10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005

Commission File #0-6072

EMS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Georgia	58-1035424
(State or other jurisdiction of	(IRS Employer ID Number)
incorporation or organization)

660 Engineering Drive, Norcross, Georgia	30092
(Address of principal executive offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (770) 263-9200
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes o No þ

Indicate by check mark if the registrant is a not required to file reports pursuant to Section 13 or Section 15(d) of the Act: Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: Yes o No þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes o No þ

The aggregate market value of voting stock held by persons other than directors or executive officers on July 2, 2005 was $166 million, based on a closing price of $15.13 per share. The basis of this calculation does not constitute a determination by the registrant that all of its directors and executive officers are affiliates as defined in Rule 405. As of March 29, 2006, the number of shares of the registrant’s common stock outstanding was 15,150,933 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the Company’s definitive proxy statement for the 2006 Annual Meeting of Shareholders of the registrant is incorporated herein by reference in Part III of this Annual Report on Form 10-K.

AVAILABLE INFORMATION

EMS Technologies, Inc. makes available free of charge, on or through its website at www.ems-t.com, its annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with the Securities and Exchange Commission. Information contained on the Company’s website is not part of this report.

TABLE OF CONTENTS

Part I.
	ITEM 1. Business.
	ITEM 1A. Risk Factors
	ITEM 1B. Unresolved Staff Comments
	ITEM 2. Properties
	ITEM 3. Legal Proceedings
	ITEM 4. Submission of Matters to a Vote of Security Holders
PART II
	ITEM 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
	ITEM 6. Selected Financial Data
	ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
	ITEM 8. Financial Statements and Supplementary Data
	ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
	ITEM 9A. Controls and Procedures
	ITEM 9B. Other Information.
PART III
	ITEM 10. Directors and Executive Officers of the Registrant
	ITEM 11. Executive Compensation
	ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
	ITEM 13. Certain Relationships and Related Transactions
	ITEM 14. Principal Accountant Fees and Services
PART IV
	ITEM 15. Exhibits, Financial Statement Schedules
SIGNATURES
EX-4.8 AMENDMENT N0.2 TO U.S. REVOLVING CREDIT AGREEMENT
EX-4.18 AMENDMENT NO.2 TO CANADIAN REVOLVING CREDIT AGREEMENT
EX-4.19 AMENDMENT NO.3 TO CANADIAN REVOLVING CREDIT AGREEMENT
EX-4.20 CONSENT AND AMENDMENT AGREEMENT / CANADIAN REVOLVING CREDIT AGREEMENT
EX-10.1 EMPLOYMENT LETTER / ALFRED G. HANSEN
EX-10.10 FORM OF STOCK OPTION AGREEMENT / EXECUTIVE OFFICERS
EX-10.11 FORM OF STOCK OPTION AGREEMENT / OUTSIDE DIRECTORS (NEW)
EX-10.12 FORM OF STOCK OPTION AGREEMENT / OUTSIDE DIRECTORS (CONTINUING)
EX-10.15 EMS TECHNOLOGIES 2000 STOCK INCENTIVE PLAN
EX-10.16 FORM OF STOCK OPTION AGREEMENT
EX-10.17 FORM OF STOCK OPTION AGREEMENT
EX-10.22 COMPENSATION ARRANGEMENTS WITH EXECUTIVE OFFICERS
EX-23.1 CONSENT OF INDEPENDENT REGISTERED ACCOUNTING FIRM
EX-23.2 CONSENT OF INDEPENDENT AUDITORS
EX-31.1 SECTION 302 CERTIFICATION OF THE CEO
EX-31.2 SECTION 302 CERTIFICATION OF THE CFO
EX-32 SECTION 906 CERTIFICATION OF THE CEO AND CFO

FORWARD-LOOKING STATEMENTS

The discussions of the Company’s business in this Report, including “Managements Discussion and Analysis of Financial Condition and Results of Operations” in Item 7, and in other public documents or statements that may from time to time incorporate or refer to these disclosures, contain various statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “plan,” “expect,” “believe,” “anticipate,” “estimate,” “will,” “should,” “could” and other words and terms of similar meaning, typically identify such forward-looking statements. Forward-looking statements include, but are not limited to:

1.	statements about what the Company or management believes or expects,
2.	statements about anticipated technological developments or anticipated market response to or impact of current or future technological developments or product offerings,
3.	statements about trends in markets that are served or pursued by the Company,
4.	statements implying that the Company’s technology or products are well-suited for particular emerging markets, and
5.	statements about the Company’s plans for product developments or market initiatives.

These statements are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. Actual results could differ materially from those suggested in any forward-looking statements as a result of a variety of factors, including those risks and uncertainties set forth under Risk Factors in Item IA. You should not place undue reliance on these forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to these forward-looking statements to reflect events or circumstances that occur or arise or are anticipated to occur or arise after the date of this Report except as may be required by law.

Part I.

ITEM 1. Business

Overview

In this report, unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to the continuing operations of EMS Technologies, Inc. and its consolidated subsidiaries. Unless otherwise indicated, all financial and statistical information pertains solely to our continuing operations.

We are a leading designer, manufacturer and marketer of advanced wireless communications products for diverse commercial, defense and government markets. We focus on the needs of the mobile information user and the increasing demand for wireless broadband communications. Our products enable communications across a variety of coverage areas, ranging from global to regional to within a single building.

We operate in four business units, each of which is focused on a different aspect of wireless communications. These units share a common foundation in broadband and other advanced wireless technologies, which provides important technical and marketing synergies and contributes to our ability to continually develop and commercialize new products for use in a wide array of mobile communications. Our product offerings include hardware for use in defense and commercial satellite communications, PCS/cellular networks and in-building wireless local area networks.

We were founded in 1968 and have a strong history in the wireless communications industry. We initially concentrated on microwave components, products and technology and subsequently developed subsystems for one of the first electronically steerable antennas deployed in space. The expertise and technology we have developed

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during the past 38 years in this original business remain directly applicable to a range of our current defense and commercial products, including products for satellite, ground and airborne communications, as well as radar, signal intelligence and electronic countermeasure systems.

In the early 1980’s, we developed a line of wireless mobile computers and local-area network products for use in materials-handling applications. These products enable our industrial customers to connect mobile employees to central data networks and take advantage of sophisticated enterprise software and automatic-identification technologies such as bar-code scanning and radio frequency identification (“RFID”).

Since the mid-1990’s, we have expanded into several new markets through the development or acquisition of additional product lines. In 1994, we began designing and manufacturing PCS/cellular base-station antennas, and since 2001 have also offered a line of in-building and outdoor repeaters for use with PCS/cellular systems. In addition, we have established an industry-leading position in the market for high-speed, two-way satellite communications antennas and terminals for use on aircraft and other mobile platforms, and we develop and market hardware and software for use by search-and-rescue and emergency-management organizations around the world.

Today, our products address multiple markets and niches in the wireless communications industry, focusing on mobility and bandwidth. For example, equipment from three of our four divisions was utilized by government and commercial entities in response to Hurricanes Katrina and Rita to track the storms from both aircraft and satellites, to assess their aftermath, to provide communications for emergency vehicles, and to re-establish cellular phone coverage in areas where T1 backhaul lines were lost.

Competitive Strengths

Technological Leadership

Since our founding in 1968, we have been an innovative leader in the development and commercialization of wireless communications technologies. Early in our history, we pioneered the use of ferrite materials for electronic beam-forming, a practice that remains important in many sophisticated defense communications applications today. Our more recent innovations include the following products which we believe were the first in their respective markets: commercial airborne terminals for high-speed, two-way satellite data, antenna systems allowing commercial airlines to provide satellite television to passengers, and handheld wireless data terminals incorporating an integrated, FCC-approved, EPC Global-compliant RFID reader, and dual-polarized antennas for PCS/cellular base stations.

Commitment to Research and Development

We continually devote significant resources to research and development that enhances and maintains our technological advantages, and enables us to overcome the substantial technical barriers that are often encountered in the commercialization of sophisticated wireless communications hardware. Over the past three years, we have invested an aggregate of $48.2 million in company-sponsored research and development. In addition, our work under government and commercial contracts for new wireless communications hardware often leads to innovations that benefit us on future contracts and product development efforts. Approximately 21% of our employees hold engineering degrees, and our engineers actively participate in professional and industry technical conferences and working groups. As of December 31, 2005, our personnel have been awarded, and have assigned to us, 71 currently active U.S. patents and 75 foreign patents. In addition, at December 31, 2005, we had pending applications for approximately 45 U.S. and 95 foreign patents covering various technology improvements and other current or potential products.

Technological Synergies

Although we conduct our businesses through separately managed business units, we have established a variety of processes that facilitate technical exchanges and cooperation among them. We believe that our shared knowledge base and core expertise in wireless technologies create synergies among our various businesses. This provides us advantages in research and development, manufacturing, and sales and marketing, and better positions us as an important supplier of wireless technology and equipment to commercial, defense and government customers. An

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important recent example is LXE’s collaboration with antenna experts from each of our other three divisions that resulted in the development of one of the industry’s first commercially-available mobile forklift-mounted RFID readers.

Strong Customer Relationships

During our 38 years of operation, we have developed cooperative and ongoing relationships with important commercial and government customers. We build and strengthen these relationships by anticipating and recognizing our customers’ needs, by working with them to understand how we should focus our internal innovation efforts, and by providing customers with technologically advanced and cost-effective solutions coupled with excellent customer service. We continue to receive important orders and contracts from companies that first became our customers 20 or more years ago. We are particularly proud of the recognitions that we have received from our customers, such as the Gold Award we received in 2004 from Northrop Grumman. This award recognized our successful efforts on a highly challenging and technically advanced defense satellite contract and was one of only 11 awarded among Northrop Grumman’s pool of subcontractors.

Diverse Global Customer Base

We offer multiple wireless product lines to a diverse customer base through facilities in 12 countries. None of our customers were responsible for more than 10% of our annual net sales during any of the years ended December 31, 2003, 2004 or 2005, although sales to multiple customers for the nationwide system expansion of Cingular Wireless were approximately 14% of our net sales in 2005. 14.7% of our net sales in 2004 and 13.2% of our net sales for 2005 were from sales to various customers for U.S. government end use. Additionally, 35.8% and 26.0% of our net sales for 2004 and 2005, respectively, were derived from sales to customers outside the U.S. We believe our geographically diverse customer base and broad range of products provide us ample opportunity to grow our business and help mitigate the effects of a downturn in any one of our markets.

Strong Manufacturing Capabilities

For some of our products, particularly our defense applications, we have developed our own highly specialized domestic manufacturing capabilities. For others, we source components from foreign and domestic suppliers and primarily perform final assembly and test functions. Through our continuous efforts to improve our manufacturing processes, in recent years we have dramatically reduced the time required for us to ship products in several commercial markets in which a short delivery cycle for custom-manufactured products is an important competitive factor. We have also achieved major reductions in the incidence of rework on highly engineered space and defense products. These efforts have both enhanced our ability to compete for new business and improved our profitability.

Our Markets and Products

Our business is the design, manufacture and sale of advanced wireless communications products. We participate in selected markets within the broad wireless communications industry that typically require a high level of technical expertise, innovative product development, and in many cases specialized manufacturing capabilities. Although our businesses share a common heritage and focus on wireless communications, they address a variety of markets with different technical and manufacturing requirements, distribution channels, customers and purchasing processes.

Accordingly, we are organized into four separately managed business units, as follows:

Business Unit	Primary Operations	Percentage of Net Sales
		2005			2004			2003
Defense & Space Systems	Highly engineered hardware for satellites and defense electronics applications (primarily defense)		16.6	%		20.2	%		19.5	%
LXE	Rugged mobile computers and related equipment for wireless data collection (predominantly commercial)		39.7			45.3			41.4
SATCOM	Satellite communications antennas and terminals for aircraft and ground-based vehicles (majority commercial)		16.6			16.1			18.3
EMS Wireless	Base station antennas and signal repeaters for PCS/cellular systems (commercial)		27.1			18.4			21.1

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Defense & Space Systems

Our Defense & Space Systems business unit (“D&SS”) principally develops advanced microwave-based hardware for use on satellites and in other defense electronics applications. Its products are also used in a number of commercial and civil ventures, including high-capacity communications satellites, direct broadcast radio systems, and systems for bringing satellite television signals to the seat backs of commercial airliners. D&SS products are sold primarily to space and defense prime contractors or commercial communications systems integrators rather than to end-users, and are deployed on space, airborne, naval and terrestrial platforms. D&SS also performs research and development services directly for the U.S. Department of Defense.

Defense markets are vital to our Defense & Space Systems business. Secure communications, as well as intelligence and surveillance systems, are being newly developed or significantly upgraded as part of the U.S. Department of Defense initiatives to transform military communications and to achieve “information dominance” over adversaries. European defense ministries are also pursuing significant new and upgraded systems, particularly for satellite communications. D&SS provides defense customers with critical subsystems and components for terrestrial, airborne and space-based communication, and for radar and electronic warfare systems, and supports advanced surveillance, electronic counter-measure and secure communications capabilities. Our D&SS facilities meet requirements for performing on classified, including Top Secret, military programs, and over 170 of our personnel hold Department of Defense security clearances.

Products	Key Features/Benefits	Selected Applications	Programs
Space Solutions	Microwave subsystems capable of high-frequency, low noise, high-power and fast switching, facilitating jam-resistant, secure mobile communications and surveillance	Direct broadcast television (incl. HDTV) Direct broadcast radio Earth Observation/ Environmental sensing High-rate communications	DirecTV XMRadio, SIRIUS NPOESS, SARLupe, COSMO, other AEHF, ANIK, Intelsat, Skynet5, Inmarsat, TSAT, other
Airborne and Terrestrial Solutions	Antenna and microwave subsystems supporting satellite communications, radar, signal intelligence, electronic warfare and line-of-sight communications	Airborne (Commercial) Airborne (Military) Naval Terrestrial Smart Weapons	JetBlue, Frontier, WestJet, Virgin Blue Airlines F/A-22, ALQ-211, F-16, B2, CV-22, other NMT, Phalanx WIN-T, other JCM, other
Standard Products & Engineering Services	Ferrite components controlling microwave signals Positioners to precisely point optical sensors and microwave antennas Services for the maintenance, operation, and upgrade of precision tracking systems	Electronic Warfare Direct broadcast television/radio Earth observation satellites Precision tracking	B2, F-14 DirecTV, Astra, XMRadio, SIRIUS CloudSat, SARLupe, other Trident II, NASA Shuttle Return to Flight, Sea Launch, LLC

LXE

Our LXE business unit designs, manufactures and installs rugged mobile computers for use with wireless local area networks (“WLANs”). These systems enable a customer to collect data and transact supply-chain execution events in real-time, which is critical to the speed and efficiency that sophisticated businesses are seeking in their materials-handling operations. LXE’s products are designed to operate in harsh environments and in settings with difficult radio-connectivity characteristics. They are used primarily in logistics applications such as distribution centers and

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container port operations, markets that LXE products first addressed in the early 1980’s. By providing network connectivity for mobile users, LXE’s products increase the accuracy, timeliness and convenience of data collection and information access. The increased use of improved computing and advanced automatic-identification technologies (such as voice recognition and RFID) and the widespread adoption of the 802.11 WLAN standard are creating new demand and applications in established industrial markets, as well as in other vertical markets, such as transportation and service applications.

LXE’s rugged computers and WLANs have been installed at more than 7,500 sites worldwide, including the facilities of many Fortune 500 companies and some of the world’s largest materials-handling installations. In 2004 and in 2005, approximately 50% of LXE’s net sales were generated outside the U.S.

A typical LXE system consists of mobile computers that incorporate WLAN radios and automatic-identification capabilities, network access points that provide a radio link to the wired network and associated host computers, and software that manages and facilitates the communications process. LXE’s systems generally incorporate barcode scanning or other automatic-identification capabilities, and are increasingly based on the 802.11 open system standards. Uses include employment of real-time data communications in directing and tracking inventory movement in a large warehouse, manufacturing facility, or container yard. LXE products normally are used in conjunction with IT infrastructure products provided by others, such as host computer systems and inventory-management or other applications software.

LXE generally designs and manufactures the mobile computers it sells for use in wireless systems. In addition, LXE sells certain handheld models that it jointly designed with and purchases from original equipment manufacturers. LXE’s computers are intended to be either handheld or mounted on a forklift or other vehicle, and are ruggedized to withstand harsh conditions in warehouses and port facilities. Our latest generation of mobile computers has significantly more computing power than previous models, supports the WindowsÒ and Windows CEÒ operating systems, and offers improved power-management features and superior ergonomics. Radio access points and other infrastructure products are generally acquired from third parties for resale and installation by LXE.

During the past two years LXE has made a substantial research and development commitment to the emerging use of RFID technology in materials handling applications. It has now introduced what it believes to be the first FCC-approved rugged handheld terminal that incorporates an EPC Global-compliant RFID reader. Additionally, LXE has developed an effective forklift-mounted RFID antenna and reader system that permits data collection from RFID tags as pallets of merchandise are assembled and relocated. Unlike portal-based RFID systems, the forklift-mounted mobile system will function throughout the warehouse, in real time, as handling operations are being conducted. In seeking to become a leader in RFID-based materials handling technology, LXE has been leveraging its long experience in mounting computer terminals and related hardware on industrial forklift vehicles, its extensive expertise in adapting radio-linked computer technology to the rigors of the warehouse environment, and the sophisticated antenna expertise available in each of our divisions.

Hardware is marketed both to end-users and to integrators (such as value-added resellers who provide inventory management software) that incorporate it with their products and services for sale and delivery to end-users.

Products	Key Features/Benefits	Selected Applications	Customers
Hand-Held Computers	Small, lightweight and rugged, providing true mobility	Warehousing, Logistics	Consumer product manufacturers, Third-party logistics providers, Retailers, Container Port Operators
Vehicle-Mounted Computers	Heavier-duty design for use on forklifts, cranes, and other material handling vehicles
Wireless Networks	Communications link between mobile computers and local network, primarily based on 802.11 standard
Host connectivity software; accessory products; maintenance services	Industry-standard connectivity to various host computers; enhanced system functionality; extended service on either a contract or pay-as-you-go basis

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SATCOM

Our SATCOM unit supplies a broad array of terminals and antennas to enable customers in aircraft and other mobile platforms, such as military command vehicles or over-the-road trucks, to communicate over satellite networks at a variety of data speeds. Portions of this business date to the early 1990’s, but we first organized SATCOM as a business unit in 2001, and the majority of its growth and major product expansions have occurred since that time.

Reflecting the need for mobile communications in the business world, satellite communications systems of some type are now commonly used on corporate and commercial jets around the world. Current industry efforts are directed towards higher-speed satellite-base applications such as video, enterprise data systems and Internet access. To address these trends, SATCOM has introduced products that currently support in-air communications at data speeds of up to 256 kbps, which are adequate to provide e-mail and Internet access in addition to voice services. Even higher data speeds will become available when Inmarsat activates its fourth-generation of communications satellites, which is currently expected to occur in 2006. As a lead developer of airborne terminals for use with Inmarsat’s Broadband Global Area Network (“BGAN”), our SATCOM division has designed and is introducing products that will support 432 kbps data speeds on a single channel, and even higher speeds in multi-channel configurations or through the use of compression technology. Although our Inmarsat terminals currently operate on the third-generation Global Area Network (“GAN”) system, we have already introduced aeronautical terminals that can be converted to BGAN service when it is initiated.

SATCOM is the top supplier of antennas for satellite-based voice/data communications aboard corporate aircraft, with over two-thirds of this market. More than 1,000 of our antennas have been installed on over 35 different types of aircraft used for general aviation and corporation purposes. In addition, SATCOM supplies over 85% of all Inmarsat high-speed data terminals used aboard U.S. military command aircraft, and has supplied this equipment to the U.S. Department of Defense executive jet fleet. Our antennas typically are mounted atop the jet’s tail fin and are automatically steered to remain pointed at a communications satellite during flight. In addition, we have also developed a high-speed data terminal that can be installed in, and removed from, military transport aircraft on an as-needed basis, using either our specially designed carry-on antenna or antennas that are already available on the aircraft; approximately 60 of these systems currently provide various U.S. Army and Marine units with continuous communications capabilities while in transit aboard Air Force aircraft, and they can also be used in the field after they arrive at their destinations.

Our SATCOM division has also pursued opportunities to meet satellite-based communications needs for ground-based vehicles, and offers two types of terminals for this market: low-speed satellite packet data terminals for messaging, telemetry and tracking applications, and higher-speed GAN terminals. SATCOM has been successful in supplying its land-based high-speed-data products to the U.S. and certain other organizations, particularly for use in supplying data communications to remote command posts, or to mobile command posts located in vehicles, such as armored carriers. SATCOM also manufactures search-and-rescue ground terminals and emergency-management software for use with the COSPAS-SARSAT satellite system.

SATCOM’s hardware typically is marketed to third parties who incorporate it with their products and services for sale and delivery to end-users. However, SATCOM’s emergency-management products are often marketed directly to end-user organizations.

Products	Key Features/Benefits	Selected Applications	Customers
Aeronautical Antennas	Mechanically-steered antennas connected to an aircraft’s navigational system, steerable antenna systems for live television from broadcast satellites	High-end corporate jets, private jets, military helicopters, military transport and surveillance	Gulfstream, Bombardier, Honeywell, Dassault
Aeronautical Terminals	Provide aircraft operators with high-speed data (broadband) capability	Corporate aircraft, government and military aircraft, air transport	Corporate aircraft modification centers, U.S. Department of Defense, Northrup-Grumman, L3, Boeing, Rockwell-Collins, Honeywell, Thales

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Products	Key Features/Benefits	Selected Applications	Customers
Inmarsat High-Speed Data Terminals	Worldwide access to corporate networks and the Internet using the Inmarsat satellite system	Military transport, Peacekeeping, Media	U.S. Army, Canadian Department of National Defense, CNN
Satellite Packet Data Terminals	Two-way messaging and location information in North America, Mexico and Central America	Transportation, Public Safety, Workforce Automation, Oil and Gas Remote Monitoring and Control	Long-Haul Trucking Companies
Emergency Management Products	Hardware and software features for Search and Rescue (SAR) systems	Rescue and Mission Control Centers	Over 18 Governments Worldwide

EMS Wireless

We believe our EMS Wireless division has the leading market share as a supplier of base-station antennas used by service providers in PCS/cellular communications networks in North America. EMS Wireless also designs and markets repeater products that enable PCS/cellular service providers to extend their usable signals into buildings, or into sparsely populated geographical areas. This business unit was first organized in 1994, and expanded into repeater products in 2001.

The infrastructure to support land-based wireless communications has expanded to support growing demand, both domestically and internationally. During the mid-1990’s, the continuing growth of demand for cellular communications strained the capacity of traditional analog cellular systems that can carry only one call per channel of radio spectrum. As a result, in recent years most service providers have installed digital equipment to increase per-channel call capacity by factors ranging from three to eight. In addition, service providers have constructed PCS digital networks that operate at twice the frequency level of cellular systems; this provides the greater bandwidth necessary for an expanded range of voice and data services. However, PCS technology requires smaller cells than analog technology and, as a result, approximately four times the number of base stations to complete its geographical build-out.

Emerging wireless data applications are creating additional opportunities for carriers to generate additional revenue from PCS/cellular networks by providing data-based services, such as Internet access, e-mail, music downloads and sharing of video images. Data-intensive services further expand the bandwidth per subscriber that PCS/cellular systems must accommodate, and also require consistent high-quality signal connections. To meet bandwidth requirements necessary to provide data-based applications, many carriers are currently building out 3G systems that include the additional cell sites and related infrastructure required to meet higher bandwidth and quality standards. Our participation in this process, and particularly in one carrier’s nationwide 3G build-out, contributed to rapid sales growth at EMS Wireless in 2005.

EMS Wireless has an extensive line of base station antennas. Our leading antenna products employ polarization-diversity technology, which we introduced to the PCS/cellular markets in 1995. These antennas offer comparable or superior coverage and resistance to signal-fading, as compared to networks with conventional vertically-polarized antennas. In addition, this technology allows cell towers to be simpler, less expensive, and less obtrusive than conventional antenna towers. We also offer a full line of lower-priced, conventional antennas for both cellular and PCS networks. Newer products include antennas whose downtilt angle, and thus area of coverage, can be remotely adjusted to adapt to changing usage patterns and network configurations, and we also are introducing software that enables the system operator to manage these adjustments from its central office and without physical visits to the various affected cell sites. Other products include dual-band antennas that operate at both PCS and cellular frequencies, which is of increasing importance as industry consolidation results in carriers that hold multiple spectrum rights in single markets.

Our outdoor repeater products enable service providers to extend or improve coverage in areas where usage does not warrant the expense of a new base station. Our in-building repeater products, which are designed to boost cellular/PCS signals indoors, include cable distribution products for use in small and medium buildings, and fiber-based products that can provide effective coverage in large facilities such as convention centers. We believe that in-building coverage is of increasing importance to service providers, particularly for those using PCS frequencies, which do not effectively penetrate into buildings.

In 2003, we introduced our DataNex line of repeaters that enable a wireless carrier to use its licensed spectrum for the backhaul connection between cell towers and the wired network. This approach can be particularly

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valuable as an alternative to expensive T1 connections for rural cellsites that have unused spectrum capacity, or in situations in which T1 lines are inoperative, as occurred in the aftermath of Hurricanes Katrina and Rita.

Our wireless infrastructure products, along with accessory products, are marketed directly to service providers and to original equipment manufactures (“OEM’s”), both domestically and internationally.

Products	Key Features/Benefits	Selected Applications	Customers
Dual Polarization Antenna	Functionality of three vertically polarized antennas in one device. Compact configuration, less expensive investment	PCS/Cellular towers	PCS/Cellular Carriers
Remotely Controlled Electronic Downtilt Dual Polarization Antennas	Dual polarization antennas with which carriers can adjust the shape and size of cell site coverage from the base of the tower or a central office	PCS/Cellular towers	PCS/Cellular Carriers
Vertical Polarization Antenna	Lower-cost polarized antenna. Apply beam-shaping techniques of amplitude and phase weighting	Rural or Initial Urban Systems	PCS/Cellular Carriers
Repeaters/Signal Distribution Products	Extend RF coverage either indoors or into rural or uneven terrain locations	Indoor and Rural/Remote RF Coverage Extension	PCS/Cellular Carriers and Integrators

Additional segment information is contained elsewhere in this Report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 12 of the Company’s consolidated financial statements.

Sales and Marketing

Our Defense & Space Systems unit produces highly technical products that are often custom-designed. For these products, internal personnel with strong engineering backgrounds conduct significant sales efforts. D&SS also utilizes independent marketing representatives, both in the U.S. and internationally, selected for their knowledge of local markets and their ability to provide technical support and ongoing, direct contact with current and potential customers.

The development of major business opportunities for our Defense & Space Systems business often involves significant bid-and-proposal effort. This work often requires complex, pre-award engineering to determine the technical feasibility and cost-effectiveness of various design approaches.

The markets for space and defense electronics comprise a relatively small number of large customers, which are typically first or second-tier contractors. Our D&SS marketing efforts rely on ongoing communications with this base of potential customers, both to determine customers’ future needs and to inform customers of our capabilities and recent developments. Technical support and service after the sale are also important factors that impact our ability to maintain strong relationships and generate additional sales.

The sales and marketing strategies for our other business units involve direct sales to end-users, and sales to third parties that incorporate our hardware with their products and services for delivery to end-users. Third parties include strategic partners, value-added resellers, original equipment manufacturers, distributors and independent marketing representatives in approximately 35 countries.

LXE maintains a direct sales force across North America and salespersons working through nine international subsidiaries (seven in Europe), all assisted by inside sales and sales support staff. For EMS Wireless, sales and marketing is performed by an internal staff and three regional sales offices in North America, with international sales being handled by two employees based in Atlanta, and one representative each in Venezuela and Brazil. For marketing of SATCOM products, we rely on our relationships with major airframe manufacturers, avionics manufacturers, a network of completion centers that install aeronautical products, and value-added resellers.

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Research, Development and Intellectual Property

We spent $15.9 million, $16.5 million and $15.9 million in 2005, 2004 and 2003, respectively, on company-sponsored research and development. In addition, our work under government and commercial contracts for new wireless communications hardware often leads to innovations that benefit us on future contracts and product development efforts; most of the costs for this work are included with the overall manufacturing costs for specific orders.

We use both domestic and foreign patents to protect our technology and product development efforts. As of December 31, 2005, we owned 71 currently active U.S. patents, expiring 2006 through 2023, and 75 foreign patents expiring 2006 through 2020. We do not expect that any impending patent expirations will have a material effect on our business. In addition, at December 31, 2005, we had pending applications for approximately 45 U.S. and 95 foreign patents, covering various technology improvements and other current or potential products. We have maintained internal patent expertise since 2001, and expect to continue to expand our patent activities. However, we also believe that many of our processes and much of our know-how are more efficiently and effectively protected as trade secrets, and we seek to maintain that protection through the use of employee and third-party non-disclosure agreements, physical controls and need-to-know restrictions.

In some cases, we rely on licenses from third parties under patent rights that could otherwise restrict our ability to market significant products. The principal instances of such licenses involve the integration of bar code scanners in certain of our LXE terminals under license from Symbol Technologies, Inc., or Symbol, the development and sale of RFID-based products by LXE under license from Intermec Corporation, or Intermec, and the sale of remotely controlled electronic down-tilt cellular/PCS antennas by EMS Wireless under license from Andrew Corporation, or Andrew. In each case the licenses are non-exclusive, and are non-cancelable for the lives of the relevant patents except upon default by us.

Backlog

The backlog of firm orders related to continuing operations at December 31, 2005, was $74.3 million, compared with $84.4 million at December 31, 2004. EMS Wireless, LXE and many SATCOM customers typically require short delivery cycles; as a result, these units usually convert orders into revenues within a few weeks, and they do not build up an order backlog that extends substantially beyond one fiscal quarter. However, backlog is very important for Defense & Space Systems, due to the long delivery cycles for its products. The backlog for Defense & Space Systems at December 31, 2005 was $36.8 million compared with $55.9 million at December 31, 2004.

Manufacturing

For some of our products, particularly those of Defense & Space Systems, we perform extensive manufacturing operations, including the formulation and fabrication of unique ferrite-based ceramic materials, precision machining, and the production of advanced integrated electronic circuitry. For others, we primarily perform final assembly and test manufacturing functions. Our manufacturing strategy is:

• to perform those functions for which we have special capabilities and that are most critical to quality and timely performance,

• to equip ourselves with the modern tools we need to perform our manufacturing functions efficiently,

• to use outside sources for functions requiring special skills that we do not have, or that do not offer attractive returns on internal investment in people and equipment, and

• to continually seek ways to further improve the cost-effectiveness and time-to-market of our manufacturing operations.

All of our production activities have been ISO 9000-certified. Our facilities, equipment and processes enable us to meet all quality and process requirements applicable to our products under demanding military and space hardware

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standards, and we are also certified by the Federal Aviation Administration and Transport Canada to manufacture equipment for installation on commercial aircraft.

Materials

Materials used in Defense & Space Systems products consist of magnetic microwave ferrites, metals such as aluminum and brass, permanent magnet materials and electronic components such as motors, servos, transistors, diodes, integrated circuits, resistors, capacitors and printed circuit boards. Most of the raw materials for the formulation of magnetic microwave ferrite materials are purchased from two suppliers, while permanent magnet materials and space-qualified electronic components are purchased from a limited number of suppliers. Electronic components and metals are available from a larger number of suppliers and manufacturers.

The electronic components and supplies, printed circuit assemblies, and molded parts needed for the standard products produced by our other business units are generally available from a variety of sources. However, LXE systems include barcode scanners in almost all orders, and a significant number of the scanners are purchased from an LXE competitor, Symbol Technologies, Inc. There are alternative suppliers that manufacture and sell barcode scanners, either independently or under license agreements with Symbol. We believe that many of LXE’s competitors also rely on scanning equipment purchased from or licensed by Symbol. In addition, LXE has a license agreement with Symbol that allows it to utilize Symbol’s patented integrated scanning technology in certain products.

Our advanced technology products often require sophisticated subsystems supplied or cooperatively developed by third parties having specialized expertise, production skills and economies of scale. Important examples include critical specialized components and subsystems required for successful completion of particular D&SS programs, and application-specific integrated circuitry and computers incorporated into LXE products. In such cases, the performance, reliability and timely delivery of our products can be heavily dependent on the effectiveness of those third parties.

We believe that our present sources of required materials are adequate, and that the loss of any supplier or subassembly manufacturer would not have a material adverse effect on our business as a whole. In the past, shortages of supplies and delays in the receipt of necessary components have not had a material adverse effect on shipments of our established products. However from time to time, the roll-out of new standard products, and our performance on D&SS programs, have been adversely affected by quality and scheduling problems with developers/suppliers of critical subsystems. In some cases these problems have resulted in significant additional costs to us, and in difficulties with our customers. Such problems, should they continue to occur, may have a material adverse effect on us in the future.

Competition

We believe that each of our business units is an important supplier in its principal markets. However, these markets are highly competitive, and some of our competitors have substantial resources that exceed ours. We also compete against smaller, specialized firms.

D&SS competes with specialized divisions of large U.S. industrial concerns, such as Boeing, L3 Communications, Harris Corporation, Raytheon, M/A-Com and Heico Corporation, as well as with such non-U.S. companies as COMDEV of Canada, and Chelton, Ltd of the U.K. Some of these companies, as well as others, are both potential competitors for certain contracts and potential customers on other contracts. In addition, D&SS experiences competition in the form of existing or potential customers’ choice between developing and manufacturing a product internally or purchasing it from us.

LXE’s principal competitors include Intermec, Symbol, and Psion Teklogix. In SATCOM’s markets, we compete with companies including Thrane & Thrane, Chelton, Ltd., Tecom, Nera and Qualcomm. EMS Wireless competes with large U.S. and international companies, including Andrew, Powerwave, Radio Frequency Systems (a subsidiary of Alcatel), and Kathrein.

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We believe that the key competitive factors in all of our business units are product performance, technical expertise and ongoing support to customers, time-to-market, time-to-ship and adherence to delivery schedules, and price.

Employees

As of December 31, 2005, we had approximately 1,200 employees and in addition approximately 100 persons working under other contractual arrangements in our continuing operations. Approximately 60% of our personnel are directly involved in engineering or manufacturing activities. None of the employees of our continuing operations are represented by a labor union. Management believes that its relationship with its employees is good.

Government Regulation

Certain of our products are subject to regulation by various agencies in both the U.S. and abroad. The radios used in the wireless networks sold by LXE, and in the satellite communications terminals sold by our SATCOM division, must have various approvals from the Federal Communications Commission and similar agencies in other countries in which those systems are sold. Our airborne satellite communications equipment requires certifications from the Federal Aviation Administration for installation on civil aircraft. In addition, a large portion of net sales of Defense & Space Systems is derived from government end-use contracts that are subject to a variety of federal acquisition regulations, including pricing and cost-accounting requirements, and in many cases subject to security requirements related to classified military programs. The European Union imposes standards for electrical safety and electromagnetic compatibility that affect many of o ur products sold in those countries.

We believe that our products and business operations are in material compliance with current standards and regulations. However, governmental standards and regulations affect the design, cost and schedule for new products. In addition, future regulatory changes could require modifications in order to continue to market certain of our products.

Our products for use in defense applications and on satellites are subject to the U.S. State Department’s International Traffic in Arms Regulations, and as a result we must obtain licenses in order to export these products, or to disclose their non-public design features to persons who are not citizens or permanent residents of the United States. We maintain trained internal personnel to monitor compliance, to educate our personnel on the restrictions and procedures, and to process license applications. At times, the licensing process has prevented us from working with non-U.S. suppliers on European or Asian space programs, and it also affects the extent to which we can involve our Canada-based engineers in Defense & Space Systems programs, or use D&SS engineers and capabilities to assist our Canadian divisions on their products or programs.

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EXECUTIVE OFFICERS OF THE REGISTRANT

Information concerning the executive officers of the Company, and their ages as of December 31, 2005 is set forth below:

Alfred G. Hansen, age 72, became President and Chief Executive Officer in January 2001. Mr. Hansen is a Director of the Company and chairs our Stock Incentive Plan Committee and is on the Science & Technology Committee. Mr. Hansen joined the Company as President and Chief Operating Officer in January 2000 after having become a Director in 1999. From 1998 through 1999, Mr. Hansen was President of A.G. Hansen Associates, Inc., Marietta, Georgia, an aerospace marketing and manufacturing consulting firm. From 1995 to 1998, Mr. Hansen served as Executive Vice President of Lockheed Martin Aeronautical Systems, with broad operational responsibilities for its aerospace business, and as a Vice President of its parent company, Lockheed Martin Corporation. Mr. Hansen retired from the U.S. Air Force in 1989 as a four-star general, serving in his last assignment as commander of the Air Force Logistics Command.

Don T. Scartz, age 63, was elected Executive Vice President of the Company in February 2003, and also currently serves as Chief Financial Officer and Treasurer, positions he has held since 1995 and 1981, respectively. Mr. Scartz also currently serves as the Chief Financial Officer of each of the Company’s operating subsidiaries. Formerly, he served the Company as Senior Vice President from 1995 to February 2003, as Vice President-Finance from 1981 to 1995, and as Secretary from 1982 to 1991. Mr. Scartz joined the Company as Controller in 1978. He served as a Director of the Company from 1995 to 2003.

Timothy C. Reis, age 48, became Vice President and General Counsel of the Company in August 2005. He is also responsible for the legal affairs of the operating subsidiaries. Mr. Reis first joined the Company in 2001 as Assistant General Counsel. Previously, he was engaged in the private practice of law and as in-house counsel for United Parcel Service and for Manufacturers Hanover, a New York bank, focusing his practice on intellectual property and technology transactions.

Gary B. Shell, age 51, was appointed Chief Accounting Officer in May 2005 and has served as Vice President, Corporate Finance of the Company since 2004. He was Director, Corporate Finance from 1998 to 2004. He joined the Company in 1983 as Corporate Financial Analyst.

Jay R. Grove, age 43, is Senior Vice President and General Manager of the Defense & Space Systems division. He accepted this position upon joining the Company in January 2001. Formerly, he was Director of Mobile SATCOM Systems for ViaSat, Inc., a California-based provider of advanced satellite communications, defense electronics, and wireless signal-processing equipment. Prior to his tenure at ViaSat, Mr. Grove contributed in management, marketing, and system engineering roles for defense electronics applications at Lockheed-Martin in Nashua, NH and TRW, Inc. in San Diego, CA.

James S. Childress, age 61, was appointed President and General Manager of the LXE division in 2001. He joined the Company in August 2000 as Vice President of Business Development at LXE. Prior to joining EMS, he served as Vice President of EG&G Technical Services, Inc., a leading provider of technical and support services to the U.S. Departments of Defense, Energy, Transportation, Treasury, Justice and Commerce, and to the National Aeronautics and Space Administration. He joined EG&G in 1998 following a distinguished career in the U.S. Air Force, where he focused on logistics and systems acquisition. In the Air Force, he attained the rank of major general, and last served as commander of the San Antonio Air Logistics Center.

Neilson A. Mackay, age 65, has served as Senior Vice President and General Manager of our SATCOM division since 2001. He joined the Company in January 1993, when the Company acquired an Ottawa, Ontario-based space satellite communications business of which he was serving as President.

T. Gerald Hickman, age 65, has been Senior Vice President and General Manager of our EMS Wireless division since March 2000. He joined the Company in 1988 as Vice President, Marketing, and prior to his current position was a Vice President in the Company’s EMS Wireless division.

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ITEM 1A. Risk Factors

We believe the risks and uncertainties described below are the most significant risks we face. If any of the following risks actually materialize, our business could be harmed. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial, may also impair our operations or results. In all of those cases, the trading price of our common stock could decline, and investors could lose all or part of their investments.

Risks Related to Our Business

In addition to general economic conditions, both domestic and foreign, which can change unexpectedly and generally affect U.S. businesses with worldwide operations, we are subject to a number of risks and uncertainties that are specific to us or the businesses we operate:

Decisions by our customers about the timing and scope of major programs can have a significant effect on our net sales and earnings

Major commercial communications infrastructure programs, such as PCS/cellular systems for large urban areas, and large defense programs are important sources of our current and anticipated future net sales. Customer decisions as to the nature and timing of these programs can have a significant effect on us, particularly in our EMS Wireless and Defense & Space Systems divisions, and can create volatility in our net sales and earnings. If any of our customers were to delay the implementation of, or significantly reduce the scope of, one of these programs, our net sales and earnings would decline.

If our commercial customers fail to find adequate funding for major potential programs, or our government customers do not receive necessary funding approvals, our net sales would decline.

To proceed with major programs, our customers typically must obtain substantial amounts of capital, from either governmental or private sources. The availability of this capital is directly affected by political developments and by conditions in the private capital markets. If adequate funds are not available to our targeted customers for these programs, our expected net sales may be adversely affected. Large defense programs are often funded in multiple phases, requiring periodic further funding approvals, which may be withheld for a variety of political, budgetary or technical reasons. Such multi-year programs can also be terminated or modified by the government in ways adverse to us and, in many cases, with limited notice and without penalty. These developments would reduce our net sales below the levels we would otherwise expect.

If we cannot continue to rapidly develop, manufacture and market innovative products and services that meet customer requirements for performance and reliability, we may incur development costs that we cannot recover and our net sales and earnings will suffer.

The process of developing new wireless communications products is complex and uncertain, and failure to anticipate customers’ changing needs and emerging technological trends accurately or to develop or obtain appropriate intellectual property could significantly harm our results of operations. In many instances we must make long-term investments and commit significant resources before knowing whether our investments will eventually result in products that the market will accept. If our new products are not accepted by the market, our net sales and earnings will decline.

Competing technology could be superior to ours, and could cause customer orders and net sales to decline.

The markets in which we compete are very sensitive to technological advances. As a result, technological developments by competitors can cause our products to be less desirable to customers, or even to become obsolete. Those developments could cause our customer orders and net sales to decline.

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Our competitors’ marketing and pricing strategies could make their products more attractive than ours. This could cause reductions in customer orders or company profits.

We operate in highly competitive technology markets, and some of our competitors have substantially greater resources and facilities than we do. As a result, our competition may be able to pursue aggressive marketing strategies, such as significant price discounting. These competitive activities could cause our customers to purchase our competitors’ products rather than ours, or cause us to increase marketing expenditures or reduce prices, in any such case, causing a reduction of net sales and earnings below expected levels.

Slow public acceptance of new communications systems could limit purchases by our customers.

Construction and expansion of new communications systems depend on public demand for the new services. As a result, growth rates in our net sales from wireless infrastructure products and proposed high-speed satellite communications systems are likely to be heavily affected by the timing and extent of public willingness to buy mobile and/or broadband communications services. If public acceptance of the new systems does not develop as expected, our customers are unlikely to place the level of orders we expect, and our net sales and earnings would also fall short of expectations.

We may encounter technical problems or contractual uncertainties, which can cause delays, added costs, lost sales, and liability to customers.

From time to time we have encountered technical difficulties that have caused delays and additional costs in our technology development efforts. We are particularly exposed to this risk in new product development efforts, and in fixed-price contracts on technically advanced programs in our Defense & Space Systems unit that require novel approaches and solutions. In these cases, the additional costs that we incur are not covered by revenue commitments from our customers, and therefore reduce our earnings. In addition, technical difficulties can cause us to miss expected delivery dates for new product offerings, which could cause customer orders to fall short of expectations.

Some of our products perform mission-critical functions in space applications. If we experience technical problems and are unable to adhere to a customer’s schedule, the customer could experience costly launch delays or re-procurements from other vendors. The customer may then be contractually entitled to substantial financial damages from us. The customer would also be entitled to cancel future deliveries, which would reduce our future revenues and could make it impossible for us to recover our design, tooling or inventory costs, or our remaining commitments to third-party suppliers.

Due to technological uncertainties in new or unproven applications of technology, our contracts may be broadly defined in its early stages, with a structure to accommodate future changes in the scope of work or contract value as technical development progresses. In such cases, management must evaluate these contract uncertainties and estimate the future expected levels of scope of work and likely contract value changes to determine the appropriate level of revenue associated with costs incurred. Actual changes may vary from expected changes, resulting in a reduction of net sales and earnings recognized in future periods.

Our transitions to new product offerings can be costly and disruptive, and could adversely affect our net sales or profitability.

Because our businesses involve constant efforts to improve existing technology, we regularly introduce new generations of products. During these transitions, customers may reduce purchases of older equipment more rapidly than we expect, or may choose not to migrate to our new products, which could result in lower net sales and excessive inventories. In addition, product transitions create uncertainty about both production costs and customer acceptance. These potential problems are generally more severe if our product introduction schedule is delayed by technical development issues. These problems could cause our net sales or profitability to be less than expected.

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Our products may inadvertently infringe third party patents, which could create substantial liability to our customers or the third-party patent owners.

As we regularly develop and introduce new technology, we face risks that our new products or manufacturing techniques may infringe valid patents held or currently being processed by others. The earliest that the U.S. Patent Office publishes patents is 18 months after their initial filing, and exceptions exist so that some applications are not published before they issue as patents. Thus, we may be unaware of a pending patent until well after we have introduced an infringing product. In addition, questions of whether a particular product infringes a particular patent can involve significant uncertainty. As a result of these factors, third-party patents may require us to redesign our products and to incur both added expense and delays that interfere with marketing plans. We may also be required to make significant expenditures from time to time to defend or pay damages or royalties on infringement claims, or to respond to customer indemnification claims relating to third-party patents. Such costs could reduce our earnings.

If our customers are combined through merger or acquisition, their combined purchases of our products may decline or they may increase their price concession demands, adversely affecting our net sales or earnings.

The telecommunications service provider industry has undergone, and continues to undergo, a significant reduction in the number of service providers due to industry consolidation. Some of these providers are end-users of products sold by our EMS Wireless division. Business combinations, such as mergers, often lead the combined entity to reduce the number of suppliers it uses. If our customers are combined, they may also demand greater price concessions from their suppliers, which increasingly include the use of reverse auctions. Those actions could cause declines in our net sales and earnings.

We may not be successful in protecting our intellectual property.

Our unique intellectual property is a critical resource in our efforts to produce and market technically advanced products. We primarily seek to protect our intellectual property, including product designs and manufacturing processes, through patents and as trade secrets. If we are unable to obtain enforceable patents on certain technologies, or if information we protect as trade secrets becomes known to our competitors, then competitors may be able to copy or otherwise appropriate our technology, we would lose competitive advantages, and our net sales and operating income could decline. In any event, litigation to enforce our intellectual property rights could result in substantial costs and diversion of resources that could have a material adverse effect on our operations regardless of the outcome of the litigation. We may also enter into transactions in countries where intellectual property laws are not well developed and legal protection of our rights may be ineffective.

For the year ended December 31, 2005, we identified two material weaknesses and several significant deficiencies in our internal control over financial reporting. If we fail to maintain effective internal control over financial reporting, we may not be able to provide timely and accurate financial statements. This could cause investors to lose confidence in our reported financial results and have a negative effect on the trading price of our securities.

For the year ended December 31, 2005, we identified two material weaknesses and several significant deficiencies in our internal control over financial reporting. We have taken steps to correct identified deficiencies in our internal control over financial reporting. However, we cannot be certain that we will not identify any material weaknesses in the future. If a material weakness were to be identified with respect to our internal control over financial reporting, we would not be able to conclude that our internal control over financial reporting was effective. This could result in the inability of our independent registered public accounting firm to deliver an unqualified report, or any report, on our internal control over financial reporting. Ineffective internal control over financial reporting also could result in a misstatement of our operating results or prevent us from meeting our reporting obligations under the federal securities laws, which could cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our securities.

Our success depends on our ability to attract and retain a highly skilled workforce.

Because our products and programs are technically sophisticated, we must attract and retain employees with advanced technical and program-management skills. Many of our senior management personnel also possess advance knowledge of the business in which we operate and are otherwise important to our success. Other

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employers also often recruit persons with these skills, both generally and in focused engineering fields. If we are unable to attract skilled employees and senior management, our performance obligations to our customers could be affected and our net sales could decline.

The future success of our business strategies and operations could depend on effective succession plans as senior management members reach retirement.

Certain of our senior managers, including our Chief Executive Officer, have reached or are approaching typical retirement age. Effective transition to their successors will be important to the future success of our business strategies and operations. Our Board of Directors is responsible for developing succession plans for senior management of the Company, including our Chief Executive Officer. The Board has retained an executive search firm to assist in the identification and evaluation of potential candidates for Chief Executive Officer. No fixed schedule is in effect for any such transition, and we expect that our Chief Executive Officer will continue to serve in his current capacity until a suitable successor is appointed.

We depend on highly skilled suppliers, who may become unavailable or fail to achieve desired levels of technical performance.

In addition to our requirements for basic materials and electronic components, our advanced technological products often require sophisticated subsystems supplied or cooperatively developed by third parties. To meet those requirements, our suppliers must have specialized expertise, production skills and economies of scale, and in some cases there are only a limited number of qualified potential suppliers. Our ability to perform according to contract requirements, or to introduce new products on the desired schedule, can be heavily dependent on our ability to identify and engage appropriate suppliers, and on the effectiveness of those suppliers in meeting our development and delivery objectives. If these highly skilled suppliers are unavailable when needed, or fail to perform as expected, our ability to meet our performance obligations to our customers could be affected and our net sales and earnings could decline.

Changes in regulations that limit the availability of radio frequency licenses or otherwise result in increased expenses could cause our net sales or earnings to decline.

Many of our products are incorporated into wireless communications systems that are regulated in the U.S. by the Federal Communications Commission and internationally by other government agencies. Changes in government regulations could reduce the growth potential of our markets by limiting either the access to or availability of frequency spectrum. In addition, other changes in government regulations could make the competitive environment more difficult by increasing costs or inhibiting our customers’ efforts to develop or introduce new technologies and products. Also, changes in government regulations could substantially increase the difficulty and cost of compliance with government regulations for both our customers and us. All of these factors could result in reductions in our net sales and earnings.

The export license process for space products has become uncertain, increasing the chance that we may not obtain required export licenses in a timely or cost-effective manner.

Our products for use on commercial satellites are included on the U.S. Munitions List of the U.S. International Traffic in Arms Regulations and are subject to State Department licensing requirements. The licensing process for our products for use on commercial satellite and many of our other products is time-consuming, and political considerations can increase the time and difficulty of obtaining licenses for export of technically advanced products. The license process may prevent particular sales, and generally has created schedule uncertainties that encourage foreign customers, such as those in Western Europe, to develop internal or other foreign sources rather than use U.S. suppliers. If we are unable to obtain required export licenses when we expect them or at the costs we expect, our net sales and earnings could be adversely affected.

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Export controls on space technology restrict our ability to hold technical discussions with foreign customers, suppliers and internal engineering resources, which reduces our ability to obtain sales from foreign customers or to perform contracts with the desired level of efficiency or profitability.

U.S. export controls severely limit unlicensed technical discussions with any persons who are not U.S. citizens. As a result, we are restricted in our ability to hold technical discussions between U.S. personnel and current or prospective non-U.S. customers or suppliers, between Canadian personnel and current or prospective U.S. customers or suppliers, and between U.S. employees and our Canadian or other non-U.S. employees. These restrictions reduce our ability to win cross-border space work, to utilize cross-border supply sources, to deploy technical expertise in the most effective manner, and to pursue cooperative development programs involving our U.S. and Canadian space facilities.

Economic or political conditions in other countries could cause our net sales or earnings to decline.

International sales significantly affect our financial performance. Approximately $81 million, $88 million and $86 million, or 26.0%, 35.8% and 35.2% of our net sales for 2005, 2004, and 2003, respectively, were derived from customers residing outside of the U.S. Adverse economic conditions in our customers’ countries, mainly in Western Europe, Latin America and the Pacific Rim, have affected us in the past, and could adversely affect future international revenues in all of our businesses, especially from our wireless local-area network and PCS/cellular infrastructure businesses. Unfavorable currency exchange rate movements can adversely affect the marketability of our products by increasing the local-currency cost. In addition to these economic factors directly related to our markets, there are risks and uncertainties inherent in doing business internationally that could have an adverse effect on us, such as potential adverse effects of political instability or changes in governments, of changes in foreign income tax laws, and of restrictions on funds transfers by us or our customers, as well as of unfavorable changes in laws and regulations governing a broad range of business concerns, including proprietary rights, legal liability, and employee relations. All of these factors could cause significant harm to our net sales or earnings.

Our net sales of wireless communications could be affected by public health concerns.

Among the factors that could affect the growth of markets for new wireless communications systems is the potential concern about alleged health risks relating to radio frequency (“RF”) emissions. Media reports and some studies have suggested that RF emissions from wireless handsets and cell sites may be associated with various health problems, including cancer, and may interfere with electronic medical devices, including hearing aids and pacemakers. In addition, lawsuits have been filed against participants in the wireless industry alleging various adverse health consequences as a result of wireless equipment emissions. Additional studies of RF emissions are ongoing. Consumers may be discouraged from purchasing new wireless services if consumers’ health concerns over RF emissions increase. In addition, concerns over RF emissions could lead to increased regulation by government authorities to introduce further restrictions on the location and operation of wireless-related hardware, or could result in wireless companies being held liable for costs or damages associated with these concerns. If our wireless customers were to become subject to increased governmental regulation or liable for significant damages in connection with these lawsuits, our net sales and earnings could be adversely affected.

Unfavorable currency exchange rate movements could result in foreign exchange losses and cause our earnings to decline.

We have international operations, and we can use forward currency contracts to reduce – but not entirely eliminate – the earnings risk from holding certain assets and liabilities in different currencies. Our SATCOM division derives a major portion of its sales from agreements with U.S. customers in U.S. dollars; a stronger Canadian dollar would increase our costs relative to our U.S. net sales, and we are unlikely to recover these increased costs through higher U.S.-dollar prices due to competitive conditions. As a result of these factors, our financial results will continue to have an element of risk related to foreign exchange rates.

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Our net sales in certain markets depend on the availability and performance of other companies with which we have marketing relationships.

With respect to some applications, including mobile satellite communications, we are seeking to develop marketing relationships with other companies that have, for example, specialized software and established customer service systems. In other markets, such as wireless local-area networks, a major element of our distribution channels is a network of value-added retailers and independent distributors. In foreign markets for many of our products we are often dependent on successful working relationships with local distributors and other business personnel. If we are unable to identify and structure effective relationships with other companies that are able to market our products, our net sales could fail to grow in the ways we expect.

Customer orders in backlog may not result in sales.

Our order backlog represents firm orders for products and services. However, our customers may cancel or defer orders for products and services, in most cases without penalty. Cancellation or deferral of an order in our Defense & Space Systems business typically involves penalties and termination charges for costs incurred to date, but these termination penalties would still be considerably less than what we would have expected to earn if the order could have been completed. We make management decisions based on our backlog, including hiring of personnel, purchasing of materials, and other matters that may increase our production capabilities and costs whether or not the backlog is converted into revenue. Cancellations, delays or reductions of orders could adversely affect our results of operations and financial condition.

Our products typically carry warranties, and the costs to us to repair or replace defective products could exceed the amounts we have experienced historically.

Most of our products carry warranties of between one and three years; however, we have some products with warranties of up to 10 years, and we depend on our reputation for reliability and customer service in our competition for sales. If our products are returned for repair or replacement under warranty or otherwise under circumstances in which we assume responsibility, we can incur significant costs that may be in excess of the reserves that we have established based on our historical warranty cost levels, which would reduce our earnings. For example, during 2005, we incurred unexpected costs to replace a non-functioning component of our remotely controllable electrical downtilt antennas.

Changes in our consolidated effective income tax rate and the related effect on our results can be difficult to predict.

We earn taxable income in various tax jurisdictions around the world. The rate of income tax that we pay in each jurisdiction can vary significantly, due to differing income tax rates and benefits that may be available in some jurisdictions and not in others. In particular, our earnings in Canada are subject to very low income taxes due to the substantial pool of research-related tax incentives that we have accumulated. As a result, our overall effective income tax rate depends upon the relative annual income that we expect to earn in each of the tax jurisdictions where we do business. As a result, even though our expectations for consolidated earnings before taxes could remain unchanged, our income tax expenses and net earnings may still increase or decrease, depending upon changes in the jurisdictions in which we expect to have earnings.

Our business and revenue growth could be limited by our inability to obtain additional financing.

Our current cash and available credit facilities may not be sufficient enough to finance significant synergistic acquisitions to complement our technical and product capabilities. Although the proceeds of our recent public stock offering, and of our recent sales of discontinued operations, have provided us with substantially greater flexibility in funding growth efforts and moderately-sized acquisitions, we may continue to need other sources of financing to support any large acquisitions that we believe would contribute to our growth and profitability. We may not be able to secure sufficient additional credit or other financing, on acceptable terms, to take advantage of major growth opportunities of this nature.

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We may not effectively manage possible future growth, which could result in reduced earnings.

Historically, we have experienced broad fluctuations in demand for our products and services. These changes in demand have depended on many factors and have been difficult to predict. In recent years, there has been a general growth trend in certain of our businesses, as well as increasing complexity in the technologies and applications involved. These changes in our businesses place significant demands on both our management personnel and our management systems for information, planning and control. If we are to achieve further strong growth on a profitable basis, our management must identify and exploit potential market opportunities for our products and technologies, while continuing to manage our current businesses effectively. Furthermore, our management systems must support the changes to our operations resulting from our business growth. If our management and management systems fail to meet these challenges our business and prospects will be adversely affected.

We may make acquisitions and investments that could adversely affect our business.

To support growth, we have made and may continue to make acquisitions of and investments in businesses, products and technologies that could complement or expand our businesses. However, if we should be unable to successfully negotiate with a potential acquisition candidate, finance the acquisition, or effectively integrate the acquired businesses, products or technologies into our existing business and products, our net sales and earnings could be adversely affected. Furthermore, to complete future acquisitions, we may issue equity securities, incur debt, assume contingent liabilities or the risk of unknown liabilities, and may incur amortization expenses and write-downs of acquired assets as a result of future acquisitions, which could cause our earnings to decline.

Risks Related to our Common Stock

In addition to risks and uncertainties related to our operations, there are investment risks that could adversely affect the return to an investor in our common stock, and also could adversely affect our ability to raise capital for financing future operations.

Our quarterly results are volatile and difficult to predict. If our quarterly performance results fall short of market expectations, the market value of our shares is likely to decline.

The quarterly net sales and earnings contributions of some of our business units are heavily dependent on customer orders or product shipments in the final weeks or days of the quarter. Due to some of the risks related to our business discussed above, it can be difficult for us to predict the timing of receipt of major customer orders, and we are unable to control timing decisions made by our customers. This can create volatility in quarterly results, and hinders our ability to determine before the end of each quarter whether quarterly earnings will in fact meet prevailing expectations. The market price for our shares is likely to be adversely affected by quarterly earnings results that are below analyst and market expectations.

Our share price may fluctuate significantly, and an investor may not be able to sell our shares at a price that would yield a favorable return on investment.

The market price of our stock will fluctuate in the future, and such fluctuations could be substantial. Price fluctuations may occur in response to a variety of factors, including:

• actual or anticipated operating results,

• the limited average trading volume and public float for our stock, which means that orders from a relatively few investors can significantly impact the price of our stock, independently of our operating results,

• announcements of technological innovations, new products or new contracts by us, our customers, our competitors or our customers’ competitors,

• government regulatory action,

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• developments with respect to wireless and satellite communications, and

• general market conditions.

In addition, the stock market has from time to time experienced significant price and volume fluctuations that have particularly affected the market prices for the stocks of technology companies, and that have been unrelated to the operating performance of particular companies.

Future sales of our common stock may cause our stock price to decline.

Our outstanding shares are freely tradable without restriction or further registration, and shares reserved for issuance upon exercise of stock options will also be freely tradable upon issuance, in each case unless held by affiliates. Sales of substantial amounts of common stock by our shareholders, including those who have acquired a significant number of shares in connection with business acquisitions or private investments, or even the potential for such sales, may depress the market price of our common stock and could impair our ability to raise capital through the sale of our equity securities.

Provisions in our governing documents and law could prevent or delay a change of control not supported by our Board of Directors.

Our shareholder rights plan and provisions of our amended and restated articles of incorporation and amended bylaws could make it more difficult for a third party to acquire us. These documents include provisions that:

• allow our shareholders the right to acquire common stock from us at discounted prices in the event a person acquires 20% or more of our common stock or announces an attempt to do so without our Board of Directors’ prior consent;

• authorize the issuance of up to 10,000,000 shares of “blank check” preferred stock by our Board of Directors without shareholder approval, which stock could have terms that could discourage or thwart a takeover attempt;

• limit who may call a special meeting of shareholders;

• require unanimous written consent for shareholder action without a meeting;

• establish advance notice requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at shareholder meetings;

• adopt the fair price requirements and rules regarding business combinations with interested shareholders set forth in Article 11, Parts 2 and 3 of the Georgia Business Corporation Code; and

• require approval by the holders of at least 75% of the outstanding common stock to amend any of the foregoing provisions.

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ITEM 1B. Unresolved Staff Comments.

None.

ITEM 2. Properties

Our corporate headquarters and domestic operations are located in five buildings, two of which we own (comprising 250,000 square feet of floor space on 21 acres), as well as three that are leased (136,000 square feet, leases to expire in 2008 and 2009), all located in a suburb of Atlanta, Georgia. These facilities include clean rooms, a microelectronics laboratory, materials storage and control areas, assembly and test areas, offices, engineering laboratories, a ferrites laboratory, drafting and design facilities, a machine shop, a metals finishing facility, and painting facilities.

We lease approximately 69,000 square feet of office and manufacturing space, primarily for SATCOM’s operations, located in Ottawa, Ontario (lease expiring in 2007).

Our EMS Wireless division leases an 11,000 square-foot manufacturing facility in Curitiba, Brazil. The lease is annually renewable, and management expects to continue the lease on terms comparable to those of the current lease.

We currently lease several small sites in the U.S., U.K., Europe and Australia for LXE sales offices and a SATCOM engineering facility. If any of these leases were terminated, we believe we could arrange for comparable replacement facilities on similar terms.

ITEM 3. Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not likely to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

ITEM 4. Submission of Matters to a Vote of Security Holders

None.

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PART II

ITEM 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

The common stock of EMS Technologies, Inc. is traded on the NASDAQ national market (symbol ELMG). At March 13, 2006, there were approximately 364 shareholders of record, and the Company believes that there were approximately 3,300 beneficial shareholders, based upon broker requests for distribution of Annual Meeting materials. The price range of the stock is shown below:

	2005 Price Range				2004 Price Range
	High		Low		High		Low
First Quarter	$	17.13		12.48	$	26.31		16.47
Second Quarter		16.68		10.75		23.25		17.50
Third Quarter		18.90		14.52		19.81		13.84
Fourth Quarter		18.50		15.09		18.59		14.86

The Company has never paid a cash dividend with respect to shares of its common stock, and has retained its earnings to provide cash for the operation and expansion of its business. The Company cannot currently declare or make any cash dividends due to restrictions in its revolving credit agreement. Future dividends, if any, will be determined by the Board of Directors in light of the circumstances then existing, including the Company’s earnings and financial requirements and general business conditions.

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ITEM 6. Selected Financial Data

(in thousands, except	Years ended December 31
earnings (loss) per share)	2005			2004			2003			2002			2001
Net sales	$	310,033			246,518			243,854			221,749			188,823
Cost of sales		209,808			159,597			156,828			141,651			125,287
Selling, general and administrative expenses		66,597			58,907			55,283			49,033			41,826
Research and development expenses		15,893			16,482			15,853			16,589			17,460
Contract reserve adjustment		—			—			—			(3,500	)		3,500
Operating income		17,735			11,532			15,890			17,976			750
Non-operating income (expense)		587			1,085			450			(67	)		604
Foreign exchange (loss) gain		(145	)		(205	)		(235	)		357			(71	)
Interest expense		(4,018	)		(2,296	)		(1,923	)		(2,246	)		(3,407	)
Earnings (loss) from continuing operations before income taxes		14,159			10,116			14,182			16,020			(2,124	)
Income tax (expense) benefit		(4,736	)		(2,823	)		(3,964	)		(4,592	)		1,728
Earnings (loss) from continuing operations before accounting change		9,423			7,293			10,218			11,428			(396	)
Discontinued operations:
Gain/(loss) from discontinued operations		(20,910	)		(7,928	)		(51,689	)		(3,260	)		6,171
Income tax benefit (expense)		44			827			4,079			419			(908	)
Earnings (loss) before accounting change		(11,443	)		192			(37,392	)		8,587			4,867
Cumulative effect of change in accounting principle		—			—			—			—			(351	)
Net earnings (loss)	$	(11,443	)		192			(37,392	)		8,587			4,516
Earnings (loss) per share:
Basic:
From continuing operations	$	0.84			0.66			0.95			1.08			(0.04	)
From discontinued operations		(1.86	)		(0.64	)		(4.44	)		(0.27	)		0.56
Cumulative effect of change in accounting principle		—			—			—			—			(0.04	)
Net earnings (loss)	$	(1.02	)		0.02			(3.49	)		0.81			0.48
Diluted:
From continuing operations	$	0.84			0.65			0.95			1.06			(0.04	)
From discontinued operations		(1.86	)		(0.63	)		(4.42	)		(0.26	)		0.56
Cumulative effect of change in accounting principle		—			—			—			—			(0.04	)
Net earnings (loss)	$	(1.02	)		0.02			(3.47	)		0.80			0.48
Weighted average number of shares:
Common		11,179			11,094			10,702			10,561			9,464
Common and dilutive common equivalent		11,225			11,237			10,785			10,731			9,464

	As of December 31
	2005		2004		2003		2002		2001
Working capital related to continuing operations	$	79,336		82,438		38,250		41,120		44,372
Total assets		219,460		255,078		228,549		256,304		236,818
Long-term debt, including current installments		43,408		61,454		53,569		52,444		51,611
Shareholders’ equity		113,656		126,021		120,042		145,985		132,321

No cash dividends have been declared or paid during any of the periods presented.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a leading designer, manufacturer and marketer of advanced wireless communications products for diverse commercial, defense and government markets. We focus on the needs of the mobile information user and the increasing demand for wireless broadband communications. Our products enable communications across a variety of coverage areas, ranging from global to regional to within a single building. Our continuing operations include the following four business units:

• Defense & Space Systems - Highly engineered hardware for satellites and defense electronics applications;

• LXE - Rugged mobile computer terminals and other equipment for wireless local area networks;

• SATCOM - Satellite communications antennas and terminals for aircraft and ground-based vehicles, other portable satellite terminals, and satellite ground stations for search and rescue operations;

• EMS Wireless - Base station antennas and signal repeaters for PCS/cellular systems.

We sell our Defense & Space Systems products primarily for defense applications. We sell our EMS Wireless products exclusively, and our LXE products predominantly, for commercial applications. We also sell the majority of our SATCOM products for commercial applications. Sales of products for U.S. government end-use comprised 13.2% and 14.7% of our net sales in 2005 and 2004, respectively.

Our sales to customers in the United States accounted for 74.0% of our consolidated net sales in 2005 and 64.2% of our consolidated net sales in 2004. The largest single geographic market for our products outside the U.S. has recently been the United Kingdom, which accounted for 4.6% and 6.6% of net sales in 2005 and 2004 respectively. Net sales from our non-U.S. markets have generally increased when the Euro and other local functional currencies have increased in value as compared with the U.S. dollar.

Following is a summary of significant factors affecting the Company in 2005:

For continuing operations:

• Net sales reached an all-time high of $310.0 million from continuing operations in 2005. This was mainly due to record sales recorded at our EMS Wireless and SATCOM divisions, and from continued sales growth at our LXE division.

• Strong operating income was recorded by each of the four divisions in 2005, and in total for continuing operations, was 54% over those reported in 2004.

For discontinued operations:

• On November 28, 2005, the Company completed the sale of the assets and operating liabilities of its Space & Technology/Montreal division to MacDonald, Dettwiler and Associates, Ltd. of Vancouver, B.C. (“MDA”).

• On March 9, 2006, the Company completed the sale of the assets and operating liabilities of its SatNet division to Advanced Microwave Technologies, Inc (“Advantech”).

• 2005 included impairment charges of $6.2 million for our SatNet division and $10.0 million for our Space & Technology/Montreal division. They were recorded to reflect the revised estimate of the fair value, less cost to sell, of these divisions. The loss recorded for our discontinued operations also reflected cost increases on certain long-term contracts at our Space & Technology/Montreal (“S&T/Montreal”) division, lower than expected net sales by our SatNet division, and increases in reported costs for both of these Canadian-based operations as a result of a weaker U.S. dollar versus the Canadian dollar.

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Description of Net Sales, Costs and Expenses

Net sales

The amount of net sales reported in a given period is the most significant factor affecting our operating income. We sell our products through established networks of value-added-resellers and systems integrators who incorporate our products into the systems they sell to end users. In addition to product sales, we also generate net sales from the sale of maintenance and repair services. Such service revenues have been below 10% of our net sales for each of the three years ended December 31, 2005.

We recognize revenues under most of our customer agreements when we ship units or perform services. If the customer agreement is in the form of a long-term contract (typical in our Defense & Space Systems division), we recognize revenue under the percentage-of-completion method, using the ratio of cost incurred to total estimated cost as the measure of performance.

Cost of sales

We conduct most of our manufacturing efforts in our Atlanta-area facilities, including the manufacture of all of our LXE and Defense & Space Systems products, as well as all EMS Wireless products for the U.S. market. We manufacture EMS Wireless products for distribution outside the U.S. at our Brazilian facility. We manufacture all SATCOM products at our facility in Ottawa, Canada.

Cost of sales includes the cost of materials, payroll and benefits for direct and indirect manufacturing labor, engineering and design costs, outside costs such as subcontracts, consulting or travel related to specific contracts, and manufacturing overhead expenses such as depreciation, utilities and facilities maintenance.

Through our four divisions, we sell a wide range of wireless products into markets with varying competitive conditions; as a result, cost of sales, as a percentage of net sales, varies with each product. The mix of products sold in a given period is a significant factor affecting our operating income. In recent years, the cost-of-sales percentage has generally been lower for LXE and SATCOM products, as compared with products from our Defense & Space Systems and EMS Wireless divisions.

The cost-of-sales percentage is principally a function of competitive conditions, but our SATCOM division is also directly affected by changes in foreign currency exchange rates. SATCOM derives most of its net sales from contracts denominated in U.S. dollars, but the Canada-based SATCOM division incurs most of its costs in Canadian dollars. As the U.S. dollar weakens against the Canadian dollar, our reported manufacturing costs may increase relative to our net sales, which increases the cost-of-sales percentage.

Selling, general and administrative expenses

Selling, general and administrative (“SG&A”) expenses include salaries, commissions, bonuses and related overhead costs for our personnel engaged in sales, administration, finance, human resources, information systems and legal functions. Also included in SG&A are the costs of engaging outside professional services such as legal consultation, auditing and tax compliance, as well as general corporate expenditures to other outside suppliers and service providers.

Research and development expenses

Research and development (“R&D”) expenses represent the cost of our development efforts, net of any reimbursement under specific customer-funded R&D agreements. R&D expenses include salaries of engineers and technicians and related overhead expenses, the cost of materials utilized in research, and additional engineering or consulting services provided by independent companies. R&D costs are expensed as they are incurred. We also often incur significant development costs to meet the requirements of customer contracts in our Defense & Space Systems division, and we report these costs in the consolidated statements of operations as cost of sales.

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Non-operating income, net

Non-operating income, net mainly includes the gain or loss on the sale or disposal of long-lived assets that are held and used.

Foreign exchange gains and losses

We recognize foreign exchange gains and losses, mainly in our SATCOM and LXE divisions, related to assets or liabilities that are denominated in a currency different from the local functional currency. For our Canada-based SATCOM division, most trade receivables relate to contracts denominated in U.S. dollars; when the U.S. dollar weakens against the Canadian dollar, the value of SATCOM’s trade receivables decreases and foreign exchange losses result. For our LXE division’s Europe-based subsidiaries, most trade payables are in U.S. dollars and relate to their purchases of hardware from LXE for sale in Europe; when the U.S. dollar weakens against the Euro or other European currency, the value of the LXE subsidiaries’ trade payables decreases and foreign exchange gains result.

We enter into forward currency contracts to manage our exposure to changes in foreign currency exchange rates. The notional amount of each forward currency contract is based on the amount of exposure for a specific asset or liability subject to changes in foreign currency exchange rates. We mark these contracts to market in our consolidated statements of operations.

Interest expense

We incur interest expense related to our long-term debt, principally revolving credit loans with U.S. and Canadian banks. The interest rates on most of our long-term debt are variable rates.

Income tax expense

The main factor affecting our effective income tax rate each year is the relative proportion of taxable income that we earn in Canada, where we have a much lower effective rate than in the U.S., or other locations. The lower effective rate in Canada results from certain Canadian tax benefits for research-related expenditures.

Discontinued operations

We have reclassified the assets related to our S&T/Montreal division (through their date of disposition), and Satellite Networks division (for all periods presented) from “assets held and used” to “assets held for sale,” due to decisions to dispose of these operations in the third quarter of 2003 and the second quarter of 2005, respectively. Our discontinued operations have not been profitable for any of the three years ended December 31, 2005 reflecting difficult market conditions for both divisions. We recorded an impairment charge of $2.2 million and $4.0 million for our SatNet division in the fourth and third quarters of 2005, respectively, and additional impairment charges of $10.0 million and $1.7 million in the second quarter of 2005, and third quarter of 2004, respectively, for our Space & Technology/Montreal division.

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Results of Operations

	Years Ended December 31
	2005			2004			2003
Net sales		100.0	%		100.0	%		100.0	%
Cost of sales		67.7			64.7			64.3
Selling, general and administrative expenses		21.5			23.9			22.7
Research and development expenses		5.1			6.7			6.5
Operating income		5.7			4.7			6.5
Non-operating income		0.2			0.4			0.2
Foreign exchange loss		—			(0.1	)		(0.1	)
Interest expense		(1.3	)		(0.9	)		(0.8	)
Earnings from continuing operations before income taxes		4.6			4.1			5.8
Income tax expense		(1.6	)		(1.1	)		(1.6	)
Earnings from continuing operations		3.0			3.0			4.2
Discontinued operations:
Loss from discontinued operations before income taxes		(6.7	)		(3.2	)		(21.2	)
Income tax benefit		—			0.3			1.7
Loss from discontinued operations		(6.7	)		(2.9	)		(19.5	)
Net earnings (loss)		(3.7	)%		0.1	%		(15.3	)%

Years ended December 31, 2005 and 2004:

Net sales increased by 25.8%, to $310.0 million from $246.5 million, in 2005 as compared with 2004. Net sales increased in each of the Company’s four divisions, including a $38.7 million increase at EMS Wireless. Net sales for EMS Wireless increased as a result of significant orders placed by several U.S. wireless service providers, beginning late in the first quarter of 2005, for our antenna products to expand and upgrade their network coverage footprints. SATCOM’s net sales increased $11.7 million mainly due to continued growth in high-speed-data aeronautical terminals reflecting growth in the military markets, and new U.S. defense applications. LXE’s net sales increased $11.6 million due mainly to increased shipments of products, which we believe was related to market acceptance of our latest product offerings.

Cost of sales, as a percentage of net sales, was 67.7% for 2005, compared with 64.7% for 2004. The increase in the cost-of-sales percentage was mainly due to the very high volume of sales at EMS Wireless, which typically carries a higher cost of sales, as well as a higher cost-of-sales percentage for a new model of base station antenna introduced in 2005.

SG&A, as a percentage of net sales, decreased from 23.9% to 21.5%. The decrease in SG&A percentage was related primarily to the large net sales increase at EMS Wireless and other divisions, which substantially increased the net sales over which we absorb fixed SG&A. Actual expenses increased by $7.7 million primarily due to an increased investment in sales and marketing expenditures in international markets by our LXE division, and higher domestic administrative expenses to support the continued growth in product sales in the Americas. An additional factor in the SG&A growth was the weaker U.S. dollar versus the Canadian dollar and the fluctuations in the Euro, which raised the reported U.S. dollar-equivalent of SG&A expenses incurred in the Canada-based SATCOM division and in LXE’s international subsidiaries.

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R&D expenses decreased due to our planned transition from certain internal development programs at D&SS that neared completion to more contract-related efforts on these and other programs. Net R&D also decreased as our SATCOM division engaged in more R&D arrangements involving partial customer reimbursement.

The most significant element of non-operating income for 2004 was a $938,000 pre-tax gain for the sale of non-operating real estate adjoining our facility in Montreal that occurred in March of 2004.

Interest expenses increased from $2.3 million in 2004 to $4.0 million in 2005 due to higher interest rates and increased average debt levels.

The effective income tax rate was 33% in 2005 as compared to 28% in 2004. The increase is due to a significantly higher proportion of earnings in 2005 being derived from the U.S., which has a higher effective income tax rate than most other countries (especially Canada) in which we do business. Our low effective rate in Canada is due to research-related tax benefits.

Years ended December 31, 2004 and 2003:

Net sales increased to $246.5 million in 2004 from $243.9 million in 2003. The largest growth occurred at LXE with a net sales increase of $10.5 million, principally due to increased hardware sales, which we believe were related to our leadership in the introduction of new products, as well as favorable foreign exchange rates that enhanced market conditions in Europe. Net sales of our Defense & Space Systems division also increased approximately $2.3 million due to new orders for commercial applications of our antenna technologies. These increases in net sales were substantially offset by declines in net sales at EMS Wireless and SATCOM. We believe that EMS Wireless’ antenna markets were unfavorably affected in 2004 by consolidation in the telecommunications industry that delayed several carriers’ plans for system expansion. In 2004, net sales at SATCOM were the second highest in the division’s history, but were less than the record levels set in 2003, when orders benefited from new U.S. defense applications of SATCOM products.

Cost of sales, as a percentage of net sales, increased slightly from 64.3% in 2003 to 64.7% in 2004. A significant factor in the increase in the cost-of-sales percentage was the unfavorable effect of a stronger Canadian dollar on the costs associated with our Canadian-based SATCOM division. These increases were somewhat offset by cost savings resulting from selective staff reductions at SATCOM.

SG&A, as a percentage of net sales, increased in 2004 to 23.9% from 22.7% in 2003, mainly due to an increase in the level of selling and marketing expenses in support of sales growth opportunities at LXE. An additional factor in the SG&A growth was the weaker U.S. dollar versus the Canadian dollar and the Euro, which raised the reported U.S. dollar-equivalent of SG&A expenses incurred in the Canada-based SATCOM division and in LXE’s international subsidiaries. The effect of these expense increases was offset somewhat by selective staff reductions at SATCOM.

R&D expenses increased due to development initiatives such as the WIN-T program at D&SS and RFID technology at LXE.

The most significant element of non-operating income for 2004 was a $938,000 pre-tax gain for the sale of non-operating real estate adjoining our facility in Montreal that occurred in March 2004.

In 2004 and 2003, we reported net foreign currency losses of $205,000 and $235,000 respectively, which were mainly the result of a weaker U.S. dollar against the Canadian dollar.

Interest expense increased to $2.3 million from $1.9 million, resulting from interest rate increases, as well as approximately $170,000 of bank fees associated with the extension of our previous revolving loan agreement and the new revolving credit loan initiated in December 2004.

The effective income tax rate was 28% in 2004 and 2003, reflecting a comparable relative proportion of earnings at our Canada-based SATCOM division, which is subject to a much lower effective income tax rate than in the U.S. and other jurisdictions due to tax benefits from research-related expenditures.

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Net Sales, Cost of sales, and Operating Income (Loss) by Segment

Our segment net sales, cost of sales as a percentage of respective segment net sales, and segment operating income (loss) for the years ended December 31, 2005, 2004 and 2003 were as follows (in thousands, except percentages):

	Years ended December 31
(in thousands, except percentages)	2005			2004			2003
Net sales:
Defense & Space Systems	$	51,394			49,815			47,562
LXE		123,140			111,575			101,075
SATCOM		51,353			39,693			44,736
EMS Wireless		84,146			45,418			51,381
Other		—			17			(900	)
Total	$	310,033			246,518			243,854
Cost of sales percentage:
Defense & Space Systems		80.0	%		79.0	%		78.6	%
LXE		60.3			60.0			59.9
SATCOM		60.3			60.0			58.2
EMS Wireless		75.9			66.0			63.8
Total		67.7			64.7			64.3
Operating income (loss):
Defense & Space Systems	$	3,191			2,614			3,402
LXE		7,520			7,262			6,966
SATCOM		3,524			1,713			5,026
EMS Wireless		4,302			(720	)		2,529
Corporate and other		(802	)		663			(2,033	)
Total	$	17,735			11,532			15,890

Defense & Space Systems: Net sales increased in 2005 as compared with 2004 mainly due to increased production activity, including significant work to supply antennas for systems that provide live television on commercial aircraft. Orders for long-term defense contracts slowed at the end of 2005 as a result of delayed funding by the U.S. Department of Defense due to budgetary delays. Net sales increased in 2004 as compared with 2003 due to strong orders growth for long-term defense contracts which resulted in a record backlog of defense orders at the end of 2004, totaling almost $33 million. Net sales in 2004 also reflected greater activity for non-defense orders as compared to the previous year.

The cost-of-sales percentage remained relatively unchanged for years ending December 31, 2005, 2004 and 2003.

LXE: Net sales increased by $11.6 million in 2005 from 2004. This growth in net sales was mainly due to an increase in product shipments for both the U.S. and international markets, which we attribute to market acceptance of our latest product offerings (especially vehicle-mounted computer models) that incorporate the Windows^® CE.NET operating system. Fluctuations in exchange rates for the Euro and other foreign currencies compared with the U.S. dollar also influenced the increase in international net sales.

Net sales for our LXE segment increased to $111.6 million in 2004 from $101.1 million in 2003. We believe the growth over this period was due to the continued expansion of our product line of rugged computers for logistics, and the introduction of new partner and service programs. Additionally, we believe that our products’ marketability in Europe and other international markets has benefited from an improved competitive environment and a weakening U.S. dollar over the periods presented.

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Cost of sales, as a percentage of net sales, remained relatively stable for the three years ended December 31, 2005.

SG&A expenses increased significantly in 2005 as compared with the previous year due to an increased investment in sales and marketing expenditures in international markets, higher domestic administrative expenses to support the continued growth in product sales in the Americas, and increased domestic selling expenses as a result of higher sales volumes. In addition, SG&A expenses increased in 2005 due to the effect of changes in foreign exchange rates.

SATCOM: Net sales in 2005 increased by 29.4% compared with 2004 as the division achieved two quarterly net sales records in 2005. Net sales increased in 2005 due to continued growth in high-speed-data aeronautical terminals reflecting growth in the military markets, and strong sales of new aeronautical products introduced in the second half of the year.

SATCOM’s net sales declined in 2004 as compared with 2003 due primarily to strong net sales in 2003 resulting from favorable timing of orders near the end of the year. On a normalized basis, we believe that our SATCOM division has shown continued sales growth over the previous three fiscal years. Most of this growth has been due to growth in unit sales of high-speed-data aeronautical and land-mobile portable terminals. These terminals are typically installed on executive jets and on military aircraft and vehicles for senior U.S. military commanders.

The cost-of-sales percentage increased over the years 2003, 2004 and 2005 due to the continued weakening of the U.S. dollar compared with the Canadian dollar. This foreign exchange trend resulted in increased reported costs for our Canada-based SATCOM division relative to sales from its customer agreements, most of which were denominated in U.S. dollars.

EMS Wireless: Net sales for 2005 increased by 85.3% as compared with 2004, due to substantial orders placed by several U.S. wireless service providers, and one in particular, for our next-generation antenna products which were needed to expand and upgrade their network coverage footprints. For 2004, net sales decreased from the preceding year due to lower capital spending by our customers, which we believe related to uncertainty during a period of consolidation in the telecommunications industry. However, the decrease in antenna sales was partly mitigated by substantial growth in sales of repeaters, which set a new record in 2004. Net sales of antennas manufactured by our Brazilian subsidiary were also higher in 2004 compared with 2003, reflecting a period of build-out activity for wireless service providers in Latin American markets.

Cost of sales, as a percentage of net sales, increased in 2005 compared with 2004, due to an unusually high volume of net sales of a newly-introduced model of antenna that had a higher cost-of-sales percentage than our traditional product line, and a related increase in warranty expense. In addition, royalty fees were higher as a technology license was purchased to produce the new remote electrical down-tilt antenna that was released in the second quarter of 2005. The cost-of-sales percentage increased slightly in 2004 compared with 2003, due to additional engineering and manufacturing costs associated with the roll-out of our new antenna product in 2004.

Discontinued Operations: In the third quarter of 2003, and in the second quarter of 2005, our Board of Directors approved a formal plan to sell our Space & Technology/Montreal division, and our Satellite Network operations, respectively. As a result, we have accounted for these divisions as discontinued operations (Space & Technology/Montreal through its date of disposition, and SatNet for all periods presented), and have classified their net assets as assets held for sale.

On November 28, 2005, we completed the sale of the assets and operating liabilities of our Space & Technology/Montreal division to MDA for approximately $21.3 million in cash. Additional payments may be received in future years depending on the extent to which contractual in-orbit incentives are earned under the contract governing S&T/Montreal’s role as payload subcontractor to MDA on the Canadian Radarsat-2 satellite program. The transaction also eliminated a previous contractual requirement that the Company post approximately $3 million to secure in-orbit incentive performance of the Radarsat-2 payload, but the Company remains liable for that amount in the event of specified in-orbit payload failures. The Company recorded a net after-tax gain of $788,000 from the disposal of these operations in 2005. See Note 2 to the Company’s consolidated financial statements.

Also as part of the agreement to sell the net assets of S&T/Montreal, the Company released the purchaser, MDA, from a corporate guarantee, resulting in the Company accruing a $1.7 million long-term liability. This liability represents the Company’s estimated loss under a previous agreement to acquire a sub-license from MDA for $8 million in payments over a six-year period, which would entitle the Company to receive a portion of the satellite service revenues from a specific market territory over the same period. MDA had previously guaranteed that the revenues derived under the sub-license would equal or exceed the acquisition cost of the sub-license; however, without the guarantee, the Company currently estimates that its portion of the satellite service revenues will be less than the acquisition cost, and the Company has accordingly accrued a net long-term liability.

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On March 9, 2006, we completed the sale of the assets and operating liabilities of our SatNet division to Advantech. In addition to Advantech’s assumption of trade payables, liabilities under existing SatNet contracts and other specified liabilities, the agreement provides for the payment of aggregate consideration in the amount of $8,827,000, consisting of cash in the amount of $6,502,000 (of which $100,000 had been previously paid) and an interest-bearing note of Advantech in the initial principal amount of $2,325,000. The note is to be repaid in three equal annual installments commencing in May 2007. See Note 16 to the Company’s consolidated financial statements.

The 2005 pre-tax results from our discontinued operations was a loss of $20.9 million. This loss includes impairment charges of $10.0 million and $6.2 million for our Space & Technology/Montreal and SatNet divisions, respectively, in 2005 to reflect the revised estimate of the fair value, less cost to sell, of these divisions. The loss also reflected cost increases on certain long-term contracts at our S&T/Montreal division and lower than expected net sales by our SatNet division. In addition, the results from these Canada-based discontinued operations were adversely affected by a weaker U.S. dollar compared with the Canadian dollar, which increased the reported costs of SatNet’s operations relative to sales under its customer agreements, most of which were denominated in U.S. dollars.

The $7.9 million pre-tax loss from discontinued operations in 2004 related to two significant factors affecting the Space & Technology/Montreal division: two large commercial space contracts experienced combined losses of $5.4 million due to engineering and supplier difficulties, and we recorded an additional $1.7 million charge to write-down the value of assets held for sale to their estimated fair value, less costs to dispose.

The $51.7 million pre-tax loss from discontinued operations in 2003 reflected approximately $34 million of losses for Space & Technology/Montreal from additional costs and reserve provisions for legacy commercial space programs, and additional costs of downsizing. Also significant in 2003 were a $13.5 million charge to write-down the Space & Technology/Montreal assets to estimated fair value, less costs to sell, and a $2.9 million loss related to the disposal in 2003 of a small U.S.-based product line that had been accounted for as discontinued operations.

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Liquidity and Capital Resources

During 2005, net cash provided by continuing operating activities was $12.8 million, primarily as a result of our earnings from continuing operating activities and an increase in payables, partially offset by an increase in receivables from higher sales at EMS Wireless, SATCOM and LXE.

Net cash used in operating activities in discontinued operations was $7.5 million mainly due to the loss from discontinued operations and a decrease in payables. We received $21.3 million in cash upon the sale of S&T/Montreal, which has been included in cash flows from investing activities. Total debt decreased by $18.0 million during the twelve months ended December 31, 2005.

On February 11, 2005, the Company amended its U.S. and Canadian revolving credit agreements to increase the aggregate borrowing capacity from $55.0 million to $65.0 million, and to add another financial institution in the U.S. and in Canada to the group of creditors in the agreements. Under this amendment, the aggregate borrowing capacity of the revolving credit agreements was $32.5 million in both the U.S. and Canada. The new U.S. revolver facilities are secured by substantially all tangible and intangible assets of the Company, with certain exceptions for real estate that secures existing mortgages and other permitted liens. The new agreements mature in December 2007. Interest under both the U.S. and the Canadian revolving loans are, at the Company’s option, a function of either the bank’s prime rate or LIBOR. A commitment fee equal to .50% per annum of the daily average unused credit in both the U.S. and Canada is payable quarterly. These credit facilities also restrict our ability to declare or pay cash dividends.

The sale of the S&T/Montreal division resulted in repayment of $21.3 million of our Canadian credit facility. Thereafter, amounts available for borrowing under the Canadian facility were reduced by $15 million, but the credit available under the Company’s U.S. facility was increased by an equal, offsetting amount. We are no longer required to maintain an aggregate reserve of $5.0 million in unused revolving credit and cash related to a S&T/Montreal contract. At December 31, 2005, the Company had $26.9 million available for borrowing in the U.S. and $8.6 million available for borrowing in Canada under the respective revolving credit agreements after current borrowings and outstanding letters of credit.

Subsequent to the end of the year, the Company repaid all of its $31.4 million of borrowings under its U.S. and Canadian revolving credit facilities from the $59.6 million in proceeds from the sale of 3,300,000 initial shares and 495,000 over-allotment shares of its common stock in a public stock offering in February 2006. The Company invested the remaining proceeds from its stock offering along with the $6.4 million received from the closing of the SatNet sale on March 9, 2006 in a government obligations money market fund. This reduction in the Company’s overall debt should reduce our interest expense in the future, and allow us to more readily meet our debt covenants. See Note 16 to the Company’s consolidated financial statements.

Upon the closing of the sale of our SatNet division, the amounts available for borrowing under the Canadian credit facility were reduced by $3.3 million. As of the date of this filing, the Company had a $47.5 million borrowing capacity under its U.S. revolving credit facility, and a $14.2 million borrowing capacity under its Canada revolving credit facility and no borrowings were outstanding under either facility.

The Company expects that capital expenditures in 2006 will range from $10 million to $12 million. These expenditures will be used primarily to purchase equipment that increases or enhances capacity and productivity.

Management believes that cash provided from operations, the proceeds from the sale of its recent public stock offering, and borrowings available under our credit agreements will provide sufficient liquidity to meet the operating and capital expenditure needs for existing operations during the next 12 months.

Off-Balance Sheet Arrangements

The Company has $2.8 million of standby letters of credit to satisfy performance guarantee requirements under certain customer contracts outstanding under the revolving credit agreement. While these obligations are not normally called, they could be called by the beneficiaries at any time before the expiration date should we fail to meet certain contractual requirements. The Company has an additional $1.8 million of standby letters of credit outstanding under another Canadian bank to secure a revolving credit facility for one of its foreign location. The Company has deposited $2.6 million at a Canadian bank as collateral for a portion of these standby letters of credit,

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which is classified as restricted cash on the Company’s consolidated balance sheet. Most of this cash will become available to the Company by the middle of 2006 as the underlying letters of credit expire or are settled. At December 31, 2005, the Company had $26.9 million available for borrowing in the U.S. and $8.6 million available for borrowing in Canada under the respective revolving credit agreements after current borrowings and outstanding letters of credit.

As a result of the closing of the sale of its S&T/Montreal division, the Company agreed to pay half (to a maximum of $1.25 million) of the potential liability to satisfy grievance claims arising from previously severed employees of S&T/Montreal who claim to have received insufficient severance payments, and half (to a maximum of $500,000) of any increase in the accrued pension benefit obligation of the post-retirement medical plan from December 31, 2004 to December 31, 2006. In addition, an existing contractual requirement for the Company to post approximately $3 million to secure in-orbit incentive performance of the Radarsat-2 payload was eliminated, but the Company remains liable for that amount in the event of specified in-orbit payload failures. See Note 2 to the Company’s consolidated financial statements.

Also as part of the agreement to sell the net assets of S&T/Montreal, the Company released the purchaser, MDA, from a corporate guarantee, resulting in the Company accruing a $1.7 million long-term liability. This liability represents the Company’s estimated loss under a previous agreement to acquire a sub-license from MDA for $8 million in payments over a six-year period, which would entitle the Company to receive a portion of the satellite service revenues from a specific market territory over the same period. MDA had previously guaranteed that the revenues derived under the sub-license would equal or exceed the acquisition cost of the sub-license; however, without the guarantee, the Company currently estimates that its portion of the satellite service revenues will be less than the acquisition cost, and the Company has accordingly accrued a net long-term liability.

Subsequent to December 31, 2005, the Company closed the sale of its SatNet division. Based on that agreement, the Company is obligated to repurchase from Advantech, at face value, the accounts receivable included in the purchased assets that have not been collected within 90 days after the closing date, with the exception of certain identified receivables that will be repurchased at 75% of face value if they remain uncollected 180 days after the closing. See Note 16 to the Company’s consolidated financial statements.

Commitments and Contractual Obligations

Following is a summary of the Company’s material contractual cash commitments as of December 31, 2005 (in thousands):

	Payments due by period
			Less than						After 5
	Total		1 year		1-3 years		4-5 years		years
Continuing Operations:
Long-term debt, excluding capital lease obligations	$	43,070		6,505		25,969		2,680		7,916
Interest on outstanding long-term debt (1)		6,293		1,366		1,822		1,443		1,662
Capital lease obligations		344		326		18		—		—
Operating lease obligations		8,925		3,422		5,333		168		2
Deferred compensation agreements		308		—		—		—		308
Agreement to acquire satellite service sub-license		8,000		—		2,000		2,000		4,000
Purchase commitments (2)		29,655		29,520		5		130		—
Discontinued Operations:
Operating lease obligations	$	2,207		638		1,249		317		3
Purchase commitments		731		731		—		—		—

(1)	Reflects the repayment of the Company’s revolving loan balance from the proceeds of its stock offering in February 2006, and the related reduction in variable interest rate. See Note 16 to the Company’s consolidated financial statements.
(2)	Purchase commitments primarily represent existing commitments under purchase orders or contracts to purchase inventory and raw materials for our products. Most of these purchase orders and contracts can be terminated for a fee that is either fixed or based on when termination occurs.

Critical Accounting Policies

Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, which often requires the judgment of management in the selection and application of certain accounting principles and methods. We consider the following accounting policies to be critical to understanding our consolidated financial statements, because the application of these policies requires significant judgment on the part

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of management, and as a result, actual future developments may be different from those expected at the time that we make these critical judgments.

Revenue recognition on long-term contracts

Revenue recognition for fixed-price, long-term contracts is a critical accounting policy involving significant management estimates by the Defense & Space Systems and SATCOM divisions in continuing operations, as well as the Space & Technology/Montreal division in discontinued operations for periods prior to its November 2005 disposition. Long-term contracts use the ratio of cost-incurred to total-estimated-cost as the measure of performance that determines how much revenue should be recognized (percentage-of-completion method of accounting). Cost incurred and estimates of cost to complete include overhead expenses, which are applied at a budgeted rate; the budgeted overhead rate has historically been closely comparable with the periodic actual overhead rate, but any budget-versus-actual rate variance during an accounting period is expensed in that period, with no effect on revenues recognized.

The determination of total estimated cost relies on engineering estimates of the cost to complete the contract, with allowances for identifiable risks and uncertainties. If changes in engineering estimates result in an expected cost overrun (i.e., the estimated cost to complete exceeds the revenue to be recognized on the remainder of the contract), then revenue recognized-to-date will be adjusted downward, so that the revenue to be recognized on the remainder of the contract will equal the estimated cost to complete. Engineering estimates are frequently reviewed and updated; however, unforeseen problems can occur to substantially reduce the rate of future revenue recognition in relation to costs incurred. As of December 31, 2005, the Company had recognized a cumulative total of $25.1 million in revenues from continuing operations under percentage-of-completion accounting, but which revenues were unbilled as of that date due to the billing milestones specified in the respective customer contracts.

Net sales under cost-reimbursement contracts in the Defense & Space Systems segment are recorded as costs are incurred and include an estimate of fees earned under specific contract terms. Costs incurred include overhead, which is applied at the division’s customer-approved rates. Fixed fees are earned ratably over the life of a contract. Incentive fees are based upon achievement of objective criteria for technical product performance or delivery milestones, although such fees may also be based upon subjective criteria (for example, the customer’s qualitative assessment of the Company’s project management). In all cases related to incentive fee arrangements, the Company does not record revenue until the fee has been earned under the terms of the contract.

Net sales under all other contracts in the Defense & Space Systems and SATCOM segment, as well as all the Company’s other segments, are recognized when units are shipped or services are performed.

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Accounting for government research incentives

Our accrual of research incentives from the Canadian government is a critical accounting policy involving management estimates for the SatNet and Space & Technology/Montreal divisions in discontinued operations. These incentives are in the form of a cash reimbursement for a portion of certain qualified research expenditures. Incentives are recorded as a reduction of cost-of-sales, because the underlying research efforts primarily apply to development of technological capabilities for specific business opportunities. For the 2005, total incentives earned were approximately $2.4 million, compared with $3.7 million for 2004. We have established procedures to identify qualified costs and to submit appropriate claims for reimbursement. All of these claims are subject to financial and scientific audits by the Canadian government to determine whether certain expenses qualified for incentive programs. Although historically these audits have not resulted in significant disallowances of previously accrued incentives, such disallowances in the future would have an unfavorable effect on our consolidated statements of operations.

Inventory valuation

Management assesses inventory valuation based upon an analysis of the aging of the inventory and assumptions that management develops concerning how the value of inventory for specific products, markets or applications may decrease over time. Inventory write-downs are accounted for as adjustments to the related inventory’s cost basis, and reserves are reduced only upon subsequent sale, disposal or usage of the inventory, rather than upon any subsequent improvement in the inventory aging.

Evaluation of long-lived assets for impairment

All long-lived assets on the consolidated balance sheet are periodically reviewed for impairment. If an indication of impairment arises, we test recoverability by estimating the cash flows expected to result from the long-lived assets under several different scenarios, including the potential sale of assets, as well as continued holding of the assets under several different kinds of business conditions. No long-lived assets that were classified as “held and used” were determined to be impaired as of December 31, 2005.

The assets were reclassified from “assets held and used” to “assets held for sale,” for our Space & Technology/Montreal (through the date of its disposition; November 2005) and the SatNet (for all periods presented) divisions due to decisions to dispose of these operations in the third quarter of 2003 and the second quarter of 2005, respectively. As a result, the Space & Technology/Montreal and SatNet divisions were accounted for as discontinued operations, and the net assets held for sale were written down to their estimated fair values upon disposal.

EMS recorded an impairment charge of $2.2 million and $4.0 million for our SatNet division that was recorded in the fourth and third quarters of 2005, respectively, and additional impairment charges of $10.0 million and $1.7 million that were recorded in the second quarter of 2005, and third quarter of 2004, respectively, for our Space & Technology/Montreal division. These impairment charges were recorded to reflect the revised estimate of the fair value, less cost to sell, of these divisions based on discussions with potential purchasers.

On March 9, 2006, the Company closed the sale of the net assets of our SatNet division. See Note 16 to the Company’s consolidated financial statements.

Establishment of reserves for deferred income tax assets

It is management’s current expectation that our Canadian operations will utilize enough research-related tax benefits each year to offset any Canadian federal tax liability for any given year. Historically, we had reserved substantially all the net deferred tax assets associated with these research-related tax benefits (totaling approximately $48 million at the end 2005), because they are unlikely to be realized. However, this reserve was reduced by $.4 million to reflect the expected future utilization of research-related tax benefits following the disposition of our discontinued operations, which were unprofitable. This reserve may be reduced further – resulting in an income tax benefit to future consolidated statements of operations – if: (1) our profitability in Canada increases, which would increase the tax liability available to offset in future years, or (2) the level of our qualified research in Canada decreases, which would lower the tax benefits earned in future years.

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Risk Factors and Forward-Looking Statements

The Company has included forward-looking statements in management’s discussion and analysis of financial condition and results of operations. All statements, other than statements of historical fact, included in this report that address activities, events or developments that we expect or anticipate will or may occur in the future, or that necessarily depend upon future events, including such matters as our expectations with respect to future financial performance, future capital expenditures, business strategy, competitive strengths, goals, expansion, market and industry developments and the growth of our businesses and operations, are forward-looking statements. Actual results could differ materially from those suggested in any forward-looking statements as a result of a variety of factors. Such factors include, but are not limited to:

• economic conditions in the U.S. and abroad and their effect on capital spending in the Company’s principal markets;

• difficulty predicting the timing of receipt of major customer orders, and the effect of customer timing decisions on the Company’s quarterly results;

• successful completion of technological development programs by the Company and the effects of technology that may be developed by, and patent rights that may be held or obtained by, competitors;

• the ability of the Company to obtain patent licenses, with satisfactory license rights and royalty rates, from owners of RFID-related patents that the Company concludes are valid and would otherwise be infringed by Company products;

• U.S. defense budget pressures on near-term spending priorities;

• uncertainties inherent in the process of converting contract awards into firm contractual orders in the future;

• volatility of foreign exchange rates relative to the U.S. dollar and their effect on purchasing power by international customers, and the cost structure of the Company’s non-U.S. operations, as well as the potential for realizing foreign exchange gains and losses associated with non-U.S. assets or liabilities held by the Company;

• successful resolution of technical problems, proposed scope changes, or proposed funding changes that may be encountered on contracts;

• changes in the Company’s consolidated effective income tax rate caused by the extent to which actual taxable earnings in the U.S., Canada and other taxing jurisdictions may vary from expected taxable earnings;

• successful transition of products from development stages to an efficient manufacturing environment;

• changes in the rate at which the Company’s products are returned for repair or replacement under warranty;

• customer response to new products and services, and general conditions in the Company’s target markets (such as logistics, PCS/cellular telephony and space-based communications);

• the success of certain of the Company’s customers in marketing our line of high-speed commercial airline communications products as a complimentary offering with their own lines of avionics products;

• the availability of financing for satellite data communications systems and for expansion of terrestrial PCS/cellular phone systems;

• the extent to which terrestrial systems reduce market opportunities for space-based broadband communications systems by providing extensive broadband Internet access on a dependable and economical basis;

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• development of successful working relationships with local business and government personnel in connection with distribution and manufacture of products in foreign countries;

• the demand growth for various mobile and high-speed data communications services, and the possible effect of public health concerns about alleged health risks of radio frequency emissions;

• the Company’s ability to attract and retain qualified personnel, particularly those with key technical skills;

• the availability of sufficient additional credit or other financing, on acceptable terms, to support any large acquisitions that we believe would contribute to our growth and profitability;

• the ability to negotiate successfully with potential acquisition candidates, finance acquisitions, or effectively integrate the acquired businesses, products or technologies into the Company’s existing businesses and products;

• the availability, capabilities and performance of suppliers of basic materials, electronic components and sophisticated subsystems on which the Company must rely in order to perform according to contract requirements, or to introduce new products on the desired schedule;

• the effects of consolidation in the telecommunications service provider industry, including effects on the numbers of suppliers used by the Company’s customers, the overall demand by such customers for the Company’s products, and the possibility that such customers may demand greater price concessions; and

• uncertainties associated with U.S. export controls and the export license process, which restrict the Company’s ability to hold technical discussions with customers, suppliers and internal engineering resources and can reduce the Company’s ability to obtain sales from foreign customers or to perform contracts with the desired level of efficiency or profitability.

Additional information concerning these and other potential risk factors is included in Item 1A. of this Annual Report on Form 10-K under the caption “Risk Factors.”

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Effect of New Accounting Pronouncements

In March 2005, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) No. 47, “Accounting for Conditional Asset Retirement Obligations.” FIN No. 47 clarifies the conditions under which an entity would have sufficient information to apply an expected value technique to, and recognize a liability for, a conditional asset retirement obligation. This interpretation was effective for the Company at December 31 of the year 2005. The adoption of FIN No. 47 did not have a material impact on the Company’s consolidated financial statements.

In November 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs – an amendment of ARB No. 43 Chapter 4.” SFAS No. 151 more clearly defines when excessive idle facility expense, freight, handling costs, and spoilage are to be current-period charges. In addition, SFAS No. 151 requires the allocation of fixed production overhead to the cost of conversion to be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company expects that SFAS No. 151 will not have a material impact on the Company’s 2006 consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment,” (SFAS No. 123(R)). SFAS No. 123(R) eliminates the intrinsic value method under Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued for Employees,” and requires the Company to use a fair-value based method of accounting for share-based payments. Under APB No. 25, no compensation cost related to stock options is recognized in the consolidated statements of operations. SFAS No. 123(R) requires that compensation cost for employee services received in exchange for an award of equity instruments be recognized in the consolidated statements of operations based on the grant-date fair value of that award. The Company expects to adopt the modified prospective method of transition in the first quarter of 2006, which requires that compensation expense be recorded for all unvested stock options at the end of 2005, and any additional options granted thereafter, based on the fair value of the awards determined at the date of grant. The Company anticipates recording an expense in the range of $.5 million to $1.1 million for the year ended December 31, 2006 related to the adoption of SFAS 123(R).

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29.” SFAS No. 153 amends APB No. 29 to require that assets exchanged in a nonmonetary transaction are to be measured at fair value except for those exchanges of nonmonetary assets that lack commercial substance. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal years beginning after June 15, 2005. The Company expects that SFAS No. 153 will not have a material impact on the Company’s consolidated financial statements.

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ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

At December 31, 2005, the Company had the following market risk sensitive instruments (in thousands):

Revolving credit loan with U.S. and Canadian banks, maturing in December 2007, interest payable quarterly at a variable rate (8.62% at December 31, 2005)	$	26,804
Revolving credit loan with a bank in the United Kingdom, maturing in April 2006, interest payable monthly at a variable rate (5.50% at December 31, 2005)		1,632
Total market-sensitive debt	$	28,436

A 1% increase in the interest rates of our market-sensitive debt obligations would have increased interest expense by $512,000 for the year based upon the average outstanding borrowings under these obligations.

As of December 31, 2005, the Company also had intercompany accounts that eliminate in consolidation but that are considered market risk sensitive instruments. Short-term due to (from) the parent, payable (receivable) by international subsidiaries arising from purchase of the parent’s products for sale were as follows:

	Exchange Rate	$U.S.
	($U.S. per unit of	in thousands
	local currency)	(reporting currency)
Canada	0.8577 /Dollar	$	1,951
Belgium	1.1840 /Euro		1,727
France	1.1840 /Euro		1,261
Australia	0.7337 /Dollar		1,260
Germany	1.1840 /Euro		611
United Kingdom	1.7185 /Pound		303
Italy	1.1840 /Euro		228
Netherlands	1.1840 /Euro		120
Singapore	0.6013 /Dollar		49
Sweden	0.1258 /Krona		18
Total short-term due to parent		$	7,528

The Company has foreign currency risks associated with forward contracts as follows (in thousands, except average contract rate):

		Average		($U.S.)
	Notional	Contract		Fair
	Amount	Rate		Value
Foreign currency forward contracts
Continuing Operations:
Euros (sell for U.S. dollars)	2,600 Euros		1.1738	$	(5	)
U.S. dollars (sell for Canadian dollars)	9,500 USD		1.1610		11
Australian dollars (sell for U.S. dollars)	1,200 AUD		0.7203		2
British pounds (sell for U.S. dollars)	140 GBP		1.7129		1
				$	9

The Company enters into foreign currency forward contracts in order to mitigate the risks associated with currency fluctuations on future cash flows. There were no open forward contracts for discontinued operations as of the end of 2005.

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ITEM 8. Financial Statements and Supplementary Data

Information required for this item is contained in the Consolidated Financial Statements and Notes to Consolidated Financial Statements included immediately after the Signature Page of this Annual Report on Form 10-K.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

ITEM 9A. Controls and Procedures

(a)  Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues, errors and instances of fraud, if any, within a company have been detected.

The Company’s management, including the Chief Executive Officer (CEO) and its Executive Vice President and Chief Financial Officer (CFO), evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2005, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“disclosure controls”). Based on that evaluation and the material weakness (discussed below) that was identified, the CEO and CFO have concluded that the Company’s disclosure controls were not effective as of December 31, 2005.

(b)  Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements for external purposes, in accordance with generally accepted accounting principles. Management conducted its evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework.

A material weakness in internal control over financial reporting is defined by the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standard No. 2 as a control deficiency, or combination of control deficiencies, that results in more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. In the course of its evaluation, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2005 due to the following material weaknesses:

(a)

The Company did not maintain adequate company level controls. Specifically, the Company’s policies and procedures did not provide for sufficiently detailed supervisory review controls with respect to the accounting functions at the Company’s operating divisions. This deficiency resulted in errors in the Company’s preliminary 2005 consolidated financial statements, and more than a remote likelihood that a material misstatement would not be prevented or detected in the Company’s annual or interim financial statements.

(b)

The Company’s policies and procedures did not provide for a sufficiently detailed review regarding analysis of sales agreements and related documentation in accounting for assets/liabilities held for sale—discontinued operations. This deficiency resulted in a material overstatement of the charge for asset impairment related to certain assets held for sale in the Company’s preliminary 2005 consolidated financial statements.

KPMG LLP, the independent registered public accounting firm that audited the consolidated financial statements of the Company, has issued an audit report on management’s assessment of the Company’s internal control over financial reporting. The report is included in Item 9A(d) under the heading “Report of Independent Registered Public Accounting Firm.”

(c)  Changes in Internal Control Over Financial Reporting

There were no changes in internal control over financial reporting that occurred during the fourth quarter of 2005 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, the Company plans to implement additional controls and procedures to provide more detailed and effective monitoring of the accounting functions at the divisional level. These controls will involve a combination of increased scrutiny and oversight through corporate-level controls, as well as expected procedures at the divisional level.

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(d)  Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
EMS Technologies, Inc.:

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting (Item 9A(b)), that EMS Technologies, Inc. (the Company) did not maintain effective internal control over financial reporting as of December 31, 2005, because of the effect of the material weaknesses in internal control over financial reporting identified in management’s assessment, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weaknesses have been identified and included in management’s assessment as of December 31, 2005:

(a)

The Company did not maintain adequate company level controls. Specifically, the Company’s policies and procedures did not provide for sufficiently detailed supervisory review controls with respect to the accounting functions at the Company’s operating divisions. This deficiency resulted in errors in the Company’s preliminary 2005 consolidated financial statements, and more than a remote likelihood that a material misstatement would not be prevented or detected in the Company’s annual or interim financial statements.

(b)

The Company’s policies and procedures did not provide for a sufficiently detailed review regarding analysis of sales agreements and related documentation in accounting for assets/liabilities held for sale - discontinued operations. This deficiency resulted in a material overstatement of the charge for asset impairment related to certain assets held for sale in the Company’s preliminary 2005 consolidated financial statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of EMS Technologies, Inc. and subsidiaries as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2005. The aforementioned material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2005 consolidated financial statements, and this report does not affect our report dated March 31, 2006, which expressed an unqualified opinion on those consolidated financial statements.

In our opinion, management’s assessment that the Company did not maintain effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Also, in our opinion, because of the effect of the material weaknesses described above on the

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achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

KPMG LLP
 

Atlanta, Georgia
March 31, 2006

ITEM 9B. Other Information.

None.

PART III

ITEM 10. Directors and Executive Officers of the Registrant

The information concerning directors and the Audit Committee financial experts called for by this Item will be contained in the Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

We have a written Code of Business Ethics and Conduct that applies to our directors and to all of our employees, including our chief executive and chief financial officers. Our Code of Business Ethics and Conduct has been distributed to all employees, is available free of charge on our website at www.ems-t.com, under the link for “Investor Relations,” and is included as Exhibit 14 to this Report.

The information concerning executive officers called for by this Item is set forth under the caption “Executive Officers of the Registrant” in Item 1 hereof.

ITEM 11. Executive Compensation

The information called for by this Item will be contained in the Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

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ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth certain information about the Company’s equity compensation plans as of December 31, 2005:

					(c)
	(a)				Number of securities
	Number of securities		(b)		remaining available for
	to be issued upon		Weighted average		future issuance under
	exercise of		exercise price of		equity compensation plans
	outstanding options,		outstanding options,		(excluding securities
Plan Category	warrants and rights		warrants and rights		reflected in column(a))
Equity compensation plans approved by security holders		762,438	$	17.94		517,151
Equity compensation plans not approved by security holders		465,300		18.44		128,762
Total		1,227,738	$	18.13		645,913

All other information called for by this Item will be contained in the Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13. Certain Relationships and Related Transactions

The information called for by this Item will be contained in the Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14. Principal Accountant Fees and Services

Information on the Audit Committee’s pre-approval policy for audit services, and information on the principal accountants’ fees and services called for by this Item will be contained in the Company’s definitive Proxy Statement for its 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

PART IV

ITEM 15. Exhibits, Financial Statement Schedules

(a) 1. Financial Statements

The consolidated financial statements listed in the accompanying Index to Financial Statements, appearing immediately after the Signature Page, are filed as part of this Annual Report on Form 10-K.

(a) 2. Financial Statement Schedules

Schedule II. Valuation and Qualifying Accounts — Years ended December 31, 2005, 2004 and 2003

All other schedules are omitted as the required information is inapplicable, or the information is presented in the financial statements or related notes.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Directors of
EMS Technologies Canada, Ltd.

We have audited the consolidated financial statements of EMS Technologies Canada, Ltd. (a wholly-owned subsidiary of EMS Technologies, Inc.) as of December 31, 2003 and 2002, and for each of the years in the two-year period ended December 31, 2003 (not presented separately herein), and have issued our report thereon dated February 6, 2004 (except with respect to note 3(b) and 21; which are as of January 6, 2006). Our audits also included Schedule II — Valuation and Qualifying Accounts of EMS Technologies Canada, Ltd. (not presented separately herein) which are included in the related schedule of EMS Technologies, Inc. in this Registration Statement. This financial statement schedule is the responsibility of the Corporation’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule of EMS Technologies Canada, Ltd. referred to above, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

Ottawa, Canada
January 6, 2006 Ernst & Young LLP
Chartered Accountants

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS (in thousands):

			Years ended December 31, 2005, 2004 and 2003
			Additions
	Balance at		charged to								Balance
	beginning		costs and								at end
Classification	of year		expenses			Deductions			Other		of year
Allowance for Doubtful Accounts:
2003	$	1,107		887			(472	) (a)		—		1,522
2004		1,522		455			(971	) (a)		—		1,006
2005		1,006		649			(878	) (a)		—		777
Valuation Allowance for Deferred Tax Assets:
2003	$	10,898		18,850	(b)		—			—		29,748
2004		29,748		7,087	(b)		—			—		36,835
2005		36,835		10,134	(b)		—			—		46,969
Valuation Allowance for Assets Held for Sale:
2003	$	—		13,500	(c)		—			—		13,500
2004		13,500		1,700	(c)		—			—		15,200
2005		15,200		16,200	(c)		(25,200	) (d)		—		6,200

(a) Deductions represent receivables that were charged off to the allowance during the year, most of which related to quantitatively-derived provisions based upon the aging of accounts receivable.

(b) The 2005, 2004 and 2003 increases in the valuation allowance for deferred tax assets related primarily to the net change in the underlying deferred tax assets associated with the Company’s discontinued operations in Canada. These Canadian deferred tax assets were fully reserved at acquisition due to uncertainty about realization. As a result, approximately $8.9 million of this change in reserves in 2005 and all the changes in reserves in 2004 and 2003 had no effect on the Company’s consolidated statements of operations for respective years.

Approximately $1.2 million of the change in reserves in 2005 related to a net increase in the valuation allowance for deferred tax benefits from foreign net operating losses. This increase was based on management’s assessment that, due to changing business conditions and the limitations of tax planning strategies, the Company is not likely to fully realize these deferred tax assets.

(c) The 2005, 2004 and 2003 charges are adjustments to write down to estimated fair value the S&T/Montreal and SatNet assets held for sale.

(d) Reduction in the allowance as a result of the sale of Company’s S&T/Montreal division.

(a) 3. Exhibits

The following exhibits are filed as part of this report:

2.1 Asset Purchase Agreement dated as of October 28, 2005 between EMS Technologies, Inc. and MacDonald, Dettwiler and Associates Ltd. (incorporated by reference to Exhibit 2.01 to the Company’s Report on Form 8-K dated December 2, 2005).

2.2 Amending Agreement to the Asset Purchase Agreement dated as of November 28, 2005 between EMS Technologies, Inc. and MacDonald, Dettwiler and Associates Ltd. (incorporated by reference to Exhibit 2.02 to the Company’s Report on Form 8-K dated December 2, 2005).

2.3 Asset Purchase Agreement by and among EMS Technologies Canada, Ltd, EMS Technologies, Inc., Advantech Satellite Networks Inc. and Advantech Advanced Microwave Technologies Inc. dated December 22, 2005 (incorporated by reference to Exhibit 2.3 to the Company’s Registration on Form S-3 dated January 13, 2006).

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3.1 Second Amended and Restated Articles of Incorporation of EMS Technologies, Inc., effective March 22, 1999 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 3, 2004).

3.2 Bylaws of EMS Technologies, Inc., as amended through March 15, 1999 (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended April 3, 2004).

4.1 EMS Technologies, Inc. Stockholder Rights Plan dated as of April 6, 1999. (incorporated by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.2 Agreement with respect to long-term debt pursuant to Item 601(b)(4)(iii)(A) of regulation S-K (incorporated by reference to Exhibit 4.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000).

4.3 U.S. Revolving Credit Agreement, dated as of December 10, 2004, among the Company, the lenders from time to time party thereto, and SunTrust Bank as Administrative Agent (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.4 Security Agreement, dated as of December 10, 2004, by the Company and certain of its subsidiaries, in favor of SunTrust Bank as Collateral Agent (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.5 Pledge Agreement, dated as of December 10, 2004, by the Company and certain of its subsidiaries, in favor of SunTrust Bank as Collateral Agent (incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.6 Form of Note issued by the Company in favor of the lenders under the U.S. Revolving Credit Agreement, dated as of December 31, 2004 (incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.7 Amendment No. 1, dated February 11, 2005, to U.S. Revolving Credit Agreement (incorporated by reference to Exhibit 4.7 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.8 Amendment No. 2, dated August 10, 2005, to U.S. Revolving Credit Agreement. *

4.9 Canadian Revolving Credit Agreement, dated as of December 10, 2004, among EMS Technologies Canada, Ltd., the Company, the lenders from time to time party thereto, and Bank of America, National Association (Canada Branch) as Canadian Administrative Agent and Funding Agent (incorporated by reference to Exhibit 4.8 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.10 Canadian Security Agreement, dated as of December 10, 2004, by EMS Technologies Canada, Ltd., in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.11 Deed of Movable Hypothec, dated as of December 10, 2004, by EMS Technologies Canada, Ltd., in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 5.0 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.12 Canadian Intellectual Property Security Agreement, dated as of December 10, 2004, by EMS Technologies Canada, Ltd., in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 5.1 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

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4.13 Pledge Agreement, dated as of December 10, 2004, by the Company and certain of its domestic subsidiaries in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 5.2 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.14 Trademark Security Agreement, dated as of December 10, 2004, by the Company and one of its domestic subsidiaries in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 5.3 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.15 Patent Security Agreement, dated as of December 10, 2004, by the Company and one of its domestic subsidiaries in favour of Bank of America, National Association (Canada Branch) as Canadian Collateral Agent (incorporated by reference to Exhibit 5.4 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.16 Form of Note issued by the Company in favour of the lenders under the Canadian Revolving Credit Agreement, dated as of December 31, 2004 (incorporated by reference to Exhibit 5.5 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.17 Amendment No. 1, dated February 11, 2005, to Canadian Revolving Credit Agreement (incorporated by reference to Exhibit 5.6 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

4.18 Amendment No. 2, dated June 24, 2005, to Canadian Revolving Credit Agreement. *

4.19 Amendment No. 3, dated August 10, 2005, to Canadian Revolving Credit Agreement. *

4.20 Consent and amendment agreement, dated February 2006, to Canadian Revolving Credit Agreement. *

10.1 Letter dated January 17, 2000 between the Company and Alfred G. Hansen concerning the terms of his employment as President and Chief Operating Officer. *

10.2 Form of Agreement between the Company and each of its executive officers, related to certain change-of-control events (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2001).

10.3 EMS Technologies, Inc. Deferred Compensation Plan for Non-Employee Directors, as amended, effective December 13, 2004 (incorporated by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

10.4 EMS Technologies, Inc. Officers’ Deferred Compensation Plan, as amended, effective December 13, 2004 (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

10.5 EMS Technologies, Inc. 1992 Stock Incentive Plan as amended through October 3, 1996 (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement No. 333-14235 on Form S-4).

10.6 Amendments adopted May 2, 1997, to the EMS Technologies, Inc. 1992 Stock Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

10.7 EMS Technologies, Inc. 1997 Stock Incentive Plan, as adopted January 24, 1997, and amended through May 10, 2004 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 3, 2004).

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10.8 Form of Stock Option Agreement evidencing options granted prior to 2001 to executive officers under the EMS Technologies, Inc. 1997 Stock Incentive Plan (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

10.9 Form of Stock Option Agreement evidencing options granted after 2000 to executive officers under the EMS Technologies, Inc. 1997 Stock Incentive Plan, together with related Terms of Officer Stock Option, Form 1/25/01 (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000).

10.10 Form of Stock Option Agreement evidencing options granted after 2005 to executive officers under the EMS Technologies, Inc. 1997 Stock Incentive Plan, together with related Terms of Officer Stock Option, Form 1/25/01 *

10.11 Form of Stock Option Agreement evidencing options granted automatically to non-employee members of the Board of Directors upon their initial election to the Board, under the EMS Technologies, Inc. 1997 Stock Incentive Plan. *

10.12 Form of Stock Option Agreement evidencing options granted automatically to non-employee members of the Board of Directors, upon each election to an additional one-year term of service, under the EMS Technologies, Inc. 1997 Stock Incentive. *

10.13 Form of Stock Option Agreement evidencing options granted to executive officers under EMS Technologies, Inc. 1992 Stock Incentive Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

10.14 Form of Stock Option Agreement evidencing options granted automatically under the 1992 Stock Incentive Plan, on a one-time basis and prior to 1998, to non-employee members of the Board of Directors (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2000).

10.15 EMS Technologies, Inc. 2000 Stock Incentive Plan. *

10.16 Form of Stock Option Agreement evidencing options granted after 2005 to employees under the EMS Technologies, Inc. 2000 Stock Incentive Plan, together with related Terms of Stock Option, Form 02/16/00. *

10.17 Form of Stock Option Agreement evidencing options granted before 2006 to employees under the EMS Technologies, Inc. 2000 Stock Incentive Plan, together with related Terms of Stock Option, Form 02/16/00. *

10.18 EMS Technologies, Inc. Executive Annual Incentive Compensation Plan, as amended through April 30, 1999 (incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

10.19 Form of Indemnification Agreement between the Company and each of its directors (incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

10.20 Form of Indemnification Agreement between the Company and Don T. Scartz (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

10.21 Summary of compensation arrangements with non-employee members of the Board of Directors, as revised February 17, 2006 (incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 8-K dated February 24, 2006).

10.22 Summary of 2006 compensation arrangements with executive officers. *

14 EMS Technologies, Inc. Code of Business Ethics and Conduct, as revised February 6, 2004 (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003).

21.1 Subsidiaries of the registrant (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2004).

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23.1 Consent of Independent Registered Public Accounting Firm (KPMG LLP); incorporation by reference in Registration Statement Nos. 2-76455, 33-50528, 333-20843, 333-32425, 333-35842, 333-86973 and 333-74770, each on Form S-8, and Registration Statement Nos. 333-131042 and 333-131719, each on Form S-3. *

23.2 Consent of Independent Auditors’ (Ernst & Young LLP); incorporation by reference in Registration Statement Nos. 2-76455, 33-50528, 333-20843, 333-32425, 333-35842, 333-86973 and 333-74770, each on Form S-8, and Registration Statement Nos. 333-131042 and 333-131719, each on Form S-3. *

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *

32 Certification of the Company’s Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

* Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EMS TECHNOLOGIES, INC.
By: /s/ Alfred G. Hansen	Date: 3/31/06
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Alfred G. Hansen	President and Chief Executive Officer, and Director (Principal Executive	3/31/06
Alfred G. Hansen	Officer)
/s/ Don T. Scartz	Executive Vice President, Chief Financial Officer, and Treasurer (Principal	3/31/06
Don T. Scartz	Financial Officer)
/s/ Gary B. Shell	Vice President, Finance	3/31/06
Gary B. Shell	(Principal Accounting Officer)
/s/ Hermann Buerger	Director	3/31/06
Hermann Buerger
/s/ John R. Kreick	Director	3/31/06
John R. Kreick
/s/ John B. Mowell	Director, Chairman of the Board	3/31/06
John B. Mowell
/s/ Norman E. Thagard	Director	3/31/06
Norman E. Thagard
/s/ John L. Woodward, Jr.	Director	3/31/06
John L. Woodward, Jr.

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Reports of Independent Registered Public Accounting Firm		52
Consolidated Statements of Operations — Years ended December 31, 2005, 2004 and 2003		54
Consolidated Balance Sheets — December 31, 2005 and 2004		55
Consolidated Statements of Cash Flows — Years ended December 31, 2005, 2004 and 2003		57
Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss) — Years ended December 31, 2005, 2004 and 2003		58
Notes to Consolidated Financial Statements		59

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
EMS Technologies, Inc.:

We have audited the accompanying consolidated balance sheets of EMS Technologies, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity and comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31, 2005. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We did not audit the consolidated financial statements or financial statement schedule of EMS Technologies Canada, Ltd., a wholly-owned subsidiary, which financial statements reflect total net sales constituting 27% of total consolidated net sales for the year ended December 31, 2003. Those financial statements and financial statement schedule were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for EMS Technologies Canada, Ltd., is based solely on the report of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of EMS Technologies, Inc. and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 31, 2006 expressed an unqualified opinion on management’s assessment of, and an adverse opinion on the effective operation of, internal control over financial reporting.

KPMG LLP

Atlanta, Georgia
March 31, 2006

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors of
EMS TECHNOLOGIES CANADA, LTD.

We have audited the accompanying consolidated statements of operations, stockholder’s equity and comprehensive income and cash flows of EMS TECHNOLOGIES, INC. CANADA, LTD. (a wholly owned subsidiary of EMS Technologies, Inc.) for the year ended December 31, 2003 (not presented herein). These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Corporation’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, these consolidated financial statements referred to above present fairly, in all material respects, the results of operations and the cash flows of the Corporation for the year ended December 31, 2003, in conformity with U.S. generally accepted accounting principles.

Since the accompanying consolidated financial statements have not been prepared in accordance with accounting principles generally accepted in Canada and our audit has not been conducted in accordance with auditing standards generally accepted in Canada, these financial statements will not satisfy the reporting requirements of Canadian statutes and regulations. The consolidated statements of operations, stockholder’s equity and comprehensive income and cash flows of the Corporation for the year ended December 31, 2003, might be significantly different if the consolidated financial statements had been prepared in accordance with accounting principles generally accepted in Canada.

Ottawa, Canada,	Ernst & Young LLP
February 6, 2004 (except with respect	Chartered Accountants
to notes 3(b) and 21, which are as at
January 6, 2006)

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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except net earnings (loss) per share)

	Years ended December 31
	2005			2004			2003
Net sales (note 12)	$	310,033			246,518			243,854
Cost of sales		209,808			159,597			156,828
Selling, general and administrative expenses		66,597			58,907			55,283
Research and development expenses		15,893			16,482			15,853
Operating income		17,735			11,532			15,890
Non-operating income		587			1,085			450
Foreign exchange loss		(145	)		(205	)		(235	)
Interest expense		(4,018	)		(2,296	)		(1,923	)
Earnings from continuing operations before income taxes		14,159			10,116			14,182
Income tax expense (note 9)		(4,736	)		(2,823	)		(3,964	)
Earnings from continuing operations		9,423			7,293			10,218
Discontinued operations (note 2):
Loss from discontinued operations before income taxes		(20,910	)		(7,928	)		(51,689	)
Income tax benefit		44			827			4,079
Loss from discontinued operations		(20,866	)		(7,101	)		(47,610	)
Net earnings (loss)	$	(11,443	)		192			(37,392	)
Net earnings (loss) per share (note 8):
Basic:
Earnings from continuing operations	$	0.84			0.66			0.95
Loss from discontinued operations		(1.86	)		(0.64	)		(4.44	)
Net earnings (loss)	$	(1.02	)		0.02			(3.49	)
Diluted:
Earnings from continuing operations	$	0.84			0.65			0.95
Loss from discontinued operations		(1.86	)		(0.63	)		(4.42	)
Net earnings (loss)	$	(1.02	)		0.02			(3.47	)
Weighted average number of shares (note 8):
Common		11,179			11,094			10,702
Common and dilutive common equivalent		11,225			11,237			10,785

See accompanying notes to consolidated financial statements.

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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands)

	December 31
	2005		2004
ASSETS
Current assets:
Cash and cash equivalents	$	12,978		14,553
Restricted cash		2,620		4,715
Trade accounts receivable, net (note 4)		92,973		75,370
Inventories (note 5)		34,673		33,408
Deferred income taxes, net (note 9)		1,433		1,362
Assets held for sale (note 2)		6,732		64,710
Total current assets		151,409		194,118
Property, plant and equipment:
Land		1,150		1,150
Buildings and leasehold improvements		15,242		15,166
Machinery and equipment		76,342		70,160
Furniture and fixtures		8,511		8,061
		101,245		94,537
Less accumulated depreciation and amortization		66,965		63,068
Net property, plant and equipment		34,280		31,469
Deferred income taxes, net — non-current (note 9)		3,634		4,604
Intangible assets, net of accumulated amortization of $3,954 in 2005 and $2,568 in 2004 (note 6)		3,298		3,990
Goodwill		13,526		13,526
Other assets		13,313		7,371
	$	219,460		255,078

See accompanying notes to consolidated financial statements.

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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, continued
(in thousands, except share data)

	December 31
	2005			2004
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt (note 7)	$	6,825			3,462
Accounts payable		34,089			23,840
Income taxes payable		1,866			1,726
Accrued compensation costs		9,402			6,232
Accrued retirement costs (note 10)		2,603			2,453
Deferred service revenue		5,755			5,214
Liabilities related to assets held for sale (note 2)		2,130			24,095
Other current liabilities		4,801			4,043
Total current liabilities		67,471			71,065
Long-term debt, excluding current installments (note 7)		36,583			57,992
Other liabilities		1,750			—
Total liabilities		105,804			129,057
Shareholders’ equity (note 8):
Preferred stock of $1.00 par value per share.
Authorized 10,000,000 shares; none issued		—			—
Common stock of $.10 par value per share.
Authorized 75,000,000 shares, issued and outstanding 11,343,000 in 2005 and 11,164,000 in 2004		1,134			1,116
Additional paid-in capital		71,389			69,058
Accumulated other comprehensive income (loss) — foreign currency translation adjustment		(97	)		3,174
Retained earnings		41,230			52,673
Total shareholders’ equity		113,656			126,021
Commitments and contingencies (notes 2, 7, 13, 14, 15, and 16)
	$	219,460			255,078

See accompanying notes to consolidated financial statements.

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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Years ended December 31
	2005			2004			2003
Cash flows from operating activities:
Net earnings (loss)	$	(11,443	)		192			(37,392	)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and other intangibles amortization		9,742			8,158			8,097
Deferred income taxes		899			(1,079	)		(1,414	)
Loss (gain) on sale of assets		394			(1,082	)		(659	)
Loss from discontinued operations		20,866			7,101			47,610
Changes in operating assets and liabilities, net of effects of acquisition:
Trade accounts receivable		(19,187	)		(8,837	)		9,782
Inventories		(1,122	)		(2,012	)		(670	)
Accounts payable		8,206			5,442			(3,144	)
Income taxes payable		14			4,580			(2,175	)
Accrued costs, deferred revenue, and other current liabilities		4,416			(1,275	)		1,561
Other		14			803			(2,989	)
Net cash provided by operating activities in continuing operations		12,799			11,991			18,607
Net cash used in operating activities in discontinued operations (Revised — Note 1)		(7,539	)		(9,220	)		(17,370	)
Net cash provided by operating activities		5,260			2,771			1,237
Cash flows from investing activities:
Purchase of property, plant and equipment		(10,029	)		(5,320	)		(7,153	)
Payments for asset acquisitions		(275	)		(1,754	)		—
Proceeds from sale of assets		21,931			2,846			1,759
Net cash provided by (used in) investing activities in continuing operations		11,627			(4,228	)		(5,394	)
Net cash used in investing activities in discontinued operations (Revised — Note 1)		(782	)		(2,448	)		(1,724	)
Net cash provided by (used in) investing activities		10,845			(6,676	)		(7,118	)
Cash flows from financing activities:
Net increase (decrease) in revolving debt		(16,882	)		8,991			(68	)
Repayment of term debt		(1,342	)		(3,667	)		(2,321	)
(Increase) decrease in restricted cash		2,095			(4,715	)		—
Deferred financing costs paid		(98	)		(1,063	)		—
Proceeds from exercise of stock options, net of withholding taxes paid		1,966			3,709			3,765
Net cash provided by (used in) financing activities		(14,261	)		3,255			1,376
Net change in cash and cash equivalents		1,844			(650	)		(4,505	)
Effect of exchange rates on cash and cash equivalents		(3,419	)		1,023			6,255
Cash and cash equivalents at January 1		14,553			14,180			12,430
Cash and cash equivalents at December 31	$	12,978			14,553			14,180
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,869			3,657			3,386
Cash paid for income taxes		2,661			562			2,043

     See accompanying notes to consolidated financial statements.

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EMS TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)
(in thousands)

	Three years ended December 31, 2005
													Accum-
													ulated
													other
										Compre-			compre-						Total
	Common Stock						Additional			hensive			hensive						Share-
							paid-in			income			income			Retained			holders’
	Shares			Amount			capital			(loss)			(loss)			earnings			equity
Balance December 31, 2002		10,658		$	1,066			60,867						(5,821	)		89,873			145,985
Net loss		—			—			—			(37,392	)		—			(37,392	)		(37,392	)
Income tax benefit from exercise of non-qualified stock options (note 9)		—			—			383			—			—			—			383
Exercise of common stock options		356			36			5,474			—			—			—			5,510
Redemption of shares upon exercise of common stock options		(86	)		(9	)		(1,703	)		—			—			—			(1,712	)
Foreign currency translation adjustment gain		—			—			—			7,301			7,301			—			7,301
Repurchases of stock		(2	)		—			(33	)		—			—			—			(33	)
Comprehensive loss for 2003											(30,091	)
Balance December 31, 2003		10,926			1,093			64,988						1,480			52,481			120,042
Net earnings		—			—			—			192			—			192			192
Income tax benefit from exercise of non-qualified stock options (note 9)		—			—			384			—			—			—			384
Exercise of common stock options		255			25			4,083			—			—			—			4,108
Redemption of shares upon exercise of common stock options		(15	)		(2	)		(332	)		—			—			—			(334	)
Foreign currency translation adjustment gain		—			—			—			1,694			1,694			—			1,694
Repurchases of stock		(2	)		—			(61	)		—			—			—			(61	)
Other		—			—			(4	)		—			—			—			(4	)
Comprehensive income for 2004											1,886
Balance December 31, 2004		11,164			1,116			69,058						3,174			52,673			126,021
Net loss		—			—			—			(11,443	)		—			(11,443	)		(11,443	)
Income tax benefit from exercise of non-qualified stock options (note 9)		—			—			383			—			—			—			383
Exercise of common stock options		221			22			2,642			—			—			—			2,664
Redemption of shares upon exercise of common stock options		(42	)		(4	)		(691	)		—			—			—			(695	)
Repurchases of stock					—			(3	)		—			—			—			(3	)
Foreign currency translation adjustment loss		—			—			—			1,971			1,971			—			1,971
Reclassification due to sale of discontinued operations		—			—			—			(5,242	)		(5,242	)		—			(5,242	)
Comprehensive loss for 2005											(14,714	)
Balance December 31, 2005		11,343		$	1,134			71,389						(97	)		41,230			113,656

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2005, 2004 and 2003

(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

EMS Technologies, Inc. (“EMS”) designs, manufactures and markets products to wireless and satellite communications markets for both commercial and defense applications. EMS’s products are focused on the needs of the mobile information user, with an increasing emphasis on broadband applications for high-data-rate, high-capacity wireless communications.

The consolidated financial statements include the accounts of EMS Technologies, Inc. and its wholly owned subsidiaries, LXE Inc., EMS Investment Holdings, Inc., EMS Technologies Canada, Ltd. (included are our SatNet and Space & Technology/Montreal divisions which are accounted for as discontinued operations), and EMS Wireless do Brasil, Ltda. (collectively, “the Company”). All significant intercompany balances and transactions have been eliminated in consolidation. In 2005, the Company has separately disclosed the operating, investing and financing portions of the cash flows attributable to its discontinued operations, which in prior periods were reported on a combined basis as a single amount.

In the third quarter of 2003, and in the second quarter of 2005, our Board of Directors approved a formal plan to sell our Space & Technology/Montreal division, and our Satellite Network operations, respectively. As a result, we have accounted for these divisions as discontinued operations (Space & Technology/Montreal through their date of disposition, and SatNet for all periods presented), and have classified their net assets as assets held for sale.

Following is a summary of the Company’s significant accounting policies:

— Management’s Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date and reporting of revenue and expenses during the period. Actual future results could differ from those estimates.

— Revenue Recognition

Net sales are derived from sales of the Company’s products to end-users and to other manufacturers or systems integrators. Net sales under certain long-term contracts of the Defense & Space Systems and SATCOM segments, many of which provide for periodic payments, are recognized under the percentage-of-completion method using the ratio of cost incurred to total estimated cost as the measure of performance. Estimated manufacturing cost-at-completion for these contracts are reviewed on a routine periodic basis, and adjustments are made periodically to the estimated cost-at-completion based on actual costs incurred, progress made, and estimates of the costs required to complete the contractual requirements. When the estimated manufacturing cost-at-completion exceeds the contract value, the contract is written down to its net realizable value, and the loss resulting from cost overruns is immediately recognized.

The Company establishes budgeted overhead rates, which are used to apply overhead costs to projects to calculate the estimated cost-to-complete for revenue recognition calculations. The Company expenses the monthly rate variance between actual overhead expenses incurred versus overhead expenses applied at budgeted rates. The monthly rate variance has no effect on the Company’s calculation of revenues to be recognized under percentage-of-completion accounting.

To properly match net sales with costs, certain contracts may have revenue recognized in excess of billings (unbilled revenues), and other contracts may have billings in excess of net sales recognized (customer advance payments). Under long-term contracts, the prerequisites for billing the customer for periodic payments generally involve the Company’s achievement of contractually specific, objective milestones (e.g., completion of design, testing, or other engineering phase, delivery of test data or other documentation, or delivery of an engineering model or flight

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hardware). Net sales collected in advance under service contracts are recorded as a liability and recognized over the term of the contract.

Net sales under cost-reimbursement contracts in the Defense & Space Systems segment are recognized depending on the type of fee specified in the contract. Contracts may have a fixed fee, award fee or a combination of these.

A fixed fee is recognized over the performance of a cost-reimbursement contract in the same ratio as the costs incurred to date to the total target contract costs at completion. This same ratio is used for both billing the customer and recognizing net sales. If the expected costs to be incurred under the contract subsequently become materially different from the original estimated total costs, the fixed fee ratio and related fee recognition are adjusted accordingly. If the contract includes a clause for partial withholding of the fee pending specific acceptance or performance criteria, then the amount of withheld fee to be recognized will depend upon management’s evaluation of the likelihood of the withheld fee amount being paid.

An award or incentive fee is usually variable based upon specific performance criteria stated in the contract. Award or incentive fees are recognized at 100% only upon achieving the contractual criteria, and after the customer has approved or granted the award or incentive.

Net sales under all other contracts in the Defense & Space Systems and SATCOM segment, as well as in the LXE, and EMS Wireless segments are recognized when units are shipped or services are performed.

— Government Research Incentives

The Company’s Canadian operations receive government-sponsored research incentives in the form of cash reimbursement for a portion of certain qualified research expenditures. These incentives are recorded as a reduction of cost of sales, because underlying research efforts primarily apply to development of technological capabilities for specific business opportunities.

— Cash Equivalents

The Company considers all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. Cash equivalents as of December 31 included investments of $1,459,000 in 2005 and $1,649,000 in 2004 in U.S. Government Securities, money market instruments and interest-bearing deposits each purchased with an initial or remaining term of less than three months.

— Inventories

Inventories are valued at the lower of cost (first-in, first-out) or market (net realizable value). Work in process consists of raw material and production costs, including indirect manufacturing costs.

— Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided primarily using the straight-line method over the following estimated useful lives of the respective assets:

Buildings	20 to 40 years
Machinery and equipment	3 to 8 years
Furniture and fixtures	10 years

Leasehold improvements are amortized over the shorter of their estimated useful lives or the terms of the respective leases.

— Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by

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a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. If assets are to be disposed of, such assets are reported at the lower of carrying amount or fair value less costs to sell, and no longer depreciated. The assets and liabilities of a disposal group classified as held for sale would be presented separately in the appropriate asset or liability sections of the consolidated balance sheet.

— Income Taxes

The Company provides for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are classified as current or non-current based upon the nature of the underlying temporary differences. The effect on deferred taxes of a change in tax rates is recognized in earnings in the period that includes the enactment date.

— Earnings Per Share

Basic earnings per share is the per share allocation of income available to common shareholders based only on the weighted average number of common shares actually outstanding during the period. Diluted earnings per share represents the per share allocation of income attributable to common shareholders based on the weighted average number of common shares actually outstanding plus all dilutive potential common shares outstanding during the period.

— Goodwill and Intangible Assets

Goodwill represents the excess purchase price paid by the Company over the fair value of the tangible and intangible assets and liabilities acquired. Other intangible assets are valued at fair value at the date of acquisition. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets,” goodwill is not being amortized, but instead is subject to an annual assessment of impairment by applying a fair-value based test. Intangible assets held by the Company represent satellite communications technology, intellectual property and product designs purchased as part of the acquisitions of various companies. Acquisitions for the two years ending December 31, 2005 include Multiple Services Technologies, Inc. in 2004, and other small purchases. These intangible assets are amortized on a straight-line basis over their estimated useful lives of 2.5 to 6 years.

The Company evaluates the carrying value of goodwill for impairment in the fourth quarter of each fiscal year, or more frequently if circumstances indicate impairment may exist. As part of the evaluation, the Company compares the carrying value of each reporting unit with its fair value to determine whether there has been impairment. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. The ongoing recoverability of intangible assets subject to amortization is assessed by determining whether the intangible asset balance can be recovered over the remaining amortization period through projected undiscounted future cash flows. If projected future cash flows indicate that the unamortized intangible asset balances will not be recovered, an adjustment is made to reduce the net intangible asset to an amount consistent with discounted projected future cash flows. Cash flow projections, although subject to a degree of uncertainty, are based on management’s estimates of future performance, giving consideration to existing and anticipated competitive and economic conditions.

— Stock Option Plans

The Company accounted for its stock option plans in accordance with the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. As such, compensation expense would be recorded on the date of grant only if the current market price of the underlying stock exceeded the exercise price. The Company adopted the disclosure requirements of SFAS No. 123,

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“Accounting for Stock-Based Compensation.” SFAS No. 123 allowed entities to continue to apply the provisions of APB Opinion No. 25 and provide pro forma net earnings (loss) and pro forma earnings (loss) per share disclosures for employee stock option grants made in 1995 and future years as if the fair-value-based method defined in SFAS No. 123 had been applied. The Company elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure required by SFAS No. 123.

In accordance with SFAS No. 148 “Accounting for Stock-Based Compensation – Transition and Disclosure”, the following table illustrates the effect on net earnings (loss), and earnings (loss) per share if the Company had applied the fair value method to measure stock-based compensation (in thousands, except net earnings (loss) per share):

	2005			2004			2003
Net earnings (loss):
As reported	$	(11,443	)		192			(37,392	)
Stock-based employee compensation expense determined under the fair value method, net of tax		(947	)		(2,137	)		(3,061	)
Pro forma	$	(12,390	)		(1,945	)		(40,453	)
Basic net earnings (loss) per share:
As reported	$	(1.02	)		0.02			(3.49	)
Pro forma		(1.11	)		(0.18	)		(3.78	)
Diluted net earnings (loss) per share:
As reported	$	(1.02	)		0.02			(3.47	)
Pro forma		(1.10	)		(0.17	)		(3.75	)

In December 2004, SFAS No. 123 was revised to require that the cost resulting from all share-based payment transactions should be recognized in the financial statements, beginning with the first interim period in 2006.

— Foreign Currency Translation

Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at current exchange rates. Income and expenses of the foreign subsidiaries are translated into U.S. dollars at the approximate average exchange rates that prevailed during the years presented. The functional currency of all subsidiaries is considered to be the local currency; consequently, adjustments resulting from the translation of the subsidiaries’ financial statements (including long-term financing from the parent) are reflected in accumulated other comprehensive income (loss) in shareholders’ equity and not as a part of the results of operations. The Company accrues foreign currency exchange gains or losses on direct export activity, on the LXE European subsidiaries’ short-term intercompany liabilities that arise from the purchase of the parent’s products for resale, and on work performed in the U.S. for Canadian subsidiaries.

— Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments, and is presented in the consolidated statements of shareholders’ equity and comprehensive income (loss).

— Derivative Financial Instruments

The Company uses derivative financial instruments (foreign currency forward contracts) to hedge currency fluctuations in future cash flows denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from changes in exchange rates. The Company has established policies and procedures for risk assessment and for the approval, reporting and monitoring of derivative financial instrument activities. The Company does not enter into derivative financial instruments for trading or speculative purposes.

Certain of the Company’s routine long-term contracts to deliver antennas and other hardware for satellite communications are considered to be derivative instruments because these contracts create long-term obligations for non-U.S. customers to pay the

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Company’s Canadian subsidiary in U.S. dollars. These “embedded” derivatives do not qualify as hedging instruments and are accounted for at fair value. None of the Company’s derivative instruments were designated as hedges in 2005 or 2004 and as a result all unrealized gains or losses are reflected currently in foreign exchange loss on the consolidated statements of operations.

— Warranties

The Company provides a limited warranty for each of its products. Upon sale, the Company records a liability for the estimated costs to be incurred under warranties. The amount of this warranty liability is based on historical, as well as expected, rates of warranty claims. The warranty liability is periodically reviewed for adequacy and adjusted as necessary.

— Effect of New Accounting Pronouncements

In March 2005, the FASB issued FASB Interpretation (“FIN”) No. 47, “Accounting for Conditional Asset Retirement Obligations.” FIN No. 47 clarifies the conditions under which an entity would have sufficient information to apply an expected value technique to, and recognize a liability for, a conditional asset retirement obligation. This interpretation was effective for the Company at December 31, 2005. The Company expects that FIN No. 47 will not have a material impact on the Company’s consolidated financial statements.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs – an amendment of ARB No. 43 Chapter 4.” SFAS No. 151 more clearly defines when excessive idle facility expense, freight, handling costs, and spoilage are to be current-period charges. In addition, SFAS No. 151 requires the allocation of fixed production overhead to the cost of conversion to be based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company expects that SFAS No. 151 will not have a material impact on the Company’s 2006 consolidated financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment,” (SFAS No. 123(R)). SFAS No. 123(R) eliminates the intrinsic value method under Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued for Employees,” and requires the Company to use a fair-value based method of accounting for share-based payments. Under APB No. 25, no compensation cost related to stock options is recognized in the consolidated statements of operations. SFAS No. 123(R) requires that compensation cost for employee services received in exchange for an award of equity instruments be recognized in the consolidated statements of operations based on the grant-date fair value of that award. The Company expects to adopt the modified prospective method of transition in the first quarter of 2006, which requires that compensation expense be recorded for all unvested stock options at the end of 2005, and any additional options granted thereafter, based on the fair value of the awards determined at the date of grant. The Company anticipates recording an expense in the range of $.5 million to $1.1 million for the year ended December 31, 2006 related to the adoption of SFAS 123(R).

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets – an amendment of APB Opinion No. 29.” SFAS No. 153 amends APB No. 29 to require that assets exchanged in a nonmonetary transaction are to be measured at fair value except for those exchanges of nonmonetary assets that lack commercial substance. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in fiscal years beginning after June 15, 2005. The Company expects that SFAS No. 153 will not have a material impact on the Company’s consolidated financial statements.

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(2) DISCONTINUED OPERATIONS

In the third quarter of 2003, and in the second quarter of 2005, our Board of Directors approved a formal plan to sell our Space & Technology/Montreal division, and our Satellite Networks operations, respectively. As a result, we have accounted for these divisions as discontinued operations (Space & Technology/Montreal through their date of disposition, and SatNet for all periods presented), and have classified their net assets as assets held for sale.

On November 28, 2005, we completed the sale of the assets and operating liabilities of our Space & Technology/Montreal division to MDA for $21.3 million in cash. Additional payments may be received in future years depending on the extent to which contractual in-orbit incentives are earned under the contract governing S&T/Montreal’s role as payload subcontractor to MDA on the Canadian Radarsat-2 satellite program. The transaction also eliminated a previous contractual requirement that the Company post approximately $3 million to secure in-orbit incentive performance of the Radarsat-2 payload, but the Company remains liable for that amount in the event of specified in-orbit payload failures.

Also as part of the agreement to sell the net assets of S&T/Montreal, the Company released the purchaser, MDA, from a corporate guarantee, resulting in the Company accruing a $1.7 million long-term liability. This liability represents the Company’s estimated loss under a previous agreement to acquire a sub-license from MDA for $8 million in payments over a six-year period, which would entitle the Company to receive a portion of the satellite service revenues from a specific market territory over the same period. MDA had previously guaranteed that the revenues derived under the sub-license would equal or exceed the acquisition cost of the sub-license; however, without the guarantee, the Company currently estimates that its portion of the satellite service revenues will be less than the acquisition cost, and the Company has accordingly accrued a net long-term liability.

The Company recorded a net after-tax gain in 2005 of $788,000 from the disposal of its S&T/Montreal division, and has incurred certain costs associated with its disposal including termination benefits to certain individuals who were employed in senior positions in the S&T/Montreal division but who were not retained by the purchaser, and other associated costs, including transaction fees to the selling agent and the Company’s attorneys. Total costs expected to be incurred, incurred through December 31, 2005, and the cumulative amount incurred to date for the disposal of this operation was $2.2 million. These costs are included in the loss from discontinued operations line on the Company’s consolidated statement of operations for 2005. The following table summarizes, in thousands of dollars, the liability of costs incurred for the disposal of our S&T/Montreal division as of the end of 2005:

	Liability		Costs incurred		Costs		Adjustments		Liability
	at		and expensed		paid		in		at
	Dec 31, 2004		in 2005		in 2005		2005		Dec 31, 2005
Termination benefits		—	$	1,230		183		—		1,047
Other associated costs		—		1,016		855		—		161
Total		—	$	2,246		1,038		—		1,208

On March 9, 2006, the Company completed the sale of the assets and operating liabilities of its SatNet division to Advantech. In addition to Advantech’s assumption of trade payables, liabilities under existing SatNet contracts and other specified liabilities, the agreement provides for the payment of aggregate consideration in the amount of $8,827,000, consisting of cash in the amount of $6,502,000 (of which $100,000 had been previously paid) and an interest-bearing note of Advantech in the initial principal amount of $2,325,000. The note is to be repaid in three equal annual installments commencing in May 2007. See Note 16 to the Company’s consolidated financial statements.

The 2005 pre-tax results from our discontinued operations was a loss of $20.9 million. This loss includes impairment charges of $10.0 million and $6.2 million for our Space & Technology/Montreal and SatNet divisions, respectively, in 2005 to reflect the revised estimate of the fair value, less cost to sell, of these divisions. The loss reflected cost increases on certain long-term contracts at our S&T/Montreal division and lower than expected net sales by our SatNet division. In addition, the results from these Canada-based discontinued operations were adversely affected by a weaker U.S. dollar compared with the Canadian dollar. This change in foreign exchange rates increased the reported costs of the Canada-based SatNet operations relative to sales from their customer agreements, most of which were denominated in U.S. dollars.

The $7.9 million pre-tax loss from discontinued operations in 2004 related to two significant factors affecting the Space & Technology/Montreal division: two large commercial space contracts experienced combined losses of $5.4

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million due to engineering and supplier difficulties, and we recorded an additional $1.7 million charge to write-down the value of assets held for sale to their estimated fair value, less costs to dispose.

The $51.7 million pre-tax loss from discontinued operations in 2003 reflected approximately $34 million of losses for Space & Technology/Montreal from additional costs and reserve provisions for legacy commercial space programs, and additional costs of downsizing. Also significant in 2003 were a $13.5 million charge to write-down the Space & Technology/Montreal assets to estimated fair value, less costs to sell, and a $2.9 million loss related to the disposal in 2003 of a small U.S.-based product line that had been accounted for as discontinued operations.

The results of these discontinued operations for 2005, 2004 and 2003 were as follows (in thousands):

	2005			2004			2003
Net sales	$	59,780			65,786			38,813
Expenses		64,490			72,014			74,075
Loss on sale of assets		—			—			2,927
Estimated loss on disposal		16,200			1,700			13,500
Loss before income taxes		(20,910	)		(7,928	)		(51,689	)
Income tax benefit		44			827			4,079
Loss from discontinued operations	$	(20,866	)		(7,101	)		(47,610	)

The table below presents the components of the balance sheet accounts classified as current assets and liabilities related to assets held for sale as of December 31, 2005 and 2004 (in thousands):

	2005		2004
Trade accounts receivable, net	$	3,417		18,879
Inventories		3,035		8,022
Investments		—		2,709
Property, plant and equipment, net		—		24,298
Non-current accounts receivable, net		—		6,516
Accrued pension assets		—		3,255
Other assets		280		1,031
Total assets held for sale	$	6,732		64,710
Accounts payable	$	1,587		15,185
Long term debt		—		2,783
Post-retirement obligations		—		4,481
Other current liabilities		543		1,646
Total liabilities related to assets held for sale	$	2,130		24,095

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(3) ACQUISITIONS

The Company occasionally expands its technology base by acquiring small companies or their assets. In 2004 and 2005, the Company invested a total of $1.8 million and $326,000 on acquisitions, respectively. The largest investment for the two years ending December 31, 2005 was in Multiple Services Technologies, Inc. D/B/A Multitech Corp in 2004. This acquisition was not significant and as a result, pro forma disclosures have not been presented.

(4) TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable at December 31, 2005 and 2004 included the following (in thousands):

	2005			2004
Amounts billed	$	71,662			57,010
Unbilled revenues under long-term contracts (1)		25,086			21,241
Customer advanced payments		(2,998	)		(1,875	)
Allowance for doubtful accounts		(777	)		(1,006	)
Trade accounts receivable, net	$	92,973			75,370

(1) Unbilled net sales under long-term contracts are usually billed and collected within one year.

(5) INVENTORIES

Inventories at December 31, 2005 and 2004 included the following (in thousands):

	2005		2004
Parts and materials	$	23,020		23,789
Work in process		2,783		3,605
Finished goods		8,870		6,014
Inventories	$	34,673		33,408

(6) OTHER INTANGIBLE ASSETS

In 2004, the Company acquired certain assets of Multitech, and recorded an intangible asset of $989,000 on the consolidated balance sheet. As of December 31, 2005, the net amount of this intangible asset was $693,000. This intangible asset is being amortized over an estimated useful life of 5 years. Amortization expense relating to this intangible asset was $198,000 in 2005, with amortization expense of $198,000 expected for each of the next three years, and $99,000 in the fourth year.

The Company also acquired various intangible assets through acquisitions of technology companies in prior years totaling $6,263,000 based on the year-end foreign currency exchange rate. As of December 31, 2005, the net amount of these additional intangible assets was $2,605,000. These intangible assets are being amortized over their estimated useful lives which range from 2.5 to 6 years. Amortization expense relating to these intangible assets was $1,189,000 in 2005, with amortization expense of $1,018,000 expected for each of the next two years, $383,000 in the third year, and $186,000 in the fourth year.

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(7) LONG-TERM DEBT

The following is a summary of long-term debt at December 31, 2005 and 2004 (in thousands):

	2005		2004
Revolving credit loans with U.S. and Canadian financial institutions, secured by substantially all the assets of the Company, except for certain real estate that secures existing mortgages and other permitted liens, maturing in December 2007, interest payable quarterly at a variable rate (8.62% at the end of 2005 and 6.66% at the end of 2004)	$	26,804		43,417
Promissory note, secured by a first mortgage on the Company’s headquarters facility, maturing in 2016, principal and interest payable in equal monthly installments of $103,975 with a fixed interest rate of 8.0%		8,889		9,404
Term loan with an insurance company, secured by a U.S. building, maturing in February 2014, principal and interest payable in equal monthly installments of $67,832 with a fixed interest rate of 7.1%		4,995		5,438
Capital lease agreements, secured by machinery and equipment, computer hardware, software and peripherals, with various terms through 2008, due in quarterly installments with implicit interest rates of 3.0% to 13.0%		338		772
Financing agreements, related to installation of computer hardware and peripherals and implementation of software, maturing in April 2007, principal and interest payable in equal quarterly installments of $155,000 with an average fixed interest rate of 5.79%		750		687
Revolving credit loan with a bank in the United Kingdom, maturing in April 2006, interest payable monthly at a variable rate (5.50% at the end of 2005 and 5.75% at the end of 2004)		1,632		1,736
Total long-term debt		43,408		61,454
Less current installments of long-term debt		6,825		3,462
Long-term debt, excluding current installments	$	36,583		57,992

On February 11, 2005, the Company amended its U.S. and Canadian revolving credit agreements to increase the aggregate borrowing capacity from $55.0 million to $65.0 million, and to add another financial institution in the U.S. and in Canada to the group of creditors in the agreements. Under this amendment, the aggregate borrowing capacity of the revolving credit agreements was $32.5 million in both the U.S. and Canada. The new U.S. revolver facilities are secured by substantially all tangible and intangible assets of the Company, with certain exceptions for real estate that secures existing mortgages and other permitted liens. The new agreements mature in December 2007. Interest under both the U.S. and the Canadian revolving loans are, at the Company’s option, a function of either the bank’s prime rate or LIBOR. A commitment fee equal to .50% per annum of the daily average unused credit in both the U.S. and Canada is payable quarterly. These credit facilities also restrict our ability to declare or pay cash dividends.

The sale of the S&T/Montreal division resulted in repayment of $21.3 million of our Canadian credit facility. Thereafter, amounts available for borrowing under the Canadian facility were reduced by $15 million, but the credit available under the Company’s U.S. facility was increased by an equal, offsetting amount. We are no longer required to maintain an aggregate reserve of $5.0 million in unused revolving credit and cash related to an S&T/Montreal contract.

The Company has $2.8 million of standby letters of credit to satisfy performance guarantee requirements under certain customer contracts outstanding under the revolving credit agreement. While these obligations are not normally called, they could be called by the beneficiaries at any time before the expiration date should we fail to meet certain contractual requirements. The Company has an additional $1.8 million of standby letters of credit outstanding under another Canadian bank to secure a revolving credit facility for one of its foreign location. The Company has deposited $2.6 million at a Canadian bank as collateral for a portion of these standby letters of credit, which is classified as restricted cash on the Company’s consolidated balance sheet. Most of this cash will become available to the Company by the middle of 2006 as the underlying letters of credit expire or are settled. At December 31, 2005, the Company had $26.9 million available for borrowing in the U.S. and $8.6 million available for borrowing in Canada under the respective revolving credit agreements after current borrowings and outstanding letters of credit.

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The revolving credit agreements include a covenant that establishes a quarterly minimum required consolidated net worth. The minimum consolidated net worth required at December 31, 2005 was approximately $113 million, as compared with the reported consolidated net worth of approximately $114 million. Other covenants under the agreements include a maximum ratio of total funded debt to historical earnings before interest, taxes, depreciation, and amortization (EBITDA) and a minimum ratio of historical EBITDA less capital expenditures and taxes paid to specified fixed charges, mainly interest and scheduled principal repayments under all debt agreements. There are various other debt covenants that are customary in such borrowings. The agreements also restrict the ability of the Company to declare or make cash dividends. At December 31, 2005, the Company was in compliance with these covenants.

Following is a summary of the combined principal maturities of all long-term debt (in thousands):

2006	$	6,825
2007		24,785
2008		1,202
2009		1,289
2010		1,391
Thereafter		7,916
Total principal maturities	$	43,408

Included in these totals are principal payments to be made under the Company’s capital lease agreements.

Following is a summary of annual payment totals under capital lease agreements (in thousands):

2006	$	326
2007		12
2008		6
Total capital lease payments		344
Less: Interest payments		(6	)
Capital lease obligations	$	338

Subsequent to the end of the year, the Company repaid all of its borrowings under its U.S. and Canadian revolving credit facilities, which then totaled $31.4 million, from the $59.6 million in proceeds from the sale of 3,300,000 initial shares and 495,000 over-allotment shares of its common stock in a public stock offering in February 2006. The Company invested the remaining proceeds from its stock offering along with the $6.4 million received from the closing of the SatNet sale on March 9, 2006 in a government obligations money market fund. This reduction in the Company’s overall debt should reduce our interest expense in the future and allow us to more readily meet our debt covenants.

Upon the closing of the sale of our SatNet division on March 9, 2006, the amounts available for borrowing under the Canadian credit facility were reduced by $3.3 million. And as of that date, the Company had a $47.5 million borrowing capacity under its U.S. revolving credit facility and a $14.2 million borrowing capacity under its Canada revolving credit facility and no borrowings were outstanding under either facility.

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(8) STOCK PLANS

The Company has granted non-qualified stock options to key employees and directors under several stock option plans. All outstanding options have been granted at 100% of fair market value on each option’s grant date. All outstanding options become exercisable from one to three years after the date of grant and expire from six to ten years after the date of grant. Under all plans at December 31, 2005, options for a total of approximately 1,051,062 shares of stock were exercisable, and there were approximately 645,913 shares available for future grants.

Following is a summary of activity in all of the Company’s stock option plans for the years ended December 31, 2005, 2004 and 2003 (shares in thousands):

				Weighted Average
				Exercise Price
	Shares			Per Share
Options outstanding at December 31, 2002		1,788		$	17.19
Granted		318			14.24
Canceled or expired		(356	)		15.49
Exercised		(12	)		18.46
Options outstanding at December 31, 2003		1,738			16.85
Granted		218			20.07
Canceled or expired		(135	)		20.72
Exercised		(255	)		16.13
Options outstanding at December 31, 2004		1,566			17.08
Granted		72			14.81
Canceled or expired		(189	)		15.30
Exercised		(221	)		12.06
Options outstanding at December 31, 2005		1,228		$	18.13

The weighted average fair value of options granted in 2005, 2004, and 2003 was $13.32, $13.85, and $10.58, respectively. These fair values were based on the Black-Scholes option pricing model and a weighted average risk-free rate of return of 3.9% in 2005, 3.5% in 2004, and 2.8% in 2003, terms from four to ten years, expected volatility of 65% in 2005, 61% in 2004, and 68% in 2003, and no expected dividend yield.

Following is a summary of options outstanding at December 31, 2005 (shares in thousands):

		Outstanding						Exercisable
				Weighted		Weighted Average				Weighted
	Range of			Average		Remaining Years In				Average
	Exercise Prices	Shares		Per Share		Contractual Life		Shares		Per Share
$	11.63 - - 13.90		149	$	13.03		6.0		122	$	12.98
	14.00 - 14.94		153		14.23		6.6		141		14.23
	15.25 - 15.81		98		15.64		5.2		44		15.71
	16.08 - 17.88		196		16.97		1.1		196		16.97
	18.00 - 18.99		251		18.67		3.9		223		18.64
	19.04 - 22.75		173		21.09		5.9		120		20.82
	23.50 - 23.88		208		23.80		3.6		205		23.80
	11.63 - 23.88		1,228		18.13		4.4		1,051		18.21

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In the Company’s capital structure, stock options are the only securities that are potentially dilutive in the future to basic earnings (loss) per share for the years ended December 31, 2005, 2004 and 2003, summarized as follows (shares in thousands):

	2005		2004		2003
Dilutive stock options, included in earnings (loss) per share calculations:
Shares		437		761		1,367
Average price per share	$	14.32		13.64		15.10
Anti-dilutive stock options, excluded from earnings (loss) per share calculations:
Shares		791		805		371
Average price per share	$	20.24		20.34		23.31

Following is a reconciliation of the denominator for basic and diluted earnings (loss) per share calculations for the years ended December 31, 2005, 2004 and 2003 (shares in thousands):

	2005		2004		2003
Basic earnings (loss) per share denominator		11,179		11,094		10,702
Common equivalent shares from dilutive stock options		46		143		83
Diluted earnings (loss) per share denominator		11,225		11,237		10,785

Under SFAS No. 123, “Accounting for Stock-Based Compensation,” the Company is permitted to continue accounting for the issuance of stock options in accordance with Accounting Principles Board (“APB”) Opinion No. 25, which does not require recognition of compensation expense for option grants unless the exercise price is less than the market price on the date of grant. As a result, the Company has not recognized any compensation cost for stock options. If the Company had recognized compensation cost for the “fair value” of option grants under the provisions of SFAS No. 123, the pro forma financial results for 2005, 2004, and 2003 would have differed from the actual results, as presented in Note 1 (Basis of Presentation and Summary of Significant Accounting Policies).

Under SFAS No. 123, the fair value of stock options issued in any given year is expensed as compensation over the vesting period, which for substantially all of the Company’s options is two or three years. Therefore, the pro forma net earnings (loss) and net earnings (loss) per share do not reflect the total compensation cost for options granted in the respective years.

The Company adopted a Shareholder Rights Plan effective April 6, 1999, to replace a similar plan adopted in 1989 that expired on April 6, 1999. Under the new plan, the Company declared a dividend distribution of one right for each outstanding share of the Company’s common stock to stockholders of record at the close of business on April 16, 1999. Subsequent transfers of common stock certificates also transfer the associated rights. The rights become exercisable for one share of common stock at a specific purchase price (initially $45) upon the acquisition of at least 20% beneficial ownership in the Company without the consent of a majority of the Company’s Board of Directors not having an interest in the acquirer. The rights will become exercisable for shares of common stock having a value equal to two times the purchase price, upon the following events: (1) the acquisition of at least a 20% beneficial ownership in the Company without the consent of a majority of the members of the Company’s Board of Directors not having an interest in the acquirer, (2) the acquisition of 2% of the outstanding common stock without such consent, following acquisition of 20% with consent, or (3) certain merger, consolidation or asset sale transactions, in each case without the consent of a majority of the members of the Company’s Board of Directors not having an interest in the acquirer. If the Company is purchased or merged into another company, the rights may become exercisable for comparable securities of the surviving entity. The rights expire on August 6, 2009. At any time before their expiration, the outstanding rights may be redeemed by vote of the Board of Directors at a price of $.01 per right.

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(9) INCOME TAXES

Total income tax (expense) benefit provided for in the Company’s consolidated financial statements consists of the following for the years ended December 31, 2005, 2004 and 2003 (in thousands):

	2005			2004			2003
Income tax expense, continuing operations	$	(4,736	)		(2,823	)		(3,964	)
Income tax benefit, discontinued operations		44			827			4,079
Income tax benefit resulting from exercise of stock options credited to stockholders’ equity		383			384			383
Total	$	(4,309	)		(1,612	)		498

The components of income tax (expense) benefit for continuing operations for the years ended December 31, 2005, 2004 and 2003 were (in thousands):

	2005			2004			2003
Current:
Federal	$	(3,711	)		(2,562	)		(2,407	)
State		(629	)		(359	)		(396	)
Foreign		503			(981	)		(2,242	)
Total		(3,837	)		(3,902	)		(5,045	)
Deferred:
Federal		(29	)		1,068			532
State		164			52			90
Foreign		(1,034	)		(41	)		459
Total		(899	)		1,079			1,081
Total income tax expense	$	(4,736	)		(2,823	)		(3,964	)

Income tax expense for continuing operations differed as follows from the amounts computed by applying the U.S. federal income tax rate of 34% to earnings from continuing operations before income taxes for the years ended December 31, 2005, 2004 and 2003 (in thousands):

	2005			2004			2003
Computed “expected” income tax expense	$	(4,814	)		(3,440	)		(4,822	)
Reduction (increase) in income tax:
State income taxes, net of federal income tax effect		(276	)		(159	)		(36	)
Tax credits from research activities		79			105			101
Difference in effective foreign tax rates		990			669			942
Net increase to valuation allowance for deferred tax assets		(797	)		—			—
Other		82			2			(149	)
Income tax expense	$	(4,736	)		(2,823	)		(3,964	)

In 2004 and 2003, income tax expense for continuing operations is net of tax benefits, totaling $124,000 and $352,000, respectively, recognized from foreign net operating loss. The Company’s net deferred tax assets at December 31, 2005 include $1,798,000 related to a cumulative $6,749,000 net operating loss incurred by certain international operations, for which the Company has recognized an income tax benefit. In 2005, the Company increased by $797,000 the valuation allowance on deferred tax benefits for foreign net operating losses; this increase was based on management’s assessment that, due to changing business conditions and the limitation of tax planning strategies, the Company was not more likely than not to fully realize these deferred tax assets.

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The Company expects to retain all deferred tax assets and liabilities after disposal of assets held for sale. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2005 and 2004 are presented below (in thousands):

	2005			2004
Deferred tax assets:
Accounts receivable	$	214			252
Inventories		1,544			1,690
Accrued compensation costs		834			731
Gain on sales to foreign subsidiaries		232			182
Accrued warranty costs		1,669			1,025
Accrued post-retirement benefits		—			1,445
Foreign research expense and tax credit carry forward		48,136			40,843
Foreign net operating loss carry forward		1,798			2,034
Investment		3,265			3,265
Credit for corporate minimum tax		—			306
Research and development credit carry forward		—			900
Intellectual property		218			250
Other		365			285
Total gross deferred tax assets		58,275			53,208
Valuation allowance		(46,969	)		(36,835	)
Net deferred tax assets		11,306			16,373
Deferred tax liabilities:
Property, plant and equipment		6,174			9,056
Pension asset		—			1,048
Customer holdbacks receivable		65			303
Total gross deferred tax liabilities		6,239			10,407
Net deferred tax assets	$	5,067			5,966

The U.S. continuing operations are consolidated for federal income tax purposes. These U.S. continuing operations had earnings before income taxes of $7,430,000 in 2005, $4,705,000 in 2004, and $6,612,000 in 2003. The continuing combined foreign operations reported earnings before income taxes of $6,729,000, $5,411,000, and $7,570,000 in 2005, 2004, and 2003, respectively.

(10) RETIREMENT PLANS

The Company established a qualified defined contribution plan in 1993. All U.S.-based employees that meet a minimum service requirement (approximately 800 employees) are eligible to participate in the plan. Company contributions are allocated to each participant based upon an age-weighted formula that discounts an equivalent benefit (as a percentage of eligible compensation) at age 65 to each employee’s current age. Accumulated contributions are invested at each participant’s discretion from among a diverse range of investment options offered by an independent investment firm selected by the Company.

The Company’s contribution to this plan is determined each year by the Board of Directors. There is no required minimum annual contribution, but the target contribution has been approximately 6% of base payroll. The Company’s total expense related to the defined contribution plan totaled $2.6 million in 2005, $2.5 million for 2004, and $2.6 million for 2003.

The Company sponsors qualified retirement savings plans in the U.S., Canada and the United Kingdom, in which the Company matches a portion of each eligible employee’s contributions. The Company’s matching contributions to these plans were $1.6 million in 2005, $1.6 million in 2004, and $1.5 million in 2003.

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(11) FAIR VALUE OF FINANCIAL INSTRUMENTS

The following summarizes certain information regarding the fair value of the Company’s financial instruments at December 31, 2005 and 2004:

Cash and cash equivalents, restricted cash, trade accounts receivable and accounts payable — The carrying amount approximates fair value because of the short maturity of these instruments.

Long-term debt — Most of the Company’s long-term debt bears interest at variable rates that management believes are commensurate with rates currently available on similar debt. Accordingly, the carrying value of variable-rate long-term debt approximates fair value.

The Company has two fixed-rate, long-term mortgages. One mortgage has an 8.0% current rate and a carrying amount at December 31, 2005 and 2004 of $8.9 million, and $9.4 million, respectively. The other mortgage has an 7.1% rate and a carrying amount at December 31, 2005 and 2004 of $5.0 million and $5.4 million, respectively. The carrying amounts of the mortgages approximate fair value, based on current market rates at which the Company could borrow funds with similar remaining maturities.

(12) BUSINESS SEGMENT AND GEOGRAPHIC AREA INFORMATION

The Company is organized into four reportable segments: Defense & Space Systems, LXE, SATCOM, and EMS Wireless. Each segment is separately managed and comprises a range of products and services that share distinct operating characteristics. The Company evaluates each segment primarily upon operating profit.

The Defense & Space Systems segment manufactures custom-designed, highly engineered hardware for use in space, airborne, and terrestrial applications for communications, radar, surveillance, precision tracking and electronic countermeasures. Orders typically involve development and production schedules that can extend a year or more, and most revenues are recognized under percentage-of-completion long-term contract accounting. Hardware is sold to prime contractors or systems integrators rather than to end-users.

The LXE segment manufactures mobile computer and wireless data collection equipment for supply chain execution. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to end-users and to third parties that incorporate their products and services with the Company’s hardware for delivery to end-users.

The SATCOM segment manufactures antennas and other hardware for satellite communications systems. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to third parties that incorporate their products and services with the Company’s hardware for delivery to end-users.

The EMS Wireless segment manufactures antennas and repeaters for PCS/cellular communications systems. The manufacturing cycle for each order is generally just a few days, and revenues are recognized upon shipment of hardware. Hardware is marketed to wireless service providers and to original equipment manufacturers (“OEMs”) for mobile voice/paging services, as well as for other emerging high-speed wireless systems.

Accounting policies for segments are the same as those described in the summary of significant accounting policies, except that deferred income tax assets and liabilities are provided for only at the consolidated level.

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The following segment data is presented in thousands.

	Years ended December 31
	2005			2004			2003
Net sales:
Defense & Space Systems	$	51,394			50,063			49,381
Less sales to discontinued operations		—			(248	)		(1,819	)
Defense & Space Systems external sales		51,394			49,815			47,562
LXE		123,140			111,575			101,075
SATCOM		51,353			39,693			44,736
EMS Wireless		84,146			45,418			51,381
Other		—			17			(900	)
Total	$	310,033			246,518			243,854
Operating income (loss):
Defense & Space Systems	$	3,191			2,614			3,402
LXE		7,520			7,262			6,966
SATCOM		3,524			1,713			5,026
EMS Wireless		4,302			(720	)		2,529
Other		—			(110	)		(1,054	)
Corporate		(802	)		773			(979	)
Total	$	17,735			11,532			15,890
Non-operating income (expense), net of foreign exchange gain (loss):
Defense & Space Systems	$	(4	)		(1	)		1
LXE		148			89			270
SATCOM		(203	)		(171	)		(627	)
EMS Wireless		142			(18	)		459
Other		—			873			409
Corporate		359			108			(297	)
Total	$	442			880			215
Interest expense:
Defense & Space Systems	$	(372	)		(450	)		(417	)
LXE		(474	)		(439	)		(430	)
SATCOM		(264	)		(93	)		(87	)
EMS Wireless		(714	)		(505	)		(389	)
Corporate		(2,194	)		(809	)		(600	)
Total	$	(4,018	)		(2,296	)		(1,923	)
Income tax (expense) benefit:
Defense & Space Systems	$	(1,070	)		(824	)		(1,169	)
LXE		(2,734	)		(2,626	)		(2,587	)
SATCOM		443			326			(562	)
EMS Wireless		(1,417	)		473			(987	)
Other		(239	)		(435	)		65
Corporate		281			263			1,276
Total	$	(4,736	)		(2,823	)		(3,964	)

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	Years ended December 31
	2005			2004			2003
Net earnings (loss):
Defense & Space Systems	$	1,745			1,339			1,817
LXE		4,460			4,286			4,219
SATCOM		3,500			1,775			3,750
EMS Wireless		2,313			(770	)		1,612
Other		(239	)		328			(580	)
Corporate		(2,356	)		335			(600	)
Earnings from continuing operations		9,423			7,293			10,218
Discontinued operations, net		(20,866	)		(7,101	)		(47,610	)
Total	$	(11,443	)		192			(37,392	)
Capital expenditures:
Defense & Space Systems	$	2,735			1,278			1,965
LXE		2,243			2,677			1,449
SATCOM		2,743			353			1,788
EMS Wireless		927			317			890
Corporate		1,381			713			865
Total	$	10,029			5,338			6,957
Depreciation and amortization:
Defense & Space Systems	$	2,631			2,599			2,630
LXE		2,419			2,150			2,551
SATCOM		2,832			1,961			1,697
EMS Wireless		819			863			930
Other		—			4			15
Corporate		1,041			581			265
Total	$	9,742			8,158			8,088

	As of December 31
	2005		2004
Assets:
Defense & Space Systems	$	41,321		42,067
LXE		71,759		70,450
SATCOM		43,996		35,774
EMS Wireless		42,452		27,884
Other		8,395		6,688
Assets held for sale		6,732		64,710
Corporate		4,805		7,505
Total	$	219,460		255,078
Goodwill:
LXE	$	9,982		9,982
EMS Wireless		3,544		3,544
Total	$	13,526		13,526

Following is a summary of enterprise-wide information (in thousands):

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	Years ended December 31
	2005		2004		2003
Net sales to customers in the following countries:
United States	$	229,289		158,341		157,946
United Kingdom		14,171		16,292		16,327
Other foreign countries		66,573		71,885		69,582
Total	$	310,033		246,518		243,855

	As of December 31
	2005		2004
Long-lived assets are located in the following countries:
United States	$	27,522		26,599
Canada		8,508		7,482
Other foreign countries		1,548		1,378
Total	$	37,578		35,459

No customer accounted for more than 10% of consolidated net sales in 2005, 2004 or 2003.

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(13) DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments (forward exchange contracts) to hedge currency fluctuations in future cash flows denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from changes in exchange rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. The Company does not enter into derivative financial instruments for trading or speculative purposes.

Certain of the Company’s routine long-term contracts to deliver antennas and other hardware for satellite communications are considered to be derivative instruments because these contracts create long-term obligations for non-U.S. customers to pay the Company’s Canadian subsidiary in U.S. dollars. These “embedded” derivatives do not qualify as hedging instruments and are accounted for at fair value. None of the Company’s derivative instruments were designated as hedges in 2005 or 2004 and as a result all unrealized gains or losses are reflected currently in foreign exchange loss on the consolidated statements of operations.

At December 31, 2005, the Company’s net value of all derivatives was a liability of $4,000. The derivative activity as reported in the Company’s consolidated financial statements for the years ended December 31 was (in thousands):

	2005			2004			2003
Net asset (liability) for derivatives at January 1	$	(128	)		99			(253	)
Changes in consolidated statements of operations:
Sales:
Loss in value of embedded derivatives		(13	)		(3	)		(2	)
Foreign exchange gain (loss):
Gain in value of derivative instruments that do not qualify as hedging instruments		269			124			787
Matured foreign exchange contracts		(132	)		(348	)		(433	)
Net consolidated statements of operations gain (loss) from changes in value of derivative instruments		124			(227	)		352
Net asset (liability) for derivatives at December 31	$	(4	)		(128	)		99

The Company recognized no gains or losses for cash flow hedges that have been discontinued because the forecasted transactions did not occur. All of the derivative contracts in place at December 31, 2005 will expire by December 2006.

The table below summarizes, by major currency, the notional amounts of foreign currency forward contracts outstanding at December 31, 2005 (in thousands).

	Notional
	Amount
Euros (sell for U.S. dollars)	2,600 Euros
U.S. (sell for Canadian dollars)	9,500 USD
Australian dollars (sell for U.S. dollars)	1,200 AUD
British pounds (sell for U.S. dollars)	140 GBP

The fair market value of these foreign currency forward contracts for continuing operations was a net asset of $9,000 at December 31, 2005.

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(14) COMMITMENTS AND CONTINGENCIES

The Company is committed under several non-cancelable operating leases for office space, computer and office equipment and automobiles. Minimum annual lease payments under such leases related to the Company’s continuing operations are $3,422,000 in 2006, $3,182,000 in 2007, $2,151,000 in 2008, $159,000 in 2009, $9,000 in 2010 and $2,000 thereafter. Minimum annual lease payments under such leases related to the Company’s discontinued operations are $638,000 in 2006, $630,000 in 2007, $620,000 in 2008, $314,000 in 2009, $3,000 in 2010 and $3,000 thereafter.

The Company also has short-term leases for regional sales offices, equipment and automobiles. Total rent expense under all operating leases was approximately $3,902,000, $4,231,000, and $4,064,000 in 2005, 2004, and 2003, respectively. Total rent expense under operating leases related to the Company’s discontinued operations was $1,401,000, $1,093,000, and $1,070,000 in 2005, 2004, and 2003, respectively.

As of December 31, 2005, the Company has outstanding purchase commitments of $29,655,000. These represent existing commitments under purchase orders or contracts to purchase inventory and raw materials for our products.

As a result of the closing of the sale of its S&T/Montreal division, the Company agreed to pay half (to a maximum of $1.25 million) of the potential liability to satisfy grievance claims arising from previously severed employees of S&T/Montreal who claim to have received insufficient severance payments, and half (to a maximum of $500,000) of any increase in the accrued pension benefit obligation of the post-retirement medical plan from December 31, 2004 to December 31, 2006. In addition, an existing contractual requirement for the Company to post approximately $3 million to secure in-orbit incentive performance of the Radarsat-2 payload was eliminated, but the Company remains liable for that amount in the event of specified in-orbit payload failures. See Note 2 to the Company’s consolidated financial statements.

Also as part of the agreement to sell the net assets of S&T/Montreal, the Company released the purchaser, MDA, from a corporate guarantee, resulting in the Company accruing a $1.7 million long-term liability. This liability represents the Company’s estimated loss under a previous agreement to acquire a sub-license from MDA for $8 million in payments over a six-year period, which would entitle the Company to receive a portion of the satellite service revenues from a specific market territory over the same period. MDA had previously guaranteed that the revenues derived under the sub-license would equal or exceed the acquisition cost of the sub-license; however, without the guarantee, the Company currently estimates that its portion of the satellite service revenues will be less than the acquisition cost, and the Company has accordingly accrued a net long-term liability.

The Company’s Canadian operations have received cost-sharing assistance from the Government of Canada under several programs that support the development of new commercial technologies and products for space. This funding is repayable in the form of royalties, the level of which will depend upon several factors, including future revenue and profit levels to be derived from the potential new technologies and products. To the extent that the royalties may exceed the repayable amounts already recorded in long-term debt, the Company will incur royalty expense; however, these royalties accrue at rates generally less than one percent of related sales, and will be incurred only if additional revenues and profits are also recognized from new technologies and products. As a result, although the Company cannot accurately estimate the level of future possible royalties, the Company does not believe that such royalties will have a material adverse effect on future results of operations.

The Company is required to pay royalties through its LXE, SATCOM and Wireless divisions. These royalty fees are based on the sales of the specific products and are calculated at fixed percentages on their net selling price. In total, the Company paid $1.1 million in royalty fees in 2005. The Company is also required to pay royalties through its discontinued operations for its SatNet division. SatNet’s royalty fee is based on total sales of 60,000 broadband terminals through June of 2006, and is calculated at a fixed amount based on the total units sold in the year. In 2005, SatNet paid $330,000 in royalty fees.

The Company periodically enters into agreements with customers and suppliers that include limited intellectual property indemnification obligations that are customary in the industry. These guarantees generally require the Company to compensate the other party for certain damages and costs incurred as a result of third-party intellectual property claims arising from these transactions. The nature of the intellectual property indemnification obligations prevents the Company from making a reasonable estimate of the maximum potential amount for which it could be obligated.

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The Company provides a limited warranty for each of its products. The basic warranty periods vary from one to five years, depending upon the type of product. For certain products, customers can purchase warranty coverage for specified additional periods. The Company records a liability for the estimated costs to be incurred under warranties. The amount of this liability is based upon historical, as well as expected, rates of warranty claims. The warranty liability is periodically reviewed for adequacy and adjusted as necessary. Following is a reconciliation of the aggregate product warranty liability (in thousands):

	YEARS ENDED DECEMBER 31
	2005			2004			2003
Balance at beginning of the year	$	2,088			1,826			1,249
Accruals for warranties issued during the year		4,073			2,528			1,144
Settlements made during the year		(2,792	)		(2,266	)		(567	)
Balance at end of year	$	3,369			2,088			1,826

Subsequent to December 31, 2005, the Company closed the sale of its SatNet division. Based on that agreement, the Company is obligated to repurchase certain accounts receivable if not collected in a specified period of time.

The Company has also incurred certain costs related to the sale of this operation. See Note 16 to the Company’s consolidated financial statements.

(15) LITIGATION

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

(16) SUBSEQUENT EVENTS

On February 15, 2006, the Company completed the sale of 3,300,000 shares of common stock (par value $0.10 per share) in a registered public offering, and on February 27, 2006, the Company issued an additional 495,000 shares upon the exercise of the underwriters’ over-allotment option. The offering price was $15.70 per share, after deducting $1.00 per share for estimated expenses and underwriting discounts. The Company received proceeds of approximately $59.6 million from this offering and repaid all of its borrowings under its U.S. and Canadian revolving credit facilities. The remaining proceeds, along with the available credit facility borrowings, are intended to be used to fund working capital, other general corporate expenses, and to finance possible business acquisitions that we may pursue in the future. Pending final use, the net proceeds have been invested in a government obligations money market fund.

On March 9, 2006, the Company closed the sale of the assets and operating liabilities of its SatNet division to Advantech. In addition to Advantech’s assumption of trade payables, liabilities under existing SatNet contracts and other specified liabilities, the Company received cash in the amount of $6,502,000 (of which $100,000 had been paid previously) and an interest-bearing note in the amount of $2,325,000. The note is to be repaid in three equal annual installments commencing in May 2007. The note is subject to prepayment of up to $800,000 immediately upon receipt by Advantech of payment under a specific SatNet customer contract which payment is expected to be received in the near future.

Under the agreement, the Company is obligated to repurchase from Advantech, at face value, any of the accounts receivable included in the purchased assets that have not been collected within 90 days after the closing date, with the exception of certain identified receivables that will be repurchased at 75% of face value if they remain uncollected 180 days after the closing.

In addition, the Company incurred certain costs upon the closing of the sale of its SatNet division, including approximately $800,000 in transaction fees payable to the Company’s financial advisors and attorneys and approximately $200,000 in bonuses payable to certain employees of the SatNet division.

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The net proceeds from the sale of our SatNet division of $6.4 million have been invested in a government obligations money market fund. Under the terms of the amendment to the credit agreements, the amounts available for borrowing under the Canadian credit facility were reduced by $3.3 million. The reduced outstanding balance under the overall credit facilities will reduce our interest expense in the future, and allow the Company to more readily meet its debt covenants under its credit agreements.

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(17) SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Following is a summary of interim financial information for the years ended December 31, 2005 and 2004 (in thousands, except net earnings (loss) per share):

	2005 Quarters ended
	April 2			July 2			October 1			December 31
Net sales	$	60,184			81,559			84,419			83,871
Operating income (loss)		(231	)		6,961			5,931			5,074
Earnings (loss) from continuing operations		(696	)		3,903			3,304			2,912
Earnings (loss) from discontinued operations		392			(9,551	)		(4,305	)		(7,402	)
Net loss		(304	)		(5,648	)		(1,001	)		(4,490	)
Net earnings (loss) per share:
Basic:
Continuing operations	$	(0.06	)		0.35			0.30			0.26
Discontinued operations		0.03			(0.86	)		(0.39	)		(0.66	)
Net loss	$	(0.03	)		(0.51	)		(0.09	)		(0.40	)
Diluted:
Continuing operations	$	(0.06	)		0.35			0.29			0.26
Discontinued operations		0.03			(0.85	)		(0.38	)		(0.66	)
Net loss	$	(0.03	)		(0.50	)		(0.09	)		(0.40	)

	2004 Quarters ended
	April 3		July 3			October 2			December 31
Net sales	$	60,026		62,073			57,634			66,785
Operating income		2,410		2,958			1,806			4,358
Earnings from continuing operations		2,071		1,740			1,012			2,470
Earnings (loss) from discontinued operations		147		(1,962	)		(2,728	)		(2,558	)
Net earnings (loss)		2,218		(222	)		(1,716	)		(88	)
Net earnings (loss) per share:
Basic:
Continuing operations	$	0.19		0.16			0.09			0.22
Discontinued operations		0.01		(0.18	)		(0.24	)		(0.23	)
Net earnings (loss)	$	0.20		(0.02	)		(0.15	)		(0.01	)
Diluted:
Continuing operations	$	0.19		0.15			0.09			0.22
Discontinued operations		0.01		(0.17	)		(0.24	)		(0.23	)
Net earnings (loss)	$	0.20		(0.02	)		(0.15	)		(0.01	)

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EX-4.8

                                                                     EXHIBIT 4.8

                  SECOND AMENDMENT, LIMITED WAIVER AND CONSENT

     THIS SECOND AMENDMENT, LIMITED WAIVER AND CONSENT dated as of August 10,
2005 (this "Amendment"), by and among EMS TECHNOLOGIES, INC., a Georgia
corporation (the "Borrower"), the Lenders listed on the signature page hereof
and SUNTRUST BANK, in its capacity as the Administrative Agent (the
"Administrative Agent").

                              W I T N E S S E T H:

      WHEREAS, the Borrower, the Lenders and the Administrative Agent entered
into that certain U.S. Revolving Credit Agreement dated as of December 10, 2004,
as amended by that certain First Amendment to U.S. Revolving Credit Agreement
dated as of February 11, 2005 (as so amended, the "Credit Agreement");

      WHEREAS, the Borrower, the Lenders and the Administrative Agent desire to
amend the Credit Agreement in certain respects on the terms and conditions
contained herein;

      WHEREAS, the Borrower has informed the Administrative Agent and the
Lenders that the Borrower has failed or will fail to comply with the financial
covenants contained in Sections 6.1 and 6.2 of the Credit Agreement for the
fiscal quarter of the Borrower ending on or about June 30, 2005, resulting in an
Event of Default under Sections 8.1(d) and 8.1(o) of the Credit Agreement (the
"Specified Defaults"), which failure is solely a consequence of the write-down
in the book value of the assets being sold in connection with the Canadian Sale
and Prepayment Event (the "Asset Write-Down");

      WHEREAS, the Borrower has informed the Administrative Agent and the
Lenders that the Borrower intends to sell the assets of the business currently
conducted by the Borrower's EMS Satellite Networks division from leased
facilities located in Montreal, Quebec (the "SatNet Assets") and has requested
that the Administrative Agent and the Lenders consent to the sale of the SatNet
Assets as required under Section 7.6 of the Credit Agreement; and

      WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders waive the Specified Defaults, and the effects thereof, under the Credit
Agreement and consent to the sale of the SatNet Assets.

      NOW, THEREFORE, for and in consideration of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the Lenders, the Administrative Agent and the Borrower
hereby agree as follows:

1. DEFINED TERMS. Capitalized terms which are used herein without definition and
which are defined in the Credit Agreement shall have the same meanings ascribed
to them as in the Credit Agreement.

2. AMENDMENTS. (a) The Credit Agreement is hereby amended by adding the
following sentence at the end of the defined term "CONSOLIDATED NET INCOME"
contained in Section 1.1 thereof:



            "Notwithstanding the foregoing, any net income (or loss)
      attributable to the sale of the SatNet Assets and/or the assets giving
      rise to the Canadian Sale and Prepayment Event that are otherwise included
      in Consolidated Net Income during the period of determination shall be
      excluded if such assets are sold during such period."

      (b) The Swingline Lender and the Borrower agree that (i) there shall be no
minimum amount for any Borrowings of Swingline Loans and (ii) there shall be no
minimum amount for the prepayment of any Swingline Loan. Accordingly, footnote 8
to Exhibit 2.5 is hereby deleted.

3. LIMITED WAIVER. At the request of the Borrower, but subject to the
satisfaction of the conditions precedent set forth in Section 5 below, the
Lenders hereby waive the Specified Defaults arising solely by virtue of the
Asset Write-Down; provided that the Asset Write-Down does not exceed
$12,000,000. The Borrower acknowledges and agrees that the waiver contained in
the foregoing sentence shall not waive (or be deemed to be or constitute a
waiver of) any other covenant, term or provision in the Credit Agreement or
hinder, restrict or otherwise modify the rights and remedies of the Lenders and
the Administrative Agent following the occurrence of any other present or future
Default or Event of Default (whether or not related to the Specified Defaults)
under the Credit Agreement or any other Loan Document.

4. CONSENT. At the request of the Borrower, but subject to the satisfaction of
the conditions precedent set forth in Section 5 below, the Lenders hereby
consent to the sale of the SatNet Assets; provided, that (i) the Borrower
receives cash consideration in an amount not less than $16,000,000, (ii) the Net
Proceeds of the sale of the SatNet Assets are applied in accordance with Section
2.14 of the Credit Agreement, and (iii) such sale shall be completed by December
31, 2005. The Borrower acknowledges and agrees that the consent contained in the
foregoing sentence shall not waive or amend (or be deemed to be or constitute an
amendment to or waiver of) any other covenant, term or provision in the Credit
Agreement or hinder, restrict or otherwise modify the rights and remedies of the
Lenders and the Administrative Agent following the occurrence of any present or
future Default or Event of Default (whether or not related to the sale of the
SatNet Assets) under the Credit Agreement or any other Loan Document.

5. EFFECTIVENESS OF AMENDMENT. The effectiveness of this Amendment is subject to
the truth and accuracy of the representations set forth in Sections 6 and 7
below and satisfaction of each of the following conditions:

      (a)   Receipt by the Administrative Agent of counterparts of this
            Amendment duly executed by the Borrower, the Subsidiary Loan
            Parties, the Administrative Agent and the Lenders constituting the
            Required Lenders;

      (b)   Receipt by the Administrative Agent of a waiver substantially in the
            same form and content as this Amendment executed by each of the
            parties to the Canadian Revolving Credit Agreement (the "Canadian
            Amendment");

                                       2


      (c)   Payment of all fees, costs and expenses of the Administrative Agent
            and Lenders, including the fees of Administrative Agent's counsel
            incurred through the date of this Amendment; and

      (d)   Such other documents, agreements, instruments, certificates or other
            confirmations as the Administrative Agent may reasonably request.

6. REPRESENTATIONS OF THE BORROWER. The Borrower represents and warrants to the
Administrative Agent and the Lenders that:

      (a) Corporate Power and Authority. The execution, delivery and performance
of this Amendment and the transactions contemplated hereby (i) are within the
corporate authority of the Borrower, (ii) have been duly authorized by all
necessary corporate proceedings, if any, (iii) do not and will not violate any
provision of law, statute, rule or regulation to which the Borrower is subject
or any judgment, order, writ, injunction, license or permit applicable to the
Borrower and (iv) does not violate or breach any provision of the organizational
documents of, or any agreement or other instrument binding upon, the Borrower or
its Subsidiaries. The Borrower has duly executed and delivered the Amendment,
and, both the Amendment and the Credit Agreement as amended by the Amendment,
constitute the Borrower's legal, valid and binding obligation enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).

      (b) Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made on or prior to the
date of the effectiveness of this Amendment and which remain in full force and
effect on such date), or exemption by, any Governmental Authority, is required
to authorize, or is required in connection with, (i) the execution, delivery and
performance of the Amendment by the Borrower or (ii) the legality, validity,
binding effect or enforceability of any such Amendment against the Borrower.

      (c) No Default. No Default or Event of Default will exist immediately
after giving effect to this Amendment.

7. REAFFIRMATION OF REPRESENTATIONS. Without limiting Section 6 hereof, the
Borrower hereby repeats and reaffirms all representations and warranties made by
the Borrower to the Administrative Agent and the Lenders in the Credit Agreement
and the other Loan Documents to which it is a party on and as of the date hereof
(after giving effect to this Amendment) with the same force and effect as if
such representations and warranties were set forth in this Amendment in full
(except to the extent that such representations and warranties relate expressly
to an earlier date).

8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA.

                                       3


9. EFFECT. Except as expressly provided for herein, the terms and conditions of
the Credit Agreement and the other Loan Documents shall remain in full force and
effect.

10. COUNTERPARTS. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, and all counterparts,
taken together, shall constitute but one and the same document.

11. ENTIRE AGREEMENT. THIS AMENDMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG THE
PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL
PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS,
WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

                         [SIGNATURES ON FOLLOWING PAGES]

                                       4


      IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent
have caused this Second Amendment Limited Waiver and Consent to be duly executed
by their respective duly authorized officers as of the day and year first above
written.

                             EMS TECHNOLOGIES, INC.

                             By:_______________________________________________
                                Name:
                                Title:

                             SUNTRUST BANK, in its capacities as a Lender,
                             Swingline Lender and as Administrative Agent

                             By:_______________________________________________
                                Name:
                                Title:

                             BANK OF AMERICA, NATIONAL ASSOCIATION,
                             in its capacity as a Lender

                             By:_______________________________________________
                                Name:
                                Title:

                             GENERAL ELECTRIC CAPITAL CORPORATION,
                             in its capacity as a Lender

                             By:_______________________________________________
                                Name:
                                Title:



                REAFFIRMATION OF OBLIGATIONS UNDER LOAN DOCUMENTS

      Each of the undersigned Subsidiary Loan Parties hereby reaffirms its
continuing obligations owing to the Administrative Agent and each Lender under
the Loan Documents to which such Person is a party and agrees that the foregoing
Second Amendment, Limited Waiver and Consent shall not in any way affect the
validity and enforceability of any such Loan Document, or reduce, impair or
discharge the obligations of such Person thereunder.

      This reaffirmation shall be construed in accordance with and be governed
by the laws (without giving effect to the conflict of law principles thereof) of
the State of Georgia.

      IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Reaffirmation of Obligations under Loan Documents as of August
10, 2005.

                             EMS INVESTMENT HOLDINGS, INC.

                             By:  _____________________________________________

                                  Name:  ______________________________________

                                  Title: ______________________________________


                             LXE INC.

                             By:  _____________________________________________

                                  Name:  ______________________________________

                                  Title: ______________________________________

EX-4.18

                                                                    EXHIBIT 4.18

             SECOND AMENDMENT TO CANADIAN REVOLVING CREDIT AGREEMENT

      THIS SECOND AMENDMENT TO CANADIAN REVOLVING CREDIT AGREEMENT dated as of
June 24, 2005 (this "AMENDMENT") by and among EMS TECHNOLOGIES CANADA, LTD., a
corporation incorporated under the laws of Canada (the "BORROWER"), EMS
TECHNOLOGIES, INC., a Georgia corporation (the "PARENT"), the Lenders listed on
the signature pages hereof and BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA
BRANCH), as Canadian Administrative Agent (the "AGENT").

      WHEREAS, the Borrower, EMS, the Lenders and the Agent are parties to that
certain Canadian Revolving Credit Agreement dated as of December 10, 2004, as
amended by an amending agreement dated as of February 11, 2005 (the "CREDIT
AGREEMENT"); and

      WHEREAS, the Borrower, the Lenders and the Agent desire to amend the
Credit Agreement in certain respects on the terms and conditions contained
herein;

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:

      Section 1. Amendments to Definitions in Credit Agreement.

Section 1.1 of the Credit Agreement is hereby amended by deleting the defined
term "LETTER OF CREDIT", and substituting in lieu thereof the following:

            "`LETTER OF CREDIT' shall mean any standby letter of credit or
      documentary letter of credit issued pursuant to Section 2.22 by the
      Issuing Bank for the account of the Borrower pursuant to the LC
      Commitment."

      Section 2. Amendments to Letter of Credit Provision Terms.

      (a) The Credit Agreement is hereby amended by deleting Section 2.22(a)
thereof in its entirety and substituting the following therefor: "

            "(a) During the Availability Period, the Issuing Bank, in reliance
            upon the agreements of the other Lenders pursuant to Section
            2.22(d), agrees to issue, at the request of the Borrower, Letters of
            Credit for the account of the Borrower on the terms and conditions
            hereinafter set forth; provided, that (i) each Letter of Credit
            shall be a standby letter of credit or a documentary letter of
            credit which shall expire, in the case of a standby letter of credit
            no later than the date that is three years (or such later date
            agreed by the Issuing Bank) after the date of issuance of such
            Letter of Credit (or in the case of any renewal or extension
            thereof, one year after such renewal or extension), or in the case
            of a documentary letter of credit 180 days (or such later date
            agreed by the Issuing Bank) after the issuance of such Letter of
            Credit, provided that if, in either case, the date of expiry is a
            date that is beyond five Business Days prior to the Commitment
            Termination



                                     - 2 -

            Date, the provisions of Section 2.22(g) shall apply; (ii) each
            Letter of Credit shall be in such currencies as the Issuing Lender
            will from time to time permit in a stated amount of at least the
            Canadian Dollar Equivalent of $50,000 (or such other amounts as
            agreed with the Issuing Bank); and (iii) the Borrower may not
            request any Letter of Credit, if, after giving effect to such
            issuance (A) the aggregate LC Exposure would exceed the LC
            Commitment or (B) thereafter the aggregate LC Exposure, plus the
            aggregate outstanding Swingline Loans, plus the aggregate
            outstanding Revolving Loans of all Lenders would exceed
            U.S.$32,500,000. Upon the issuance of each Letter of Credit, each
            Lender shall be deemed to, and hereby irrevocably and
            unconditionally agrees to, purchase from the Issuing Bank without
            recourse a participation in such Letter of Credit equal to such
            Lender's Pro Rata Share of the aggregate amount available to be
            drawn under such Letter of Credit. Each issuance of a Letter of
            Credit shall be deemed to utilize the Revolving Commitment of each
            Lender by an amount equal to the amount of such participation."

      (b) The Credit Agreement is hereby amended by deleting Section 2.22(g)
thereof in its entirety and substituting the following therefor:

            "(g) If either (i) any Event of Default shall occur and be
            continuing, on the Business Day that the Borrower receives notice
            from the Funding Agent or the Required Lenders demanding the deposit
            of cash collateral pursuant to this paragraph, or (ii) if Letters of
            Credit have been issued pursuant to Section 2.22(a) with expiry
            dates beyond five Business days prior to the Commitment Termination
            Date, then not later than 30 days prior to the Commitment
            Termination Date, the Borrower shall deposit in an account with the
            Funding Agent, in the name of the Funding Agent and for the benefit
            of the Lenders, an amount in cash equal to 105% of the LC Exposure
            as of such date plus any accrued and unpaid interest thereon;
            provided, that the obligation to deposit such cash collateral shall
            become effective immediately, and such deposit shall become
            immediately due and payable, without demand or notice of any kind,
            upon the occurrence of any Event of Default with respect to the
            Borrower described in subsection (g) or (h) of Section 8.1. Such
            deposit shall be held by the Funding Agent as collateral in an
            interest-bearing account (which account shall be chosen in the
            reasonable discretion of the Funding Agent and at the Borrower's
            risk and expense) for the payment and performance of the obligations
            of the Borrower under this Agreement. The Funding Agent shall have
            exclusive dominion and control, including the exclusive right of
            withdrawal, over such account. Interest and profits on such
            investments shall accumulate in such account. Moneys in such account
            shall be applied by the Funding Agent to reimburse the Issuing Bank
            for LC Disbursements for which it had not been reimbursed and to the
            extent not so applied, shall be held for the satisfaction of the
            reimbursement obligations of the Borrower for the LC Exposure at
            such time or, if the maturity of the Loans has been accelerated,
            with the consent of the Required Lenders, be applied to satisfy
            other obligations of the Borrower under this Agreement. If the
            Borrower is required to provide an amount of cash collateral
            hereunder as a result of the occurrence of an Event of Default, such
            amount (to the extent not so applied as



                                     - 3 -

            aforesaid) shall be returned to the Borrower within three Business
            Days after all Events of Default have been cured or waived."

      (c) The Credit Agreement is hereby amended by adding the following
provision as a new Section 2.22(j):

            "(j) The Issuing Bank shall not be under any obligation to issue any
            Letter of Credit if any order, judgment or decree of any
            Governmental Authority or arbitrator shall by its terms purport to
            enjoin or restrain the Issuing Bank from issuing such Letter of
            Credit, or any Applicable Law or any request or directive (whether
            or not having the force of law) from any Governmental Authority with
            jurisdiction over the Issuing Bank shall prohibit, or request that
            the Issuing Bank refrain from, the issuance of letters of credit
            generally or such Letter of Credit in particular or shall impose
            upon the Issuing Bank with respect to such Letter of Credit any
            restriction, reserve or capital requirement (for which the Issuing
            Bank is not otherwise compensated hereunder) not in effect on the
            Closing Date, or shall impose upon the Issuing Bank any unreimbursed
            loss, cost or expense which was not applicable on the Closing Date
            and which the Issuing Bank in good faith deems material to it, or if
            the issuance of such Letter of Credit would violate one or more
            policies of the Issuing Bank"

      (d) The Credit Agreement is hereby amended by deleting the last paragraph
of Section 2.22 thereof in its entirety and substituting the following therefor:

            Unless otherwise expressly agreed by the Issuing Bank and the
            Borrower when a Letter of Credit is issued and subject to applicable
            laws, performance under Letters of Credit by the Issuing Bank, its
            correspondents, and the beneficiaries thereof will be governed, in
            the case of standby letters of credit, by the rules of the
            "International Standby Practices 1998" (ISP98) (or such later
            revision as may be published by the Institute of International
            Banking Law & Practice on any date any Letter of Credit may be
            issued) and in the case of documentary letters of credit by the
            rules of the "ICC Uniform Customs and Practice for Documentary
            Credits UCP 500" and in each case to the extent not inconsistent
            therewith, the governing law of this Agreement set forth in Section
            10.5.

      Section 3. Effectiveness of Amendment. The effectiveness of this Amendment
is subject to the truth and accuracy of the representations set forth in Section
4 and Section 5 below and receipt by the Agent of each of the following, each of
which shall be in form and substance satisfactory to the Agent:

      (a) Counterparts of this Amendment duly executed by the Borrower, each
Guarantor, the Agent and the Lenders; and

      (b) Such other documents, agreements, instruments, certificates or other
confirmations as the Agent may request.



                                     - 4 -

      Section 4. Representations of the Borrower. The Borrower represents and
warrants to the Agent and the Lenders that:

      (a) Corporate Power and Authority. The Borrower has the corporate power
and authority to execute, deliver and perform the terms and provisions of the
Credit Agreement, as amended by this Amendment, and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Amendment. The Borrower has duly executed and delivered this Amendment, and
this Amendment constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

      (b) No Violation. The execution, delivery or performance by the Borrower,
and compliance by the Borrower with the terms and provisions of this Amendment
(i) will not contravene any provision of any law, statute, rule or regulation or
any order, writ, injunction or decree of any court or Governmental Authority,
(ii) will not conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will not violate any provision of the certificate or articles of
incorporation or by-laws (or equivalent organizational documents) of the
Borrower or any of its Subsidiaries.

      (c) Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made on or prior to the
date of the effectiveness of this Amendment and which remain in full force and
effect on such date), or exemption by, any Governmental Authority, is required
to authorize, or is required in connection with, (i) the execution, delivery and
performance of this Amendment by the Borrower or any Subsidiary Loan Party or
(ii) the legality, validity, binding effect or enforceability of this Amendment
against the Borrower or any Subsidiary Loan Party.

      (d) No Default. No Default or Event of Default now exists or will exist
immediately after giving effect to this Amendment.

      Section 5. Reaffirmation of Representations. The Borrower hereby repeats
and reaffirms all representations and warranties made by it to the Agent and the
Lenders in the Credit Agreement and the other Loan Documents to which it is a
party on and as of the date hereof (and after giving effect to this Amendment)
with the same force and effect as if such representations and warranties were
set forth in this Amendment in full (except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement and to the
extent that such representations and warranties relate expressly to an earlier
date).



                                     - 5 -

      Section 6. References to the Credit Agreement. Each reference to the
Credit Agreement in any of the Loan Documents (including the Credit Agreement)
shall be deemed to be a reference to the Credit Agreement, as amended by this
Amendment.

      Section 7. Benefits. This Amendment shall be binding upon and shall inure
to the benefit of the parties hereto and their respective permitted successors
and assigns.

      Section 8. Expenses. The Borrower agrees to reimburse the Lenders and the
Agent on demand for all reasonable costs and expenses (including, without
limitation, attorneys' fees) incurred by such parties in negotiating,
documenting and consummating this Amendment, the other documents referred to
herein, and the transactions contemplated hereby and thereby.

      Section 9. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN.

      Section 10. Effect/Loan Document. Except as expressly herein amended, the
terms and conditions of the Credit Agreement and the other Loan Documents shall
remain in full force and effect. This Amendment shall be deemed to be a "Loan
Document" for all purposes under the Credit Agreement. The amendments herein
will apply to all currently issued and outstanding Letters of Credit, including
any renewals or extensions thereof.

      Section 11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns.

      Section 12. Definitions. All capitalized terms not otherwise defined
herein are used herein with the respective definitions given them in the Credit
Agreement.

                         [SIGNATURES ON FOLLOWING PAGES]



      IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to Canadian Revolving Credit Agreement to be executed as of the date first above
written.

                                      EMS TECHNOLOGIES CANADA, LTD.

                                      By: ____________________________________
                                           Name:
                                           Title:

                                      EMS TECHNOLOGIES, INC.

                                      By: ____________________________________
                                           Name:
                                           Title:

                                      BANK OF AMERICA, NATIONAL
                                      ASSOCIATION, CANADA BRANCH, as
                                      Canadian Administrative Agent, as Issuing
                                      Bank, as Swingline Lender as a Lender

                                      By: ____________________________________
                                           Name:
                                           Title:

                                      GE CANADA FINANCE HOLDING
                                      COMPANY, in its capacity as a Lender

                                      By: ____________________________________
                                           Name:
                                           Title:



The following entities hereby execute this Second Amendment to Canadian
Revolving Credit Agreement to indicate their consent thereto and to acknowledge
that the making and entering into of this Canadian Revolving Second Amendment to
Credit Agreement shall not terminate, limit or otherwise impair or affect any of
their respective obligations to the Agent, the Issuing Bank and/or the Lenders
under the Loan Documents.

EMS INVESTMENT HOLDINGS, INC.

By:  _________________________________

    Name:
    Title:

LXE INC.

By:  _________________________________

    Name:
    Title:

990834 ONTARIO INC.

By: __________________________________

    Name:
    Title:

EX-4.19

                                                                    EXHIBIT 4.19

                   THIRD AMENDMENT, LIMITED WAIVER AND CONSENT

      THIS THIRD AMENDMENT, LIMITED WAIVER AND CONSENT is dated as of August 10,
2005 (this "AMENDMENT") by and among EMS TECHNOLOGIES CANADA, LTD., a
corporation incorporated under the laws of Canada (the "BORROWER"), EMS
TECHNOLOGIES, INC., a Georgia corporation (the "PARENT"), the Lenders listed on
the signature pages hereof and BANK OF AMERICA, NATIONAL ASSOCIATION (CANADA
BRANCH), as Canadian Administrative Agent (the "AGENT").

      WHEREAS, the Borrower, the Parent, the Lenders and the Agent are parties
to that certain Canadian Revolving Credit Agreement dated as of December 10,
2004, as amended by a first amending agreement dated as of February 11, 2005 and
a second amending agreement dated June 24, 2005 (the "CREDIT AGREEMENT");

      AND WHEREAS, the Borrower, the Parent, the Lenders and the Agent desire to
amend the Credit Agreement in certain respects on the terms and conditions
contained herein;

      AND WHEREAS, the Borrower has informed the Agent and the Lenders that the
Parent has failed or will fail to comply with the financial covenants contained
in Sections 6.1 and 6.2 of the Credit Agreement for the fiscal quarter of the
Parent ending on or about June 30, 2005, resulting in an Event of Default under
Sections 8.1(d) and 8.1(n) of the Credit Agreement (the "Specified Defaults"),
which failure is solely a consequence of the write-down in the book value of the
assets being sold in connection with the Sale and Prepayment Event (the "Asset
Write-Down");

      AND WHEREAS, the Borrower has informed the Agent and the Lenders that the
Parent intends to sell the assets of the business currently conducted by the
Borrower's EMS Satellite Networks division from leased facilities located in
Montreal, Quebec (the "SATNET ASSETS") and has requested that the Agent and the
Lenders consent to the sale of the SatNet Assets as required under Section 7.6
of the Credit Agreement;

      AND WHEREAS, the Borrower has requested that the Agent and the Lenders
waive the Specified Defaults, and the effects thereof, under the Credit
Agreement and consent to the sale of the SatNet Assets;

      NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:

      Section 1. Defined Terms

Capitalized terms which are used and not defined herein shall have the meanings
ascribed to them in the Credit Agreement.

      Section 2. Amendments to Definitions in Credit Agreement.

      (a) Section 1.1 of the Credit Agreement is hereby amended by adding the
following defined term after the defined term "SALE AND PREPAYMENT EVENT":



                                     - 2 -

      ""SATNET ASSETS" shall mean the assets of the business currently conducted
      by the Borrower's EMS Satellite Networks division from leased facilities
      located in Montreal, Quebec;"

      (b) Section 1.1 of the Credit Agreement is hereby amended by adding the
following sentence at the end of the defined term "CONSOLIDATED NET INCOME":

      "Notwithstanding the foregoing, any net income (or loss) attributable to
      the sale of the SatNet Assets and/or the assets giving rise to the Sale
      and Prepayment Event that are otherwise included in Consolidated Net
      Income during the period of determination shall be excluded if such assets
      are sold during such period."

      Section 3. Limited Waiver

At the request of the Borrower, but subject to the satisfaction of the
conditions precedent set forth in Section 5 below, the Lenders hereby waive the
Specified Defaults arising solely by virtue of the Asset Write-Down; provided
that the Asset Write-Down does not exceed $12,000,000. The Borrower acknowledges
and agrees that the waiver contained in the foregoing sentence shall not waive
(or be deemed to be or constitute a waiver of) any other covenant, term or
provision in the Credit Agreement or hinder, restrict or otherwise modify the
rights and remedies of the Lenders and the Agent following the occurrence of any
other present or future Default or Event of Default (whether or not related to
the Specified Defaults) under the Credit Agreement or any other Loan Document.

      Section 4. Consent.

At the request of the Borrower, but subject to the satisfaction of the
conditions precedent set forth in Section 5 below, the Lenders hereby consent to
the sale of the SatNet Assets; provided, that (i) the Parent receives cash
consideration in an amount not less than $16,000,000, (ii) the Net Proceeds of
the sale of the SatNet Assets are applied in accordance with Section 2.11 of the
Credit Agreement, and (iii) such sale shall be completed by December 31, 2005.
The Borrower acknowledges and agrees that the consent contained in the foregoing
sentence shall not waive or amend (or be deemed to be or constitute an amendment
to or waiver of) any other covenant, term or provision in the Credit Agreement
or hinder, restrict or otherwise modify the rights and remedies of the Lenders
and the Agent following the occurrence of any present or future Default or Event
of Default (whether or not related to the sale of the SatNet Assets) under the
Credit Agreement or any other Loan Document.

      Section 5. Effectiveness of Amendment. The effectiveness of this Amendment
is subject to the truth and accuracy of the representations set forth in Section
6 and Section 7 below and receipt by the Agent of each of the following, each of
which shall be in form and substance satisfactory to the Agent:

      (a) Counterparts of this Amendment duly executed by the Borrower, each
Guarantor, the Agent and the Required Lenders;



                                     - 3 -

      (b) A waiver substantially in the same form and content as this Amendment
executed by each of the parties to the U.S. Revolving Credit Agreement;

      (c) Payment of all fees, costs and expenses of the Agent and Lenders,
including the fees of Agent's counsel incurred through the date of this
Amendment; and

      (d) Such other documents, agreements, instruments, certificates or other
confirmations as the Agent may reasonably request.

      Section 6. Representations of the Borrower. The Borrower represents and
warrants to the Agent and the Lenders that:

      (a) Corporate Power and Authority. The Borrower has the corporate power
and authority to execute, deliver and perform the terms and provisions of the
Credit Agreement, as amended by this Amendment, and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
this Amendment. The Borrower has duly executed and delivered this Amendment, and
this Amendment constitutes its legal, valid and binding obligation enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).

      (b) No Violation. The execution, delivery or performance by the Borrower,
and compliance by the Borrower with the terms and provisions of this Amendment
(i) will not contravene any provision of any law, statute, rule or regulation or
any order, writ, injunction or decree of any court or Governmental Authority,
(ii) will not conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the Borrower or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will not violate any provision of the certificate or articles of
incorporation or by-laws (or equivalent organizational documents) of the
Borrower or any of its Subsidiaries.

      (c) Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made on or prior to the
date of the effectiveness of this Amendment and which remain in full force and
effect on such date), or exemption by, any Governmental Authority, is required
to authorize, or is required in connection with, (i) the execution, delivery and
performance of this Amendment by the Borrower or any Guarantor or (ii) the
legality, validity, binding effect or enforceability of this Amendment against
the Borrower or any Guarantor.

      (d) No Default. No Default or Event of Default now exists or will exist
immediately after giving effect to this Amendment.

      Section 7. Reaffirmation of Representations. The Borrower hereby repeats
and reaffirms all representations and warranties made by it to the Agent and the
Lenders in the Credit



                                     - 4 -

Agreement and the other Loan Documents to which it is a party on and as of the
date hereof (and after giving effect to this Amendment) with the same force and
effect as if such representations and warranties were set forth in this
Amendment in full (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and to the extent that such
representations and warranties relate expressly to an earlier date).

      Section 8. References to the Credit Agreement. Each reference to the
Credit Agreement in any of the Loan Documents (including the Credit Agreement)
shall be deemed to be a reference to the Credit Agreement, as amended by this
Amendment.

      Section 9. Benefits. This Amendment shall be binding upon and shall inure
to the benefit of the parties hereto and their respective permitted successors
and assigns.

      Section 10. Expenses. The Borrower agrees to reimburse the Lenders and the
Agent on demand for all reasonable costs and expenses (including, without
limitation, attorneys' fees) incurred by such parties in negotiating,
documenting and consummating this Amendment, the other documents referred to
herein, and the transactions contemplated hereby and thereby.

      Section 11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE PROVINCE OF ONTARIO AND THE LAWS OF CANADA APPLICABLE THEREIN.

      Section 12. Effect/Loan Document. Except as expressly herein amended, the
terms and conditions of the Credit Agreement and the other Loan Documents shall
remain in full force and effect. This Amendment shall be deemed to be a "Loan
Document" for all purposes under the Credit Agreement. The amendments herein
will apply to all currently issued and outstanding Letters of Credit, including
any renewals or extensions thereof.

      Section 13. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns.

                         [SIGNATURES ON FOLLOWING PAGES]



      IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment,
Limited Waiver and Consent to be executed as of the date first above written.

                                      EMS TECHNOLOGIES CANADA, LTD.

                                      By:  __________________________________
                                             Name:
                                             Title:

                                      EMS TECHNOLOGIES, INC.

                                      By:  __________________________________
                                             Name:
                                             Title:

                                      BANK OF AMERICA, NATIONAL ASSOCIATION,
                                      CANADA BRANCH, as Canadian Administrative
                                      Agent, as Issuing Bank, as Swingline
                                      Lender as a Lender

                                      By:  __________________________________
                                             Name:
                                             Title:

                                      GE CANADA FINANCE HOLDING COMPANY, in its
                                      capacity as a Lender

                                      By:  __________________________________
                                             Name:
                                             Title:



The following entities hereby execute this Third Amendment, Limited Waiver and
Consent to indicate their consent thereto and to acknowledge that the making and
entering into of this Third Amendment, Limited Waiver and Consent shall not
terminate, limit or otherwise impair or affect any of their respective
obligations to the Agent, the Issuing Bank and/or the Lenders under the Loan
Documents.

EMS INVESTMENT HOLDINGS, INC.

By:  ________________________________
    Name:
    Title:

LXE INC.

By:  ________________________________
    Name:
    Title:

990834 ONTARIO INC.

By:  ________________________________
    Name:
    Title:

EX-4.20

                                                                    EXHIBIT 4.20

                         CONSENT AND AMENDMENT AGREEMENT

      THIS CONSENT AND AMENDMENT AGREEMENT dated as of February ____, 2006 (this
"Consent"), by and among EMS TECHNOLOGIES CANADA, LTD., a Canadian corporation
(the "Borrower"), EMS TECHNOLOGIES, INC., a Georgia corporation
(the "Parent"), the Lenders listed on the signature page hereof and BANK OF
AMERICA, NATIONAL ASSOCIATION (CANADA BRANCH), in its capacities as the Funding
Agent and the Canadian Agent (the "Agent").

                              W I T N E S S E T H:

      WHEREAS, the Borrower, the Parent, the Lenders and the Agent entered into
that certain Canadian Revolving Credit Agreement dated as of December 10, 2004,
as amended by amending agreements dated as of February 11, 2005, June 24, 2005
and August 10, 2005 (as so amended, the "Credit Agreement");

      WHEREAS, the Borrower has informed the Agent and the Lenders that the
Borrower intends to sell the business currently conducted by the Borrower's EMS
Satellite Networks division from leased facilities located in Montreal, Quebec
(the "SatNet Assets") and has requested that the Agent and the Lenders consent
to the sale of the SatNet Assets as required under Section 7.6 of the Credit
Agreement; and

      WHEREAS, the Agent and the Lenders are willing to provide their consent to
the sale of the SatNet Assets, but only upon the terms and conditions of this
Consent.

      NOW, THEREFORE, for and in consideration of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, the Lenders, the Agent and the Borrower hereby agree as
follows:

1. DEFINED TERMS. Capitalized terms which are used herein without definition and
which are defined in the Credit Agreement shall have the same meanings ascribed
to them as in the Credit Agreement.

2. CONSENT. At the request of the Borrower, but subject to the satisfaction of
the conditions precedent set forth in Section 4 below, the Lenders hereby
consent to the sale of the SatNet Assets; provided, that (i) the Parent, the
Borrower and/or any Subsidiary of either of them receives, on the closing of
such sale, cash consideration in an amount not less than U.S.$6,400,000; (ii)
the Parent, the Borrower and/or any Subsidiary of either of them receives a
promissory note in the principal amount of not less than U.S.$2,300,000 (the
"Note"); (iii) the original of the Note, together with any required
endorsements, is pledged in accordance with the terms of the Collateral
Documents or the U.S. Loan Documents, as applicable; and (iv) (x) the Aggregate
Revolving Commitments under the Credit Agreement are permanently reduced by 25%
of the Net Proceeds of the sale of the SatNet Assets and thereafter the Borrower
repays the amount, if any, that the aggregate of all outstanding Borrowings
together with the face amount of all issued Letters of Credit then exceeds the
Aggregate Revolving Commitments (as so reduced); and (y) 25% of such Net
Proceeds are applied in



                                       -2-

accordance with Section 2.14 of the U.S. Revolving Credit Agreement and at such
time the Revolving Commitment under the U.S. Revolving Credit Agreement is
permanently reduced by such amount. The Borrower acknowledges and agrees that
the Net Proceeds of the Note, as and when received by the Borrower, will be
applied in the same manner (including a permanent reduction to the Commitment as
described in clause (iv) immediately above. The Borrower acknowledges and agrees
that the consent contained in the foregoing sentence shall not waive or amend
(or be deemed to be or constitute an amendment to or waiver of) any other
covenant, term or provision in the Credit Agreement or hinder, restrict or
otherwise modify the rights and remedies of the Lenders and the Agent following
the occurrence of any present or future Default or Event of Default (whether or
not related to the sale of the SatNet Assets) under the Credit Agreement or any
other Loan Document.

3. AMENDMENT TO CREDIT AGREEMENT. Section 7.13(a) of the Credit Agreement is
hereby amended by (i) deleting the words "jurisdictions identified in Schedule
II" in the fifth and sixth lines thereof and replacing them with the words "the
Province of Ontario"; (ii) adding the words "will not" before the word "store"
in the fifth line thereof; and (iii) deleting the words "one jurisdiction" in
the sixth line thereof and replacing them with the words "the Province of
Ontario".

4. EFFECTIVENESS OF CONSENT. The effectiveness of this Consent is subject to the
truth and accuracy of the representations set forth in Sections 5 and 6 below
and satisfaction of each of the following conditions:

      (a)   Receipt by the Agent of counterparts of this Consent duly executed
            by the Borrower, each Guarantor, the Agent and the Lenders
            constituting the Required Lenders;

      (b)   Receipt by the Agent of a consent substantially in the same form and
            content as this Consent executed by each of the parties to the U.S.
            Revolving Credit Agreement;

      (c)   Payment of all fees, costs and expenses of the Agent and Lenders,
            including the fees of Agent's counsel incurred through the date of
            this Consent; and

      (d)   Such other documents, agreements, instruments, certificates or other
            confirmations as the Agent may reasonably request.

5. REPRESENTATIONS OF THE BORROWER. The Borrower represents and warrants to the
Agent and the Lenders that:

      (a) Corporate Power and Authority. The execution, delivery and performance
of this Consent and the transactions contemplated hereby (i) are within the
corporate authority of the Borrower, (ii) have been duly authorized by all
necessary corporate proceedings, if any, (iii) do not and will not violate any
provision of law, statute, rule or regulation to which the Borrower is subject
or any judgment, order, writ, injunction, license or permit applicable to the
Borrower and (iv) does not violate or breach any provision of the organizational
documents of, or any agreement or other instrument binding upon, the Borrower or
its Subsidiaries. The Loan Documents constitute the legal, valid and binding
obligations of each of the Loan Parties who is a party thereto, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws



                                       -3-

generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).

      (b) Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except for those that have otherwise been obtained or made on or prior to the
date of the effectiveness of this Consent and which remain in full force and
effect on such date), or exemption by, any Governmental Authority, is required
to authorize, or is required in connection with, the execution, delivery and
performance of this Consent by the Borrower.

      (c) No Default. No Default or Event of Default will exist immediately
after giving effect to this Consent.

6. REAFFIRMATION OF REPRESENTATIONS. Without limiting Section 5 hereof, the
Borrower hereby repeats and reaffirms all representations and warranties made by
the Borrower to the Agent and the Lenders in the Credit Agreement and the other
Loan Documents to which it is a party on and as of the date hereof (after giving
effect to this Consent) with the same force and effect as if such
representations and warranties were set forth in this Consent in full (except to
the extent that such representations and warranties relate expressly to an
earlier date).

7. GOVERNING LAW. THIS CONSENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAW OF THE PROVINCE OF ONTARIO.

8. EFFECT. Except as expressly provided for herein, the terms and conditions of
the Credit Agreement and the other Loan Documents shall remain in full force and
effect.

9. COUNTERPARTS. This Consent may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, and all counterparts,
taken together, shall constitute but one and the same document.

10. ENTIRE AGREEMENT. THIS CONSENT CONSTITUTES THE ENTIRE AGREEMENT AMONG THE
PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL
PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS,
WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

11. RELEASE OF SECURITY. The Lenders hereby confirm that contemporaneously with
the sale of the SatNet Assets consented to hereby, the Agent will be releasing
all hypothecs and other security interests held by the Agent for the benefit of
the Lenders in the assets of the Borrower located in the Province of Quebec. The
Agent shall, and the Lenders authorize and direct the Agent to, from time to
time, execute and deliver, at the cost of the Borrower, all such discharges,
releases and other documents as the Borrower may reasonably request to give
effect to such releases.



                                       -4-
      IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have caused
this Consent and Amendment Agreement to be duly executed by their respective
duly authorized officers as of the day and year first above written.

                            EMS TECHNOLOGIES CANADA, LTD.

                            By: __________________________________
                                  Name:
                                  Title:

                            EMS TECHNOLOGIES, INC.

                            By: __________________________________
                                  Name:
                                  Title:

                            BANK OF AMERICA, NATIONAL ASSOCIATION,
                            (CANADA BRANCH) in its capacities as Funding
                            Agent, Canadian Administrative Agent, Issuing Bank,
                            Swingline Lender and Lender

                            By: __________________________________
                                  Name:
                                  Title:

                            GE CANADA FINANCE HOLDING COMPANY, in
                            its capacity as a Lender

                            By: __________________________________
                                  Name:
                                  Title:



                REAFFIRMATION OF OBLIGATIONS UNDER LOAN DOCUMENTS

      Each of the undersigned hereby reaffirms its continuing obligations owing
to the Agent and each Lender under the Loan Documents to which such Person is a
party and agrees that the foregoing Consent shall not in any way affect the
validity and enforceability of any such Loan Document, or reduce, impair or
discharge the obligations of such Person thereunder.

      This reaffirmation shall be construed in accordance with and be governed
by the laws (without giving effect to the conflict of law principles thereof) of
the Province of Ontario.

      IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Reaffirmation of Obligations under Loan Documents as of February
____, 2006.

                                       EMS TECHNOLOGIES INC.

                                       By:    _________________________________
                                              Name:  __________________________
                                              Title: __________________________

                                       EMS INVESTMENT HOLDINGS, INC.

                                       By:    _________________________________
                                              Name:  __________________________
                                              Title: __________________________

                                       LXE INC.

                                       By:    _________________________________
                                              Name:  __________________________
                                              Title: __________________________



                                     - 2 -

                                       990834 ONTARIO INC.

                                       By:    ________________________________
                                              Name:  __________________________
                                              Title: __________________________

EX-10.1

                                                                    EXHIBIT 10.1

January 17, 2000

Mr. Alfred G. Hansen
4609 Chattahoochee Crossing
Marietta, GA 30067

Dear Al:

EMS Technologies, Inc. is pleased that you have accepted the position of
President and Chief Operating Officer, at an initial salary of $16,667.00 per
month. This letter sets out the compensation package for this position as
recommended by the Compensation Committee and approved by the Board of Directors
on January 7, 2000.

Initial Stock Option Grant: 200,000 shares of EMS Technologies, Inc. Common
Stock, first exercisable after 6 months, remaining exercisable for 6 years after
date of employment, at 11 7/8, which is the closing market price of the common
stock on January 7, 2000, and otherwise on the terms and conditions of options
granted to executive officers under the 1997 Stock Incentive Plan.

Future Option Grants: To be determined annually as the sum of: (1) options under
the Company's normal procedure for executive long-term incentive compensation,
(2) the number of options having a Black-Scholes value equal to the amount by
which base salary is less than that number determined under the Company's normal
procedures for executive compensation, and (3) the number of options having a
Black-Scholes value equal to the cash bonus that would otherwise be paid under
the Executive Annual Incentive Compensation Plan.

Executive Annual Incentive Compensation Plan: You will not participate in the
Executive Annual Incentive Plan except as described under 'Future Options
Grants' as outlined above.

Benefit Programs: Enclosed is a summary of our benefit plans (medical, dental,
life insurance, etc.). You will also be eligible for a supplemental medical
insurance plan provided to Company Officers, which will pay up to $5,000 per
year of expenses not covered by the standard company plan. In particular, items
relating to dental and vision are covered by the supplemental plan. This
information can be covered in more detail at your convenience.

Vacation:  You will be entitled to four weeks vacation per year.



Automobiles: You are eligible to participate in the company's Automobile program
as generally available to executive officers, subject to your election to
participate.

Golf Club: You are eligible to participate in this program as generally
available to executive officers, subject to your election to participate.

Page 2
Mr. Alfred G. Hansen
January 17, 2000

Umbrella Liability Insurance: You are eligible to participate in this program as
generally available to executive officers, subject to your election to
participate.

As an employee, you should sign and return the enclosed employee agreement
dealing with inventions and non-disclosure, as well as the standard Terms of
Employment form, which is also enclosed. Our employment will be governed by and
determined in accordance with the laws of the State of Georgia.

Please indicate your acceptance of these arrangements by signing, dating, and
returning one of the enclosed copies of this letter to my attention in the Human
Resources Department. The other copy is for your own records.

I look forward to working with you at EMS Technologies, Inc. If you have any
questions, please feel free to call me at (770) 263-9200, ext. 4306.

Sincerely,
EMS Technologies, Inc.

Michael R. Robertson
Director, Human Resources

Enclosures

Accepted by:________________________________  Date: _____________

Start Date:  January 4, 2000

EX-10.10

                                                                   EXHIBIT 10.10


                                                         CONFIDENTIAL MEMORANDUM
                                                                  AND
                                                       1997 STOCK INCENTIVE PLAN
                                                          STOCK OPTION AGREEMENT
TO:

FROM:             ALFRED G. HANSEN, CEO

SUBJECT:          STOCK OPTION AWARD            DATE:

I am pleased that you have been selected by the Compensation Committee of the
Board of Directors to receive an option for shares of the common stock of EMS
Technologies, Inc. When signed by you and validated by the initials of the
Company's Secretary, this Memorandum will be the Agreement evidencing your
option.

As was true in 2005, the options have a six-year expiration date, and vest at a
rate of 25% per year over a four-year period. This year, for the first time,
vesting at each of the four vesting dates is also subject to the performance
condition that your division (or the company as a whole in the case of corporate
personnel) achieves at least 80% of its target earnings for the calendar year
preceding each vesting date. The target earnings will be determined at the
beginning of each year as part of the annual plan as approved and recorded for
compensation purposes by the Compensation Committee of the Board of Directors.
In the event you change divisions during any year, the performance condition
will be based on the division with which you are employed for the greatest
amount of time during the year.

The new performance condition reflects an important trend in compensation
philosophy, and growing investor insistence that management rewards be based on
the delivery of performance that enhances shareholder value.

Your Option has the following terms:
Grant Date:                                         Total Shares:

Expiration Date:           <>      Exercise Price:

1st Date for Exercise:                              Number of shares:         *
2nd Date for Exercise:                              Number of shares:         *
3rd Date for Exercise:                              Number of shares:         *
4th Date for Exercise:                              Number of shares:         *

                *Subject to achievement of performance conditions

Your option is also subject to the other terms specified in the Terms of Officer
Stock Option, Form 1/25/01. This document is being or has been provided to you
by e-mail. The Plan and the Prospectus for the 1997 plan that describes our
options and outlines information, such as tax consequences, related to
exercising your option, are each available by going to our intranet, EMSTonline.
Select the Document Library tab, then select the folder named Documents. Click
on Human Resources and then on Stock Plans.

This option grant was recommended by the CEO based on your current and potential
contributions to our Company's overall success. It is a long-term incentive, and
for this reason requires continued employment to become exercisable, and to
remain exercisable for its full six year life. It is our hope and goal that, as
a result of our combined efforts over these six years, and the achievement of
our performance objectives, EMS stock will become worth substantially more than
the exercise price. In this way, the option program allows top performers to
share in the Company's long-term growth and success.

_______, thank you for your contributions to EMS Technologies. Your valued
contributions will ensure the continuous progress of EMS, and these stock
options allow you to share in the Company's success. I look forward to
continuing our work together to achieve our mutual success.

                 ***********************************************

I acknowledge and accept this Stock Option Agreement including the terms and
conditions set forth in Terms of Officer Stock Option, Form 1/25/01.
                                                                       Validated
_____________________        ________________, 2006                    --------
Signature                                                              Secretary

                                                                 EXHIBIT 10.10 b

                             EMS TECHNOLOGIES, INC.

                            1997 STOCK INCENTIVE PLAN
                          TERMS OF OFFICER STOCK OPTION
                                  FORM 1/25/01

      THIS TERMS OF OFFICER STOCK OPTION sets forth certain terms of, and is
included as part of, each Stock Option Agreement (the "Agreement") that
specifically refers to this Form and that has been issued from time to time by
EMS TECHNOLOGIES, INC., a Georgia corporation (hereinafter referred to as the
"Corporation") to certain of its employees (herein, "Employee") who are also
officers of the Corporation.

                               W I T N E S S E T H

      WHEREAS, the Board of Directors (the "Board") of the Corporation has
adopted a stock incentive plan for the Corporation's and its subsidiary
corporations' officers and employees, known as the "EMS Technologies, Inc. 1997
Stock Incentive Plan" (hereinafter referred to as the "Plan");

      WHEREAS, the Compensation Committee (the "Committee") is authorized to
grant to persons who are Officers (as defined in the Plan) options enabling them
to purchase shares of the Corporation's common stock as allocated by the
Committee;

      WHEREAS, the Committee has determined that the Employee is eligible to
participate in the Plan, and that it is in the best interests of the Corporation
that the Employee, through such participation, be provided with additional
incentive to achieve the Company's objectives; and

      WHEREAS, as an employment incentive and to encourage stock ownership, the
Committee has granted the Employee an option (the "Option") to purchase the
number of shares of the Corporation's common stock set forth in the Agreement.

      NOW, THEREFORE, the following terms are included and incorporated in the
Agreement:

      1. Incorporation of Plan. The Option has been granted pursuant to the
provisions of the Plan, which has been provided or made available to the
Employee, and the terms of and definitions set forth in the Plan are
incorporated by reference into the Agreement and made a part thereof.

      2. Grant of Option. Subject to the terms and conditions stated herein, the
Agreement, when signed by the Employee and validated by the Corporation's
Secretary, evidences the grant by the Corporation to the Employee, not in lieu
of salary or other compensation, of the right and option, which is not an ISO,
to purchase all or any part of an aggregate of the Number of Shares of the
Corporation's $.10 par value common stock (the "Common Stock"), specified in the
Agreement, beginning on the First Date for Exercise specified in the Agreement.

      The Option shall expire and is not exercisable after 5:00 p.m., Atlanta
time, on the Expiration Date specified in the Agreement (the "Expiration Date"),
or such other date as determined pursuant to Section 8, 9 or 10.

      Notwithstanding the beginning date or dates for exercise set forth in the
second preceding paragraph, but subject to the provisions of the preceding
paragraph with respect to expiration of the Option, the Option may be exercised
as to all or any portion of the full number of shares subject thereto if: (a) a
tender offer or exchange offer has been made for shares of the Common Stock,
other than one made by the Corporation, provided that the corporation, person or
other entity making such offer purchases or otherwise acquires shares of Common
Stock pursuant to such offer; or (b) any person or group (as such terms are
defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act")), becomes the holder of 50% or more of the outstanding shares of
Common Stock. If either of the events specified in this paragraph has occurred,
the Option shall be fully

                                       1


exercisable: (x) in the event of (a) above, during the period commencing on the
date the tender offer or exchange offer is commenced and ending on the date such
offer expires and is not extended; or (y) in the event of (b) above, during the
30-day period commencing on the date upon which the Corporation is provided a
copy of a Schedule 13D or amendment thereto, filed pursuant to Section 13(d) of
the Act and the rules and regulations promulgated thereunder, indicating that
any person or group has become the holder of 50% or more of the outstanding
shares of Common Stock. In the case of (a) above, if the corporation, person or
other entity making the offer does not purchase or otherwise acquire shares of
Common Stock pursuant to such offer, then the Employee's right under this
paragraph to exercise the Option shall terminate, the Employee and the
Corporation shall rescind any exercise of the Option pursuant to this paragraph,
and the Option shall be reinstated as if such exercise had not occurred.

      3. Purchase Price. The price per share to be paid by the Employee for the
shares subject to the Option shall be the Exercise Price specified in the
Agreement.

      4. Exercise Terms. Beginning on the date or dates specified in, and prior
to the expiration of the Option as provided in, Section 2, the Employee may
exercise the Option as to all such number of shares, or as to any part thereof,
at any time and from time to time during the remaining term of the Option;
provided that the Employee must exercise the Option for at least the lesser of
100 shares or the unexercised portion of the Option. In the event the Option is
not exercised with respect to all or any part of the shares subject to the
Option prior to its expiration, the shares with respect to which the Option was
not exercised shall no longer be subject to this Option.

      5. Option Non-Transferable. The Option and all rights thereunder are
neither assignable nor transferable by the Employee otherwise than by will or
under the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, and during the Employee's lifetime the Option is exercisable
only by him or her (or by his or her guardian or legal representative, should
one be appointed, or qualified transferee). More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as aforesaid), pledged or hypothecated in any way (whether
by operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof shall be null and void and without legal effect.

      6. Notice of Exercise of Option. The Option may be exercised by the
Employee, or by his or her administrator, executor, personal representative or
qualified transferee, by a written notice (in substantially the form of the
"Notice of Exercise" attached hereto as Annex A) signed by the Employee, or by
such administrator, executor, personal representative or qualified transferee,
and delivered or mailed to the Corporation at its principal office in Norcross,
Georgia, to the attention of the President, Treasurer or such other officer as
the Corporation may designate. Any such notice shall (a) specify the number of
shares of Common Stock which the Employee or such administrator, executor,
personal representative or qualified transferee, as the case may be, then elects
to purchase hereunder, and (b) be accompanied by (i) a certified or cashier's
check payable to the Corporation, or personal check acceptable to the
Corporation, in payment of the total price applicable to such shares as provided
herein, or (ii) (subject to any restrictions referred to in Annex A) shares of
Common Stock, owned by him or her and duly endorsed or accompanied by stock
transfer powers, or in lieu thereof, the form of Attestation of Share Ownership
attached as Annex B executed with respect to the number of such shares, having a
Fair Market Value equal to the total purchase price applicable to the shares
purchased hereunder, or (iii) such a check, and the number of such shares (or
attestation with respect thereto) whose Fair Market Value when added to the
amount of the check equals the total purchase price applicable to such shares
purchased under the Option. Such notice shall also be accompanied by such a
check or shares of Common Stock in payment of applicable withholding and
employment taxes, or the person exercising this Option shall authorize (by use
of Annex B or otherwise) the withholding of shares of Common Stock otherwise
issuable under this Option in payment of such taxes, all as set forth on Annex A
and subject to any restrictions referred to therein. Upon receipt of any such
notice and accompanying payment, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Employee or to such
administrator, executor, personal representative or qualified transferee, as the
case may be, stock certificates for the number of shares specified in such
notice registered in the name of the person exercising the Option.

                                       2


      7. Adjustment in Option. If, between the Date of Grant specified in the
Agreement and prior to the complete exercise of the Option, there shall be a
change in the outstanding Common Stock by reason of one or more stock splits,
stock dividends, combinations or exchanges of shares, recapitalizations or
similar capital adjustments, then the number, kind and purchase price of the
shares remaining subject to the Option shall be equitably adjusted in accordance
with the terms of the Plan, so that the proportionate interest in the
Corporation represented by the shares then subject to the Option shall be the
same as before the occurrence of such event.

      8. Termination of Employment. Except as set forth in Section 10, if the
Employee ceases to be employed as an employee of the Corporation or any of its
Subsidiaries (such event being hereinafter referred to as a "Termination" and
such corporation that employs the Employee from time to time as the "Employer"),
before the First Date for Exercise set forth in the Agreement, then the Option
shall forthwith terminate on the date of Termination and shall not thereafter be
or become exercisable.

      In the event of a Termination after the First Date for Exercise set forth
in the Agreement, which Termination is (i) voluntary on the part of the Employee
and with the written consent of the Employer, (ii) involuntary and without
cause, or (iii) the result of retirement at the normal retirement date, as
prescribed from time to time by the Employer, or at an earlier date expressly
approved by the Employer as an early retirement date for the Employee, the
Employee may exercise the Option at any time within a period ending at the
earlier of the Expiration Date or 5:00 p.m., Atlanta time, on the third
anniversary of such Termination, to the extent of the number of shares that were
purchasable thereunder at the date of Termination.

      In the event of a Termination that is either (i) for cause or (ii)
voluntary on the part of the Employee and not described in the preceding
paragraph, the Option, to the extent not theretofore exercised, shall forthwith
terminate and shall not thereafter be or become exercisable.

      The Option does not confer upon the Employee any right with respect to
continuance of employment by the Corporation or any of its Subsidiaries. The
Option shall not be affected by any change of employment, so long as the
Employee continues to be an employee of the Corporation or any such Subsidiary.
In the event the Employer is not the Corporation, and such Employer ceases to be
the Corporation's Subsidiary, as a result of a sale of stock or assets or other
change of corporate status, then in the discretion of the Committee (but subject
to Section 5.2 of the Plan regarding certain transactions affecting the
Corporation) either: (i) the Option shall remain in effect as if such sale or
other change of status had not occurred, for so long as Employee shall remain an
employee of the corporation that previously was such Subsidiary, or of any
successor or subsequent Parent of such corporation, or of any Subsidiary of
either such corporation or any such Parent or successor; or (ii) concurrent with
such sale or change of status, the Corporation shall redeem the Option at a
price equal to the number of shares then subject thereto (whether or not then
purchasable) multiplied by the excess (if any) of the then Fair Market Value of
each such share over the purchase price per share specified in Section 3 (as
adjusted pursuant to Section 7).

      9. Disabled Employee. In the event of a Termination because the Employee
becomes disabled, the Employee (or his or her personal representative) may
exercise the Option at any time within a period ending at the earlier of the
Expiration Date or 5:00 p.m., Atlanta time, on the first anniversary of such
Termination, to the extent of the number of shares that were purchasable
thereunder at the date of Termination.

      For the purposes of the foregoing paragraph the Employee shall be
considered "disabled" if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to last for a continuous period of not less than
twelve months.

      10. Death of Employee. In the event of the Employee's death while employed
by the Corporation or any of its Subsidiaries, or during a period in which the
Employee may exercise the Option notwithstanding an earlier Termination, the
persons described in Section 6 may exercise the Option at any time within a
period ending at the earlier of (i) 5:00 p.m., Atlanta time, on the third
anniversary of the Employee's death, or (ii) the Expiration Date, but in any
event ending not earlier than 5:00 p.m., Atlanta time, on the first anniversary
of the Employee's death. If the Employee was an employee of the Corporation or
one of its Subsidiaries at the time of

                                       3


the Employee's death, the Option may be so exercised to the extent of the full
number of shares subject thereto. If a Termination occurred prior to Employee's
death, the Option may be so exercised only to the extent of the number of shares
that were purchasable hereunder at the date of Termination.

      11. Competitive Activities. The Option is subject to Section 9.2 of the
Plan, which provides that if the Employee provides services to a competitor of
the Corporation or any of its Subsidiaries, whether as an employee, officer,
director, independent contractor, consultant, agent or otherwise, such services
being of a nature that can reasonably be expected to involve the skills and
experience used or developed by the Employee while an employee of the
Corporation or any such Subsidiary, then the Employee's rights under the Option
shall thereupon be forfeited and terminated, subject to a determination to the
contrary by the Committee.

      12. Binding Agreement. The Agreement, including the terms and condition
set forth in this Terms of Stock Option, shall be binding upon the Employee and
the Corporation, and their representatives, successors and assigns.

                                       4


                                                                         ANNEX A

                             EMS TECHNOLOGIES, INC.
                            1997 STOCK INCENTIVE PLAN

                               NOTICE OF EXERCISE
                                 OF STOCK OPTION

      The undersigned hereby notifies EMS Technologies, Inc. (the "Corporation")
of his or her election to exercise an option to purchase ____________ shares of
the Corporation's common stock, $.10 par value (the "Common Stock"), pursuant to
that Stock Option Agreement (the "Agreement") between ________________________
(the "Employee") and the Corporation dated ____________________, 200__.
Accompanying this Notice is (1) a certified or a cashier's check (or other check
acceptable to the Corporation) in the amount of $_______________ payable to the
Corporation and/or (2) (subject to such restrictions as may be determined to be
necessary or appropriate to avoid earnings charges or other adverse consequences
to the Corporation under applicable accounting or tax rules or regulations)
_______________ shares of the Common Stock presently owned by the undersigned
and duly endorsed or accompanied by stock transfer powers, or in lieu thereof,
the form of Attestation of Share Ownership attached as Annex B to the Terms of
Officer Stock Option referenced in the Agreement, executed with respect to the
number of such shares having an aggregate Fair Market Value (as defined in the
EMS Technologies, Inc. 1997 Stock Incentive Plan (the "Plan")) as of the date
hereof of $_______________, such amounts being equal, in the aggregate, to the
purchase price per share set forth in the Agreement multiplied by the number of
shares being hereby purchased (in each instance subject to appropriate
adjustment pursuant to Section 7 of such Terms of Officer Stock Option).

      Also accompanying this Notice is my check in the amount of
$_______________, in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such payment is
based on advice received from appropriate officials of the Corporation
responsible for the administration of its payroll and employment tax
obligations. Alternatively, or in addition, and subject to such restrictions as
may be determined in the discretion of the Corporation to be necessary or
appropriate to comply with Rule 16b-3 under the Securities Exchange Act of 1934,
or to avoid earnings charges or other adverse consequences to the Corporation
under applicable accounting or tax rules or regulations, in full or partial
payment of such taxes:

            (1) I deliver herewith an additional _______________ shares of the
            Common Stock (or the form of Attestation of Share Ownership with
            respect thereto) presently owned by me, having an aggregate Fair
            Market Value as of the date hereof of $_______________; and/or

            (2) I hereby authorize the Corporation to withhold, from the shares
            of Common stock otherwise issuable to me pursuant to this
            exercise,_______________ such shares having an aggregate Fair Market
            Value at the date hereof of $_______________.

The sum of (i) any such check plus (ii) the Fair Market Value at the date hereof
of any shares of Common Stock specified in the foregoing clauses (1) and (2) is
not less than the amount of federal and state withholding and employment taxes
applicable to this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a result of such
exercise.

      IN WITNESS WHEREOF, the undersigned has set his or her hand and seal, this
______day of , _________ 20___.

                                           EMPLOYEE OR HIS OR HER ADMINISTRATOR,
                                            EXECUTOR, PERSONAL REPRESENTATIVE OR
                                                            QUALIFIED TRANSFEREE

                                            ____________________________________

                                       5


                                                                         ANNEX B

                             EMS TECHNOLOGIES, INC.

                            1997 STOCK INCENTIVE PLAN
                         ATTESTATION OF SHARE OWNERSHIP

      Pursuant to the Notice of Exercise submitted herewith, I have elected to
purchase _______________ shares of the common stock of EMS Technologies, Inc.
(the "Company"), pursuant to the Stock Option Agreement dated ____________ (the
"Option"), at an aggregate exercise price of $___________ (the "Option Price").
I hereby attest to ownership of the shares specified below (the "Shares") and
hereby tender the Shares in payment of (i) $__________ of the Option Price, and
(ii) $___________ of withholding and related taxes due upon exercise of the
Option, in each case based on their Fair Market Value on the date hereof (as
determined under the Plan) of $___________ per share).

      I certify that I have held the Shares that I am tendering (i) for at least
one year after acquiring such Shares through the exercise of an Incentive Stock
Option, and (ii) for at least six months after acquiring such Shares in any
other manner.

      Although the Company has not required me to make actual delivery of
certificates evidencing the Shares, as a result of which I (and the co-owner, if
any of the Shares) will retain ownership of such Shares, I represent that I,
with the consent and agreement of the co-owner (if any) of the Shares, have full
power to deliver and convey such certificates to the Company, and therefore
could have caused the Company to become sole owner of such Shares. The co-owner
of the Shares, by signing this form, consents to these representations and the
exercise of the Option by this notice.



Common Stock Certificate(s) No.       Number of                    Number of Shares Subject
  or Brokerage Account             Shares Represented                 to this Attestation
                                                             


You are hereby instructed to apply towards the Option Price: (check one)

            The maximum number of whole shares necessary to pay the Option Price
            and specified taxes, or, if fewer, the total number of listed
            Shares, with any remaining amount to be paid by check accompanying
            the Notice of Exercise.

            ___________ of the listed Shares with the remaining amount to be
            paid by check accompanying the Notice of Exercise.

In each case, the balance of the Shares for which the Option is being exercised
will be issued as specified in the Notice of Exercise.

                                                    ____________________________
                                                    Name

________________________                            ____________________________
Date                                                Signature

                                                    ____________________________
                                                    Co-Owner's Name (if any)
________________________                            ____________________________
Date                                                Co-Owner's Signature

                                        6

EX-10.11

                                                                   EXHIBIT 10.11

Outside Directors
(New) 4/30/99

                             EMS TECHNOLOGIES, INC.

                            1997 STOCK INCENTIVE PLAN
                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT, entered into as of the __th day of ______,
____ (the 'Date of Grant'), by and between EMS TECHNOLOGIES, INC., a Georgia
corporation (hereinafter referred to as the 'Corporation'), and
________________(hereinafter referred to as the "Director").

                      W I T N E S S E T H

      WHEREAS, the Board of Directors (the 'Board') of the Corporation has
adopted a stock incentive plan for the directors, officers and employees of the
Corporation or its subsidiary corporations, which Plan is known as the 'EMS
Technologies, Inc. 1997 Stock Incentive Plan' (hereinafter referred to as the
'Plan');

      WHEREAS, on the Date of Grant the Director was elected to serve as a
member of the Board for the forthcoming year; and

      WHEREAS, the Plan provides for the automatic grant to the Director, in the
circumstances of such election, of a stock option to purchase shares of the
Corporation's common stock as hereinafter set forth, and the Corporation and the
Director desire to enter into a written agreement with respect to such option in
accordance with the Plan.

      NOW, THEREFORE, as an incentive and to encourage stock ownership, and in
consideration of the mutual covenants contained herein, the parties hereto agree
as follows:

      1. Incorporation of Plan. This option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan, as it may be
amended from time to time, are incorporated by reference into this Stock Option
Agreement and made a part hereof. A copy of the Plan has been delivered to, and
receipt is hereby acknowledged by, the Director.

      2. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein, the Corporation hereby evidences its grant to the
Director of the right and option (hereinafter referred to as the 'Option'),
which is not an ISO,



to purchase all or any part of an aggregate of Fifteen Thousand (15,000) shares
of the Corporation's $.10 par value common stock (the 'Common Stock') beginning
as follows:



First Date                      Number of
Exercisable                      Shares
                             
_____________                   3,000
_____________                   3,000
_____________                   3,000
_____________                   3,000
_____________                   3,000


      This Option shall expire and is not exercisable after 5:00 p.m., Atlanta
time, on ____________ (the 'Expiration Date').

      Notwithstanding the beginning date for exercise set forth in the second
preceding paragraph, but subject to the provisions of the preceding paragraph
with respect to expiration of this Option, this Option may be exercised as to
all or any portion of the full number of shares subject thereto if: (a) a tender
offer or exchange offer has been made for shares of the Common Stock, other than
one made by the Corporation, provided that the corporation, person or other
entity making such offer purchases or otherwise acquires shares of Common Stock
pursuant to such offer; or (b) any person or group (as such terms are defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
'Act')), becomes the holder of 50% or more of the outstanding shares of Common
Stock. If either of the events specified in this paragraph has occurred, the
Option shall be fully exercisable: (x) in the event of (a) above, during the
period commencing on the date the tender offer or exchange offer is commenced
and ending on the date such offer expires and is not extended; or (y) in the
event of (b) above, during the 30-day period commencing on the date upon which
the Corporation is provided a copy of a Schedule 13D or amendment thereto, filed
pursuant to Section 13(d) of the Act and the rules and regulations promulgated
thereunder, indicating that any person or group has become the holder of 50% or
more of the outstanding shares of Common Stock. In the case of (a) above, if the
Corporation, person or other entity making the offer does not purchase or
otherwise acquire shares of Common Stock pursuant to such offer, then the
Director's right under this paragraph to exercise this Option shall terminate,
the Director and the Corporation shall rescind any exercise of this Option
pursuant to this paragraph, and this Option shall be reinstated as if such
exercise had not occurred.

      3. Purchase Price. The price per share to be paid by the Director for the
shares subject to this Option shall be __________ Dollars ($_____).



      4. Exercise Terms. Beginning on the date specified above, and prior to the
expiration of this Option as provided in Section 2 hereof, the Director may
exercise this Option as to all such number of shares, or as to any part thereof,
at any time and from time to time during the remaining term of this Option;
provided that the Director must exercise this Option for at least the lesser of
100 shares or the unexercised portion of the Option. In the event this Option is
not exercised with respect to all or any part of the shares prior to its
expiration, the shares with respect to which this Option was not exercised shall
no longer be subject to this Option.

      5. Option Non-Transferable. This Option and all rights hereunder are
neither assignable nor transferable by the Director otherwise than by will or
under the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, and during the Director's lifetime this Option is exercisable
only by him (or by his guardian or legal representative, should one be
appointed, or qualified transferee). More particularly (but without limiting the
generality of the foregoing), this Option may not be assigned, transferred
(except as aforesaid), pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of this Option contrary to the provisions hereof shall be null
and void and without legal effect.

      6. Notice of Exercise of Option. This Option may be exercised by the
Director, or by his administrator, executor, personal representative or
qualified transferee, by a written notice (in substantially the form of the
"Notice of Exercise" attached hereto as Annex A) signed by the Director, or by
such administrator, executor, personal representative or qualified transferee,
and delivered or mailed to the Corporation at its principal office in Norcross,
Georgia, to the attention of the President, Treasurer or such other officer as
the Corporation may designate. Any such notice shall (a) specify the number of
shares of Common Stock which the Director or such administrator, executor,
personal representative or qualified transferee, as the case may be, then elects
to purchase hereunder, and (b) be accompanied by (i) a certified or cashier's
check payable to the Corporation, or personal check acceptable to the
Corporation, in payment of the total price applicable to such shares as provided
herein, or (ii) (subject to any restrictions referred to in Annex A) shares of
Common Stock, owned by him and duly endorsed or accompanied by stock transfer
powers, or in lieu thereof, the form of Attestation of Share Ownership attached
as Annex B executed with respect to such number of such shares, having a Fair
Market Value equal to the total purchase price applicable to



the shares purchased hereunder, or (iii) such a check, and the number of such
shares (or attestation with respect thereto) whose Fair Market Value when added
to the amount of the check equals the total purchase price applicable to such
shares purchased hereunder. Such notice shall also be accompanied by such a
check or shares of Common Stock in payment of applicable withholding and
employment taxes, or the person exercising this Option shall authorize (by use
of Annex B or otherwise) the withholding of shares of Common Stock otherwise
issuable under this Option in payment of such taxes, all as set forth on Annex A
and subject to any restrictions referred to therein. Upon receipt of any such
notice and accompanying payment, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Director or to such
administrator, executor, personal representative or qualified transferee, as the
case may be, stock certificates for the number of shares specified in such
notice registered in the name of the person exercising this Option.

      7. Adjustment in Option. If prior to the complete exercise of this Option,
there shall be a change in the outstanding Common Stock by reason of one or more
stock splits, stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustments, then the number, kind and
option price of the shares remaining subject to this Option shall be equitably
adjusted in accordance with the terms of the Plan, so that the proportionate
interest in the Corporation represented by the shares then subject to the Option
shall be the same as before the occurrence of such event.

      8. Termination as a Director. If the Director for any reason ceases to be
a member of the Board of Directors of the Corporation (such event being
hereinafter referred to as a 'Termination'), then:

            (a)   To the extent this Option shall have become exercisable on or
                  prior to the date of Termination, it shall remain exercisable
                  until the Expiration Date; and

            (b)   Any portion of this Option that had not become exercisable on
                  or prior to the date of Termination shall immediately
                  terminate and shall not thereafter become exercisable.

      This Option does not confer upon the Director any right with respect to
continuance as a member of the Board of Directors of the Corporation.



      9. Competitive Activities. This Option is subject to Section 9.2 of the
Plan, which provides that if the Director provides services to a competitor of
the Corporation or any of its Subsidiaries, whether as an employee, officer,
director, independent contractor, consultant, agent or otherwise, such services
being of a nature that can reasonably be expected to involve the skills and
experience used or developed by the Director while an employee or Director of
the Corporation or any such Subsidiary, then the Director's rights under this
Option shall thereupon be forfeited and terminated, subject to a determination
to the contrary by the Committee.

      10. Binding Agreement. This Agreement shall be binding upon the parties
hereto and their representatives, successors and assigns.

      IN WITNESS WHEREOF, the Corporation has caused this Stock Option Agreement
to be executed on behalf of the Corporation and the Corporation's seal to be
affixed hereto and attested by the Secretary of the Corporation, and the
Director has executed this Agreement under his seal, all as of the day and year
first above written.

                                   EMS TECHNOLOGIES, INC.
[CORPORATE SEAL]

ATTEST                             By:
                                     ____________________________
                                         Chief Executive Officer
_________________________________
Secretary
                                   DIRECTOR:

                                   ______________________(SEAL)



                                                                         ANNEX A

                             EMS TECHNOLOGIES, INC.
                            1997 STOCK INCENTIVE PLAN

                               Notice of Exercise
                                 of Stock Option

      The undersigned hereby notifies EMS Technologies, Inc. (the 'Corporation')
of his or her election to exercise an option to purchase ____________ shares of
the Corporation's common stock, $.10 par value (the 'Common Stock'), pursuant to
that Stock Option Agreement (the 'Agreement') between ________________________
(the "Director") and the Corporation dated ____________________ 199__.
Accompanying this Notice is (1) a certified or cashier's check (or other check
acceptable to the Corporation) in the amount of $_______________ payable to the
Corporation and/or (2) (subject to such restrictions as may be determined to be
necessary or appropriate to avoid earnings charges or other adverse consequences
to the Corporation under applicable accounting or tax rules or regulations)
_______________ shares of the Common Stock presently owned by the undersigned
and duly endorsed or accompanied by stock transfer powers, or in lieu thereof,
the form of Attestation of Share Ownership attached as Annex B to the Agreement,
executed with respect to the number of such shares, having an aggregate Fair
Market Value (as defined in the EMS Technologies, Inc. 1997 Stock Incentive Plan
(the "Plan")) as of the date hereof of $_______________, such amounts being
equal, in the aggregate, to the purchase price per share set forth in Section 3
of the Agreement multiplied by the number of shares being hereby purchased (in
each instance subject to appropriate adjustment pursuant to Section 7 of the
Agreement).

      Also accompanying this Notice is my check in the amount of
$_______________,in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such payment is
based on advice received from appropriate officials of the Corporation
responsible for the administration of its payroll and employment tax
obligations. Alternatively, or in addition, and subject to such restrictions as
may be determined to be necessary or appropriate to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, or to avoid earnings charges or other
adverse consequences to the Corporation under applicable accounting or tax rules
or regulations, in full or partial payment of such taxes:

            (1)   I deliver herewith an additional _______________ shares of the
                  Common Stock (or the form of Attestation of Share Ownership
                  with respect thereto) presently owned by me, having an
                  aggregate Fair Market Value as of the date hereof of
                  $_______________; and/or

            (2)   I hereby authorize the Corporation to withhold, from the
                  shares of Common stock otherwise issuable to me pursuant to
                  this exercise, _______________ such shares having an aggregate
                  Fair Market Value at the date hereof of $ _______________.

      The sum of (i) any such check plus (ii) the Fair Market Value at the date
hereof of any shares of Common Stock specified in the foregoing clauses (1) and
(2) is not less than the amount of federal and state withholding and employment
taxes applicable to this exercise, and is not greater than the total of all
federal and state income and employment taxes to be owed by me as a result of
such exercise.

      IN WITNESS WHEREOF, the undersigned has set his or her hand and seal, this
day of

                              DIRECTOR OR HIS OR HER ADMINISTRATOR,
                              EXECUTOR, PERSONAL REPRESENTATIVE OR
                              QUALIFIED TRANSFEREE



                                                                         ANNEX B

                             EMS TECHNOLOGIES, INC.

                            1997 Stock Incentive Plan
                         Attestation of Share Ownership

      Pursuant to the Notice of Exercise submitted herewith, I have elected to
purchase _______________ shares of the common stock of EMS Technologies, Inc.
(the 'Company'), pursuant to the Stock Option Agreement dated ____________ (the
'Option'), at an aggregate exercise price of $___________ (the 'Option Price').
I hereby attest to ownership of the shares specified below (the 'Shares') and
hereby tender the Shares in payment of (i) $__________ of the Option Price, and
(ii) $___________ of withholding and related taxes due upon exercise of the
Option, in each case based on their Fair Market Value on the date hereof (as
determined under the Plan) of $___________ per share).

      I certify that I either (i) have held the Shares that I am tendering for
at least one year after acquiring such Shares through the exercises of an
Incentive Stock Option, or (ii) did not obtain such Shares through the exercise
of an ISO.

      Although the Company has not required me to make actual delivery of
certificates evidencing the Shares, as a result of which I (and the co-owner, if
any of the Shares) will retain ownership of such Shares, I represent that I,
with the consent and agreement of the co-owner (if any) of the Shares, have full
power to deliver and convey such certificates to the Company, and therefore
could have caused the Company to become sole owner of such Shares. The co-owner
of the Shares, by signing this form, consents to these representations and the
exercise of the Option by this notice.

Common Stock             Number of               Number of Shares
Certificate(s) No.       Shares Represented      Subject to this
or Brokerage Account                             Attestation

You are hereby instructed to apply towards the Option Price: (check one)

            [ ]   The maximum number of whole shares necessary to pay the
                  Option Price and specified taxes, or, if fewer, the total
                  number of listed Shares, with any remaining amount to be paid
                  by check accompanying the Notice of Exercise.

            [ ]   ___________ of the listed Shares with the remaining amount
                  to be paid by check accompanying the Notice of Exercise.

      In each case, the balance of the Shares for which the Option is being
exercised will be issued as specified in the Notice of Exercise.

                                   Name

________________________           ______________________________________
Date                               Signature

                                   ______________________________________
                                   Co-Owner's Name (if any)

________________________           ______________________________________
Date                               Co-Owner's Signature

EX-10.12

                                                                   EXHIBIT 10.12

Outside Directors
(Continuing) 4/30/99

                             EMS TECHNOLOGIES, INC.

                            1997 STOCK INCENTIVE PLAN
                             STOCK OPTION AGREEMENT

      THIS STOCK OPTION AGREEMENT, entered into as of the __th day of____, ____
(the 'Date of Grant'), by and between EMS TECHNOLOGIES, INC., a Georgia
corporation (hereinafter referred to as the 'Corporation'), and
_______________(hereinafter referred to as the 'Director').

                                   WITNESSETH

      WHEREAS, the Board of Directors (the 'Board') of the Corporation has
adopted a stock incentive plan for the directors, officers and employees of the
Corporation or its subsidiary corporation, which Plan is known as the 'EMS
Technologies, Inc. 1997 Stock Incentive Plan' (hereinafter referred to as the
'Plan');

      WHEREAS, on the Date of Grant the Director was elected to serve as a
member of the Board for the forthcoming year; and

      WHEREAS, the Plan provides for the automatic grant to the Director, in the
circumstances of such election, of a stock option to purchase shares of the
Corporation's common stock as hereinafter set forth, and the Corporation and the
Director desire to enter into a written agreement with respect to such option in
accordance with the Plan.

      NOW, THEREFORE, as an incentive and to encourage stock ownership, and in
consideration of the mutual covenants contained herein, the parties hereto agree
as follows:

      1. Incorporation of Plan. This option is granted pursuant to the
provisions of the Plan and the terms and definitions of the Plan, as it may be
amended from time to time, are incorporated by reference into this Stock Option
Agreement and made a part hereof. A copy of the Plan has been delivered to, and
receipt is hereby acknowledged by, the Director.

      2. Grant of Option. Subject to the terms, restrictions, limitations and
conditions stated herein, the Corporation hereby evidences its grant to the
Director of the right and option (hereinafter referred to as the 'Option'),
which is not an ISO, to purchase all or any part of an aggregate of Three
Thousand



(3,000) shares of the Corporation's $.10 par value common stock (the 'Common
Stock'), beginning on __________________.

      This Option shall expire and is not exercisable after 5:00 p.m., Atlanta
time, on ____________ (the 'Expiration Date').

      Notwithstanding the beginning date for exercise set forth in the second
preceding paragraph, but subject to the provisions of the preceding paragraph
with respect to expiration of this Option, this Option may be exercised as to
all or any portion of the full number of shares subject thereto if: (a) a tender
offer or exchange offer has been made for shares of the Common Stock, other than
one made by the Corporation, provided that the corporation, person or other
entity making such offer purchases or otherwise acquires shares of Common Stock
pursuant to such offer; or (b) any person or group (as such terms are defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
'Act')), becomes the holder of 50% or more of the outstanding shares of Common
Stock. If either of the events specified in this paragraph has occurred, the
Option shall be fully exercisable: (x) in the event of (a) above, during the
period commencing on the date the tender offer or exchange offer is commenced
and ending on the date such offer expires and is not extended; or (y) in the
event of (b) above, during the 30-day period commencing on the date upon which
the Corporation is provided a copy of a Schedule 13D or amendment thereto, filed
pursuant to Section 13(d) of the Act and the rules and regulations promulgated
thereunder, indicating that any person or group has become the holder of 50% or
more of the outstanding shares of Common Stock. In the case of (a) above, if the
Corporation, person or other entity making the offer does not purchase or
otherwise acquire shares of Common Stock pursuant to such offer, then the
Director's right under this paragraph to exercise this Option shall terminate,
the Director and the Corporation shall rescind any exercise of this Option
pursuant to this paragraph, and this Option shall be reinstated as if such
exercise had not occurred.

      3. Purchase Price. The price per share to be paid by the Director for the
shares subject to this Option shall be ________________ Dollars ($______).

      4. Exercise Terms. Beginning on the date specified above, and prior to the
expiration of this Option as provided in Section 2 hereof, the Director may
exercise this Option as to all such number of shares, or as to any part thereof,
at any time and from time to time during the remaining term of this Option;
provided that the Director must exercise this Option for at least the lesser of
100 shares or the unexercised portion of the Option. In the event this Option is
not exercised with respect to all or any part of the shares prior to its
expiration, the shares with



respect to which this Option was not exercised shall no longer be subject to
this Option.

      5. Option Non-Transferable. This Option and all rights hereunder are
neither assignable nor transferable by the Director otherwise than by will or
under the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, and during the Director's lifetime this Option is exercisable
only by him (or by his guardian or legal representative, should one be
appointed, or qualified transferee). More particularly (but without limiting the
generality of the foregoing), this Option may not be assigned, transferred
(except as aforesaid), pledged or hypothecated in any way (whether by operation
of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of this Option contrary to the provisions hereof shall be null
and void and without legal effect.



      6. Notice of Exercise of Option. This Option may be exercised by the
Director, or by his administrator, executor, personal representative or
qualified transferee, by a written notice (in substantially the form of the
'Notice of Exercise' attached hereto as Annex A) signed by the Director, or by
such administrator, executor, personal representative or qualified transferee,
and delivered or mailed to the Corporation at its principal office in Norcross,
Georgia, to the attention of the President, Treasurer or such other officer as
the Corporation may designate. Any such notice shall (a) specify the number of
shares of Common Stock which the Director or such administrator, executor,
personal representative or qualified transferee, as the case may be, then elects
to purchase hereunder, and (b) be accompanied by (i) a certified or cashier's
check payable to the Corporation, or personal check acceptable to the
Corporation, in payment of the total price applicable to such shares as provided
herein, or (ii) (subject to any restrictions referred to in Annex A) shares of
Common Stock, owned by him and duly endorsed or accompanied by stock transfer
powers, or in lieu thereof, the form of Attestation of Share Ownership attached
as Annex B executed with respect to such number of such shares, having a Fair
Market Value equal to the total purchase price applicable to the shares
purchased hereunder, or (iii) such a check, and the number of such shares (or
attestation with respect thereto) whose Fair Market Value when added to the
amount of the check equals the total purchase price applicable to such shares
purchased hereunder. Such notice shall also be accompanied by such a check or
shares of Common Stock in payment of applicable withholding and employment
taxes, or the person exercising this Option shall authorize (by use of Annex B
or otherwise) the withholding of shares of Common Stock otherwise issuable under
this Option in payment of such taxes, all as set forth on Annex A and subject to
any restrictions referred to therein. Upon receipt of any such notice and
accompanying payment, and subject to the terms hereof, the Corporation agrees to
cause to be issued to the Director or to such administrator, executor, personal
representative or qualified transferee, as the case may be, stock certificates
for the number of shares specified in such notice registered in the name of the
person exercising this Option.

      7. Adjustment in Option. If prior to the complete exercise of this Option,
there shall be a change in the outstanding Common Stock by reason of one or more
stock splits, stock dividends, combinations or exchanges of shares,
recapitalizations or similar capital adjustments, then the number, kind and
option price of the shares remaining subject to this Option shall be equitably
adjusted in accordance with the terms of the Plan, so that the proportionate
interest in the Corporation represented by the shares then subject to the Option
shall be the same as before the occurrence of such event.

      8. Termination as a Director. If the Director for any reason ceases to be
a member of the Board of Directors of the Corporation (such event being
hereinafter referred to as a 'Termination'), then:

            (a)   To the extent this Option shall have become exercisable on or
                  prior to the date of Termination, it shall remain exercisable
                  until the Expiration Date; and

            (b)   Any portion of this Option that had not become exercisable on
                  or prior to the date of Termination shall immediately
                  terminate and shall not thereafter become exercisable.



      This Option does not confer upon the Director any right with respect to
continuance as a member of the Board of Directors of the Corporation.

      9. Competitive Activities. This Option is subject to Section 9.2 of the
Plan, which provides that if the Director provides services to a competitor of
the Corporation or any of its Subsidiaries, whether as an employee, officer,
director, independent contractor, consultant, agent or otherwise, such services
being of a nature that can reasonably be expected to involve the skills and
experience used or developed by the Director while an employee or Director of
the Corporation or any such Subsidiary, then the Director's rights under this
Option shall thereupon be forfeited and terminated, subject to a determination
to the contrary by the Committee.

      10. Binding Agreement. This Agreement shall be binding upon the parties
hereto and their representatives, successors and assigns.

      IN WITNESS WHEREOF, the Corporation has caused this Stock Option Agreement
to be executed on behalf of the Corporation and the Corporation's seal to be
affixed hereto and attested by the Secretary of the Corporation, and the
Director has executed this Agreement under his seal, all as of the day and year
first above written.

                                   EMS TECHNOLOGIES, INC.
[CORPORATE SEAL]

ATTEST                          By: ___________________________________
                                           Chief Executive Officer

___________________________________
Secretary

                                   DIRECTOR:

                                   ________________________________(SEAL)

                                                                         ANNEX A

                             EMS TECHNOLOGIES, INC.
                            1997 STOCK INCENTIVE PLAN

                               Notice of Exercise
                                 of Stock Option

      The undersigned hereby notifies EMS Technologies, Inc. (the 'Corporation')
of his or her election to exercise an option to purchase ____________ shares of
the Corporation's common stock, $.10 par value (the 'Common Stock'), pursuant to
that Stock Option Agreement (the 'Agreement') between ________________________
(the 'Director') and the Corporation dated ____________________ 199__.
Accompanying this Notice is (1) a certified or cashier's check (or other check
acceptable to the Corporation) in the amount of $_______________ payable to the
Corporation and/or (2) (subject to such restrictions as may be determined to be
necessary or appropriate to avoid earnings charges or other adverse consequences
to the Corporation under applicable accounting or tax rules or regulations)
_______________ shares of the Common Stock presently owned by the undersigned
and duly



endorsed or accompanied by stock transfer powers, or in lieu thereof, the form
of Attestation of Share Ownership attached as Annex B to the Agreement, executed
with respect to the number of such shares, having an aggregate Fair Market Value
(as defined in the EMS Technologies, Inc. 1997 Stock Incentive Plan (the
'Plan')) as of the date hereof of $_______________, such amounts being equal, in
the aggregate, to the purchase price per share set forth in Section 3 of the
Agreement multiplied by the number of shares being hereby purchased (in each
instance subject to appropriate adjustment pursuant to Section 7 of the
Agreement).

      Also accompanying this Notice is my check in the amount of
$_______________,in payment of federal and state income withholding and
employment taxes applicable to this exercise. The amount of such payment is
based on advice received from appropriate officials of the Corporation
responsible for the administration of its payroll and employment tax
obligations. Alternatively, or in addition, and subject to such restrictions as
may be determined to be necessary or appropriate to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, or to avoid earnings charges or other
adverse consequences to the Corporation under applicable accounting or tax rules
or regulations, in full or partial payment of such taxes:

            (1)   I deliver herewith an additional _______________ shares of the
                  Common Stock (or the form of Attestation of Share Ownership
                  with respect thereto) presently owned by me, having an
                  aggregate Fair Market Value as of the date hereof of
                  $_______________; and/or

            (2)   I hereby authorize the Corporation to withhold, from the
                  shares of Common stock otherwise issuable to me pursuant to
                  this exercise, _______________ such shares having an aggregate
                  Fair Market Value at the date hereof of $ _______________.

The sum of (i) any such check plus (ii) the Fair Market Value at the date hereof
of any shares of Common Stock specified in the foregoing clauses (1) and (2) is
not less than the amount of federal and state withholding and employment taxes
applicable to this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a result of such
exercise.

      IN WITNESS WHEREOF, the undersigned has set his or her hand and seal,
this     day of        ,         .

                              DIRECTOR OR HIS OR HER ADMINISTRATOR,
                              EXECUTOR, PERSONAL REPRESENTATIVE OR
                              QUALIFIED TRANSFEREE

                              _____________________________________________

                                                                         ANNEX B

EMS TECHNOLOGIES, INC.

1997 Stock Incentive Plan



Attestation of Share Ownership

      Pursuant to the Notice of Exercise submitted herewith, I have elected to
purchase        shares of the common stock of EMS Technologies, Inc. (the
'Company'), pursuant to the Stock Option Agreement dated ____________ (the
'Option ), at an aggregate exercise price of $___________ (the 'Option Price').
I hereby attest to ownership of the shares specified below (the Shares') and
hereby tender the Shares in payment of (i) $__________ of the Option Price, and
(ii) $___________ of withholding and related taxes due upon exercise of the
Option, in each case based on their Fair Market Value on the date hereof (as
determined under the Plan) of $___________ per share).

      I certify that I either (i) have held the Shares that I am tendering for
at least one year after acquiring such Shares through the exercises of an
Incentive Stock Option, or (ii) did not obtain such Shares through the exercise
of an ISO.

      Although the Company has not required me to make actual delivery of
certificates evidencing the Shares, as a result of which I (and the co-owner, if
any of the Shares) will retain ownership of such Shares, I represent that I,
with the consent and agreement of the co-owner (if any) of the Shares, have full
power to deliver and convey such certificates to the Company, and therefore
could have caused the Company to become sole owner of such Shares. The co-owner
of the Shares, by signing this form, consents to these representations and the
exercise of the Option by this notice.

Common Stock            Number of             Number of Shares
Certificate(s) No.      Shares Represented    Subject to this
or Brokerage Account                          Attestation

You are hereby instructed to apply towards the Option Price: (check one)

            [ ]   The maximum number of whole shares necessary to pay the Option
                  Price and specified taxes, or, if fewer, the total number of
                  listed Shares, with any remaining amount to be paid by check
                  accompanying the Notice of Exercise.

            [ ]   of the listed Shares with the remaining amount to be paid by
                  check accompanying the Notice of Exercise.

      In each case, the balance of the Shares for which the Option is being
exercised will be issued as specified in the Notice of Exercise.

                                   Name

Date                               Signature

                                   Co-Owner's Name (if any)

Date                               Co-Owner's Signature

EX-10.15

                                                                   EXHIBIT 10.15

                                                    AS ADOPTED FEBRUARY 16, 2000

                             EMS TECHNOLOGIES, INC.
                            2000 STOCK INCENTIVE PLAN

                                TABLE OF CONTENTS



                                                                          PAGE
                                                                          ----
                                                                       
ARTICLE I DEFINITIONS..................................................     1
         (a)  "Award"..................................................     1
         (b)  "Board"..................................................     1
         (c)  "Code"...................................................     1
         (d)  "Committee"..............................................     1
         (e)  "Company"                                                     1
         (f)  "Director"...............................................     2
         (g)  "Disinterested Person"...................................     2
         (h)  "Employee"...............................................     2
         (i)  "Employer"...............................................     2
         (j)  "Fair Market Value"                                           3
         (k)  "Grantee"                                                     3
         (l)  "ISO"....................................................     3
         (m)  "1934 Act"...............................................     3
         (n)  "Officer"................................................     3
         (o)  "Option".................................................     3
         (p)  "Option Agreement".......................................     4
         (q)  "Optionee"...............................................     4
         (r)  "Option Price"                                                4
         (s)  "Parent".................................................     4
         (t)  "Plan"...................................................     4
         (u)  "Purchasable" ...........................................     4
         (v)  "Qualified Domestic Relations Order".....................     4
         (w)  "Reload Option"..........................................     4
         (x)  "Restricted Stock".......................................     5
         (y)  "Restriction Agreement"..................................     5
         (z)  "Stock"..................................................     5
         (aa) "Subsidiary".............................................     5

 ARTICLE II THE PLAN...................................................     5
         Section 2.1  Name.............................................     5
         Section 2.2  Purpose..........................................     5
         Section 2.3  Effective Date...................................     5
         Section 2.4  Termination Date                                      5


                                      -i-



                           TABLE OF CONTENTS (CONT'D)



                                                                           PAGE
                                                                           ----
                                                                        
ARTICLE III ELIGIBILITY................................................      6

ARTICLE IV  ADMINISTRATION.............................................      6
         Section 4.1  Duties and Powers of the Committee...............      6
         Section 4.2  Interpretation; Rules............................      6
         Section 4.3  No Liability.....................................      7
         Section 4.4  Majority Rule....................................      7
         Section 4.5  Company Assistance...............................      7

ARTICLE V  SHARES OF STOCK SUBJECT TO PLAN.............................      7
         Section 5.1  Limitations                                            7
         Section 5.2  Antidilution.....................................      8

ARTICLE VI OPTIONS                                                           9
         Section 6.1  Types of Options Granted.........................      9
         Section 6.2  Option Grant and Agreement.......................     10
         Section 6.3  Optionee Limitations.............................     10
         Section 6.4  $100,000 Limitation..............................     11
         Section 6.5  Option Price.....................................     11
         Section 6.6  Exercise Period..................................     11
         Section 6.7  Option Exercise..................................     12
         Section 6.8  Nontransferability of Option.....................     13
         Section 6.9  Termination of Employment........................     14
         Section 6.10 Employment Rights................................     14
         Section 6.11 Certain Successor Options........................     14
         Section 6.12 Conditions to Issuing Option Stock...............     15

ARTICLE VII RESTRICTED STOCK...........................................     16
         Section 7.1  Awards of Restricted Stock                            16
         Section 7.2  Non-Transferability..............................     16
         Section 7.3  Lapse of Restrictions                                 17
         Section 7.4  Termination of Employment........................     17
         Section 7.5  Treatment of Dividends...........................     17
         Section 7.6  Delivery of Shares...............................     17
         Section 7.7  Payment of Withholding Taxes.....................     18

ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN ..........     18

ARTICLE IX  MISCELLANEOUS..............................................     19
         Section 9.1  Replacement or Amended Grants....................     19
         Section 9.2  Forfeiture for Competition.......................     19
         Section 9.3  Plan Binding on Successors.......................     19
         Section 9.4  Headings Not a Part of Plan......................     19


                                      -ii-



                             EMS TECHNOLOGIES, INC.
                            2000 STOCK INCENTIVE PLAN

                                    ARTICLE I
                                   DEFINITIONS

            As used herein, the following terms have the meanings hereinafter
set forth unless the context clearly indicates to the contrary:

            (a) "Award" shall mean a grant of Restricted Stock.

            (b) "Board" shall mean the Board of Directors of the Company.

            (c) "Code" shall mean the United States Internal Revenue Code of
      1986, as amended, including effective date and transition rules (whether
      or not codified). Any reference herein to a specific section or sections
      of the Code shall be deemed to include a reference to any corresponding
      provision of future law.

            (d) "Committee" shall mean a committee of at least two Directors
      appointed from time to time by the Board, having the duties and authority
      set forth herein in addition to any other authority granted by the Board;
      provided, however, that with respect to any Options or Awards granted to
      an individual who is also an Officer or Director, the Committee shall
      consist of at least two Non-Employee Directors (who need not be members of
      the Committee with respect to Options or Awards granted to any other
      individuals), and all authority and discretion shall be exercised by such
      Non-Employee Directors, and references herein to the "Committee" shall
      mean such Non-Employee Directors insofar as any actions or determinations
      of the Committee shall relate to or affect Options or Awards made to or
      held by any Officer or Director.

            (e) "Company" shall mean EMS Technologies, Inc., a Georgia
      corporation.

                                     -iii-



            (f) "Director" shall mean a member of the Board.

            (g) "Employee" shall mean any employee of the Company or any
      Subsidiary of the Company.

            (h) "Employer" shall mean the corporation that employs a Grantee.

            (i) "Fair Market Value" of the shares of Stock on any date shall
      mean

                  (i) the closing sales price, regular way, or in the absence
                  thereof the mean of the last reported bid and asked
                  quotations, on such date on the exchange having the greatest
                  volume of trading in the shares during the thirty-day period
                  preceding such date (or if such exchange was not open for
                  trading on such date, the next preceding date on which it was
                  open); or

                  (ii) if there is no price as specified in (i), the final
                  reported sales price, or if not reported in the following
                  manner, the mean of the closing high bid and low asked prices,
                  in the over-the-counter market for the shares as reported by
                  the National Association of Securities Dealers Automatic
                  Quotation System or, if not so reported, then as reported by
                  the National Quotation Bureau Incorporated, or if such
                  organization is not in existence, by an organization providing
                  similar services, on such date (or if such date is not a date
                  for which such system or organization generally provides
                  reports, then on the next preceding date for which it does
                  so); or

                  (iii) if there also is no price as specified in (ii), the
                  price determined by the Committee by reference to
                  bid-and-asked quotations for the shares provided by members of
                  an association of brokers and dealers registered pursuant to
                  subsection 15(b) of the 1934 Act, which members make a market
                  in the shares, for such recent dates as the Committee shall
                  determine to be appropriate

                                      -2-



                  for fairly determining current market value; or

                  (iv) if there also is no price as specified in (iii), the
                  amount determined in good faith by the Committee based on such
                  relevant facts, which may include opinions of independent
                  experts, as may be available to the Committee.

            (j) "Grantee" shall mean an Employee, former employee or other
      person who is an Optionee or who has received an Award of Restricted
      Stock.

            (k) "ISO" shall mean an Option that complies with and is subject to
      the terms, limitations and conditions of Code section 422 and any
      regulations promulgated with respect thereto.

            (l) "1934 Act" shall mean the Securities Exchange Act of 1934, as
      amended from time to time.

            (m) "Non-Employee Director" shall have the meaning set forth for
      such term or corresponding concept in Rule 16b-3 under the 1934 Act, as
      the same may be in effect from time to time, or in any successor rule
      thereto, and shall be determined for all purposes under the Plan according
      to interpretative or "no-action" positions with respect thereto issued by
      the Securities and Exchange Commission or its staff; provided, however,
      that to the extent it is determined and intended that Options qualify as
      "performance-based compensation" within the meaning of section 162(m) of
      the Code, a person shall be a "Non-Employee Director" only if he or she is
      also an "outside director" within the meaning of such section 162(m).

            (n) "Officer" shall mean a person who constitutes an officer of the
      Company for the purposes of Section 16 of the 1934 Act, as determined by
      reference to such Section 16 and to the rules, regulations, judicial
      decisions, and interpretative or "no-action" positions with respect
      thereto of the Securities and Exchange Commission or its staff, as the
      same may be in effect or set forth from time to time.

            (o) "Option" shall mean a contractual right to purchase Stock
      granted pursuant to the provisions of Article VI hereof.

                                      -3-



            (p) "Option Agreement" shall mean an agreement between the Company
      and an Optionee setting forth the terms of an Option.

            (q) "Optionee" shall mean a person to whom an Option has been
      granted hereunder.

            (r) "Option Price" shall mean the price at which an Optionee may
      purchase a share of Stock pursuant to an Option.

            (s) "Parent," when used with respect to any subject corporation,
      shall mean any other corporation that owns stock possessing 50% or more of
      the total combined voting power of all classes of stock of the subject
      corporation or that owns such stock of another corporation in an unbroken
      chain of corporations having such ownership of the stock of another
      corporation and ending with the subject corporation.

            (t) "Plan" shall mean the 2000 Stock Incentive Plan of the Company.

            (u) "Purchasable," when used to describe Stock, shall refer to Stock
      that may be purchased by an Optionee under the terms of this Plan on or
      after a certain date specified in the applicable Option Agreement.

            (v) "Qualified Domestic Relations Order" shall have the meaning set
      forth in the Code or in the Employee Retirement Income Security Act of
      1974, as amended, or the rules and regulations promulgated under the Code
      or such Act.

            (w) "Reload Option" shall mean an Option that is granted, without
      further action of the Committee, (i) to an Optionee who surrenders or
      authorizes the withholding of shares of Stock in payment of amounts
      specified in paragraphs 6.7(c) or 6.7(d) hereof, (ii) for the same number
      of shares as is so paid, (iii) as of the date of such payment and at an
      Option Price equal to the Fair Market Value of the Stock on such date, and
      (iv) otherwise on the same terms and conditions as the Option whose
      exercise has occasioned such payment, subject to such contingencies,
      conditions or other terms as the Committee shall specify at the time such
      exercised Option is granted.

                                      -4-



            (x) "Restricted Stock" shall mean Stock issued, subject to
      restrictions, to an Employee pursuant to Article VII hereof.

            (y) "Restriction Agreement" shall mean the agreement setting forth
      the terms of an Award, and executed by a Grantee as provided in Section
      7.1 hereof.

            (z) "Stock" shall mean the $.10 par value common stock of the
      Company or, in the event that the outstanding shares of such stock are
      hereafter changed into or exchanged for shares of a different class of
      stock or securities of the Company or some other corporation, such other
      stock or securities.

            (aa) "Subsidiary," when used with respect to any subject
      corporation, shall mean any other corporation as to which the subject
      corporation is a Parent.

                                   ARTICLE II
                                    THE PLAN

      2.1 NAME. This plan shall be known as the "EMS Technologies, Inc. 2000
Stock Incentive Plan."

      2.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company, its shareholders, and any Subsidiary of the Company, by offering
certain Employees an opportunity to acquire or increase their proprietary
interests in the Company. Options and Awards will promote the growth and
profitability of the Company and any Subsidiary of the Company, because Grantees
will be provided with an additional incentive to achieve the Company's
objectives through participation in its success and growth.

      2.3 EFFECTIVE DATE. The Plan shall become effective on January 28, 2000.

      2.4 TERMINATION DATE. No further Options or Awards shall be granted
hereunder on or after January 28, 2010, but all Options or Awards granted prior
to that time shall remain in effect in accordance with their terms.

                                      -5-



                                   ARTICLE III
                                   ELIGIBILITY

      The persons eligible to participate in this Plan shall consist only of
those Employees whose participation the Committee determines is in the best
interests of the Company. However, no ISO's may be granted, and no Options or
Awards may be granted to any Director or Officer, prior to approval of this Plan
by the Company's shareholders.

                                   ARTICLE IV
                                 ADMINISTRATION

      4.1 DUTIES AND POWERS OF THE COMMITTEE. The Plan shall be administered by
the Committee. The Committee shall select one of its members as its Chairman and
shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and shall have the right to meet telephonically. In administering the
Plan, the Committee's actions and determinations shall be binding on all
interested parties. The Committee shall have the power to grant Options or
Awards in accordance with the provisions of the Plan. Subject to the provisions
of the Plan, the Committee shall have the discretion and authority to determine
those individuals to whom Options or Awards will be granted and whether such
Options shall be accompanied by the right to receive Reload Options, the number
of shares of Stock subject to each Option or Award, such other matters as are
specified herein, and any other terms and conditions of an Option Agreement or
Restriction Agreement. To the extent not inconsistent with the provisions of the
Plan, the Committee shall have the authority to amend or modify an outstanding
Option Agreement or Restriction Agreement, or to waive any provision thereof,
provided that the Grantee consents to such action.

      4.2 INTERPRETATION; RULES. Subject to the express provisions of the Plan,
the Committee also shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable in the administration of the
Plan, including, without limitation, the amending or altering of any Options or
Awards granted hereunder as may be required to comply

                                      -6-



with or to conform to any federal, state or local laws or regulations.

      4.3 NO LIABILITY. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option or Award granted hereunder.

      4.4 MAJORITY RULE. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.

      4.5 COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.

                                    ARTICLE V
                         SHARES OF STOCK SUBJECT TO PLAN

      5.1 LIMITATIONS. Shares subject to an Option or issued as an Award may be
either authorized and unissued shares or shares issued and later acquired by the
Company. Subject to any antidilution adjustment pursuant to the provisions of
Section 5.2 hereof, the maximum number of shares of Stock that may be issued
hereunder shall be 500,000 (of which a maximum of 80,000 shares may be issued as
Restricted Stock). Shares (i) covered by any unexercised portion of an Option
that has terminated for any reason; (ii) covered by any forfeited portion of an
Award (except any portion as to which the Grantee has received, and not
forfeited, dividends or other benefits of ownership other than voting rights);
(iii) withheld in payment of the Option Price or withholding taxes; or (iv)
issued hereunder but equal to the number of shares surrendered in payment of the
Option Price or withholding taxes or purchased by the Company for an aggregate
price not exceeding the aggregate cash received from Grantees in payment of
Option Prices or withholding

                                      -7-



taxes, may each again be optioned or awarded under the Plan, and such shares
shall not be considered as having been optioned or issued in computing the
number of shares of Stock remaining available for option or award hereunder.

      5.2 ANTIDILUTION.

            (a) In the event that the outstanding shares of Stock are changed
      into or exchanged for a different number or kind of shares or other
      securities of the Company by reason of merger, consolidation,
      reorganization, recapitalization, reclassification, combination or
      exchange of shares, stock split or stock dividend, or in the event that
      any spin-off, spin-out or other distribution of assets materially affects
      the price of the Company's stock:

                  (i) The aggregate number and kind of shares of Stock for which
            Options or Awards may be granted hereunder shall be adjusted
            proportionately by the Committee; and

                  (ii) The rights of Optionees (concerning the number of shares
            subject to Options and the Option Price) under outstanding Options
            and the rights of the holders of Awards (concerning the terms and
            conditions of the lapse of any then-remaining restrictions), shall
            be adjusted proportionately by the Committee.

            (b) If the Company shall be a party to any reorganization in which
      it does not survive, involving merger, consolidation, or acquisition of
      the stock or substantially all the assets of the Company, the Committee,
      in its discretion, may:

                  (i) notwithstanding other provisions hereof, declare that all
            Options granted under the Plan shall become exercisable immediately
            notwithstanding the provisions of the respective Option Agreements
            regarding exercisability, that all such Options shall terminate a
            specified period of time after the Committee gives written notice of
            the immediate right to exercise all such Options and of the decision
            to terminate all Options not exercised within such period, and that
            all then-

                                      -8-



            remaining restrictions pertaining to Awards under the Plan shall
            immediately lapse; or

                  (ii) notify all Grantees that all Options or Awards granted
            under the Plan shall be assumed by the successor corporation or
            substituted on an equitable basis with options or restricted stock
            issued by such successor corporation.

            (c) If the Company is to be liquidated or dissolved in connection
      with a reorganization described in paragraph 5.2(b), the provisions of
      such paragraph shall apply. In all other instances, the adoption of a plan
      of dissolution or liquidation of the Company shall, notwithstanding other
      provisions hereof, cause all then-remaining restrictions pertaining to
      Awards under the Plan to lapse, and shall cause every Option outstanding
      under the Plan to terminate to the extent not exercised prior to the
      adoption of the plan of dissolution or liquidation by the shareholders,
      provided that, notwithstanding other provisions hereof, the Committee may
      declare all Options granted under the Plan to be exercisable at any time
      on or before the fifth business day following such adoption
      notwithstanding the provisions of the respective Option Agreements
      regarding exercisability.

            (d) The adjustments described in paragraphs (a) through (c) of this
      Section 5.2, and the manner of their application, shall be determined
      solely by the Committee, and any such adjustment may provide for the
      elimination of fractional share interests. The adjustments required under
      this Article V shall apply to any successors of the Company and shall be
      made regardless of the number or type of successive events requiring such
      adjustments.

                                   ARTICLE VI
                                     OPTIONS

      6.1 TYPES OF OPTIONS GRANTED. Within the limitations provided herein,
Options may be granted to one Employee at one or several times or to different
Employees at the same time or at different times, in either case under different
terms and conditions, as long as the terms and conditions of each Option are

                                      -9-



consistent with the provisions of the Plan. Without limitation of the foregoing,
Options may be granted subject to conditions based on the financial performance
of the Company or any other factor the Committee deems relevant.

      6.2 OPTION GRANT AND AGREEMENT. Each Option granted or modified hereunder
shall be evidenced (a) by either minutes of a meeting or a written consent of
the Committee, and (b) by a written Option Agreement executed by the Company and
the Optionee. The terms of the Option, including the Option's duration, time or
times of exercise, exercise price, whether the Option is intended to be an ISO,
whether the Option is transferable under paragraph 6.8(b), and whether the
Option is to be accompanied by the right to receive a Reload Option, shall be
stated in the Option Agreement. Separate Option Agreements shall be used for
Options intended to be ISO's and those not so intended, but any failure to use
such separate Agreements shall not invalidate, or otherwise adversely affect the
Optionee's rights under and interest in, the Options evidenced thereby.

      6.3 OPTIONEE LIMITATIONS. The Committee shall not grant an ISO to any
person who, at the time the ISO would be granted:

            (a) is not an Employee; or

            (b) owns or is considered to own stock possessing more than 10% of
      the total combined voting power of all classes of stock of the Employer,
      or any Parent or Subsidiary of the Employer; provided, however, that this
      limitation shall not apply if at the time an ISO is granted the Option
      Price is at least 110% of the Fair Market Value of the Stock subject to
      such Option and such Option by its terms would not be exercisable after
      the expiration of five years from the date on which the Option is granted.
      For the purpose of this paragraph (b), a person shall be considered to own
      (i) the stock owned, directly or indirectly, by or for his brothers and
      sisters (whether by the whole or half blood), spouse, ancestors and lineal
      descendants, (ii) the stock owned, directly or indirectly, by or for a
      corporation, partnership, estate, or trust in proportion to such person's
      stock interest, partnership interest or beneficial interest therein, and
      (iii) the stock which such person may purchase under any outstanding
      options of the Employer or of any Parent or

                                      -10-


      Subsidiary of the Employer.

      6.4 CERTAIN LIMITATIONS

            (a) LIMITATION ON NUMBER OF SHARES. No Optionee shall be granted,
      during any calendar year, Options to purchase in excess of 50,000 shares
      of stock.

            (b) $100,000 LIMITATION ON ISO'S. Except as provided below, the
      Committee shall not grant an ISO to, or modify the exercise provisions of
      outstanding ISO's held by, any person who, at the time the ISO is granted
      (or modified), would thereby receive or hold any incentive stock options
      (as described in Code section 422) of the Employer and any Parent or
      Subsidiary of the Employer, such that the aggregate Fair Market Value
      (determined as of the respective dates of grant or modification of each
      option) of the stock with respect to which such incentive stock options
      are exercisable for the first time during any calendar year is in excess
      of $100,000; provided, that the foregoing restriction on modification of
      outstanding ISO's shall not preclude the Committee from modifying an
      outstanding ISO if, as a result of such modification and with the consent
      of the Optionee, such Option no longer constitutes an ISO; and provided
      that, if the $100,000 limitation described in this Section 6.4 is
      exceeded, an Option that otherwise qualifies as an ISO shall be treated as
      an ISO up to the limitation and the excess shall be treated as an Option
      not qualifying as an ISO. The preceding sentence shall be applied by
      taking options intended to be ISO's into account in the order in which
      they were granted.

      6.5 OPTION PRICE. The Option Price under each Option shall be determined
by the Committee. However, the Option Price shall not be less than the Fair
Market Value of the Stock on the date that the Option is granted (or, in the
case of an ISO that is subsequently modified, on the date of such modification).

      6.6 EXERCISE PERIOD. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, but the Option Agreement with
respect to each Option intended to be an ISO shall provide that such Option
shall not be exercisable after a date not more than ten years from the date of
grant (or modification) of the Option. In addition, no Option granted to an

                                      -11-



Employee who is also an Officer or Director shall be exercisable prior to the
expiration of six months from the date such Option is granted, other than in the
case of the death or disability of such Employee.

      6.7 OPTION EXERCISE.

            (a) Unless otherwise provided in the Option Agreement, an Option may
      be exercised at any time or from time to time during the term of the
      Option as to any or all whole shares that have become Purchasable under
      the provisions of the Option, but not at any time as to less than 100
      shares unless the remaining shares that have become so Purchasable are
      less than 100 shares. The Committee shall have the authority to prescribe
      in any Option Agreement that the Option may be exercised only in
      accordance with a schedule that specifies when all or any portion of an
      Option becomes first exercisable or ceases to be exercisable.

            (b) An Option shall be exercised by (i) delivery to the Treasurer of
      the Company at its principal office of written notice of exercise with
      respect to a specified number of shares of Stock, and (ii) payment to the
      Company at that office of the full amount of the Option Price for such
      number of shares.

            (c) The Option Price shall be paid in full upon the exercise of the
      Option. The Committee may provide in an Option Agreement that, in lieu of
      cash, all or any portion of the Option Price may be paid by (i) tendering
      to the Company shares of Stock duly endorsed for transfer and owned by the
      Optionee, or (ii) delivering to the Company an attestation of the
      Optionee's then-current ownership of a number of shares equal to the
      number thereby authorized to be withheld by the Company from the shares
      otherwise deliverable upon exercise of the Option, in each case to be
      credited against the Option Price at the Fair Market Value of such shares
      on the date of exercise (however, no fractional shares may be so
      transferred, and the Company shall not be obligated to make any cash
      payments in consideration of any excess of the aggregate Fair Market Value
      of shares transferred over the aggregate Option Price).

            (d) In addition to and at the time of payment of the

                                      -12-



      Option Price, the Optionee shall pay to the Company in cash the full
      amount of any federal, state and local income, employment or other taxes
      required to be withheld from the income of such Optionee as a result of
      such exercise. However, in the discretion of the Committee any Option
      Agreement may provide that all or any portion of such tax obligations,
      together with additional taxes not exceeding the actual additional taxes
      to be owed by the Optionee as a result of such exercise, may, upon the
      irrevocable election of the Optionee, be paid by (i) tendering to the
      Company whole shares of Stock duly endorsed for transfer and owned by the
      Optionee, (ii) delivering to the Company an attestation of the Optionee's
      then-current ownership of a number of shares equal to the number thereby
      authorized to be withheld by the Company from the shares otherwise
      deliverable upon exercise of the Option, or (iii) authorizing the Company
      to withhold shares of Stock otherwise issuable upon exercise of the
      Option, in any such case in that number of shares having a Fair Market
      Value on the date of exercise equal to the amount of such taxes thereby
      being paid, but subject to such restrictions as the Committee may from
      time to time determine, including any such restrictions as may be
      necessary or appropriate to satisfy the conditions of the exemption set
      forth in Rule 16b-3 under the 1934 Act.

            (e) The holder of an Option shall not have any of the rights of a
      shareholder with respect to the shares of Stock subject to the Option
      until such shares have been issued upon exercise of the Option.

      6.8 NONTRANSFERABILITY OF OPTION.

            (a) Except as provided in paragraph 6.8(b), no Option or any rights
      therein shall be transferable by an Optionee other than by will or the
      laws of descent and distribution, or (except for an ISO) pursuant to a
      Qualified Domestic Relations Order. During the lifetime of an Optionee, an
      Option granted to that Optionee shall be exercisable only by such
      Optionee, by such Optionee's guardian or other legal representative,
      should one be appointed, or by such Optionee's transferee permitted under
      paragraph 6.8(b).

            (b) The Committee may, in its discretion, provide that

                                      -13-



      all or any portion of an Option (other than an ISO) may be transferred by
      the Optionee to (i) the spouse, children or grandchildren of the Optionee
      ("Immediate Family Members"), (ii) a trust or trusts for the exclusive
      benefit of such Immediate Family Members, or (iii) a partnership in which
      the Optionee and or such Immediate Family Members are the only partners.
      Following transfer, any such Option shall continue to be subject to the
      same terms and conditions as were applicable immediately prior to
      transfer, including those terms and conditions governing transfer and the
      effect on such Option of the termination of employment of the Optionee.
      The Company shall have no obligation to any transferee to provide notice
      of any termination of an Option as a result of termination of the
      Optionee's employment. The Committee may specify as a condition of any
      such transfer the manner in which the Optionee shall remain responsible
      for the payment of taxes required to be withheld as a result of the
      exercise of such transferred Option.

      6.9 TERMINATION OF EMPLOYMENT. The Committee shall have the power to
specify, with respect to the Options granted to any particular Optionee, the
effect upon such Optionee's right to exercise an Option of the termination of
such Optionee's employment under various circumstances, which effect may include
(but is not limited to) immediate or deferred termination of such Optionee's
rights under an Option, or acceleration of the date at which an Option may be
exercised in full. With respect to an ISO, such effects shall be consistent with
applicable requirements for treatment as an ISO.

      6.10 EMPLOYMENT RIGHTS. Options granted under the Plan shall not be
affected by any change of employment so long as the Optionee continues to be an
Employee. Nothing in the Plan or in any Option Agreement shall confer on any
person any right to continue in the employ of the Company or any Subsidiary of
the Company, or shall interfere in any way with the right of the Company or any
such Subsidiary to terminate such person's employment at any time.

      6.11 CERTAIN SUCCESSOR OPTIONS. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422, and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by

                                      -14-



the Company (or by any Subsidiary of the Company) may contain terms that differ
from those stated in this Article VI, but solely to the extent necessary to
preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).

      6.12 CONDITIONS TO ISSUING OPTION STOCK. The Company shall not be required
to issue or deliver any Stock upon the full or partial exercise of any Option
prior to fulfillment of all of the following conditions:

            (a) The admission of such shares to listing on all stock exchanges
      on which the Stock is then listed;

            (b) The completion of any registration or other qualification of
      such shares that the Company shall determine to be necessary or advisable
      under any federal or state law or under the rulings or regulations of the
      Securities and Exchange Commission or any other governmental regulatory
      body, or the Company's determination that an exemption is available from
      such registration or qualification;

            (c) The obtaining of any approval or other clearance from any
      federal or state governmental agency that the Company shall determine to
      be necessary or advisable; and

            (d) The lapse of such reasonable period of time following exercise
      as shall be appropriate for reasons of administrative convenience.

      Unless the shares of Stock covered by the Plan shall be the subject of an
effective registration statement under the Securities Act of 1933, as amended,
stock certificates issued and delivered to Optionees shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.

                                      -15-



                                   ARTICLE VII
                                RESTRICTED STOCK

      7.1 AWARDS OF RESTRICTED STOCK. The Committee may grant Awards of
Restricted Stock upon determination by the Committee, acting pursuant to the
delegation hereby of the Board's authority to make such determinations, that the
value or other benefit to the Company of the services of a Grantee theretofore
performed or to be performed as a condition of the lapse of restrictions
applicable to such Restricted Stock, or the benefit to the Company of the
incentives created by the issuance thereof, is adequate consideration for the
issuance of such shares. Each such Award shall be governed by a Restriction
Agreement between the Company and the Grantee. Each Restriction Agreement shall
contain such restrictions, terms and conditions as the Committee shall, in its
discretion, determine, and may require that an appropriate legend be placed on
the certificates evidencing the subject Restricted Stock.

      Shares of Restricted Stock granted pursuant to an Award hereunder shall be
issued in the name of the Grantee as soon as reasonably practicable after the
Award is granted, provided that the Grantee has executed the Restriction
Agreement governing the Award, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of such shares. If a
Grantee shall fail to execute the foregoing documents, within any time period
prescribed by the Committee, the Award shall be null and void. At the discretion
of the Committee, shares of Restricted Stock issued in connection with an Award
shall be held by the Company or deposited together with the stock powers with an
escrow agent designated by the Committee. Unless the Committee determines
otherwise and as set forth in the Restriction Agreement, upon issuance of such
shares, the Grantee shall have all of the rights of a shareholder with respect
to such shares, including the right to vote the shares and to receive all
dividends or other distributions paid or made with respect to them.

      7.2 NON-TRANSFERABILITY. Until any restrictions upon Restricted Stock
awarded to a Grantee shall have lapsed in a manner set forth in Section 7.3,
such shares of Restricted Stock shall not be transferable other than by will or
the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, nor shall they be delivered to the Grantee.

                                      -16-



      7.3 LAPSE OF RESTRICTIONS. Restrictions upon Restricted Stock awarded
hereunder shall lapse at such time or times (but, with respect to any award to
an Employee who is also a Director or Officer, not less than six months after
the date of the Award) and on such terms and conditions as the Committee shall,
in its discretion, determine at the time the Award is granted or thereafter.

      7.4 TERMINATION OF EMPLOYMENT. The Committee shall have the power to
specify, with respect to each Award granted to any particular Employee, the
effect upon such Grantee's rights with respect to such Restricted Stock of the
termination of such Grantee's employment under various circumstances, which
effect may include (but is not limited to) immediate or deferred forfeiture of
such Restricted Stock or acceleration of the date at which any then-remaining
restrictions shall lapse.

      7.5 TREATMENT OF DIVIDENDS. At the time an Award of Restricted Stock is
made the Committee may, in its discretion, determine that the payment to the
Grantee of any dividends, or a specified portion thereof, declared or paid on
such Restricted Stock shall be (i) deferred until the lapsing of the relevant
restrictions, and (ii) held by the Company for the account of the Grantee until
such time. In the event of such deferral, there shall be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum determined by the Committee. Payment
of deferred dividends, together with interest thereon, shall be made upon the
lapsing of restrictions imposed on such Restricted Stock, and any dividends
deferred (together with any interest thereon) in respect of Restricted Stock
shall be forfeited upon any forfeiture of such Restricted Stock.

      7.6 DELIVERY OF SHARES. Within a reasonable period of time following the
lapse of the restrictions on shares of Restricted Stock, the Committee shall
cause a stock certificate or certificates to be delivered to the Grantee with
respect to such shares. Such shares shall be free of all restrictions hereunder,
except that if the shares of stock covered by the Plan shall not be the subject
of an effective registration statement under the Securities Act of 1933, as
amended, such stock certificates shall bear such restrictive legends as the
Company shall deem necessary

                                      -17-



or advisable pursuant to applicable federal and state securities laws.

      7.7 PAYMENT OF WITHHOLDING TAXES.

            (a) The Restriction Agreement may authorize the Company to withhold
      from compensation otherwise due to the Grantee the full amount of any
      federal, state and local income, employment or other taxes required to be
      withheld from the income of such Grantee as a result of the lapse of the
      restrictions on shares of Restricted Stock, or otherwise as a result of
      the recognition of taxable income with respect to an Award. At the time of
      and as a condition to the delivery of a stock certificate or certificates
      pursuant to Section 7.6, the Grantee shall pay to the Company in cash any
      balance owed with respect to such withholding requirements.

            (b) In the discretion of the Committee, any Restriction Agreement
      may provide that all or any portion of the tax obligations otherwise
      payable in the manner set forth in paragraph 7.7(a), together with
      additional taxes not exceeding the actual additional taxes to be owed by
      the Grantee with respect to the Award, may, upon the irrevocable election
      of the Grantee, be paid by tendering to the Company whole shares of Stock
      duly endorsed for transfer and owned by the Grantee, or by authorizing the
      Company to withhold and cancel shares of Stock otherwise deliverable
      pursuant to Section 7.6, in either case in that number of shares having a
      Fair Market Value on the date that taxable income is recognized equal to
      the amount of such taxes thereby being paid, in all cases subject to such
      restrictions as the Committee may from time to time determine.

                                  ARTICLE VIII
                 TERMINATION, AMENDMENT AND MODIFICATION OF PLAN

      The Board may at any time, (i) cause the Committee to cease granting
Options and Awards, (ii) terminate the Plan, or (iii) in any respect amend or
modify the Plan. However, the Board (unless its actions are approved or ratified
by the shareholders of the Company within twelve months of the date the Board
amends the Plan) may not amend the Plan to materially increase the number of
shares of Stock available under the Plan to Directors or Officers.

                                      -18-



      No termination, amendment or modification of the Plan shall affect
adversely a Grantee's rights under an Option Agreement or Restriction Agreement
without the consent of the Grantee or his or her legal representative.

                                   ARTICLE IX
                                  MISCELLANEOUS

      9.1 REPLACEMENT OR AMENDED GRANTS. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or Awards or accept the surrender of outstanding Options or
Awards on terms specified by the Committee, which terms may include the grant of
new Options or Awards in substitution for them. However no modification of an
Option or Award shall adversely affect a Grantee's rights under an Option
Agreement or Restriction Agreement without the consent of the Grantee or his or
her legal representative.

      9.2 FORFEITURE FOR COMPETITION. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Grantee while an Employee, then that
Grantee's rights under any Options outstanding hereunder shall be forfeited and
terminated, and any shares of Restricted Stock held by such Grantee subject to
remaining restrictions shall be forfeited, subject in each case to a
determination to the contrary by the Committee.

      9.3 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors of the Company.

      9.4 HEADINGS NOT A PART OF PLAN. Headings of Articles and Sections hereof
are inserted for convenience and reference, and do not constitute a part of the
Plan.

                                      -19-

EX-10.16

                                                                   EXHIBIT 10.16

                                                         CONFIDENTIAL MEMORANDUM
                                                                   AND
                                                       2000 STOCK INCENTIVE PLAN
                                                          STOCK OPTION AGREEMENT

TO:

FROM:             ALFRED G. HANSEN, CEO

SUBJECT:          STOCK OPTION AWARD                          DATE:

I am pleased that you have been selected by the Stock Incentive Plan Committee
of the Board of Directors to receive an option for shares of the common stock of
EMS Technologies, Inc. When signed by you and validated by the initials of the
Company's Secretary, this Memorandum will be the Agreement evidencing your
option.

As was true in 2005, the options have a six-year expiration date, and vest at a
rate of 25% per year over a four-year period. This year, for the first time,
vesting at each of the four vesting dates is also subject to the performance
condition that your division (or the company as a whole in the case of corporate
personnel) achieves at least 80% of its target earnings for the calendar year
preceding each vesting date. The target earnings will be determined at the
beginning of each year as part of the annual plan as approved and recorded for
compensation purposes by the Compensation Committee of the Board of Directors.
In the event you change divisions during any year, the performance condition
will be based on the division with which you are employed for the greatest
amount of time during the year.

The new performance condition reflects an important trend in compensation
philosophy, and growing investor insistence that management rewards be based on
the delivery of performance that enhances shareholder value.

Your option has the following terms:
  Grant Date:                                  Total Shares:

  Expiration Date:                             Exercise Price:

1st Date for Exercise:                         Number of Shares:         *
2nd Date for Exercise:                         Number of Shares:         *
3rd Date for Exercise:                         Number of Shares:         *
4th Date for Exercise:                         Number of Shares:         *

- ------------
*Subject to achievement of performance conditions

Your option is also subject to the other terms specified in the Terms of Stock
Option, Form 2/16/00. For Atlanta and Ottawa employees, this document is
available on our intranet, MyEMS\EMSTOnline. To view this document, start from
the Home page of MyEMS, select the tab Document Library at the top of the page.
Scroll down and select the folder on the left called Documents. Now select Human
Resources and then Stock Plans. At this site, you will find the 2000 Plan, and
the Prospectus that describes our options and outlines information, such as tax
consequences, related to exercising your option.

This option grant was recommended by EMS management based on your current and
potential contributions to our Company's overall success. In addition to being
performance based, it is a long-term incentive, and for this reason requires
continued employment to become exercisable, and to remain exercisable for its
full six-year life. It is our hope and goal that, as a result of our combined
efforts over these next six years, and the achievement of our performance
objectives, EMS stock will become worth substantially more than the exercise
price. In this way, the option program allows top performers to share in the
Company's long-term growth and success.

_______, thank you for your contributions to EMS Technologies. Your talents and
hard work are important reasons for the Company's exciting future. I look
forward to continuing our work together to achieve our potential for success.

                 ***********************************************

I acknowledge and accept this Stock Option Agreement,
including the terms and conditions set forth in Terms
of Stock Option, Form 2/16/00.                                     Validated
                                                                   ---------
___________________________       _________________, 2006          Secretary
Signature

                                                              <>


                                                                  EXHIBIT 10.16b

                             EMS TECHNOLOGIES, INC.

                            2000 STOCK INCENTIVE PLAN
                              TERMS OF STOCK OPTION
                                  FORM 02/16/00

      THIS TERMS OF STOCK OPTION sets forth certain terms of, and is included as
part of, each Stock Option Agreement (the "Agreement") that specifically refers
to this Form and that has been issued from time to time by EMS TECHNOLOGIES,
INC., a Georgia corporation (hereinafter referred to as the "Corporation").

                               W I T N E S S E T H

      WHEREAS, the Board of Directors (the "Board") of the Corporation has
adopted a stock incentive plan for the Corporation's and its subsidiary
corporations' officers and employees, known as the "EMS Technologies, Inc. 2000
Stock Incentive Plan" (hereinafter referred to as the "Plan");

      WHEREAS, the Stock Incentive Plan Committee (the "Committee") has
determined that each recipient of an Agreement (the "Employee") is eligible to
participate in the Plan, and that it is in the best interests of the Corporation
that the Employee, through such participation, be provided with additional
incentive to achieve the Company's objectives; and

      WHEREAS, as an employment incentive and to encourage stock ownership, the
Committee has granted the Employee an option (the "Option") to purchase the
number of shares of the Corporation's common stock set forth in the Agreement.

      NOW, THEREFORE, the following terms are included and incorporated in the
Agreement:

      1. Incorporation of Plan. The Option has been granted pursuant to the
provisions of the Plan, which has been provided or made available to the
Employee, and the terms of and definitions set forth in the Plan are
incorporated by reference into the Agreement and made a part thereof.

      2. Grant of Option. Subject to the terms and conditions stated herein, the
Agreement, when signed by the Employee and validated by the Corporation's
Secretary, evidences the grant by the Corporation to the Employee, not in lieu
of salary or other compensation, of the right and option, which is not an ISO,
to purchase all or any part of an aggregate of the Number of Shares of the
Corporation's $.10 par value common stock (the "Common Stock"), specified in the
Agreement, beginning on the First Date for Exercise specified in the Agreement.

      The Option shall expire and is not exercisable after 5:00 p.m., Atlanta
time, on the Expiration Date specified in the Agreement (the "Expiration Date"),
or such other date as determined pursuant to Section 8, 9 or 10.

      Notwithstanding the beginning date or dates for exercise set forth in the
second preceding paragraph, but subject to the provisions of the preceding
paragraph with respect to expiration of the Option, the Option may be exercised
as to all or any portion of the full number of shares subject thereto if: (a) a
tender offer or exchange offer has been made for shares of the Common Stock,
other than one made by the Corporation, provided that the corporation, person or
other entity making such offer purchases or otherwise acquires shares of Common
Stock pursuant to such offer; or (b) any person or group (as such terms are
defined in Section 13(d)(3) of the Securities


Stock/Term of Stock 2000


Exchange Act of 1934, as amended (the "Act")), becomes the holder of 50% or more
of the outstanding shares of Common Stock. If either of the events specified in
this paragraph has occurred, the Option shall be fully exercisable: (x) in the
event of (a) above, during the period commencing on the date the tender offer or
exchange offer is commenced and ending on the date such offer expires and is not
extended; or (y) in the event of (b) above, during the 30-day period commencing
on the date upon which the Corporation is provided a copy of a Schedule 13D or
amendment thereto, filed pursuant to Section 13(d) of the Act and the rules and
regulations promulgated thereunder, indicating that any person or group has
become the holder of 50% or more of the outstanding shares of Common Stock. In
the case of (a) above, if the corporation, person or other entity making the
offer does not purchase or otherwise acquire shares of Common Stock pursuant to
such offer, then the Employee's right under this paragraph to exercise the
Option shall terminate, the Employee and the Corporation shall rescind any
exercise of the Option pursuant to this paragraph, and the Option shall be
reinstated as if such exercise had not occurred.

      3. Purchase Price. The price per share to be paid by the Employee for the
shares subject to the Option shall be the Exercise Price specified in the
Agreement.

      4. Exercise Terms. Beginning on the date or dates specified in, and prior
to the expiration of the Option as provided in, Section 2, the Employee may
exercise the Option as to all such number of shares, or as to any part thereof,
at any time and from time to time during the remaining term of the Option;
provided that the Employee must exercise the Option for at least the lesser of
100 shares or the unexercised portion of the Option. In the event the Option is
not exercised with respect to all or any part of the shares subject to the
Option prior to its expiration, the shares with respect to which the Option was
not exercised shall no longer be subject to this Option.

      5. Option Non-Transferable. The Option and all rights thereunder are
neither assignable nor transferable by the Employee otherwise than by will or
under the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, and during the Employee's lifetime the Option is exercisable
only by him or her (or by his or her guardian or legal representative, should
one be appointed, or qualified transferee). More particularly (but without
limiting the generality of the foregoing), the Option may not be assigned,
transferred (except as aforesaid), pledged or hypothecated in any way (whether
by operation of law or otherwise), and shall not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of the Option contrary to the provisions
hereof shall be null and void and without legal effect.

      6. Notice of Exercise of Option. The Option may be exercised by the
Employee, or by his or her administrator, executor, personal representative or
qualified transferee, by a written notice (in substantially the form of the
"Notice of Exercise" attached hereto as Annex A) signed by the Employee, or by
such administrator, executor, personal representative or qualified transferee,
and delivered or mailed to the Corporation at its principal office in Norcross,
Georgia, to the attention of the President, Treasurer or such other officer as
the Corporation may designate. Any such notice shall (a) specify the number of
shares of Common Stock which the Employee or such administrator, executor,
personal representative or qualified transferee, as the case may be, then elects
to purchase hereunder, and (b) be accompanied by (i) a certified or cashier's
check payable to the Corporation, or personal check acceptable to the
Corporation, in payment of the total price applicable to such shares as provided
herein, or (ii) (subject to any restrictions referred to in Annex A) shares of
Common Stock, owned by him or her and duly endorsed or accompanied by stock
transfer powers, or in lieu thereof, the form of Attestation of Share Ownership
attached as Annex B executed with respect to the number of such shares, having a
Fair Market Value equal to the total purchase price applicable to the shares
purchased hereunder, or (iii) such a check, and the number of such shares (or
attestation with respect thereto) whose Fair Market Value when added to the
amount of the check equals the total purchase price applicable to such shares
purchased under the Option. Such notice shall also be accompanied by such a
check or shares of Common Stock in payment of applicable withholding and
employment taxes, or the person exercising this Option shall authorize (by use
of Annex B or otherwise) the withholding of shares of Common Stock otherwise
issuable under this Option in payment of such taxes, all as set forth on Annex A
and subject to any restrictions referred to therein. Upon receipt of any such
notice and accompanying payment, and subject to the terms hereof, the
Corporation agrees to cause to be issued to the Employee or to such
administrator, executor, personal representative or qualified transferee, as the
case

                                       2


may be, stock certificates for the number of shares specified in such notice
registered in the name of the person exercising the Option.

      7. Adjustment in Option. If, between the Date of Grant specified in the
Agreement and prior to the complete exercise of the Option, there shall be a
change in the outstanding Common Stock by reason of one or more stock splits,
stock dividends, combinations or exchanges of shares, recapitalizations or
similar capital adjustments, then the number, kind and purchase price of the
shares remaining subject to the Option shall be equitably adjusted in accordance
with the terms of the Plan, so that the proportionate interest in the
Corporation represented by the shares then subject to the Option shall be the
same as before the occurrence of such event.

      8. Termination of Employment. Except as set forth in Section 10, if the
Employee ceases to be employed as an employee of the Corporation or any of its
Subsidiaries (such event being hereinafter referred to as a "Termination" and
such corporation that employs the Employee from time to time as the "Employer"),
before the First Date for Exercise set forth in the Agreement, then the Option
shall forthwith terminate on the date of Termination and shall not thereafter be
or become exercisable.

      In the event of a Termination after the First Date for Exercise set forth
in the Agreement, which Termination is either (i) voluntary on the part of the
Employee and with the written consent of the Employer, or (ii) involuntary and
without cause, the Employee may exercise the Option at any time within a period
ending at the earlier of the Expiration Date or 5:00 p.m., Atlanta time, on the
day of the expiration of three months from the date of such Termination, to the
extent of the number of shares that were purchasable thereunder at the date of
Termination.

      In the event of a Termination after the First Date for Exercise set forth
in the Agreement, which Termination is the result of retirement at the normal
retirement date, as prescribed from time to time by the Employer, or at an
earlier date expressly approved by the Employer as an early retirement date for
the Employee, the Employee may exercise the Option at any time within a period
ending at the earlier of the Expiration Date or 5:00 p.m., Atlanta time, on the
third anniversary of such Termination, to the extent of the number of shares
that were purchasable thereunder at the date of Termination.

      In the event of a Termination that is either (i) for cause or (ii)
voluntary on the part of the Employee and not described in the two preceding
paragraphs, the Option, to the extent not theretofore exercised, shall forthwith
terminate and shall not thereafter be or become exercisable.

      The Option does not confer upon the Employee any right with respect to
continuance of employment by the Corporation or any of its Subsidiaries. The
Option shall not be affected by any change of employment, so long as the
Employee continues to be an employee of the Corporation or any such Subsidiary.
In the event the Employer is not the Corporation, and such Employer ceases to be
the Corporation's Subsidiary, as a result of a sale of stock or assets or other
change of corporate status, then in the discretion of the Committee (but subject
to Section 5.2 of the Plan regarding certain transactions affecting the
Corporation) either: (i) the Option shall remain in effect as if such sale or
other change of status had not occurred, for so long as Employee shall remain an
employee of the corporation that previously was such Subsidiary, or of any
successor or subsequent Parent of such corporation, or of any Subsidiary of
either such corporation or any such Parent or successor; or (ii) concurrent with
such sale or change of status, the Corporation shall redeem the Option at a
price equal to the number of shares then subject thereto (whether or not then
purchasable) multiplied by the excess (if any) of the then Fair Market Value of
each such share over the purchase price per share specified in Section 3 (as
adjusted pursuant to Section 7).

      9. Disabled Employee. In the event of a Termination because the Employee
becomes disabled, the Employee (or his or her personal representative) may
exercise the Option at any time within a period ending at the earlier of the
Expiration Date or 5:00 p.m., Atlanta time, on the first anniversary of such
Termination, to the extent of the number of shares that were purchasable
thereunder at the date of Termination.

      For the purposes of the foregoing paragraph the Employee shall be
considered "disabled" if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental

                                       3


impairment that can be expected to last for a continuous period of not less than
twelve months.

      10. Death of Employee. In the event of the Employee's death while employed
by the Corporation or any of its Subsidiaries, or during a period in which the
Employee may exercise the Option notwithstanding an earlier Termination, the
persons described in Section 6 may exercise the Option at any time within a
period ending at the earlier of (i) 5:00 p.m., Atlanta time, on the third
anniversary of the Employee's death, or (ii) the Expiration Date, but in any
event ending not earlier than 5:00 p.m., Atlanta time, on the first anniversary
of the Employee's death. If the Employee was an employee of the Corporation or
one of its Subsidiaries at the time of the Employee's death, the Option may be
so exercised to the extent of the full number of shares subject thereto. If a
Termination occurred prior to Employee's death, the Option may be so exercised
only to the extent of the number of shares that were purchasable hereunder at
the date of Termination.

      11. Competitive Activities. The Option is subject to Section 9.2 of the
Plan, which provides that if the Employee provides services to a competitor of
the Corporation or any of its Subsidiaries, whether as an employee, officer,
director, independent contractor, consultant, agent or otherwise, such services
being of a nature that can reasonably be expected to involve the skills and
experience used or developed by the Employee while an employee of the
Corporation or any such Subsidiary, then the Employee's rights under the Option
shall thereupon be forfeited and terminated, subject to a determination to the
contrary by the Committee.

      12. Binding Agreement. The Agreement, including the terms and condition
set forth in this Terms of Stock Option, shall be binding upon the parties
hereto and their representatives, successors and assigns.

                                       4


                                                                         ANNEX A

                             EMS TECHNOLOGIES, INC.
                            2000 STOCK INCENTIVE PLAN

                               NOTICE OF EXERCISE
                                 OF STOCK OPTION

      The undersigned hereby notifies EMS Technologies, Inc. (the "Corporation")
of his or her election to exercise an option to purchase ___________ shares of
the Corporation's common stock, $.10 par value (the "Common Stock"), pursuant to
that Stock Option Agreement (the "Agreement") between ____________________ (the
"Employee") and the Corporation dated ______________, 200___. Accompanying this
Notice is (1) a certified or a cashier's check (or other check acceptable to the
Corporation) in the amount of $___________ payable to the Corporation and/or (2)
(subject to such restrictions as may be determined to be necessary or
appropriate to avoid earnings charges or other adverse consequences to the
Corporation under applicable accounting or tax rules or regulations)
_______________ shares of the Common Stock presently owned by the undersigned
and duly endorsed or accompanied by stock transfer powers, or in lieu thereof,
the form of Attestation of Share Ownership attached as Annex B to the Terms of
Stock Option referenced in the Agreement, executed with respect to the number of
such shares having an aggregate Fair Market Value (as defined in the EMS
Technologies, Inc. 2000 Stock Incentive Plan (the "Plan")) as of the date hereof
of $_________________, such amounts being equal, in the aggregate, to the
purchase price per share set forth in the Agreement multiplied by the number of
shares being hereby purchased (in each instance subject to appropriate
adjustment pursuant to Section 7 of such Terms of Stock Option).

      Also accompanying this Notice is my check in the amount of $_____________,
in payment of federal and state income withholding and employment taxes
applicable to this exercise. The amount of such payment is based on advice
received from appropriate officials of the Corporation responsible for the
administration of its payroll and employment tax obligations. Alternatively, or
in addition, and subject to such restrictions as may be determined in the
discretion of the Corporation to be necessary or appropriate to comply with Rule
16b-3 under the Securities Exchange Act of 1934, or to avoid earnings charges or
other adverse consequences to the Corporation under applicable accounting or tax
rules or regulations, in full or partial payment of such taxes:

            (1) I deliver herewith an additional __________________ shares of
            the Common Stock (or the form of Attestation of Share Ownership with
            respect thereto) presently owned by me, having an aggregate Fair
            Market Value as of the date hereof of $__________________; and/or

            (2) I hereby authorize the Corporation to withhold, from the shares
            of Common stock otherwise issuable to me pursuant to this
            exercise,________________ such shares having an aggregate Fair
            Market Value at the date hereof of $_______________________.

The sum of (i) any such check plus (ii) the Fair Market Value at the date hereof
of any shares of Common Stock specified in the foregoing clauses (1) and (2) is
not less than the amount of federal and state withholding and employment taxes
applicable to this exercise, and is not greater than the total of all federal
and state income and employment taxes to be owed by me as a result of such
exercise.

      IN WITNESS WHEREOF, the undersigned has set his or her hand and seal,
this ______ day of ______ , 20______.

                                       EMPLOYEE OR HIS OR HER ADMINISTRATOR,
                                       EXECUTOR, PERSONAL REPRESENTATIVE OR
                                       QUALIFIED TRANSFEREE

                                       ____________________________________

                                       5


                                                                         ANNEX B

                             EMS TECHNOLOGIES, INC.

                            2000 STOCK INCENTIVE PLAN
                         ATTESTATION OF SHARE OWNERSHIP

      Pursuant to the Notice of Exercise submitted herewith, I have elected to
purchase ______________ shares of the common stock of EMS Technologies, Inc.
(the "Company"), pursuant to the Stock Option Agreement dated ____________ (the
"Option"), at an aggregate exercise price of $___________ (the "Option Price").
I hereby attest to ownership of the shares specified below (the "Shares") and
hereby tender the Shares in payment of (i) $__________ of the Option Price, and
(ii) $_______________ of withholding and related taxes due upon exercise of the
Option, in each case based on their Fair Market Value on the date hereof (as
determined under the Plan) of $_______________ per share).

      I certify that I have held the Shares that I am tendering (i) for at least
one year after acquiring such Shares through the exercise of an Incentive Stock
Option, and (ii) for at least six months after acquiring such Shares in any
other manner.

      Although the Company has not required me to make actual delivery of
certificates evidencing the Shares, as a result of which I (and the co-owner, if
any of the Shares) will retain ownership of such Shares, I represent that I,
with the consent and agreement of the co-owner (if any) of the Shares, have full
power to deliver and convey such certificates to the Company, and therefore
could have caused the Company to become sole owner of such Shares. The co-owner
of the Shares, by signing this form, consents to these representations and the
exercise of the Option by this notice.



  Common Stock Certificate(s) No.              Number of               Number of Shares Subject
       or Brokerage Account               Shares Represented              to this Attestation
- ---------------------------------         ------------------           ------------------------
                                                                 


You are hereby instructed to apply towards the Option Price: (check one)

            The maximum number of whole shares necessary to pay the Option Price
            and specified taxes, or, if fewer, the total number of listed
            Shares, with any remaining amount to be paid by check accompanying
            the Notice of Exercise.

            ______________ of the listed Shares with the remaining amount to be
            paid by check accompanying the Notice of Exercise.

In each case, the balance of the Shares for which the Option is being exercised
will be issued as specified in the Notice of Exercise.
                                          __________________________________

                                          Name
________________________                  __________________________________

Date                                      Signature
                                          __________________________________

                                          Co-Owner's Name (if any)
________________________                  __________________________________

Date                                      Co-Owner's Signature

                                       6

EX-10.17

                                                                   EXHIBIT 10.17

                                                         CONFIDENTIAL MEMORANDUM
                                                                   AND
                                                       2000 STOCK INCENTIVE PLAN
                                                          STOCK OPTION AGREEMENT

TO:

FROM:             ALFRED G. HANSEN, CEO

SUBJECT:          STOCK OPTION AWARD                                   DATE:

I am pleased that you have been selected by the Stock Incentive Plan Committee
of the Board of Directors to receive an option for shares of the common stock of
EMS Technologies, Inc. When signed by you and validated by the initials of the
Company's Secretary, this Memorandum will be the Agreement evidencing your
option.

As was true in 2005, the options have a six-year expiration date, and vest at a
rate of 25% per year over a four-year period. This year, for the first time,
vesting at each of the four vesting dates is also subject to the performance
condition that your division (or the company as a whole in the case of corporate
personnel) achieves at least 80% of its target earnings for the calendar year
preceding each vesting date. The target earnings will be determined at the
beginning of each year as part of the annual plan as approved and recorded for
compensation purposes by the Compensation Committee of the Board of Directors.
In the event you change divisions during any year, the performance condition
will be based on the division with which you are employed for the greatest
amount of time during the year.

The new performance condition reflects an important trend in compensation
philosophy, and growing investor insistence that management rewards be based on
the delivery of performance that enhances shareholder value.

Your option has the following terms:
  Grant Date:                                         Total Shares:

  Expiration Date:                                    Exercise Price:

1st Date for Exercise:                                Number of Shares:       *
2nd Date for Exercise:                                Number of Shares:       *
3rd Date for Exercise:                                Number of Shares:       *
4th Date for Exercise:                                Number of Shares:       *

- -------------
*Subject to achievement of performance conditions

Your option is also subject to the other terms specified in the Terms of Stock
Option, Form 2/16/00. For Atlanta and Ottawa employees, this document is
available on our intranet, MyEMS\EMSTOnline. To view this document, start from
the Home page of MyEMS, select the tab Document Library at the top of the page.
Scroll down and select the folder on the left called Documents. Now select Human
Resources and then Stock Plans. At this site, you will find the 2000 Plan, and
the Prospectus that describes our options and outlines information, such as tax
consequences, related to exercising your option.

This option grant was recommended by EMS management based on your current and
potential contributions to our Company's overall success. In addition to being
performance based, it is a long-term incentive, and for this reason requires
continued employment to become exercisable, and to remain exercisable for its
full six-year life. It is our hope and goal that, as a result of our combined
efforts over these next six years, and the achievement of our performance
objectives, EMS stock will become worth substantially more than the exercise
price. In this way, the option program allows top performers to share in the
Company's long-term growth and success.

________, thank you for your contributions to EMS Technologies. Your talents and
hard work are important reasons for the Company's exciting future. I look
forward to continuing our work together to achieve our potential for success.

                 ***********************************************

I acknowledge and accept this Stock Option Agreement,
including the terms and conditions set forth in Terms
of Stock Option, Form 2/16/00.                                  Validated
                                                                ---------
________________________________    ________________, 2006      Secretary
Signature

                                                               <>

EX-10.22

                                                                   EXHIBIT 10.22

           COMPENSATION ARRANGEMENTS WITH CERTAIN EXECUTIVE OFFICERS

      The following table sets forth the 2006 salary for the Company's executive
officers being identified by name pursuant to Item 11 and the compensation
disclosures in the Company's Proxy Statement for its 2006 Annual Meeting of
Shareholders that is incorporated by reference into such Item 11. The table also
sets forth each such officer's 2006 incentive compensation target, as a
percentage of salary, and his 2006 grant of options under the Company's 1997
Stock Incentive Plan.



                                     2006            INCENTIVE            2006
                                     BASE          COMPENSATION          OPTION
                                   SALARY (1)          TARGET (2)        GRANT (3)
                                                                
Alfred G. Hansen                   $  450,000              75%            20,000
     President and CEO

Don T. Scartz                      $  277,400              50%            14,500
     Executive Vice President and Chief Financial Officer

James S. Childress                 $  235,900              45%             7,400
     Vice President and General Manager, LXE

T. Gerald Hickman                  $  190,400              45%             6,100
     Vice President and General Manager, EMS Wireless

Neilson A. Mackay                  $  280,200*             45%             3,300
     Vice President and General Manager, SATCOM


- ---------
*Based on exchange rate for the Canadian dollar as of March 20, 2006

(1) As approved by the Compensation Committee of the Board of Directors.

(2) Actual incentive compensation payment is determined based on Company or
   divisional performance during 2006, primarily with reference to actual profit
   before taxes compared with targets approved by the Compensation Committee in
   February 2006. For corporate officers, the determination is weighted 100%
   based on corporate performance. For divisional officers, the determination is
   weighted 70% based on divisional performance and 30% based on corporate
   performance. Except in unusual circumstances as determined by the Committee,
   no incentive compensation is paid if actual performance is at 80% or less of
   targeted performance. Performance above target would normally result in a
   2-for-1 percentage increase in incentive compensation, except that the
   maximum payment based on divisional performance is 150% of target.


(3) Granted on February 17, 2006, at an option price of $18.05 per share. First
   exercisable to the extent of 25% of the optioned shares on February 17, 2007,
   and with respect to an additional 25% on each of the subsequent three
   anniversaries of that date. However, options do not become exercisable on the
   specified dates if, for the preceding calendar year, the Company (for Messrs.
   Hansen and Scartz) or the General Manager's division fails to achieve at
   least 80% of planned earnings performance, as specified by the Compensation
   Committee at the beginning of each such year. The options expire at the end
   of 6 years.

Each officer participates in the Company's 401(k) and Retirement Benefit Plans
on the same terms as all other full-time employees, and the Company does not
currently provide a supplemental retirement plan for its executive officers.

EX-23.1

                                                                    EXHIBIT 23.1

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
EMS Technologies, Inc.:

We consent to the incorporation by reference in the registration statements on
Form S-8 (Nos. 2-76455, 33-50528, 333-20843, 333-32425, 333-35842, 333-86973 and
333-74770) and Form S-3 (Nos. 333-131042 and 333-131719) of EMS Technologies,
Inc. of our reports dated March 31, 2006, with respect to the consolidated
balance sheets of EMS Technologies, Inc. and subsidiaries as of December 31,
2005 and 2004 and related consolidated statements of operations, shareholders'
equity and comprehensive income (loss), and cash flows for each of the years in
the three-year period ended December 31, 2005, and the related financial
statement schedule, management's assessment of the effectiveness of internal
control over financial reporting as of December 31, 2005 and the effectiveness
of internal control over financial reporting as of December 31, 2005, which
reports appear in the December 31, 2005 annual report of Form 10-K of EMS
Technologies, Inc.

In our report specified above, we state that we did not audit the consolidated
financial statements and financial statement schedule of EMS Technologies
Canada, Ltd., a wholly-owned subsidiary for the year ended December 31, 2003,
which financial statements were audited by other auditors whose report has been
furnished to us. Our opinion, insofar as it relates to EMS Technologies Canada,
Ltd., is based solely on the report of the other auditors for the year ended
December 31, 2003.

Our report dated March 31, 2006, on management's assessment of the
effectiveness of internal control over financial reporting and the
effectiveness of internal control over financial reporting as of December 31,
2005, expresses our opinion that the Company did not maintain effective
internal control over financial reporting as of December 31, 2005 because of
the effect of a material weakness on the achievement of the objectives of the
control criteria and contains an explanatory paragraph that states the
following regarding such material weaknesses:

     (a)  The Company did not maintain adequate company level controls.
          Specifically, the Company's policies and procedures did not provide
          for sufficiently detailed supervisory review controls with respect to
          the accounting functions at the Company's operating divisions. This
          deficiency resulted in errors in the Company's preliminary 2005
          consolidated financial statements, and more than a remote likelihood
          that a material misstatement would not be prevented or detected in the
          Company's annual or interim financial statements.

     (b)  The Company's policies and procedures did not provide for a
          sufficiently detailed review regarding analysis of sales agreements
          and related documentation in accounting for assets/liabilities held
          for sale -- discontinued operations. This deficiency resulted in a
          material overstatement of the charge for asset impairment related to
          certain assets held for sale in the Company's preliminary 2005
          consolidated financial statements.


                                    KPMG LLP
Atlanta, Georgia
March 31, 2006

EX-23.2

                                                                    EXHIBIT 23.2

            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the registration statements on
Form S-8 (Nos. 2-76455, 33-50528, 333-20843, 333-32425, 333-35842, 333-86973 and
333-74770) and Form S-3 (Nos. 333-131042 and 333-131719) of EMS Technologies,
Inc. of our report dated February 6, 2004, except with respect to note 3 (b) and
21 as to which the date is January 6, 2006, with respect to the consolidated
financial statements of EMS Technologies Canada, Ltd. incorporated by reference
in this Annual Report (Form 10-K) of EMS Technologies, Inc. for the year ended
December 31, 2003. We also consent to the use of our report dated January 6,
2006 relating to Schedule II - Valuation and Qualifying Accounts of EMS
Technologies Canada, Ltd as of and for the period ended December 31, 2003.

March 31, 2006                                           Ernst & Young LLP
Ottawa, Canada                                           Chartered Accountants

EX-31.1

                                                                    EXHIBIT 31.1

                      SECTION 302 CERTIFICATION OF THE CEO

I, Alfred G. Hansen, certify that:

1. I have reviewed this Annual Report on Form 10-K of EMS Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

            (b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;

            (c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of the end
      of the period covered by this report based on such evaluation; and

            (d) Disclosed in this report any change in the registrant's internal
      control over financial reporting that occurred during the registrant's
      most recent fiscal quarter (the registrant's fourth fiscal quarter in the
      case of an annual report) that has materially affected, or is reasonably
      likely to materially affect, the registrant's internal control over
      financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information; and

            (b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.

6. Based on my knowledge, I am not aware of:

            (a) Any fraud during the period covered by the Annual Report on Form
      10-K; and

            (b) Any change in the control environment that would increase the
      risk of fraud.

 By:   /s/ Alfred G. Hansen                       Date: 03/31/06
       ------------------------
       Alfred G. Hansen
       President and Chief Executive Officer
       (Principal Executive Officer)

EX-31.2

                                                                    EXHIBIT 31.2

                      SECTION 302 CERTIFICATION OF THE CFO

I, Don T. Scartz, certify that:

1. I have reviewed this Annual Report on Form 10-K of EMS Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Ace Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:

            (a) Designed such disclosure controls and procedures, or caused such
      disclosure controls and procedures to be designed under our supervision,
      to ensure that material information relating to the registrant, including
      its consolidated subsidiaries, is made known to us by others within those
      entities, particularly during the period in which this report is being
      prepared;

            (b) Designed such internal control over financial reporting, or
      caused such internal control over financial reporting to be designed under
      our supervision, to provide reasonable assurance regarding the reliability
      of financial reporting and the preparation of financial statements for
      external purposes in accordance with generally accepted accounting
      principles;

            (c) Evaluated the effectiveness of the registrant's disclosure
      controls and procedures and presented in this report our conclusions about
      the effectiveness of the disclosure controls and procedures, as of the end
      of the period covered by this report based on such evaluation; and

            (d) Disclosed in this report any change in the registrant's internal
      control over financial reporting that occurred during the registrant's
      most recent fiscal quarter (the registrant's fourth fiscal quarter in the
      case of an annual report) that has materially affected, or is reasonably
      likely to materially affect, the registrant's internal control over
      financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

            (a) All significant deficiencies and material weaknesses in the
      design or operation of internal control over financial reporting which are
      reasonably likely to adversely affect the registrant's ability to record,
      process, summarize and report financial information; and

            (b) Any fraud, whether or not material, that involves management or
      other employees who have a significant role in the registrant's internal
      control over financial reporting.

6. Based on my knowledge, I am not aware of:

            (a) Any fraud during the period covered by the Annual Report on Form
      10-K; and

            (b) Any change in the control environment that would increase the
      risk of fraud.

 By:  /s/  Don T. Scartz                                  Date: 03/31/06
      --------------------------------------
      Don T. Scartz
      Executive Vice President,
      Chief Financial Officer

EX-32

                                                                      EXHIBIT 32

                    SECTION 906 CERTIFICATION OF THE CEO/CFO

                             EMS TECHNOLOGIES, INC.

                                CERTIFICATION OF
                             CHIEF EXECUTIVE OFFICER
                                       AND
                             CHIEF FINANCIAL OFFICER

      Each of the undersigned Chief Executive Officer and Chief Financial
Officer of EMS Technologies, Inc. hereby individually certifies that the Annual
Report on Form 10-K of the Company for the period ended December 31, 2005, to
which this Certification is attached, fully complies with the requirements of
Section 15(d) of the Securities Exchange Act of 1934, as amended, and that the
information contained in such Report fairly presents, in all material respects,
the financial condition and results of operations of EMS Technologies, Inc.

In witness whereof, each of the undersigned has executed and delivered this
Certification on this 31st day of March, 2006.

/s/ Alfred G. Hansen                       /s/ Don T. Scartz
- ------------------------------             -----------------------------
Alfred G. Hansen                           Don T. Scartz
Chief Executive Officer                    Chief Financial Officer
EMS Technologies, Inc.                     EMS Technologies, Inc.