EX-10.2 EXECUTIVE ANNUAL INCENTIVE PLAN



 





Exhibit 10.2




As amended and restated

May 18, 2007, effective April 2, 2007




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.



4. ELIGIBLE PARTICIPANTS




     Participants will be those executives who are designated by the Chief Executive Officer as
being in a position to have a significant impact on profits and Company performance and 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 serve during that Year as an executive of the Company and 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
in 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):




(i) 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.




Or, in the alternative, as specified for particular Participants:




(ii) 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 Section 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 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)(i), or (ii) by factoring his or her
adjusted Target Incentive by his or her individual Performance Evaluation Factor as
determined in paragraph (c)(ii), 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.



 









 





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 acquisition in one or more transactions by any person or group (as such terms
are defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)), of “Beneficial Ownership” (within the meaning of Rule 13d-3 under 1934 Act) of
50% or more of the combined voting power of the Company’s then-outstanding voting
securities; or




     (2) The individuals who are members of the Incumbent Board (as defined below), cease
for any reason to constitute at least two-thirds of the Board. The “Incumbent Board”
consists of the individuals who as of January 23, 1997, are members of the Board and any
individual becoming a director subsequent to January 23, 1997, whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least two-thirds of
the directors then composing the Incumbent Board; provided, however, that
any individual who is not a member of the Incumbent Board at the time he or she becomes a
member of the Board shall become a member of the Incumbent Board upon the completion of two
full years as a member of the Board, except that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office (i) as a result of either
an actual or threatened “election contest” (within the meaning of Rule 14a-11 under the 1934
Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board (a “Proxy Contest”), or (ii) with the approval of the other
Board members, but by reason of any agreement intended to avoid or settle a Proxy Contest;
or




     (3) Approval by shareholders of the Company of (i) a merger or consolidation involving
the Company if such shareholders do not, immediately following such merger or consolidation,
own, directly or indirectly, more than 50% of the combined voting power of the outstanding
voting securities of the corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the Company’s voting securities
immediately before such merger or consolidation, or (ii) a complete liquidation or
dissolution of the Company or an agreement for the sale or other disposition of all or
substantially all of the assets of the Company.




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) Payment Upon a Change in Control. Upon a Change in Control, the bonus for a Plan Year
ending prior to the date of the Change in Control for which payment has not previously been
made shall be unconditionally payable to each Participant. The portion based on financial
objectives shall be determined as specified in paragraph 5(b), any portion based on
non-financial objectives shall be at not less than the Target level related to such
objectives, and all Performance Evaluation Factors shall be 100%.



 









 






If a Change in Control occurs with prior approval of the Board, bonuses for the Plan Year
during which the Change in Control occurs shall be unconditionally payable to each
Participant, such bonuses to be the Target Incentive or such higher percentage of Base
Compensation as may be approved by the Committee.




If a Change in Control occurs without prior approval of the Board, bonuses for the Plan Year
during which the Change in Control occurs shall be unconditionally payable to each
Participant, such bonuses to be equal to the Target Incentive. If such a Change in Control
occurs before Targets shall have been established for a Plan Year, the Targets for such Plan
Year shall be no less favorable to each of the Participants than the Targets for the prior
Plan Year.




Bonuses payable in accordance with this paragraph 7(c) shall be paid in cash on or before
the fifth day following the date of the Change of Control.




(d) Amendment or Termination.




(i) This Section 7 shall not be amended or terminated as to any Participant who has
not given his or her written consent.




(ii) Any amendment or termination of the Plan prior to a Change in Control which (1)
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 (2) otherwise arose in
connection with or in anticipation of a Change in Control, shall be null and void as
to any Participant who has not given his or her written consent.




(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 Targets 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 to a Participant,
except with his or her written permission.