Exhibit 10.3
AS ADOPTED, EFFECTIVE
OCTOBER 31, 2003
EMS TECHNOLOGIES, INC.
DEFERRED COMPENSATION PLAN FOR
NON-EMPLOYEE DIRECTORS
ARTICLE I
DEFERRAL OF COMPENSATION
1.1 PURPOSE AND ELIGIBILITY. This deferred compensation plan (this "Plan") for
persons serving as members of the Board of Directors (the "Board") of EMS
Technologies, Inc. (the "Company") who are not employed by the Company
("Non-Employee Directors") is adopted in order to allow each Non-Employee
Director to (i) automatically defer a portion of his or her annual retainer for
service on the Board (the "Retainer") as set forth in Section 1.2 below, and
(ii) defer the receipt of all or part of the balance of his or her Retainer and
of his or her other compensation for service as a member of the Board or
committees thereof (collectively, "Eligible Compensation") as set forth in
Section 1.3 below.
1.2 AUTOMATIC DEFERRAL. Each Non-Employee Director will have a portion of his or
her Retainer then in effect automatically deferred and credited to his or her
Deferral Account as set forth in Sections 2.1 and 2.2 below. The portion of the
Retainer subject to such automatic deferral shall be determined from time to
time by the Nominating and Governance Committee of the Board (the "Committee"),
but shall be not less than 40%. Subject to the other provisions of this Plan,
all amounts deferred under this Section shall be payable on the tenth day of the
month following the month in which the participant ceases to be a member of the
Board.
1.3 IRREVOCABLE ELECTION FOR ADDITIONAL DEFERRAL
A. Except as provided in paragraph 1.3(B), prior to the first day of each
calendar year, each Non-Employee Director shall be entitled to make an
irrevocable election on a form provided by the Company to receive Eligible
Compensation payable during such year in cash or to defer payment of all or any
portion thereof into his or her Deferral Account.
Subject to the other provisions of this Plan, all amounts deferred
under this Section with respect to a calendar year shall be payable on the
earlier of: (i) the tenth day of the month following the month in which the
participant ceases to be a member of the Board; or (ii) January 10 of the fifth
year following the year of deferral, subject to the participant's election at
least one year prior to any such date to defer payment of all or a portion of
the amount then payable for one additional period of up to five years but not
beyond the date specified in clause (i) above.
B. Each Non-Employee Director as of the date of the adoption of this Plan
by the Board and each person who becomes a Non-Employee Director during a
calendar year shall, within 30 days after such date of adoption or the date of
becoming a Non-Employee Director, be entitled to make the irrevocable election
described in paragraph 1.3(A) for the remainder of such calendar year, which
election shall be effective only as to Eligible Compensation earned after the
date thereof.
C. Failure to file an election for any year as specified in paragraphs
1.3(A) and (B) shall be deemed to be an election to receive in cash all Eligible
Compensation for such year.
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ARTICLE II
DEFERRAL ACCOUNT; DEFERRED STOCK UNITS
2.1 DEFERRAL ACCOUNT. Amounts deferred under this Plan shall be credited to a
notional bookkeeping account (a "Deferral Account") established for each
participant.
2.2 DEFERRED STOCK UNITS. Amounts credited to each participant's Deferral
Account will be deemed to be invested in the form of deferred stock units
("DSU's") representing shares of the Company's $1.00 par value common stock
("EMS Shares"). DSU's are not actual EMS Shares, and cannot be settled in or
surrendered for EMS Shares. Instead, they are bookkeeping units that will be
administered by the Company to provide a return on each Deferral Account equal
to the return that would occur if the amounts credited to the Deferral Account
were used to purchase EMS Shares on the dates so credited, including the effects
of immediate reinvestment of any cash dividends paid from time to time on the
EMS Shares. Holders of DSU's have no voting rights or any attributes of stock
ownership other than such equivalent economic return. The number of DSU's
received upon each deferral shall be equal to the amount thereof divided by the
Fair Market Value (as then defined in the Company's 1997 Stock Incentive Plan or
any similar successor plan) of the EMS Shares on the date of the deferral.
2.3 RECAPITALIZATION. If, as a result of a recapitalization of the Company
(including stock splits), the EMS Shares shall be changed into a greater or
smaller number of shares, the number of DSU's credited to each Deferral Account
shall be appropriately adjusted on the same basis as such recapitalization. If
the Company shall make a distribution in kind on the EMS Shares, or the EMS
Shares shall as a result of a merger, recapitalization or similar transaction be
converted into different property or shares, each DSU shall thereafter be deemed
to include or consist of the property or shares so distributed with respect to
each EMS Share, or into which each EMS Share was so converted. The provisions of
this Section shall apply to successive transactions of the type specified herein
that may affect the value of the property deemed from time to time to be
included in the DSU's.
ARTICLE III
PAYMENT OF DEFERRED COMPENSATION
3.1 METHOD OF PAYMENT OF DEFERRED COMPENSATION. The first date on which a
participant is entitled to receive payment of a particular deferred amount, as
determined under the provisions of Section 1.2 or paragraph 1.3A, is referred to
herein as the "Payment Commencement Date" with respect to such deferred amount.
Payment shall be made in the form of a lump sum except to the extent the
participant has elected annual installments for a period specified by the
participant, commencing on the Payment Commencement Date and terminating no
later than ten years from such date. Such election may be made prior to the
commencement of the particular deferral, and may be made or modified thereafter
on one occasion at any time at least one year prior to the Payment Commencement
Date. No modification may extend the period for installment payments beyond ten
years from the Payment Commencement Date.
3.2 AMOUNT OF PAYMENTS. The amount of the each payment shall be the value of the
DSU's in the participant's Deferral Account on the payment date, divided (in the
case of elections of annual installments) by the total number of installments
(including such installment) remaining to be paid. In each case, such value
shall be the number of DSU's credited to the Deferral Account multiplied by the
Fair Market Value on the date of the payment, and upon occurrence of the payment
such number of DSU's shall be reduced to reflect the payment.
3.3 BENEFICIARIES; PAYMENT ON DEATH. A participant may designate on a form
provided by the Company a beneficiary or beneficiaries to receive upon the
participant's death any unpaid amounts credited to the participant's Deferral
Account. At any time, and from time to time, a participant may change or revoke
his or her beneficiary designation without the consent of any beneficiary. Any
such designation, change or revocation must be made by executing a new
beneficiary designation form and filing such form with the Company. If the
participant designates more than one beneficiary, any payments to beneficiaries
will be made in equal percentages unless the
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participant designates otherwise. Upon the participant's death, any portion of
the participant's Deferral Account that is not payable to a designated
beneficiary will be paid to the participant's estate in the form of a lump sum.
3.4 PERMANENT DISABILITY. If a Participant becomes permanently disabled before
payment of all or any part of amounts credited to his or her Deferral Account,
the balance in such Deferral Account shall be paid in a lump sum as soon as
practicable after the occurrence of such disability, unless, in the sole
discretion of the Committee, the disabled individual is allowed to make a new
election regarding distribution under Section 3.1. The determination of
permanent disability for this purpose shall be made by a medical doctor
consistent with other plans and policies of the Company.
3.5 ACCELERATION OF PAYMENT. In the best interest of the financial integrity and
administration of the Plan, the Committee may at any time accelerate the
distribution election made by a participant, with the result that a term of
years may be shortened, or a lump sum may be substituted for a term of years.
ARTICLE IV
GENERAL
4.1 PLAN AMENDMENT AND TERMINATION. The Board may amend or terminate this Plan
at any time. Upon termination of the Plan, each participant's Deferral Account
shall be distributed in accordance with Article II, subject to the Committee's
right to accelerate payment as provided in Section 3.5.
4.2 NO RIGHT TO CORPORATE ASSETS. This Plan is a non-qualified, unfunded,
deferred compensation plan. The Company will not be required to reserve,
segregate or deposit any funds or assets of any kind to meet its obligations
hereunder, which obligations are general unsecured obligations of the Company.
Nothing in this Plan will give a participant, a participant's beneficiary, or
any other person any equity or other interest in the assets of the Company, or
create either a trust or fiduciary relationship of any kind between the Company
and any such person. Any rights that a participant, beneficiary or other person
may have under this Plan shall not be assignable by any such person. However,
nothing contained herein shall prevent the Company, in its sole discretion, from
establishing a trust, including a so-called rabbi trust, for the purpose of
providing for the payment of its obligations arising hereunder . The assets of
such trust shall remain subject to the claims of the Company's creditors, and no
participant shall have any interest in such assets.
4.3 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing in this Plan will give a
participant any right to continue as a member of the Board.
4.4 GOVERNING LAW. This Plan will be construed, enforced and administered
according to the laws of the State of Georgia.
4.5 ADMINISTRATION AND INTERPRETATION. The Company may adopt any rules and
procedures it deems appropriate to provide for the orderly and efficient
administration of the Plan.
The Committee may interpret the provisions of this Plan, and in the
absence of bad faith any such interpretations shall be binding upon the Company
and all participants. The Committee may also make any amendments or
clarifications of a technical nature that it deems appropriate to carry out the
terms of this Plan.
4.6 CHANGE OF CONTROL. For two years after a Change of Control, and except with
the consent of each person at that time participating in this Plan, this Plan
may not be terminated, nor may it be amended if such amendment would (i) reduce
the amount of any benefit provided hereunder below the amount that would have
been payable on the date immediately preceding the date of the Change of
Control, or (ii) reduce the rate or amount of benefits accruing hereunder below
that in effect on the date immediately preceding such date.
A "Change of Control" shall be deemed to have occurred upon the
occurrence of a Triggering Event as defined in the Company's Stockholder Rights
Plan dated as of April 6, 1999.
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