Exhibit 10.3
As amended and restated
March 7, 2011
EMS TECHNOLOGIES, INC.
Executive Annual Incentive Compensation Plan
1. PURPOSE
The purpose of this Plan is to attract and retain in the employ of the Company
executives of outstanding experience and ability, and to incentivize them to
superior performance. Under this Plan, annual incentive compensation (or
“bonuses”) will be based upon performance against financial and non-financial
objectives that are consistent with the objectives of the Company and its
shareholders. Thus, the Plan provides a means of rewarding those who contribute
through their individual performance to the objectives of the Company.
2. DEFINITIONS
Unless the context otherwise requires, the words which follow shall have the
following meaning:

  (a)  
Plan — This Annual Incentive Compensation Plan for executives.
    (b)  
Business Unit — A principal subsidiary, business division or group of the
Company as identified for the purposes of the Plan by the Committee.
    (c)  
Board — The Board of Directors of the Company.
    (d)  
Company — EMS Technologies, Inc.
    (e)  
Committee — The Compensation Committee of the Board, which has the exclusive
authority to interpret and make awards under the Plan.
    (f)  
Plan Year — A fiscal year of the Company.
    (g)  
Base Compensation — A Participant’s annual salary compensation, before reduction
for Cafeteria Plan, Savings Incentive Plan, Stock Purchase Plan or other
elective reductions or deductions, and before deduction of any taxes.
    (h)  
Participant — A person selected in accordance with Section 4 to be eligible to
receive a bonus in accordance with this Plan.
    (i)  
Target Incentive — The bonus payable under the Plan in the event 100% of
financial and individual performance objectives are met.

3. ADMINISTRATION AND INTERPRETATION OF THE PLAN
The Committee shall have the power to (i) approve eligible Participants,
(ii) approve payments under the Plan, (iii) interpret the Plan, (iv) adopt,
amend and rescind rules and regulations relating to the Plan, and (v) make all
other determinations and take all other actions necessary or desirable for the
Plan’s administration.
The decision of the Committee on any question concerning the interpretation and
administration of the Plan shall be final and conclusive. The Committee’s
determinations may differ in the Committee’s sole discretion between different
Participants, irrespective of whether they are similarly situated. Subject to
Section 7, nothing in the Plan shall give any employee or his or her legal
representative or assigns any right to a bonus or otherwise to participate in
the Plan except as the Committee may determine.

 

 

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4. ELIGIBLE PARTICIPANTS
Participants will be those executives with respect to whose compensation the
Committee is responsible for formulating and submitting recommendations to the
Board, and who are approved by the Committee to receive a bonus under the Plan.
However, if a Change in Control (as defined in Section 7) occurs prior to the
time Participants are determined for the Plan Year in which the Change in
Control occurs, all persons who were Participants in the prior Plan Year and who
are active employees of the Company as of the date of the Change in Control
shall be Participants for such Plan Year.
Except as the Committee may otherwise determine or as provided in Section 7,
each Participant for any Plan Year must (i) serve during that Year as an
executive of the Company and (ii) be an active employee of the Company when the
Committee approves bonuses after the end of the Plan Year.
The Committee may decide to award a pro-rated bonus to a Participant who is
newly promoted or hired during a Plan Year. Pro-rated bonuses may also be
awarded to Participants who retire with the Company’s approval during a Plan
Year and to the estates of Participants who die during a Plan Year.
5. DETERMINATION OF INCENTIVE COMPENSATION AWARDS
Incentive compensation awards shall be determined as set forth in this
Section 5.
(a) Determination of Targets. During the first calendar quarter of each Plan
Year, the Target Incentive for each Participant shall be determined by the
Committee. The Target Incentive shall equal the Participant’s Base Compensation
multiplied by a percentage that is based on the Committee’s evaluation of the
individual Participant’s level of responsibility and potential to affect Company
profits and performance. The Committee shall also specify, as applicable to
particular Participants, the portions of each individual’s Target that are
dependent on the Company’s and/or relevant Business Unit’s financial performance
during the Year, or on the CEO’s or Committee’s (in the case of the CEO)
evaluation of the Participant’s performance against individual performance goals
during the year.
(b) Determination of Company and Business Unit Financial Targets. During the
first calendar quarter of each Plan Year, the Committee shall set for the
Company and for each Business Unit the target financial parameters against which
actual financial performance will be evaluated. The Committee shall also
determine a formula outlining how the Target Incentives identified in paragraph
5(a) will be affected if actual performance is not at the 100% level of the
specified financial performance parameters.
(c) Determination of Participant Individual Performance Goals, and of Related
Award or Evaluation Factor. During the first calendar quarter of each Plan Year,
the CEO shall determine each Participant’s individual performance goals, and
shall discuss with the Participant his or her objectives and the approximate
weighting to be given to each. At the end of the year, the CEO shall prepare an
overall assessment of each Participant’s success against such goals. The
Committee will use these assessments, together with its own assessments
(particularly of the CEO):
(1) To determine the portion to be awarded of each Participant’s Target
Incentive that is dependent on performance against non-financial goals. In the
case of performance assessed as being superior to the goals, such award may be
factored up, but not by a greater percentage than that in effect for the year
based on performance by the Company or relevant division above its financial
target parameters.

 

 

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Or, in the alternative, as specified for particular Participants:
(2) To determine individual Performance Evaluation Factors to be applied to
Awards initially determined by reference to the Company’s and/or relevant
Business Unit’s financial performance during the year. No such Performance
Evaluation Factor may exceed 115%, and the increases in Awards resulting from
application of such Factors in excess of 100% may not in the aggregate exceed
the reductions in Awards resulting from application of such Factors of less than
100%.
(d) Determination of Award Based on Financial Objectives. Following the close of
each Plan Year, the Chief Financial Officer shall prepare a report setting forth
the extent to which the Company and/or relevant Business Unit achieved the
various financial objectives described in paragraph 5(b). The relevant portion
of the Target Incentive for each Participant shall first be adjusted for the
weighting and actual performance against Company and relevant Business Unit
targets as described in paragraph 5(b). The Committee shall then determine,
based on an assessment of other financial parameters believed relevant,
including events or factors affecting the Company’s financial performance during
the year, whether the calculated portions of the Target Incentive (as adjusted
pursuant to the preceding sentence) shall be further adjusted.
(e) Preliminary Determination of Each Participant’s Award. A preliminary
determination of each Participant’s award shall be made by (i) adding his or her
adjusted Target Incentive, as determined in paragraph (d), to the award based on
performance against personal performance goals as determined in paragraph
(c)(1), or (ii) by factoring his or her adjusted Target Incentive by his or her
individual Performance Evaluation Factor as determined in paragraph (c)(2), as
the case may be for the particular Participant.
(f) Final Approval. All awards shall be subject to final approval by the
Committee, which shall have the authority in its judgment to adjust awards based
on non-financial factors.
6. PAYMENT OF INCENTIVE COMPENSATION AWARDS
Except as provided in Section 7, bonuses awarded under this Plan will be fully
paid in cash and/or shares of the Company’s common stock (which may be subject
to restrictions specified by the Committee), as determined by the Committee,
within 90 days after the end of the Plan Year.
Any amounts paid under this Plan shall be considered as compensation to the
Participant for the purpose of disability and life insurance programs, unless
and to the extent such compensation is expressly excluded by the provisions of
such programs, but such amounts shall not be considered as compensation for
purposes of any other incentive plan or other benefit unless such other plan or
benefit expressly includes compensation paid under this Plan.

 

 

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7. CHANGE IN CONTROL OF THE COMPANY
(a) Contrary Provisions. The provisions of this Section 7 shall govern and
supersede any inconsistent terms or provisions of the Plan.
(b) Change in Control. For purposes of the Plan, “Change in Control” shall mean
any of the following events:
(1) the Company consolidates or merges with or into another corporation, or is
otherwise reorganized, if the Company is not the surviving corporation in such
transaction or if after such transaction any other corporation, association or
other person, entity or group or the shareholders thereof own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock or more
than 50% of the assets of the Company; or
(2) more than 35% of the then-outstanding shares of common stock of the Company
are, in a single transaction or in a series of related transactions, sold or
otherwise transferred to or are acquired by any other corporation, association
or other person, entity or group, whether or not any such shareholder or any
shareholders included in such group were shareholders of the Company prior to
the Change in Control; or
(3) an election, or series of related elections (including a series of contested
elections involving either one or more of the same nominees or nominees of the
same party or of affiliated parties), of members of the Board of Directors shall
occur such that a majority of such members following such election(s) shall not
have been nominated or recommended for election by a majority of the members of
the Board of Directors who were serving immediately prior to such election(s);
or
4) the occurrence of any other event or circumstance which is not covered by (1)
through (3) above which the Board determines affects control of the Company and
constitutes a Change in Control for purposes of this Agreement.
If a Participant’s employment is terminated prior to a Change in Control and the
Participant reasonably demonstrates that such termination (i) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control and who thereafter effects a Change in
Control, or (ii) otherwise occurred in connection with or in anticipation of a
Change in Control which actually occurs, then for all purposes of this Plan the
date of a Change in Control in respect of such Participant shall mean the date
immediately prior to the date of termination of such Participant’s employment.
(c) Payments Upon a Change in Control.

  (1)  
For any year in which a Change in Control shall occur, the award payable to each
Participant for that year shall be the greater of (i) the Participant’s Target
Incentive for such year, and (ii) the amount determined in accordance with the
procedures specified in paragraphs 5(a) through 5(f), except that no adjustment
pursuant to paragraph 5(f) shall reduce the amount otherwise determined for such
Participant under paragraphs 5(a) through 5(e).

  (2)  
Any Participant whose employment, following a Change in Control that was
previously approved by the Incumbent Board, terminates under circumstances
entitling such Participant to receive payments for salary and benefits under an
Executive Protection Agreement in effect between the Company and that
Participant, shall receive for the year in which such termination occurs payment
of an award equal to that Participant’s Target Incentive for such year, such
payment to be made on the schedule governing post-employment payments as
provided in such Executive Protection Agreement.

 

 

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  (3)  
Notwithstanding any conflicting requirement of clause (ii) of the second
paragraph of Section 4, if, within two years following a Change in Control, a
Participant’s employment is the subject of Involuntary Termination or Voluntary
Termination (in each case as defined in an Executive Protection Agreement in
effect between the Company and that Participant) occurring subsequent to the end
of a Plan Year, that Participant shall receive the full amount of the award
determined for such prior Plan Year as determined in accordance with the
procedures specified in paragraphs 5(a) through 5(f), except that no adjustment
pursuant to paragraph 5(f) shall reduce the amount otherwise determined for such
Participant under paragraphs 5(a) through 5(e).

(d) Amendment or Termination. This Section 7 shall not be amended or terminated,
as to any Participant who has not consented thereto in writing, either following
a Change in Control, or prior to a Change in Control that (i) was at the request
of a third party who has indicated an intention or taken steps reasonably
calculated to effect a Change in Control, or (ii) otherwise arose in connection
with or in anticipation of a Change in Control.
(e) Trust Arrangement. All benefits under the Plan shall be paid by the Company.
The Plan shall be unfunded and the benefits hereunder shall be paid only from
the general assets of the Company. However, in the discretion of the Committee
the Company may establish a trust or other arrangement for the purpose of
funding the benefits payable under the Plan.
8. NON-ASSIGNABILITY
No bonus or other right or benefit under this Plan shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and
any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge
the same shall be void and shall not be recognized or given effect by the
Company.
9. NO RIGHT TO EMPLOYMENT
Nothing in this Plan or in any notice of award pursuant hereto shall confer any
right to continue in the employment of the Company nor affect the Company’s
right to terminate the employment of any Participant.
10. AMENDMENT OR TERMINATION
The Board may amend or terminate this Plan without the consent of any
Participant, but may not thereby adversely affect the Target Incentive,
Financial Targets, or individual performance goals or other terms of any award
or potential award for the Plan Year in which such action is taken, if such
Targets and goals have previously been determined for and communicated in
writing to a Participant, except with his or her written consent.