% of his
or her base compensation if the Company (for corporate employees) or division
(for divisional employees) achieves operating income targets, with proportional
reductions for actual results less than the target and two-for-one increases for
results in excess of the target.
Each officer also participates in the Company’s 401(k) and Retirement Benefit
Plans on the same terms as all other full-time employees, but Company
contributions to the Retirement Benefit Plan for 2008 and later years is
substantially below those in earlier years due to the implementation of the
Employee Performance Bonus Plan. The Company does not currently provide a
supplemental retirement plan for its executive officers, nor does it provide its
officers with either automobiles or club memberships.