exhibit10_1.htm


    ADDvantage
Technologies Group, Inc.

    


    Incentive
Compensation Plan –

    Senior
Management

    


    
      	
               
      

            	
              Section
      I

            


    

    
      	
               
      

            	
              Plan
      Objectives

            


    

    


    
      	
               
      

            	
              This
      incentive compensation plan has been established to accomplish several
      important objectives:

            


    

    


    
      	
              ·  

            	
              Improve
      company profitability and
performance.

            


    

    
      	
              ·  

            	
              Provide
      participants with an incentive to contribute at the highest level in
      growing company profits.

            


    

    
      	
              ·  

            	
              Provide
      significant incentive opportunities to plan participants, in line with
      demonstrated results.

            


    

    
      	
              ·  

            	
              Enable
      the company to attract, motivate and retain high-caliber
      talent.

            


    

    


    


    Section
II

    Plan
Participants

    


    Participation
in this incentive compensation plan will be limited to those individuals in
positions to have direct and significant influence on company performance and
profitability.

    


    Initially,
participation in this plan will be limited to the following key
personnel:

    


    · Chairman
of the Board

    · President/CEO

    · Executive
Vice President, COO (position currently vacant)

    · Vice
President, Finance (CFO)

    


    Other
participants may be included in the plan, subject to approval by the
Compensation Committee of the Board of Directors.

    


    


    Section
III

    Basic
Plan Provisions

    


    
      	
              1.

            	
              Awards
      under this incentive plan will be based on actual earnings before interest
      and taxes (EBIT) in relation to established performance
      targets.

            


    

     

    
      	
              2.

            	
              Annually,
      a Target for EBIT will be established.  The Target will be based
      on the following basic formula:

            


    

    


    
      	
               
      

            	
              Previous
      Year’s Sales

            


    

    x      1.10                               

    =      Sales
Threshold

    x      16.0%  ROS*                               

    =      EBIT
Target

    


    
      	
               
      

            	
              For
      example, if sales in FY-07 were $65.6 million, then the EBIT Target would
      be set as follows:

            


    

    


    
      	
               
      

            	
              $65.6
      mil.  x  1.10  = $72.2
      mil.  x  16.0%  = $11.6
  mil.

            


    

    


    
      	
              3.

            	
              The
      primary basis for determining incentive awards will be actual EBIT in
      relation to the EBIT Target.  The following schedule will be
      used in determining incentive
awards:

            


    

    


    %
Target                           CEO                         COO                             CFO

                                                  (%
Salary)              
(%
Salary)                    (%
Salary)

    


                   80%                              15%                       
11.25%                          
7.5%

                   90%                              20%                       
15.0%                           10.0%

                 100%                              25%                        18.8%                          
12.5%

                 110%                              30%                       
22.5%                           15.0%

                 120%                              35%                       
26.3%                           17.5%

                 130%                             
40%                       
30.0%                           20.0%

                 140%                             
45%                       
33.8%                          
22.5%

                 150%                             
50%                       
37.5%                           25.0%

                 160+%                           
55%                       
41.3%                          
27.5%

    


    
      	
              4.

            	
              The
      incentive award as a percentage of salary for the Chairman will be the
      same as for the President/CEO.  For example, if the company
      earns 110% of Target, then the Chairman and President/CEO will earn a 30%
      incentive award, as a percentage of annual salary, and the COO will earn
      22.5% and the CFO will earn a 15% incentive
  award.

            


    

    


    


    

      

    

      
      *  EBIT
as a percentage of annual sales.

    


    
      
        
           

          


        

         


      

      
         


        
          

        

      

      
         


      

    


    


    
      	
               
      

            	
              Section
      IV

            


    

    
      	
               
      

            	
              Payment
      of Incentive Awards

            


    

    


    Incentive
awards under this plan will be paid following the close of the fiscal year, once
audited financial statements are available.  Normally, incentive
awards will be paid no later than December of the following fiscal
year.

    


    The
following guidelines will be observed in determining and paying incentive awards
to plan participants:

    


    
      	
              ·  

            	
              Incentive
      awards will be calculated as a percentage of the actual base salary paid
      to the participant during the year in which the award is
      earned.

            


    

    
      	
              ·  

            	
              The
      participant’s performance must be assessed as at least “meets
      expectations” or no incentive award will be earned or
  paid.

            


    

    
      	
              ·  

            	
              The
      participant must be employed by the company at the time the award is paid
      in order to be eligible for
payment.

            


    

    
      	
              ·  

            	
              The
      payment of incentive awards may not cause the company to earn less in
      net
      income than a 10% return on
sales.

            


    

    
      	
              ·  

            	
              All
      incentive awards will be approved by the Compensation Committee of the
      Board of Directors.

            


    

    


    


    
      	
               
      

            	
              Section
      V

            


    

    
      	
               
      

            	
              Plan
      Administration

            


    

    


    This
incentive compensation plan will be administered by the Compensation Committee
of the Board of Directors.  No member of the Compensation Committee
will be a participant in this plan.

    


    The
Compensation Committee will exercise the following responsibilities in the
administration of this plan:

    


    
      	
              ·  

            	
              Adopting
      the plan and approving its
provisions.

            


    

    
      	
              ·  

            	
              Revising
      the performance targets in the plan and the associated incentive
      opportunities available to
participants.

            


    

    
      	
              ·  

            	
              Monitoring
      and evaluating performance in relation to established performance
      targets.

            


    

    
      	
              ·  

            	
              Monitoring
      the plan, in relation to its objectives, and revising or discontinuing it
      as appropriate.

            


    

    
      	
              ·  

            	
              Approving
      incentive awards to participants.

            


    

    


    This
incentive plan may be modified or discontinued, at any time, without advance
notice to participants.  Moreover, this incentive plan does not
represent an employment contract nor a commitment by the company to the
employment of any plan participant for a specified term.

    


    
      	
               
      

            	
              *     *     *     *     *     *     *

            


    

    
      	
               
      

            	
              March
      5 – 2008