Document:

Exhibit 10.2

Exhibit 10.2

EXECUTIVE PROTECTION AGREEMENT

THIS AGREEMENT, effective as of the 7th day of March  , 2011, by and between EMS TECHNOLOGIES,
INC., a Georgia corporation (the “Company”), and Neil A. Mackay (the “Executive”), supersedes and
replaces entirely any and all previous agreements between the Company and Executive that provides
Executive with post-termination compensation, following a change in the control of the Company, of
a nature or in amounts not otherwise provided under the terms of programs and policies applicable
to the Company’s employees generally.

W I T N E S S E T H:

WHEREAS, the Company wishes to assure both itself and its key employees of continuity of
management and objective judgment in the event of any Change in Control (as defined below) of the
Company and to provide certain other benefits, and the Executive is a key employee of the Company
and an integral part of its management;

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein
contained, the parties hereby agree as follows:

I. TERM OF AGREEMENT.

This Agreement shall be effective immediately upon its execution by the parties hereto. The
term of this Agreement shall be for a rolling, three-year period commencing on the date hereof, and
shall be deemed automatically (without further action by either the Company or the Executive) to
extend each day for an additional day such that the remaining term of this Agreement shall continue
to be three years. The foregoing notwithstanding, this Agreement shall immediately cease to be
effective and shall terminate if the Executive ceases to be employed by the Company, at any time
before a Change in Control (as defined below) has occurred, in a corporate officer position of vice
president or higher position; provided, however, such cessation of the Executive’s
employment (i) was not at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control, (ii) did not otherwise occur in
connection with a Change in Control that in fact occurs, or (iii) did not occur in connection with
a Board-authorized plan for, or Board-authorized implementation efforts with respect to, a Change
in Control (whether or not such Change in Control in fact occurs).

II. DEFINITIONS.

1. Board — The Board of Directors of the Company, or its successor.

2. Cause — The term “Cause” as used herein shall mean: (i) any act that constitutes,
on the part of the Executive, (a) fraud, dishonesty, gross negligence, or willful misconduct and
(b) that directly results in material injury to the Company, or (ii) the Executive’s conviction of
a felony or crime involving moral turpitude. A termination of the Executive for “Cause” based on
clause (i) of the preceding sentence shall take effect 30 days after the Company gives written
notice of such termination to the Executive specifying the conduct deemed to qualify as Cause,
unless the Executive shall, during such 30-day period, remedy the events or circumstances
constituting Cause to the reasonable satisfaction of the Company. A termination for Cause based on
clause (ii) above shall take effect immediately upon giving of the termination notice.

 

 

 

3. Change in Control — The term “Change in Control” as used herein shall mean the
occurrence of one of the following:

(i) 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

(ii) 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

(iii) 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 (or the latest in such
series of election); or

(iv) the occurrence of any other event or circumstance which is not covered by (i)
through (iii) above which the Board determines affects control of the Company and
constitutes a Change in Control for purposes of this Agreement.

4. Disability — The term “Disability” shall mean the Executive’s inability as a result
of physical or mental incapacity to substantially perform his or her duties for the Company on a
full-time basis for a period of six months.

5. Excess Severance Payment — The term “Excess Severance Payment” shall have the same
meaning as the term “excess parachute payment” defined in Section 280G(b)(1) of the Code.

6. Severance Payment — The term “Severance Payment” shall have the same meaning as the
term “parachute payment” defined in Section 280G(b)(2) of the Code.

7. Present Value — The term “Present Value” shall have the same meaning as provided in
Section 280G(d)(4) of the Code.

8. Reasonable Compensation — The term “Reasonable Compensation” shall have the same
meaning as provided in Section 280G(b)(4) of the Code.

 

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III. BENEFITS UPON TERMINATION.

1. Termination Upon Change in Control — If a Change in Control occurs during the term
of this Agreement and the Executive’s employment is terminated either:

	(i)	 	prior to a Change in Control and (x) at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in Control, (y)
otherwise in connection with a Change in Control that in fact occurs, or (z) occurred in
connection with a Board-authorized plan for, or Board-authorized implementation efforts
with respect to, a Change in Control (whether or not such Change in Control in fact
occurs), or

	(ii)	 	on or within 24 months after a Change in Control, and such termination is a result of
Involuntary Termination or Voluntary Termination, as defined below,

then the benefits described in Section 2 below shall, subject to Article IV of this Agreement, be
paid or provided to the Executive. The fact that Executive is eligible for early, normal or
delayed retirement under a Company retirement plan at the time of his or her termination shall not
make him or her ineligible to receive benefits hereunder. For the purposes of the following
definitions, the term “Company” shall include the Company’s subsidiaries and any successor as a
result of the Change in Control to the business and assets of the Company or its subsidiaries.

(a) Involuntary Termination — For purposes hereof, “Involuntary Termination”
shall mean termination of employment that is involuntary on the part of the
Executive and that occurs for reasons other than Cause, Disability or death.

(b) Voluntary Termination — For purposes hereof, “Voluntary Termination”
shall mean termination of employment that is voluntary on the part of the Executive,
and, in the judgment of the Executive, is due to, and which occurs within six months
of:

(i) the assignment to the Executive of any duties inconsistent with the
Executive’s title and status in effect prior to the Change in Control, a
material increase or decrease in the Executive’s responsibilities at the
Company from those in effect immediately prior to the Change in Control, or
an adverse alteration in the nature or status of such responsibilities
(other than any such alteration to the extent incidental to the fact that
the Company may no longer be a public company);

(ii) a reduction by the Company of the Executive’s base salary from such
salary in effect prior to the Change in Control;

(iii) the relocation of the Company’s principal executive offices to a
location outside the Atlanta, Georgia metropolitan area, or the Company’s
requiring the Executive to be based anywhere other than the Company’s
principal executive offices (or other office within the same metropolitan
area as any office principally used by the Executive during the year
preceding the Change in Control), except for required travel on the
Company’s business to an extent substantially consistent with the
Executive’s business travel obligations prior to the Change in Control;

(iv) the failure by the Company, without the Executive’s consent, to pay to
the Executive any portion of the Executive’s then-current compensation
(including base salary and annual bonus to the extent payable under the
terms of annual bonus programs in effect from time to time), or to pay to
the Executive any portion of an installment of deferred compensation under
any deferred compensation program of the Company, in each case within seven
days of the date such compensation is due;

 

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(v) the failure by the Company to continue in effect any compensation plan
in which the Executive participates immediately prior to the Change in
Control, which is material to the Executive’s total compensation, including
but not limited to the Company’s annual bonus plan, stock option plan, or
any similar or substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company to continue the Executive’s participation in such plan (or in
such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided (or potentially
available under incentive compensation programs) and the level of the
Executive’s participation relative to other participants, as existed
immediately prior to the Change in Control;

(vi) the failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive under any
of the Company’s life insurance, medical, health and accident or disability
plans in which the Executive was participating immediately prior to the
Change in Control, or the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or would
deprive the Executive of any material fringe benefit otherwise enjoyed by
the Executive immediately prior to the Change in Control; or

(v) the failure of any successor to assume this Agreement as provided in
Section V.2 below.

A termination shall not be considered voluntary within the meaning of this Agreement if such
termination is the result of Cause, Disability or death of the Executive. The Executive’s
continued employment shall not constitute consent to, or a waiver of rights with respect to, any
act or failure to act relating to Voluntary Termination hereunder.

2. Benefits to be Provided — If the Executive becomes eligible for benefits under
Section 1 above, the Company shall pay or provide to the Executive the compensation and benefits
set forth in this Section 2.

(a) Salary — The Executive will continue to receive his or her current
salary (subject to withholding of all applicable taxes and any amounts referred to
in Section 2(b) below) for the period specified below following his date of
termination in the same manner as it was being paid as of the date of termination;
provided, however, that the salary payments provided for hereunder
shall be paid in a single lump sum payment, to be paid not earlier than six months
and one day, and not later than seven months, after his or her termination of
employment; provided, further, that the amount of such lump sum
payment shall be determined by taking the salary payments to be made and discounting
them to their Present Value on the date the Executive’s employment is terminated,
increased by interest on such amount for each day from the 31st day after
termination of employment until the date of payment, calculated on a daily basis at
a rate per annum equal to the rate used to determine such Present Value. For
purposes hereof, the Executive’s “current salary” shall be the highest rate in
effect during the six-month period prior to the Executive’s termination. The period for which such salary
payments shall be so made shall be as follows:

(i) 36 months in the case of a Change in Control occurring without the prior
approval of the Board of Directors; or

 

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(ii) 30 months in the case of a Change in Control occurring with the prior
approval of the Board of Directors.

(b) Health and Life Insurance Coverage — The health and life insurance
benefits coverage (including any executive medical plan or split dollar insurance
plan) provided to the Executive at his or her date of termination (or, if greater,
within six months prior to such date of termination), shall be provided by the
Company (no less frequently than monthly) at its expense at the same level and in
the same manner as if his or her employment had not terminated (and, if applicable,
such coverage had not been terminated or modified within six months prior to such
date of termination), but subject to the customary changes in such coverages if the
Executive reaches age 65 or has similar changes in personal or family circumstances,
beginning on the date of such termination and ending on: (i) the date 12 months from
the date of such termination in the case of a Change in Control occurring without
the prior approval of the Board of Directors, or (b) the date 18 months from the
date of such termination in the case of a Change in Control occurring with the prior
approval of the Board of Directors. Any additional coverages the Executive had at
termination, including dependent coverage, will also be continued for such period on
the same terms, to the extent permitted by the applicable policies or contracts.
Any costs the Executive was paying for such coverages at the time of termination
shall be paid by the Executive by separate check payable to the Company each month
in advance. If the terms of any benefit plan referred to in this subsection do not
permit continued participation by the Executive, then the Company will arrange for
other coverage at its expense providing substantially similar benefits with the
Executive to pay for such coverage no more than the Executive was paying at the time
of termination under the terms of any benefit plan as described above. The coverages
provided for in this subsection shall be applied against and reduce the period for
which COBRA will be provided, and may at the Company’s election be provided as COBRA
coverage, subject to payment by the Company to the Executive (monthly in advance) of
additional compensation equal to the excess of the COBRA premium over the costs
otherwise payable by the Executive as provided above, in each case as in effect from
time to time, plus an additional amount as necessary to reimburse the Executive for
additional taxes payable on both such additional compensation and such additional
amount at a combined tax rate of 45%; provided, however, that the
first of any such payments by the Company shall be made no earlier than six months
and one day, and not later than seven months, after the Executive’s termination of
employment and shall include all amounts so payable with respect to the first seven
months following such termination.

(c) Stock Options — As of the Executive’s date of termination, all
outstanding stock options granted to the Executive under any stock option plan or
program
maintained by the Company shall become 100% vested and immediately exercisable, and
shall thereafter remain exercisable until the expiration dates otherwise in effect
had the Executive remained continuously employed by the Company.

 

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(d) Annual Bonus for the Year Preceding Termination — If not previously
paid, the Company shall pay to the Executive cash incentive compensation for the
year preceding the year in which the termination occurs, in an amount determined in
accordance with, and payable as provided in, the Company’s Executive Annual
Incentive Compensation Plan (or successor or replacement plan) as in effect for such
preceding year.

(e) Annual Bonus for the Year of Termination — In the case of a Change in
Control occurring with the prior approval of the Board of Directors, the Company
shall pay to the Executive cash incentive compensation for the year in which the
termination occurs in the amount determined in accordance with, and payable as
provided in, the Company’s Executive Annual Incentive Compensation Plan (or
successor or replacement plan) as in effect for such year.

(f) Effect of Death — In the event of the Executive’s death after he becomes
entitled to payments or benefits hereunder, the payments and benefits shall be
continued to his or her spouse for the remainder of the applicable 36-, 24- or
12-month period. If the Executive is not married, the payments and benefits shall
cease on his or her date of death.

IV. LIMITATION OF BENEFITS.

1. Limitation of Amount — Notwithstanding anything in this Agreement to the contrary,
if any of the compensation or benefits payable, or to be provided, to the Executive by the Company
under this Agreement or otherwise are treated as Excess Severance Payments (whether alone or in
conjunction with payments or benefits outside of this Agreement), the compensation and benefits
provided under this Agreement or otherwise shall be modified or reduced in the manner provided in
Section 2 below to the extent necessary so that the compensation and benefits payable or to be
provided to the Executive under this Agreement that are treated as Severance Payments, as well as
any compensation or benefits provided outside of this Agreement that are so treated, shall not
cause the Company to have paid an Excess Severance Payment. In computing such amount, the parties
shall take into account all provisions of Code Section 280G, and the regulations thereunder,
including making appropriate adjustments to such calculation for amounts established to be
Reasonable Compensation. The determinations under this Section IV.1 with regard to Excess
Severance Payments shall be made by an independent accounting firm selected by the Company and the
Executive, which shall provide detailed supporting calculations to the parties.

2. Modification of Amount — In the event that the amount of any Severance Payments
which would be payable to or for the benefit of the Executive under this Agreement must be modified
or reduced to comply with this Article, the Executive shall direct which Severance Payments are to
be modified or reduced but only to the extent that the right to direct, and the actual direction
of, which Severance Payments are to be modified or reduced does not result in any failure of this
Agreement to comply with Section 409A of the Code. If the right to
direct, or the actual direction of, which Severance Payments are to be modified or reduced would
result in any failure of this Agreement or any other arrangement to comply with Section 409A of the
Code, then, in lieu of the Executive’s right to direct which Severance Payments are to be reduced
or modified, the order of reduction, on a pro rata basis within each category, shall be first any
such cash payments, next any equity compensation, then any medical or life insurance and lastly any
other remaining payments or benefits. No increase in the amount of any payment shall be made
without the consent of the Company.

 

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3. Avoidance of Penalty Taxes — This Article shall be interpreted so as to avoid the
imposition of excise taxes on the Executive under Section 4999 of the Code or the disallowance of a
deduction to the Company pursuant to Section 280G(a) of the Code with respect to amounts payable
under this Agreement or otherwise. In connection with any Internal Revenue Service examination,
audit or other inquiry, the Company and the Executive agree to take action to provide, and to
cooperate in providing, evidence to the Internal Revenue Service that the compensation and benefits
provided under this Agreement or otherwise do not result in the payment of Excess Severance
Payments.

4. Additional Limitation — In addition to the limits otherwise provided in this
Article, to the extent permitted by law the Executive may in his or her sole discretion elect to
reduce (or change the timing of) any payments he may be eligible to receive under this Agreement or
otherwise to prevent the imposition of excise taxes on the Executive under Section 4999 of the Code
or to otherwise reduce or delay liability for taxes owed under the Code; but, only if the right of
the Executive to elect to reduce (or change the timing of) any payments he or she may be eligible
to receive under this Agreement or otherwise, or any actual election to reduce (or change the
timing of) any payments he or she may be eligible to receive under this Agreement or otherwise,
will not result in any failure of this Agreement or other arrangement to comply with Section 409A
of the Code.

V. MISCELLANEOUS.

1. Notices — Any notice to a party required or permitted to be given hereunder shall
be in writing and shall be deemed given when delivered and shall be hand delivered, sent by
facsimile transmission with request for confirmation of receipt, or mailed registered or certified
mail (return receipt requested), to such party at such party’s address as specified below, or at
such other address as such party shall specify by notice to the other.

	 	 	 	 	 
	 

	 	If to the Company:
	 	EMS Technologies, Inc.

660 Engineering Dr.

Norcross, GA 30092

Attention: General Counsel

If to the Executive, to his or her last address provided to the Company by the Executive, and
if none as otherwise shown on the records of the Company.

2. Assignment — This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and their respective executors, administrators, heirs, personal representatives
and successors, but, except as hereinafter provided, neither this Agreement nor any right hereunder
may be assigned or transferred by either party thereto, or by any beneficiary or any other person,
nor be subject to alienation, anticipation, sale, pledge, encumbrance,
execution, levy or other legal process of any kind against the Executive, his or her beneficiary or
any other person. Notwithstanding the foregoing, any person or business entity succeeding to
substantially all of the business of the Company by purchase, merger, consolidation, sale of assets
or otherwise, shall be bound by this Agreement and must assume all obligations of the Company set
forth in this Agreement, and the Company shall use its reasonable best efforts to obtain such
assumption prior to the effective date of any such succession.

 

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3. No Obligation to Fund — The agreement of the Company (or its successor) to make
payments to the Executive hereunder shall represent solely the unsecured obligation of the Company
(and its successor), except to the extent the Company (or its successor) in its sole discretion
elects in whole or in part to fund its obligations under this Agreement pursuant to a trust
arrangement or otherwise.

4. Applicable Law — This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia.

5. Arbitration of Disputes; Expenses — All claims by the Executive for compensation
and benefits under this Agreement shall be directed to and determined by the Board and shall be in
writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered
to the Executive in writing within 20 days following the submission of such claim, and shall set
forth the specific reasons for the denial and the specific provisions of this Agreement relied
upon. Any further dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Atlanta, Georgia, in accordance with the commercial
arbitration rules of the American Arbitration Association then in effect. The arbitration award
shall be final and binding upon the parties, and judgment upon the award may be entered on the
arbitrator’s award in any court having jurisdiction. Any arbitration award in favor of the
Executive, in whole or in part, shall include interest, at the rate of 10% per annum, on the amount
awarded from the date it was due for payment as provided in this Agreement. In the event the
Executive incurs legal fees and other expenses in seeking to obtain or enforce any rights or
benefits provided by this Agreement and is successful, in whole or in part, in obtaining or
enforcing any such rights or benefits through settlement, arbitration or otherwise, the Company
shall pay, and any arbitration award shall include, the Executive’s reasonable legal fees and
expenses incurred in enforcing this Agreement and the Executive’s share of the fees of the
arbitrator, such fees and expenses to be paid by the Company promptly but in any event within 30
days after any final settlement, arbitration or adjudication of any denial of claim for benefits
hereunder. Except to the extent provided in the preceding sentence, each party shall pay its own
legal fees and other expenses associated with any dispute, provided, that the fee for the
arbitrator shall be shared equally.

6. Amendment — This Agreement may only be amended by a written instrument signed by
the parties hereto, which makes specific reference to this Agreement.

7. Severability — If any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provisions hereof.

8. Other Benefits — Nothing in this Agreement shall limit or replace the compensation
or benefits payable to the Executive, or otherwise adversely affect the Executive’s rights, under
any other benefit plan, program or agreement to which the Executive is a party.

 

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VI. SECTION 409A COMPLIANCE.

Notwithstanding any other provision of this Agreement to the contrary, it is intended that any
payment or benefit provided pursuant to or in connection with this Agreement that is considered to
be nonqualified deferred compensation subject to Section 409A of the Code shall be provided and
paid in a manner, and at such time, including without limitation payment and provision of benefits
only in connection with the occurrence of a permissible payment event contained in Section 409A,
that complies with the applicable requirements of Section 409A of the Code, to avoid the
unfavorable tax consequences provided therein for non-compliance. For purposes of this Agreement,
all rights to payments and benefits hereunder shall be treated as rights to receive a series of
separate payments and benefits to the fullest extent allowed by Section 409A of the Code. If the
Executive is a key employee (as defined in Section 416(i) of the Code without regard to Paragraph
(5) thereof) and any of the Company’s stock is publicly traded on an established securities market
or otherwise, then payment of any amount or provision of any benefit under this Agreement which is
considered nonqualified deferred compensation subject to Section 409A of the Code shall be deferred
for six (6) months and one (1) day after termination of the Executive’s employment or, if earlier,
the Executive’s death, to the extent required by Section 409A of the Code (the “409A deferral
period”). In the event such payments are otherwise due to be made during the 409A deferral period,
the payments which would otherwise have been made in the 409A deferral period shall be accumulated
and paid in a lump sum as soon as the 409A deferral period ends, and the balance of the payments
shall be made as otherwise scheduled. In the event benefits are required to be deferred, any such
benefit may be provided during the 409A deferral period at the Executive’s expense, with the
Executive having the right to reimbursement from the Company once the 409A deferral period ends,
and the balance of the benefits shall be provided as otherwise scheduled. For purposes of this
Agreement, termination or cessation of employment shall mean a “separation from service” within the
meaning of Section 409A of the Code where it is reasonably anticipated that no further services
would be performed after such date or that the level of bona fide services the Executive would
perform after that date (whether as an employee or independent contractor) would permanently
decrease to no more than 20% of the average level of bona fide services performed over the
immediately preceding 36-month period (or, if lesser, Executive’s period of service).

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its
duly authorized officers and the Executive has hereunder set his or her hand, as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	EMS TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	/s/	 	 
	 	 	 	 	 
	 

	 	By:
	 	John B. Mowell	 	 
	 

	 	Title: Chairman of the Board	 	 

(Corporate Seal)

	 	 	 
	/s/
 

Attest:

	 	 
	Assistant Secretary
	 	 

	 	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	/s/
 

	 	 

 

9Exhibit 10.3

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.

 

 

 

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.

 

 

 

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.

 

 

 

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.

 

 

 

	 	(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.

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