Exhibit
10.2


2006
ANNUAL INCENTIVE PLAN


A.            Participating Employees


This 2006 annual
incentive plan (the “2006 AIP”) shall apply for all employees (each, a “Participating
Employee”) of TNS, Inc. (the “Corporation”) and its subsidiaries other than
Excluded Employees.


For purposes of this 2006
AIP, an “Excluded Employee” means an employee of TNS, Inc. or any of its
subsidiaries with an annual bonus level less than or equal to 17.5%.


For purposes of
this 2006 AIP, an “Executive” means each of the following individuals:


	
  1. John J.
  McDonnell, Jr.

  	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  2. Brian J.
  Bates

  	
   

  	
  President and Chief Operating Officer

  
	
   

  	
   

  	
   

  
	
  3. Henry H.
  Graham, Jr.

  	
   

  	
  Executive Vice President, Chief Financial Officer
  and Treasurer

  
	
   

  	
   

  	
   

  
	
  4. Raymond Low

  	
   

  	
  President, International Services Division
  (Transaction Network Services (UK) Limited)

  
	
   

  	
   

  	
   

  
	
  5. John J.
  McDonnell III

  	
   

  	
  Executive Vice President and Chief Strategy Officer

  
	
   

  	
   

  	
   

  
	
  6. Matthew M.
  Mudd

  	
   

  	
  Executive Vice President and Chief Development
  Officer

  
	
   

  	
   

  	
   

  
	
  7. Michael Q.
  Keegan

  	
   

  	
  Executive Vice President, General Counsel and
  Secretary

  
	
   

  	
   

  	
   

  
	
  8. Edward C.
  O’Brien

  	
   

  	
  Executive Vice President and Controller

  



 



 1
 






 



 


B.            2006 AIP Award Determination


The 2006 annual
incentive cash bonus payable to a Participating Employee (the “2006 AIP Award”)
shall be determined based upon the attainment of gross revenue and EBITDA(1)
targets, as set forth below, by the Corporation during fiscal year 2006 (“Target
2006 Gross Revenue” and “Target 2006 EBITDA,” respectively), with the amount
calibrated based on over- or under-achievement of these targets to between 0%
and 100% for all Participating Employees (other than the Executives) and to
between 0% and 200% for all Executives.


1.                                      2006
Revenue and EBITDA Targets


With respect to John J. McDonnell, Jr., Henry H. Graham, Jr., John J.
McDonnell III, Matthew M. Mudd, Michael Q. Keegan, Edward C. O’Brien and any
other Participating Employees determined by the Corporation’s Chairman and the
Corporation’s Chief Financial Officer to contribute to the consolidated
operations of TNS, Inc. and its subsidiaries, the Target 2006 Gross Revenue and
Target 2006 EBITDA shall be set by the Board of Directors in accordance with
the Corporation’s 2006 fiscal year budget approved by the Board of
Directors.  Attainment of these targets
shall be determined based on the consolidated 2006 operating results of TNS,
Inc. and its subsidiaries.


With respect to Brian Bates (the Corporation’s Chief Operating Officer)
and any other Participating Employees determined by the Corporation’s Chief
Executive Officer and the Corporation’s Chief Financial Officer to contribute
primarily to the operations of TNS, Inc. and its subsidiaries (“Domestic
Subsidiaries”) domiciled in the United States and Canada (with Mr. Bates, the “Domestic
Participating Employees”), the Target 2006 Gross Revenue and Target 2006 EBITDA
shall be as set by the Board of Directors in accordance with the Corporation’s
2006 fiscal year budget approved by the Board of Directors.  Attainment of these targets shall be determined
based on the 2006 operating results of TNS, Inc. and its Domestic Subsidiaries.


With respect to Mr. Low (President of the Corporation’s International
Services Division) and any other Participating Employees determined by the
Corporation’s Chief Executive Officer and the Corporation’s Chief Financial
Officer to contribute primarily to the operations of all subsidiaries (the
“International Subsidiaries”) of TNS, Inc. other than the Domestic
Subsidiaries, the Target 2006 Gross Revenue and Target 2006 EBITDA shall be as
set by the Board of Directors in accordance with the Corporation’s 2006 fiscal
year budget approved by the Board of Directors. 
Attainment of these targets shall be determined based on the 2006 operating
performance of the International Subsidiaries.






(1)             EBITDA
shall be determined by taking income from operations and adding back certain
non-cash items, including amortization of intangible assets, depreciation and
amortization of property and equipment and stock compensation expense.



 2
 






 



With respect to any Participating Employees determined by the
Corporation’s Chief Executive Officer and the Corporation’s Chief Financial
Officer to primarily contribute to the operations of a particular international
subsidiary or a group of international subsidiaries, the Target 2006 Gross
Revenue and Target 2006 EBITDA shall be as set by the Board of Directors for
the particular country or region in accordance with the Corporation’s 2006
fiscal year budget approved by the Board of Directors.  Attainment of these targets shall be
determined based on the 2006 operating performance of the respective
international country or region.


The 2006 Gross Revenue and 2006 EBITDA Targets shall be adjusted by the
Compensation Committee of the Board of Directors to reflect acquisitions and
dispositions of businesses and assets by the Corporation to the extent not
reflected in the Corporation’s 2006 fiscal year budget approved by the Board of
Directors.


2.             Determination
of 2006 AIP Awards


For each Participating Employee, the “Target 2006 AIP Award” shall be
(i) the Participating Employee’s annual base salary in effect on December 31,
2006 multiplied by (ii) the “annual bonus percentage” in effect on such
date for the employee.  The “annual bonus
percentage” for an employee shall be either (i) the annual bonus percentage set
forth in the employee’s employment agreement or (ii) to the extent an
employment agreement is not in effect for the employee, the annual bonus
percentage then in effect for employees having the same title as the respective
employee.


For each Participating
Employee (other than the Executives), subject to Section C of this AIP, the
amount of the 2006 AIP Award shall be:


(i)                                     50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(3) below that
represents the percentage of the Target 2006 Gross Revenue attained during the
Corporation’s 2006 fiscal year, plus


(ii)                                  50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(3) below that
represents the percentage of the Target 2006 EBITDA attained during the
Corporation’s 2006 fiscal year.



 3
 






 



For each Executive, subject to Section C of this AIP, the amount of the
2006 AIP Award shall be:


(x)                                   50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(4) below that
represents the percentage of the Target 2006 Gross Revenue attained during the
Corporation’s 2006 fiscal year, plus


(y)                                 50%
of the respective Target 2006 AIP Award multiplied by the appropriate
percentage set forth in the table contained in Section B(4) below that
represents the percentage of the Target 2006 EBITDA attained during the
Corporation’s 2006 fiscal year.


3.    Vesting Percentages for Participating
Employees (Other than Executives)


 




	
  Percentage of Target
  Attained

  	
   

  	
  Percentage of Target Award Earned

  	
   

  
	
  100% [TARGET AND MAXIMUM]

  	
   

  	
  100%

  	
   

  
	
  99%

  	
   

  	
  90%

  	
   

  
	
  98%

  	
   

  	
  80%

  	
   

  
	
  97%

  	
   

  	
  70%

  	
   

  
	
  96%

  	
   

  	
  60%

  	
   

  
	
  95%

  	
   

  	
  50%

  	
   

  
	
  94%

  	
   

  	
  40%

  	
   

  
	
  93%

  	
   

  	
  30%

  	
   

  
	
  92%

  	
   

  	
  20%

  	
   

  
	
  91% [THRESHOLD]

  	
   

  	
  10%

  	
   

  
	
  90% and below

  	
   

  	
  0%

  	
   

  






 


4.    Vesting
Percentages for Executives


 




	
  Percentage of Target
  Attained

  	
   

  	
  Percentage of Target Award Earned

  
	
  110% and above[MAXIMUM]

  	
   

  	
  200%

  
	
  109%

  	
   

  	
  190%

  
	
  108%

  	
   

  	
  180%

  
	
  107%

  	
   

  	
  170%

  
	
  106%

  	
   

  	
  160%

  
	
  105%

  	
   

  	
  150%

  
	
  104%

  	
   

  	
  140%

  
	
  103%

  	
   

  	
  130%

  
	
  102%

  	
   

  	
  120%

  
	
  101%

  	
   

  	
  110%

  
	
  100% [TARGET]

  	
   

  	
  100%

  
	
  99%

  	
   

  	
  90%

  
	
  98%

  	
   

  	
  80%

  







 4
 






 



 


	
  97%

  	
   

  	
  70%

  
	
  96%

  	
   

  	
  60%

  
	
  95%

  	
   

  	
  50%

  
	
  94%

  	
   

  	
  40%

  
	
  93%

  	
   

  	
  30%

  
	
  92%

  	
   

  	
  20%

  
	
  91% [THRESHOLD]

  	
   

  	
  10%

  
	
  90% and below

  	
   

  	
  0%

  



 


C.            Conditions


With respect to employees
of certain of the Corporation’s International Subsidiaries, the Board of
Directors acknowledges that the 2006 AIP may contradict contractual provisions
currently in place with certain international employees.  To the extent this is determined to be the
case, the terms of the respective contract shall govern (not the terms of the
2006 AIP).


For all Participating
Employees (other than the Executives), it has been the Corporation’s practice
that a certain portion of the employee’s annual incentive plan award be tied
directly to the employee’s performance. 
To the extent it is determined that a 2006 AIP Award is due to a
Participating Employee based on the criteria set forth herein, the employee’s
manager shall continue to have the ability to determine whether the employee’s
2006 AIP Award shall be reduced for failure on the part of the employee to meet
personal objectives set for the employee during the year; provided, however,
that the portion of the employee’s 2006 AIP Award attributable solely to the
Corporation’s performance in 2006 may not be reduced by the manager without
approval of the Compensation Committee of the Board of Directors.  For purposes of example only, under the
Corporation’s current annual incentive plan guidelines, 50% of any performance
award due to a Director of Transaction Network Services, Inc. is tied to
personal performance and 50% of the award is tied to corporate
performance.  Accordingly, if such Director
is due a $10,000 2006 AIP Award hereunder, the payment of $5,000 of such award
shall be subject to the discretion of the Director’s manager based on the
achievement by the Employee of personal objectives for 2006.


To the extent that no
2006 AIP Award is due hereunder for a Participating Employee, the Corporation
shall not pay an annual incentive bonus or other similar payment to the
employee without the approval of the Compensation Committee of the Board of
Directors.


No 2006 AIP Award shall
be paid to a Participating Employee to the extent that payment of the award
would result in the Corporation failing to attain the respective Target 2006
EBITDA.  For purposes of example only,
assuming that (x) the Target 2006 Gross Revenue and the Target 2006 EBITDA for
Domestic Participating Employees are $40 million and $15 million, respectively,
(y) the actual 2006 gross revenues and EBITDA (exclusive of any bonus accrual)
for the Corporation and the Domestic Subsidiaries are 



 5
 






 



$42 million and $16
million, respectively, and (z) the aggregate bonus pool due and payable
hereunder to Domestic Participating Employees in respect of such operating
results is $1.5 million, then the bonus pool shall be reduced by $500,000 (from
$1.5 million to $1 million) as payment of the entire $1.5 million bonus would
cause actual 2006 EBITDA to be less than Target 2006 EBITDA by $500,000.


For Executives, when
calculating any amount due for performance above the Target 2006 Gross Revenue
and EBITDA levels, the calculation shall be made after giving effect to the
payment of annual incentive bonuses to all Participating Employees in respect
of performance up to such Target levels. 
For purposes of example only, if (i) Target 2006 Gross Revenue and
Target 2006 EBITDA for Domestic Participating Employees are $40 million and $15
million, respectively, (y) actual 2006 Gross Revenue and EBITDA (exclusive of
any bonus accrual) for the Corporation and the Domestic Subsidiaries are $45
million and $19 million, respectively, and (z) the aggregate bonus pool due and
payable hereunder to Domestic Participating Employees in respect of such
operating results (i.e., for attaining Target 2006 Gross Revenue and EBITDA) is
$3.0 million (the “2006 Target Level Bonus Pool), then the bonus pool available
for achievement in excess of the 2006 Target Levels shall be $1 million (i.e.,
the amount actual 2006 EBITDA ($19 million - $3 million) exceeds 2006 Target
EBITDA ($15 million)).  After giving
effect to the payment of the 2006 Target Level Bonus Pool, the bonus due and
payable to an Executive (who is being measured on the operating results of the
Corporation and its Domestic Subsidiaries) for performance in excess of Target
2006 EBITDA and Target 2006 Gross Revenue levels would be:


(i)                                     in
respect of actual 2006 Gross Revenue for the Corporation and its Domestic
Subsidiaries, (1) 50% of the respective Target 2006 AIP Award for the Executive
multiplied by 200% (as actual 2006 Gross Revenue was 112.5% of Target
2006 Gross Revenue (i.e., $45 million/$40 million)) less (2) 50% of the
respective Target 2006 AIP Award for the Executive multiplied by 100%
(representing the portion of the 2006 Target Level Bonus Pool due to the
Executive in respect of attainment of Target 2006 Gross Revenue); plus


(ii)                                  in
respect of 2006 EBITDA for the Corporation and its Domestic Subsidiaries, (1)
50% of the respective Target 2006 AIP Award for the Executive multiplied by
160% (as actual 2006 EBITDA (after payment of the 2006 Target Level Bonus Pool)
was 106% of Target 2006 EBITDA (i.e., $16 million/$15 million)) less (2) 50% of
the respective Target 2006 AIP Award for the Executive multiplied by
100% (representing the portion of the 2006 Target Level Bonus Pool due to the
Executive for attainment of Target 2006 EBITDA).


To be eligible for a 2006
AIP Award, the individual must be an employee of the Corporation or one of its
subsidiaries on the date the 2006 AIP Award is paid to Participating Employees.



 6
 






 



D.            Timing and Payment


The Compensation
Committee of the Board of Directors shall make a determination as to the 2006
AIP Award, if any, payable to each Participating Employee within the 60-day
period immediately following December 31, 2006, and the Corporation shall pay
any 2006 AIP Award within 75 days following December 31, 2006.


 



 7