Document:

Exhibit 10.20

IEC Electronics Corp.

Summary of 2011 Management Incentive Plan ("2011 MIP")

 

The 2011 MIP is a cash incentive plan which links awards to performance results and is designed to provide cash incentive awards ("Awards") to the four corporate officers (the "Participants") of the Company: the Chief Executive Officer (the "CEO"), the Chief Financial Officer, the President, and the Executive Vice President of Operations.  The 2011 MIP was approved by the Compensation Committee at its meeting on October 15, 2010 and by the Board of Directors at its meeting on November 17, 2010.

Each Participant is eligible to receive an Award, if any, determined on the basis of the degree of achievement of certain specified corporate level fiscal year performance objectives ("Performance Goals").  For fiscal 2011, Performance Goals based upon the following measurements were established: Net Income Before Taxes and Incentives, Sales, and Cash Flow from Operations.  The Compensation Committee has assigned a weighting factor to each Performance Goal.

If the target goal (the “Target Goal”) for a Performance Goal is achieved, an Award equal to a predetermined percentage (varying from 25% to 60%) of the Participant's base salary earned during the fiscal year will be paid to the Participant (the "Target Award").  The incentive percentage of a Participant is based upon his or her position within the Company. Below the achievement of a threshold or minimum corporate level of performance ("Plan Entry"), no Awards will be made.  If the Plan Entry performance level is achieved or exceeded, but the Target Goal for a Performance Goal is not achieved, a pro rata payment, but less than the Target Award, will be paid to each Participant.  If the Target Goal for a Performance Goal is surpassed, Awards will increase depending on the percentage of the Target Goal for each of the Performance Goals that is achieved.  However, no Award to a Participant may exceed 200% of the Target Award.

The Compensation Committee has prepared a formula or matrix prescribing the extent to which a Participant's Award will be earned based upon the level of achievement and the weighting of each Performance Goal.

No Award will be paid to any Participant for the achievement of any Performance Goal unless the Company has reached an earnings threshold of $7.4 million (before tax and incentive) for fiscal 2011.

  

  

  

After the end of the fiscal year, the Compensation Committee will determine the extent to which the Performance Goals have been achieved and will calculate the amount of the Award to be paid to each Participant (the “Calculated Award”).  However, based on his evaluation of an individual Participant's performance, the CEO may recommend to the Compensation Committee, that the Calculated Award for any individual Participant be modified by plus or minus up to 25%.  The Compensation Committee may also recommend to the full Board that the Calculated Award for the CEO be modified by plus or minus up to 25%.  All modifications to a Calculated Award must be approved by the Compensation Committee.  In addition, any modification to the Calculated Award for the CEO must be approved by the Board of Directors.  Use of the modification factor is not expected to be an annual event, but is to be used sparingly, when the actual results achieved, either positive or negative to the planned results, are not appropriately reflected in the Calculated Award.

Payment of any Award to a Participant will be made within fifteen (15) days after receipt by the Company of the audited financial statements for fiscal 2011.  In order to receive an Award, a Participant must be an employee of the Company on the date such Award is to be distributed.

Since the Performance Goals set forth in the 2011 MIP are based upon the organic growth of the Company and do not reflect the impact of any acquisitions made by the Company in fiscal 2011, after the Company acquired Southern California Braiding, Inc. ("SCB") in December 2011, the Compensation Committee determined it appropriate to adopt a separate management incentive plan related to the achievement of certain Performance Goals for SCB (the "SCB Plan") in fiscal 2011.

The SCB Plan is similar in design to the 2011 MIP, except that (a) the Performance Goals are based upon two measurements – net income before taxes and incentive, and sales; (b) if the Target Goal for a Performance Goal is achieved, an Award equal to a predetermined 20% or 30% of the Participant's base salary will be paid to the Participant; and (c) no Awards will be paid unless SCB has reached an earnings threshold of $2.8 million (before taxes and incentives) for fiscal 2011.  Any Awards earned under the SCB Plan will be paid in two installments:  (a) 50% will be paid within fifteen (15) days after the receipt by the Company of the audited financial statements for fiscal 2011; and (b) 50% will be paid within fifteen (15) days after the receipt by the Company of the audited financial statements for fiscal 2012, provided that SCB achieves a threshold of sales and net income before taxes ($18 million and $4 million, respectively) for fiscal 2012.

 

  

2Exhibit 10.21

IEC Electronics Corp.

Summary of 2011 Long-Term Incentive Plan

 

The purpose of the Company's Long-Term Incentive Plan ("LTIP") is to motivate the Named Executive Officers and certain designated key employees (collectively, the "Participants") to enhance the long-term value of the Company by providing opportunities for the Participants to participate in stockholder gains and by rewarding them for achieving a high level of corporate financial performance.  The LTIP is also designed to help attract and retain talented personnel with outstanding abilities and skills.  The LTIP is an equity-based program and by using a mix of stock options and restricted stock, the Company is enabling and encouraging the Participants to increase their ownership in the Company.  The LTIP for fiscal 2011 was approved by the Compensation Committee at its meeting on October 15, 2010 and by the Board of Directors at its meeting on November 17, 2010.

The LTIP measures Company performance over a one-year fiscal period and the equity award ("Equity Award") is paid out at the end of the fiscal period based on the attainment of the pre-established performance goals ("Performance Goals") in the fiscal period.  The Equity Award is paid out in stock options or in restricted stock.

The Performance Goals established for fiscal 2011 are based on two metrics which the Compensation Committee believes are key to the Company's long-term financial success - Net Income Before Tax and Return on Sales.  Each Performance Goal is weighted 50%.

If the target goal (the “Target Goal”) for a Performance Goal is achieved, the dollar value of an award equal to a predetermined percentage (varying from 15%-60%) of the Participant’s base salary earned during the fiscal year will be calculated for each Participant (the “Calculated Award”).  The number of shares of restricted stock to be awarded as the Equity Target Award will be based upon the value of the Participant’s Calculated Award divided by the average closing price of the Company’s common stock, on the NYSE Amex for the 90 days prior to October 1, 2011.  The incentive percentage of a Participant is based upon his or her position within the Company.  Below the achievement of a threshold or minimum corporate level of performance (“Plan Entry”), no Equity Awards will be made.  If the Plan Entry performance level is achieved or exceeded, but the Target Goal for a Performance Goal is not achieved, a pro rata Equity Award, but less than the Equity Target Award, will be paid to each Participant.  If the Target Goal for a Performance Goal is surpassed, Equity Awards will increase depending on the percentage of the Target Goal for each of the Performance Goals that is achieved.  However, no Equity Award to a Participant may exceed 200% of the Equity Target Award.

 

  

  

  

After the end of the fiscal year, the Compensation Committee will determine the extent to which the Performance Goals have been achieved and approve the amount of the Equity Award to be paid to each Participant.  In addition, based on an evaluation of an individual Participant’s performance, the Chief Executive Officer may recommend to the Compensation Committee that the Equity Award for any individual Participant be modified by plus or minus up to 25%.  The Compensation Committee may also recommend to the full Board that the Equity Award for the Chief Executive Officer be modified by plus or minus up to 25%.  All modifications to an Equity Award must be approved by the Compensation Committee.  In addition, any modification to the Equity Award for the Chief Executive Officer must be approved by the Board of Directors.

All Equity Awards will be issued under the Company's 2001 Stock Option and Incentive Plan (the "2001 Plan") or if no shares remain available under the 2001 Plan, Equity Awards will be issued under the Company's 2010 Omnibus Incentive Compensation Plan (the "2010 Plan").  The Compensation Committee, in its sole discretion, may pay the Equity Award in stock options or in restricted stock (or in a combination thereof).  All Equity Awards shall be evidenced by an Award Agreement in the manner set forth in the 2001 Plan or 2010 Plan, as the case may be.  Equity Awards made in restricted stock will be subject to a five-year period of restriction, during which period the restricted stock may not be sold or otherwise transferred.  The restrictions will lapse and the shares will vest as follows: one half (1/2) of the shares after four (4) years from the date the restricted stock is granted and one half (1/2) of the shares after five (5) years from the date the restricted stock is granted.  Equity Awards made in stock options will similarly be subject to a five-year period of vesting.  If a Participant's employment with the Company is terminated for any reason whatsoever, other than death, disability, retirement or change in control, before the expiration of the restrictive period and before the lapse of restrictions or before the vesting of the stock options, the restricted stock  or the unvested stock options will be deemed forfeited by the Participant and will be returned to or cancelled by the Company.  The Award Agreements may contain such other terms and conditions deemed appropriate by the Compensation Committee.  Such provisions need not be uniform among all grants of stock options or restricted stock or among all Participants.  The Compensation Committee may, at its discretion, authorize the Company to pay or reimburse a Participant the amount of any income taxes the Participant incurs with the award of restricted stock.

Payment of any Equity Award to a Participant based upon the degree of attainment of the applicable Performance Goals will be made within fifteen (15) days after receipt by the Company of the audited financial statements for fiscal 2011.  In order to receive an Equity Award, a Participant must be an employee of the Company on the date such Equity Award is granted.  For purposes of the LTIP, the grant date is the date on which the Compensation Committee approves the Equity Awards for all Participants except the Chief Executive Officer, for whom the grant date will be the date on which the Board approves the Equity Award.

The LTIP is based upon the organic growth of the Company.  If any acquisition is made by the Company in fiscal 2011, the Compensation Committee will review the impact of such acquisition and determine what changes, if any, should be made to the LTIP.

  

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