exv10w2



 






Exhibit 10.2




Endwave Corporation

2005 Executive Incentive Compensation Plan




I. Philosophy



Attainment of our goals for 2005 will require that our Executive team work seamlessly together in
building sales revenue, examining and executing on strategic opportunities, maintaining cost
control and focusing on the bottom line. The basis for the incentive plan is a combination of
Endwave’s Annual Operating Plan as well as personal contributions to meeting our annual corporate
goals.



The award of bonuses will be discretionary, administered by the Board of Directors, and based upon
several factors, including but not limited to: individual performance, team work, exhibited
leadership, and efforts in the sales process.




II. Participation:





	•  	All Endwave regular, Executive employees as determined by the
Board of Directors (“Officers”) will participate in the incentive
plan.






	•  	Officers who worked less than twelve months, but more than one
month, (new hires and those on leave of absence) will receive a
pro-rata share of their bonus based on the percent of the year
worked.






	•  	Participants must be employed as of the day of bonus payment.






	•  	Officers are eligible for a target bonus to be determined by the
Compensation Committee of the Endwave Board of Directors (the
“Committee”) based on corporate and personal performance criteria
established by the Committee.






	•  	The payment of a bonus to any Officer is totally discretionary and
will not be paid if the Board of Directors believes that it is in
the best interest of the company not to pay bonuses.






	•  	The bonus payment date is anticipated to be on or about January
31, 2006, after completion of the annual corporate audit.





III. Incentive Plan





	•  	A bonus pool is generated by multiplying the bonus target times
the corporate performance achievement level.






	•  	Corporate performance is determined based upon financial results
for the fiscal year in accordance with the guidelines established
by the Committee.






	•  	Individual performance is determined by the Committee.





IV. Performance Targets




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	•  	The corporate performance percentage is based on the critical factors of the Annual
Operating Plan. As the plan states, we are focused on the following:






	(1)  	Grow sales, by capturing new customers, expanding current customers, and
acquisitions.






	(2)  	Build profitability, by maintaining high operating leverage, fixing low margin
products and capturing NRE.






	(3)  	Generate cash from operations, by improving gross margin and bottom line
performance.





(4) Widen our position as the leader in technology and quality




V. Bonus Percentage





	•  	The performance percentage is calculated by reference to the
corporate achievement level for each of the above items. Various
percentages can be earned for each measure depending on whether that
performance is above or below plan.






	•  	At the discretion of the Board of Directors, targets may be changed
dependent upon our business outlook





VI. Definitions:



Sales revenue includes sales of products and recognition of non-recurring engineering fees,



Gross margin is calculated as sales revenue minus cost of goods sold



Operating profit is calculated as sales revenue less cost of goods sold and operating expenses,
including bonus expense. It does not include interest income/expense, intangible costs, taxes or
other non-operating income or expenses.



Operating cash is the “GAAP” calculation of cash generated or used to run the company’s operations,
and excludes cash from investments or financings.





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