Signal Technology, Inc.
Exhibit Number 1030
APPLIED SIGNAL TECHNOLOGY, INC.
EXECUTIVE RETENTION AND SEVERANCE PLAN
Effective August 19, 2004
1. Establishment and Purpose of Plan
1. Establishment. The Applied Signal Technology, Inc. Executive Retention and Severance
Plan (the “ Plan ” ) is hereby established by the Compensation Committee of the Board of
Directors of Applied Signal Technology, Inc., effective August 19, 2004 (the “ Effective
Date ” ).
2. Purpose. The Company draws upon the knowledge, experience and advice of its Executive
Officers in order to manage its business for the benefit of the Company’s stockholders. Due
to the widespread awareness of the possibility of mergers, acquisitions and other strategic
alliances in the Company’s industry, the topics of compensation and other employee benefits
in the event of a Change in Control or other circumstances that may result in termination of
employment are issues in competitive recruitment and retention efforts. The Committee
recognizes that the possibility or pending occurrence of a Change in Control could lead to
uncertainty regarding the consequences of such an event and could adversely affect the
Company’s ability to attract, retain and motivate present and future Executive Officers. The
Committee has therefore determined that it is in the best interests of the Company and its
stockholders to provide for the continued dedication of its Executive Officers notwithstanding
the possibility or occurrence of circumstances that may result in termination of employment by
establishing this Plan to provide Executive Officers with enhanced financial security in the
event of a termination of employment. The purpose of this Plan is to provide its Participants
with specified compensation and benefits in the event of a termination of employment under
circumstances specified herein.
2. Definitions and Construction .
1. Definitions. Whenever used in this Plan, the following terms shall have the meanings set forth