- Statement of Ownership: Solicitation (SC 14D9)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14D-9
(Rule 14d-101)

SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934

EMS TECHNOLOGIES, INC.
(Name of Subject Company)

EMS TECHNOLOGIES, INC.
(Name of Person Filing Statement)

Common Stock, par value $0.10 per share, and the Associated Common Stock Purchase Rights
(Title of Class of Securities)

26873N108
(CUSIP Number of Class of Securities)

Neilson A. Mackay
President and Chief Executive Officer
EMS Technologies, Inc.
660 Engineering Drive
Norcross, Georgia 30092
(770) 263-9200
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person Filing Statement)

With copies to:


C. William Baxley Anne M. Cox King & Spalding LLP 1180 Peachtree Street, N.E. Atlanta, Georgia 30309 (404) 572-4600		Stephen Fraidin Yi (Claire) Sheng Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 (212) 446-4800


£		Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS


	Page
Item 1. Subject Company Information		1
Item 2. Identity and Background of Filing Person		1
Item 3. Past Contacts, Transactions, Negotiations and Agreements		3
Item 4. The Solicitation or Recommendation		12
Item 5. Persons/Assets Retained, Employed, Compensated or Used		32
Item 6. Interest in Securities of the Subject Company		33
Item 7. Purposes of the Transaction and Plans or Proposals		33
Item 8. Additional Information		33
Item 9. Exhibits		45
Annex I—Information Statement, dated June 27, 2011
Annex II—Opinion Letter of Merrill Lynch, Pierce, Fenner & Smith Incorporated

Item 1. Subject Company Information.

Name and Address

The name of the subject company is EMS Technologies, Inc., a Georgia corporation (the “Company” , “EMS” , “we” , “us” or “our” ). The principal executive offices of the Company are located at 660 Engineering Drive, Norcross, Georgia 30092, and its telephone number is (770) 263-9200.

Securities

The title of the class of equity securities to which this Solicitation/Recommendation Statement on Schedule 14D-9 (together with the exhibits hereto, this “Statement” ) relates is the common stock, par value $0.10 per share, of the Company (the “Common Stock” or the “Shares” ). As of the close of business on June 22, 2011, there were 15,513,970 Shares issued and outstanding (including 129,139 Shares of unvested restricted Common Stock). In addition, there were 1,151,925 Shares issuable upon exercise of outstanding options to acquire Common Stock.

Item 2. Identity and Background of Filing Person.

Name and Address

The Company is the person filing this Statement. The Company’s name, address and business telephone number are set forth in “Item 1. Subject Company Information—Name and Address ,” and is incorporated herein by reference. The Company’s website address is www.ems-t.com. The Company’s website and the information on or connected to the Company’s website are not a part of this Statement.

Tender Offer and Merger

This Statement relates to the tender offer by Egret Acquisition Corp., a Georgia corporation ( “Purchaser” ), as disclosed in its Tender Offer Statement on Schedule TO (as it may be amended or supplemented from time to time, the “Schedule TO” ) filed with the Securities and Exchange Commission (the “SEC” ) on June 27, 2011. Purchaser is a wholly owned subsidiary of Honeywell International Inc., a Delaware corporation ( “Parent” or “Honeywell” ). Pursuant to the Schedule TO, Purchaser is offering to purchase all the issued and outstanding Shares of the Company including the associated common stock purchase rights at a purchase price of $33.00 per share (the “Offer Price” ), net to the holder in cash, subject to any applicable withholding taxes and without interest, and otherwise upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 27, 2011 (the “Offer to Purchase” ), and in the related letter of transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase, each as may be amended or supplemented from time to time, constitute the “Offer” ).

The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of June 13, 2011 (as such agreement may be amended from time to time, the “Merger Agreement” ), among the Company, Purchaser and Parent. There is no financing condition to the Offer. The consummation of the Offer will be conditioned on (i) the satisfaction of the “minimum condition” (as described below) and (ii) the satisfaction or waiver of other customary closing conditions as set forth in the Merger Agreement, including the receipt of necessary regulatory approvals (including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act” ) and the termination or expiration of the required waiting periods under the antitrust laws of Canada and Austria), obtaining approvals of the Federal Communications Commission and absence of a material adverse effect on the Company.

The “minimum condition” requires that, by the expiration of the Offer, there shall have been validly tendered and not withdrawn that number of Shares which, when added to the Shares already owned by Parent or any of its subsidiaries, represents at least a majority of all then-outstanding Shares on a fully diluted basis, including all Shares that may be issued upon the vesting or exercise of all outstanding stock options or awards then vested and exercisable (including stock options or

awards that vest or are exercisable as a result of the transactions contemplated by the Merger Agreement), but excluding Shares issuable upon the exercise of the Top-Up Option (as defined in “Item 8. Additional Information—Top-Up Option” below) and any options or awards that are validly cancelled under the Merger Agreement. Based on the foregoing, Purchaser believes that the “minimum condition” would be satisfied if 8,332,948 Shares are validly tendered and not withdrawn prior to expiration of the Offer.

The Merger Agreement provides, among other things, that following the successful consummation of the Offer and subject to the satisfaction of the conditions set forth in the Merger Agreement and in accordance with the relevant portions of the Georgia Business Corporation Code (the “GBCC” ), Purchaser will be merged with and into the Company (the “Merger” and, together with the Offer and the other transactions contemplated by the Merger Agreement, the “Transaction” ), with the Company surviving the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation” ). As of the effective time of the Merger (the “Effective Time” ), each Share that is not validly tendered pursuant to the Offer will be converted into the right to receive cash in an amount equal to the Offer Price (other than Shares that are held by Parent, Purchaser, the Company or any of their respective subsidiaries and Shares held by shareholders, if any, who properly exercise their dissenters rights under the GBCC), subject to any applicable withholding taxes and without interest.

If Purchaser acquires at least one more Share than 90% of the outstanding Shares pursuant to the Offer or through exercise of the Top-Up Option, it will complete the Merger through the “short form” procedures available under the GBCC, which would not require the Company to hold a meeting of its shareholders to vote on the adoption of the Merger Agreement. Purchaser may provide for a “subsequent offering period” under federal securities law and in accordance with the Merger Agreement following completion of the initial offer period in order to seek additional Shares and facilitate the consummation of the Merger using such short form merger procedures. In addition, the Company has granted Purchaser a Top-Up Option to acquire additional Shares following the consummation of the Offer in order to facilitate the consummation of the Merger using such short form merger procedures. Subject to certain conditions, Purchaser may exercise the Top-Up Option. In addition, the Merger Agreement provides that Purchaser will exercise the Top-Up Option upon the written request of the Company.

If Purchaser purchases Shares in the Offer but does not hold at least one more Share than 90% of the Company’s outstanding Shares following the consummation of the Offer (and the subsequent offering period provided by Purchaser, if any, and any exercise of the aforementioned Top-Up Option to purchase shares of the Company’s common stock), the Company must obtain the approval of the Company’s shareholders to consummate the Merger. In this event, the Company will call and convene a shareholders’ meeting to obtain this approval, and Parent and Purchaser will vote all Shares owned by them (including Shares acquired pursuant to the Offer) in favor of the adoption of the Merger Agreement, thereby assuring receipt of the requisite vote to consummate the Merger.

The treatment of the Company’s outstanding equity awards under the terms of the Merger Agreement is described below in “Item 3. Past Contacts, Transactions, Negotiations and Agreements” , which information is incorporated herein by reference. A copy of the Merger Agreement is filed as Exhibit (e)(1) hereto and is incorporated herein by reference. The Merger Agreement is summarized in Section 11 of the Offer to Purchase.

The Merger Agreement contains representations and warranties made by EMS to Parent and Purchaser and representations and warranties made by Parent and Purchaser to EMS. The representations and warranties in the Merger Agreement were made for solely for purposes of the Merger Agreement, were the product of negotiations among EMS, Parent and Purchaser, and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement, including disclosure letters provided by the respective parties. Some of those representations and warranties may not be accurate or complete as of any particular date because they are subject to a contractual standard of materiality or material adverse effect different from that generally applicable to public disclosures to shareholders, used for the purpose of allocating risk between the parties to the Merger Agreement rather than establishing matters of fact

or qualified by separate schedules or EMS’ public filings. Moreover, inaccuracies in the representations and warranties are subject to waiver by the parties to the Merger Agreement without notice to you. Accordingly, you should not rely on the representations and warranties contained in the Merger Agreement as statements of actual facts.

According to the Offer to Purchase, Purchaser’s and Parent’s principal executive offices are located at 101 Columbia Road, Morristown, New Jersey, 07962 and the telephone number of their principal executive offices is (973) 455-2000.

Item 3. Past Contacts, Transactions, Negotiations and Agreements.

Certain contracts, agreements, arrangements or understandings between the Company or its affiliates and certain of its executive officers or directors are, except as noted below, described in the Information Statement pursuant to Section 14(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act” ) and Rule 14f-1 thereunder (the “Information Statement” ) that is attached hereto as Annex I and is incorporated herein by reference. In addition, for further information with respect to the contracts, arrangements or understandings between the Company or its affiliates and certain of its executive officers, or directors described in this Item 3, see the information included under “Item 8. Additional Information—Information about Golden Parachute Compensation” , which is incorporated herein by reference.

Except as set forth in this Item 3, Item 4, Item 8 or Annex I, or as otherwise incorporated herein by reference, to the knowledge of the Company, there are no material contracts agreements, arrangements or understandings, and no potential or actual conflicts of interest, between the Company or its affiliates and (i) the Company’s executive officers, directors or affiliates or (ii) Purchaser, Parent or their respective executive officers, directors or affiliates.

Arrangements with Executive Officers and Directors of the Company.

Interests of Certain Persons

Certain members of management and the Company’s board of directors (the “board” or the “board of directors” ) may be deemed to have interests in the transactions contemplated by the Merger Agreement that are different from or in addition to the interests of the Company’s shareholders, generally. These interests may create potential conflicts of interest. The board of directors was aware of these interests and considered them, among other matters, in approving the Merger Agreement and the transactions contemplated thereby. As described below, consummation of the Offer will constitute a change in control of the Company for the purposes of determining the entitlements due to executive officers and directors of the Company relating to certain severance and other benefits.

Consideration Payable Pursuant to the Offer

Consideration for Shares. If the Company’s directors and executive officers were to tender any Shares they own for purchase pursuant to the Offer, they would receive the same cash consideration on the same terms and conditions as the other shareholders of the Company. As of June 22, 2011, the Company’s directors and executive officers (and affiliates and affiliated investment entities) owned 157,633 Shares in the aggregate. If the directors and executive officers (and affiliates and affiliated investment entities) were to tender all of their Shares for purchase pursuant to the Offer and those Shares were accepted for purchase and purchased by Purchaser, the directors and executive officers would receive an aggregate of approximately $5,201,889 in cash. The beneficial ownership of each director and executive officer is further described in the Information Statement under the heading “Security Ownership.”

Consideration for Options and Restricted Shares. As of June 22, 2011, the Company’s directors and executive officers held options to purchase 724,850 Shares in the aggregate, of which 398,101 were vested and exercisable as of that date, with exercise prices ranging from $12.00 to $28.67 and a weighted average exercise price of $18.79 per Share.

Pursuant to the Merger Agreement, each outstanding stock option under the Company’s equity incentive plan will vest and become exercisable between the period beginning with the commencement of the Offer and ending immediately prior to the acceptance for purchase of Shares in the Offer (the “Acceptance Time” ), provided that the Acceptance Time occurs. Upon the consummation of the Merger, (i) each unexercised stock option with an exercise price that is less than the Offer Price will terminate and convert into the right to receive the difference between the Offer Price and the exercise price of such option and (ii) each unexercised stock option with an exercise price that is greater than or equal to the Offer Price will terminate without the payment of any consideration. In addition, immediately prior to the Acceptance Time, the restrictions on each share of restricted stock under the Company’s equity incentive plans that is outstanding shall lapse. Accordingly, holders of outstanding stock options with an exercise price that is less than the Offer Price can exercise their options and, upon receipt of such Shares, tender such Shares in the Offer and holders of shares of restricted Common Stock are able to tender their Shares in the Offer.

The table below sets forth, as of June 22, 2011, the approximate value of the cash payments, before applicable taxes, that each executive officer and director of the Company will receive for such person’s:

•

stock options in connection with the exercise of such stock options and the tender of Shares received upon exercise (or upon the cancellation of any stock options not exercised prior to the Acceptance Time),

•

Shares of restricted Common Stock upon which the restrictions lapse and that are tendered in the Offer (or upon Shares not tendered being converted into the right to receive cash in an amount equal to the Offer Price at the Effective Time), and

•

phantom-stock units issued to the Company’s non-employee directors that will convert to cash and be paid to each participant at the Effective Time and are further described below under the heading “—Arrangements with the Company’s Directors”.


Executive Officer/Director	Options outstanding with a per-share exercise price less than the Offer Price		Restricted Stock		Phantom- Stock Units		Total Payments ($)
Neilson A. Mackay President and Chief Executive Officer		159,500		2,000		—		2,317,071
Gary B. Shell Senior Vice President, Chief Financial Officer, and Treasurer		87,500		500		—		1,220,435
Timothy C. Reis Vice President and General Counsel		62,925		—		—		858,031
Nils A. Helle Vice President and Chief of Staff		33,425		625		—		551,041
David M. Sheffield Vice President, Finance and Chief Accounting Officer		33,000		800		—		546,000
Constandino Koutrouki Vice President and General Manager, Global Resource Management		35,000		750		—		593,240
John C. Jarrell Vice President and General Manager, Aviation		21,000		—		—		285,220
Marion H. Van Fosson Vice President and General Manager, D&S		19,500		—		—		281,815
John R. Bolton Director		15,000		—		1,886.77		225,463
Hermann Buerger Director		44,000		—		5,800.68		849,832
Joseph D. Burns Director		15,000		—		1,083.03		292,690


Executive Officer/Director	Options outstanding with a per-share exercise price less than the Offer Price		Restricted Stock		Phantom- Stock Units		Total Payments ($)
John B. Mowell Director, Chairman		29,000		—		13,180.26		833,859
John R. Kreick Director		29,000		—		7,531.73		647,457
Thomas W. O’Connell Director		30,000		—		3,276.08		451,361
Bradford W. Parkinson Director		35,000		—		7,739.40		719,650
Norman E. Thagard Director		32,000		—		10,924.94		822,433
John L. Woodward, Jr. Director		44,000		—		11,288.34		1,030,925

Total		724,850		4,675		62,711.23		12,526,523

Employment Agreements, Executive Protection Agreements and Severance Agreements

Employment Agreements. The Company does not have employment agreements with any of its executive officers.

Executive Protection Agreements. The Company has entered into Amended and Restated Executive Protection Agreements with Dr. Mackay and Messrs. Shell, Sheffield and Jarrell and Executive Protection Agreements with Messrs. Reis, Helle, Koutrouki and Van Fosson. Each of these agreements provides for severance benefits in the event of termination following a change in control.

For Dr. Mackay, the Amended and Restated Executive Protection Agreement, dated June 12, 2011, provides that if a change in control of the Company approved by the board of directors occurs and within two years thereafter the employment of Dr. Mackay is terminated involuntarily (other than for cause or as the result of disability or death), or voluntarily by him due to Company-initiated adverse changes in duties, compensation or benefits, or change in principal location for the performance of the officer’s duties, he is entitled to a lump sum cash payment of the present value of 30 months of salary, continuation of health and life insurance benefits for 18 months and accelerated vesting of any unvested stock options. The Amended and Restated Executive Protection Agreement includes a non-compete provision that prohibits Dr. Mackay from competing with the Company for six months following a termination of his employment for any reason. The agreement allocates $500,000 of any payments ultimately made to Dr. Mackay under the agreement as consideration for the non-compete.

For Messrs. Shell, Sheffield and Jarrell, the Amended and Restated Executive Protection Agreement, provides that if a change in control of the Company approved by the board of directors occurs and within two years thereafter the employment of the executive is terminated involuntarily (other than for cause or as the result of disability or death), or voluntarily by him due to Company-initiated adverse changes in duties, compensation or benefits, or change in principal location for the performance of the officer’s duties, he is entitled to a lump sum cash payment of the present value of 24 months of salary, continuation of health and life insurance benefits for 12 months and accelerated vesting of any unvested stock options. The Amended and Restated Executive Protection Agreement includes a non-compete provision that prohibits the executive from competing with the Company or a specific business of the Company for six months following a termination of his employment for any reason. The agreements allocate a certain dollar amount of any payments ultimately made to the executives under the agreements as consideration for the non-compete as follows: Mr. Shell—$75,000; Mr. Sheffield—$50,000; and Mr. Jarrell— $150,000.

The Executive Protection Agreements for each of Messrs. Reis, Helle, Koutrouki and Van Fosson provide that if a change in control of the Company approved by the board of directors

occurs and within two years thereafter the employment of an executive officer is terminated involuntarily (other than for cause or as the result of disability or death), or voluntarily by the executive due to Company-initiated adverse changes in duties, compensation or benefits, or change in principal location for the performance of the executive’s duties, the executive officer is entitled to a lump sum cash payment of the present value of two years’ salary, continuation of health and life insurance benefits for one year and accelerated vesting of any unvested stock options held by the executive. Each agreement provides that if any of the compensation or benefits payable, or to be provided, to the executive officer by the Company under the agreement or otherwise are treated as “excess parachute payment” defined in Section 280G(b)(1) of the Code (whether alone or in conjunction with payments or benefits outside of the agreement), the compensation and benefits provided under the agreement or otherwise will be modified or reduced to the extent necessary so that the compensation and benefits payable or to be provided to the executive officer under the agreement that are treated as severance payments, as well as any compensation or benefits provided outside of the agreement that are so treated, shall not cause the Company to have paid an “excess parachute payment”.

Letter Agreement with Dr. Mackay. The Company entered into a letter agreement with Dr. Mackay dated March 19, 2007 (the “Letter Agreement” ) and an amendment to the letter agreement dated June 12, 2011 (the “Amended Letter Agreement” ) that clarifies the payments that Dr. Mackay would receive in the event of certain terminations of employment. In connection with Dr. Mackay’s transfer to the United States from the Company’s Canadian subsidiary in 2007, the Letter Agreement provided that if Dr. Mackay is involuntarily terminated without cause he would be entitled to severance payments determined by reference to Canadian law and practice, which is more generous to the terminated executive than the Company typically otherwise provide to a terminated executive. Pursuant to the Amended Letter Agreement, Dr. Mackay is not entitled to any payments and/or benefits under the Amended Letter Agreement if he receives payments under the Amended and Restated Executive Protection Agreement as a result of a termination of employment within 24 months following a change in control.

The Amended Letter Agreement clarifies that to the extent Dr. Mackay’s employment is terminated as a result of his involuntary termination (other than for cause or as a result of disability or death), or voluntarily by him due to Company-initiated adverse changes in duties, compensation or benefits, or change in principal location for the performance of his duties, and he is not receiving payments under the Amended EPA, the Company will (a) pay, for 21 months following the date of termination, the sum of his monthly base salary in effect on the date of termination, and one-twelfth (1/12th) of the average of the bonuses paid to him for the three calendar years preceding his termination, and (b) provide health and life insurance benefits for 21 months following the date of termination.

The Amended Letter Agreement includes a non-compete provision that prohibits Dr. Mackay from competing with the Company for six months following a termination of his employment for any reason following a change in control. In connection with the non-compete, and in order to encourage him to remain employed with the Company following a change in control, the Company will make a cash retention payment of $500,000, provided that Dr. Mackay remains employed with the Company or its successor for two years following the change in control. To the extent earned, the retention payment will be paid in a lump sum payment within 30 days following termination of his employment for any reason more than two years following a change in control.

Executive Annual Incentive Compensation Plan. Under the amended Executive Annual Incentive Compensation Plan ( “EAICP” ), a target percentage of base salary is set for each executive officer, and target performance goals are established at the beginning of the calendar year. Awards are earned based on achievement of the performance goals. The EAICP provides that if a change in control of the Company approved by the board of directors occurs and within two years thereafter the employment of an executive officer is terminated involuntarily (other than for cause or as the result of disability or death), or voluntarily following certain adverse employment actions, the executive officer is entitled to a lump sum cash payment of his or her target award for the year in which he or she is terminated.

Stock Incentive Plans. The Company’s executive officers hold stock options and restricted stock awards that were granted under the Company’s 1997 Stock Incentive Plan, 2000 Stock Incentive Plan and 2007 Stock Incentive Plan (the “Stock Plans” ). The Stock Plans provide for accelerated vesting of all unvested stock options on the occurrence of a change in control. On June 12, 2011, the Stock Plans were amended to provide that if (1) a tender offer to purchase for cash all of the outstanding shares of common stock of the Company is commenced, (2) the Company is party to a reorganization in which it does not survive, including a merger, consolidation, or acquisition of the stock or substantially all of the assets of the Company, or (3) the Company is party to any reorganization in which it does survive, including a merger, consolidation or acquisition of the stock or substantially all the assets, but in which the outstanding shares of the Company are converted into cash as a result of the transaction, the board of directors may cause all outstanding stock options to become 100% vested in connection with such a transaction, all outstanding stock options to be exercisable at any time prior to the occurrence of such a transaction, and all outstanding stock options not exercised as of the occurrence of such a transaction to be cancelled in exchange for payments of cash. The Stock Plans were also amended to provide that they will terminate at the effective time of the Merger.

In accordance with the terms of the stock award agreements, the board of directors determined on June 12, 2011 that all outstanding stock options will, upon the commencement of the Offer to purchase for cash all the outstanding shares of the Company’s common stock (provided that the Acceptance Time occurs), vest and be exercisable during the Offer, that any unexercised stock options with an exercise price that is less than the per-share Merger consideration will be terminated and converted into cash at the Effective Time, and that any unexercised stock options with an exercise price that exceeds the per-share Merger consideration will be terminated and no longer exercisable.

In addition, the terms of the outstanding restricted stock were amended on June 12, 2011 to provide that, immediately prior to the Acceptance Time, all then-remaining restrictions will lapse and the restricted stock will be free of all restrictions and become fully vested and transferable.

Employee Performance Bonus Plan. The Employee Performance Bonus Plan (the “EPB Plan” ) is a Company-wide annual incentive plan that covers substantially all full-time employees, including the executive officers, and is designed to encourage all employees to work together toward improving the Company’s financial performance and enhance shareholder value. For 2011, the target awards are set at 4% of base compensation. On June 12, 2011, the board of directors amended the terms of the EPB Plan to provide that if a participant is employed by the Company at the Effective Time, and the participant does not resign prior to the applicable bonus approval date, the participant will receive a lump sum cash payment of his or her target bonus even if the participant is terminated following the Merger (other than a termination for cause).

Employment and Retention Agreement with Constandino Koutrouki. In connection with the Merger Agreement, but contingent upon consummation of the Merger and other conditions, Parent offered Mr. Constandino Koutrouki, Vice President and General Manager, EMS Global Resource Management, an operating segment of EMS, continued employment with the Surviving Corporation as the Vice President and General Manager of Honeywell Global Tracking, and entered into an employment agreement with Mr. Koutrouki as of June 12, 2011 ( “Retention Agreement” ). Among other salary, bonus, benefits and other compensation requirements, Mr. Koutrouki may be paid an aggregate retention payment of up to a maximum of £664,500, payable in installments. A portion of the retention payment will be paid upon consummation of the Merger, another portion will be paid if Mr. Koutrouki remains with the Surviving Corporation for at least six months following completion of the Merger, and remaining portions, if any, will be paid based upon achievement of negotiated business performance metrics and continued employment on February 1, 2013 and February 1, 2014, respectively. The Retention Agreement also includes confidentiality, non-competition and non-solicitation covenants from Mr. Koutrouki. As required under the Merger Agreement, the Compensation Committee of the board of directors has approved the Retention Agreement to satisfy the non-exclusive safe harbor provisions of Rule 14d-10(d) under the Exchange Act.

See “Item 8. Additional Information—Information about Golden Parachute Compensation” below (which is incorporated into this Item 3 by reference) for further information with respect to certain of these arrangements and for a quantification of the amounts potentially payable to certain of the executive officers in connection with the Offer and completion of the Merger.

Arrangements with the Company’s Directors

Each director who is not an employee of the Company is paid a $40,000 annual retainer (in quarterly installments, of which $24,000 is paid in cash and $16,000 is deferred into phantom-stock units), $2,500 per board meeting attended ($1,000 for telephonic participation), and $2,000 for committee meetings ($500 for telephonic participation) occurring on a day other than the day of either a board meeting or another compensated committee meeting, or $500 for committee meetings occurring on the same day of either a board meeting or another compensated committee meeting. An additional $1,000 is paid for the second day of multi-day board or committee meetings. Travel expenses are paid to out-of-town directors, and an additional $1,000 each way is paid to a director traveling from a home located more than two time zones from a meeting site.

The Company also pays additional cash retainers as follows: to Mr. Mowell, in the amount of $100,000 per year, for his services as Chairman of the board; to Mr. Buerger, in the amount of $20,000 per year, for his services as Chairman of the Audit Committee; to Dr. Thagard, in the amount of $10,000 per year, for his services as Chairman of the Compensation Committee; and to Dr. Kreick, in the amount of $10,000 per year, for his services as Chairman of the Science & Technology Committee.

The Company also grants each director who is not an employee of the Company options to acquire shares of its common stock. These options include an initial grant of 15,000 shares, vesting 3,000 shares per year for the first five years of service, and further grants of 5,000 shares per year (vesting at the end of six months of further service) upon each election as a board member by the shareholders. All options are granted at the fair market value of the common stock on the date of grant (which automatically occurs at the date of election). Upon the optionee ceasing to be a director for any reason, these options terminate and are forfeited to the extent that they are not exercisable at that time. Once exercisable, these options are not forfeitable and remain exercisable until the sixth anniversary of the date of grant.

The Company also maintains a Directors Deferred Compensation Plan (the “Directors Plan” ) for non-employee directors. Under the Directors Plan, each non-employee director must defer 40% of the annual cash retainer into stock units valued at the date the cash retainer would otherwise have been paid, and may also defer into stock units all other amounts earned for service on the board or its committees. The stock units are payable after the director is no longer a member of the board, or after five years in the case of elective deferrals, subject to the director’s limited right to further defer payment. When payable, the stock units are converted to cash in an amount equal to the value, at the time of payment, of the common stock. The stock units have no minimum guaranteed value, accrue no minimum level of income, and have no voting rights. On June 12, 2011, the board of directors amended the Directors Plan to provide that it will terminate at the Effective Time, and that each director’s deferral account will convert to cash and be paid to each director in a lump sum within 30 days after termination.

Employee Matters

The Merger Agreement provides that until December 31, 2011, the continuing employees of the Company will receive salary and benefits substantially comparable in the aggregate to those provided by the Company immediately prior to the Merger (excluding benefits under any defined benefit plans, equity compensation plans or any other plan or agreement terminated in connection with the Merger Agreement), and during 2012, salary and benefits that are substantially comparable in the aggregate to similarly situated Parent employees (excluding benefits under any defined benefit pension plans). In addition, change in control agreements maintained by the Company will be honored by Purchaser.

Exculpation and Indemnification of Directors and Officers.

The Company’s articles of incorporation eliminate, as permitted by Section 14-2-202(b)(4) of the GBCC, the personal liability of directors for monetary damages to the Company or its shareholders for breach of their duty of care and other duties; provided, however, that the Company’s articles of incorporation and Section 14-2-202(b)(4) of the GBCC do not permit the Company to eliminate or limit liability for (i) a breach of duty involving appropriation of a business opportunity of the Company; (ii) an act or omission which involves intentional misconduct or a knowing violation of law; (iii) any payments of a dividend or any other type of distribution that is illegal under the GBCC; or (iv) any transaction from which an improper personal benefit is derived. In addition, if at any time the GBCC is amended to authorize further elimination or limitation of personal liability, then the liability of each of the Company’s directors shall be eliminated or limited to the fullest extent permitted by such provisions, as so amended, without further action by the Company’s shareholders, unless the provisions of the GBCC require such action.

Sections 14-2-850 to 14-2-859, inclusive, of the GBCC govern the indemnification of directors, officers, employees and agents. Section 14-2-851 of the GBCC provides for indemnification of any of the Company’s directors for liability incurred by him in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative and whether formal or informal, in which he may become involved by reason of being a member of the Company’s board of directors. Section 14-2-851 also provides such indemnity for directors who, at the Company’s request, act as trustees, fiduciaries or agents of employee benefit plans or programs. Section 14-2-851 permits indemnification if the director, while in his official capacity, conducted himself in good faith and reasonably believed that his conduct was in the best interests of the Company (or at least not opposed to the best interests of the Company, if not in his official capacity), and in the case of any criminal proceeding, if he had no reasonable cause to believe his conduct was unlawful. If the required standard of conduct is met, indemnification may include judgments, settlements, penalties, fines or reasonable expenses, including attorneys’ fees, incurred with respect to a proceeding. However, the Company may only indemnify a director for reasonable expenses if a derivative proceeding is involved and the requisite standard of conduct has been met. Section 14-2-852 of the GBCC provides that directors who are wholly successful with respect to any claim brought against them, which claim is brought because they are or were directors, are entitled to indemnification against reasonable expenses incurred in connection with the proceeding.

Section 14-2-857 of the GBCC provides that an officer who is not a director has the mandatory right of indemnification granted to directors under Section 14-2-852, as described above. In addition, the Company may, as provided by the Company’s articles of incorporation, bylaws or specific actions by the board of directors, or by contract, indemnify and advance expenses to an officer, employee or agent who is not a director to the extent that such indemnification is consistent with public policy.

The bylaws of the Company provide that the Company will indemnify its directors and officers against all expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by any such person in connection with threatened or actual actions, suits or proceedings, whether civil, criminal, administrative or investigative, to which such person becomes subject by having served in such role. The Company’s officers and directors are also presently covered by insurance which (with certain exceptions and within certain limitations) indemnifies them against any losses or liabilities arising from any alleged “wrongful act,” including any alleged breach of duty, neglect, error, misstatement, misleading statement, omissions or other act done or wrongfully attempted. The Company pays the cost of such insurance as permitted by the Company’s bylaws and the GBCC. In addition, the Company has indemnification agreements with its officers and directors that provide indemnification to the maximum extent permitted by the GBCC.

The Merger Agreement provides that all rights to indemnification and exculpation from liabilities and advancement of expenses for acts or omissions occurring or alleged to have occurred at or prior to the Effective Time existing (as of the date of the Merger Agreement) in favor of any individual who is now, or has been at any time prior to the date of the Merger Agreement, or who becomes prior to the Effective Time, a director, officer or employee of the Company or any of its

subsidiaries or who is or was serving at the request of the Company or any of its Subsidiaries as a director, officer or employee of another person as provided in the respective articles of incorporation or bylaws (or comparable organizational documents) of the Company and its subsidiaries, and any indemnification agreements shall survive the Offer and the Merger and the other transactions contemplated by the Merger Agreement and will continue in full force and effect in accordance with their terms, and can not be amended, repealed or otherwise modified for a period of six (6) years after the Closing Date in any manner that would adversely affect the rights thereunder of such individuals for acts or omissions occurring at or prior to the Effective Time.

The Merger Agreement also provides that Parent will cause the individuals serving as officers and directors of the Company or any of its subsidiaries immediately prior to the Effective Time to be covered for a period of six (6) years from the Effective Time by the directors’ and officers’ liability insurance policy maintained by the Company (provided that Parent may substitute policies of at least the same coverage and amounts containing terms and conditions that are not less advantageous than such policy) with respect to acts or omissions occurring prior to the Effective Time that were committed by such officers and directors in their capacity as such; provided that after the Closing Date in no event shall Parent be required to expend annually in the aggregate an amount in excess of 250% of the last annual premium paid by the Company for such insurance prior to June 13, 2011 in respect of coverage required to be obtained pursuant to the Merger Agreement. In lieu of the foregoing, the Company may purchase, prior to, on or after the Effective Time, a six-year “tail” prepaid directors’ and officers’ liability insurance policy in respect of acts or omissions occurring prior to the Effective Time covering each such director and officer.

If the Surviving Corporation or its successors or assigns (i) consolidates with or merges into any other corporation or entity and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any individual, corporation or other entity, then, and in each such case, the Merger Agreement provides that proper provision shall be made so that the successors and assigns of the Surviving Corporation shall assume all of the foregoing indemnification and insurance obligations.

The foregoing summary of the indemnification of directors and officers and director and officer liability insurance does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit (e)(1) hereto and is incorporated herein by reference.

Section 16 Matters

The Merger Agreement provides that, prior to the Effective Time, the board of directors will take all such actions as may be necessary or appropriate to cause any disposition of the Shares or conversion of any derivative securities in respect of such Shares by an individual who is a director or officer of the Company subject to Section 16 of the Exchange Act to be exempt under Rule 16b-3 promulgated under the Exchange Act in connection with the consummation of the transactions contemplated by the Merger Agreement.

Rule 14d-10(d) Matters

The Merger Agreement provides that, prior to the Acceptance Time, the Compensation Committee of the board of directors will take all such steps as may be required to cause each agreement, arrangement or understanding entered into by the Company or its subsidiaries on or after June 13, 2011 with any of its officers, directors or employees pursuant to which consideration is paid to such officer, director or employee to be approved as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act and to satisfy the requirements of the non-exclusive safe harbor set forth in Rule 14d-10(d) under the Exchange Act.

Representation on the Company’s Board of Directors

The Merger Agreement provides that, after the acceptance for payment of such number of Shares tendered pursuant to the Offer, Parent will have the right to designate a number of directors,

rounded up to the nearest whole number, to the board equal to the product of the total number of members of the board multiplied by the percentage that the number of Shares beneficially owned by Parent or Purchaser or any of their Subsidiaries (including Shares accepted for payment and Shares acquired pursuant to the Top-Up Option described in this Statement) bears to the total number of Shares then outstanding, but in no event less than a majority of the number of directors. The Company is also required, upon the request of Purchaser, to either increase the size of the board or secure the resignations of such number of the Company’s incumbent directors, or both, as is necessary to enable Purchaser’s designees to be so elected or appointed to the board and the Company cause such designees to be so elected or appointed. The Company is also required, if requested by Purchaser, to take all action necessary to cause Purchaser’s designees to constitute at least the same percentage (rounded up to the next whole number) as is on the board of each committee of the board, to the extent permitted by applicable law and the rules of the Nasdaq Stock Market.

Notwithstanding the foregoing, until the Effective Time, the board of directors will always have at least three of its current directors who are not employed by the Company and who are independent for purposes of the continuing listing requirements of the Nasdaq Stock Market (the “Continuing Directors” ). The Merger Agreement further provides that prior to the Effective Time, the prior approval of a majority of the Continuing Directors will be required in order to (i) amend or terminate the Merger Agreement, (ii) extend the time for performance of any of the obligations of Parent or Merger Sub under the Merger Agreement, (iii) waive any of the Company’s rights under the Merger Agreement, (iv) amend the Company’s articles of incorporation or bylaws in a manner adverse to the Company’s shareholders or (v) take any other action of the Company under the Merger Agreement which adversely affects or could adversely affect the Company’s shareholders.

Agreements between the Company or its Affiliates and Parent or the Purchaser

The Merger Agreement

The summary of the Merger Agreement contained in Section 11 of the Offer to Purchase and the description of the conditions of the Offer contained in Section 15 of the Offer to Purchase are incorporated herein by reference. Such summary and description are qualified in their entirety by reference to the Merger Agreement, which is filed as Exhibit (e)(1) hereto and is incorporated herein by reference.

Mutual Nondisclosure Agreement

On April 25, 2011, Parent executed a mutual nondisclosure agreement with EMS. Among other provisions, pursuant to the mutual nondisclosure agreement, Parent agreed that for 18 months following execution of the nondisclosure agreement, Parent and its affiliates will not attempt to (a) acquire any voting interest in EMS, (b) engage in a proxy solicitation involving EMS, (c) participate in a group (within the meaning of the Exchange Act) with respect to EMS voting securities, (d) acquire a substantial portion of EMS assets (or acquire an option or similar right to acquire such substantial portion of EMS assets), (e) participate in any financing for the purposes of acquiring voting securities of EMS, (f) seek to influence the management of EMS (through proposed tender offer or other business combination, nominating directors, seeking to effect amendments or modifications to EMS’ governing documents or the Rights Plan, or commencing litigation to block a proposed acquisition of control of EMS by another party), (g) attempt to amend, terminate, or publicly disclose the existence of these obligations, or (h) take any other action or make any other public announcement that would reasonably result in EMS’ having to make a public announcement regarding any of the foregoing. Certain provisions of this standstill would terminate earlier upon EMS executing a definitive transaction agreement with a third party.

Amendment to Rights Plan.

In connection with the Company’s execution of the Merger Agreement, the board of directors approved an amendment to the Amended and Restated Shareholder Rights Plan, dated as of

January 4, 2011 (the “Rights Plan” ), with the purpose and intent of rendering the Rights Plan inapplicable to the Offer, the Top-Up Option, the Merger, the Merger Agreement and any other transaction contemplated by the Merger Agreement and to cause the Rights Plan to terminate immediately prior to the effective time of the Merger. This summary of the amendment to the Rights Plan does not purport to be a complete description of the terms and conditions thereof and is qualified in its entirety by reference to Amendment No. 1 to Amended and Restated Shareholder Rights Plan, which is filed as Exhibit (e)(6) hereto and is incorporated herein by reference.

Commercial Relationships with Parent.

The Company’s Aviation segment has various commercial agreements with Honeywell to provide products and services on corporate aircraft as well as commercial airlines. Among other matters, this segment provides Honeywell with products and services related to aeronautical antennas (mechanically and electronically-steered antennas connected to an aircraft’s antenna systems for live television from broadcast satellites) as well as avionics data networking products (routers and switches to manage Internet, entertainment and operational data aboard aircraft). Pursuant to its customer relationship with Honeywell, EMS recognized revenue of approximately $14.3 million in EMS’ 2009 fiscal year and approximately $18.8 million in EMS’ 2010 fiscal year.

Item 4. The Solicitation or Recommendation.

Solicitation/Recommendation.

After careful consideration, including a thorough review of the Offer with the Company’s legal and financial advisors, at a meeting held on June 12, 2011, the board of directors unanimously determined that the Merger Agreement and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders and approved, adopted and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Offer, the Merger and the Top-Up Option.

Accordingly, and for the other reasons described in more detail below, the board of directors unanimously recommends that the Company’s shareholders accept the Offer, tender their Shares pursuant to the Offer, and if required under the GBCC, approve the Merger.

The press release issued by the Company announcing the execution of the Merger Agreement is filed as Exhibit (a)(7) hereto and is incorporated herein by reference.

Background of the Transaction

The industries in which our Company operates are undergoing rapid change, particularly in the area of mobile connectivity. Our board regularly reviews developments in our strategic and business plans (including current and expected changes in the industries in which our Company operates) and considers potential strategic alternatives with a view to maximizing shareholder value.

In November 2009, our board appointed Neilson A. Mackay as our chief executive officer. Over the course of 2010, working with Dr. Mackay, our board focused on increasing the Company’s profitability, alignment and growth. In particular, we worked with Dr. Mackay and our management team to create greater alignment and collaboration among our business units to provide for more scale and opportunities, and we worked with Dr. Mackay and management toward lowering our cost base and creating a new distribution and product strategy for our LXE business. In addition, our board worked with Dr. Mackay to strengthen our management team, improve the productivity of our businesses, and reinforce a culture of effective execution. Beginning in July 2009 and through 2010, we also added to our board two new independent directors, whose business acumen and industry experience broadened the board’s insight into our Company’s strategic alternatives. All of these efforts, among others, were undertaken with a singular focus by the board on creating shareholder value.

On September 27, 2010, John B. Mowell, our chairman, received a letter from MMI Investments, L.P. ( “MMI” ), urging our board to form a special committee of independent directors to pursue strategic alternatives, including a potential sale of the Company in whole or in parts. MMI

also disclosed the letter in an amendment to its Schedule 13D filed with the SEC. Our board engaged King & Spalding LLP ( “King & Spalding” ) as legal advisor in connection with MMI’s letter and other matters.

During the two year period preceding the receipt of the MMI letter, we were contacted informally by various strategic parties and financial sponsors that expressed interest in acquiring all or part of our Company. In particular, from the Fall of 2008 through the Fall of 2009, members of our management engaged in a series of discussions with Honeywell’s representatives regarding the potential acquisition of our LXE business. In early 2009, we entered into a mutual nondisclosure agreement with Honeywell, and we provided Honeywell with summary level information related to our LXE business. After a series of discussions regarding such information, our representatives informed Honeywell that our board had determined not to pursue a sale of our LXE business at this time. During July 2010, Honeywell’s representatives contacted our management again to determine if we had any interest in restarting discussions regarding a sale of our LXE business, and our representatives reiterated that we were not pursuing a sale of our LXE business at that time.

Subsequent to the receipt of MMI’s letter, we received several inquiries from financial sponsors expressing interest in our Company and/or in one or more of our business units, including our LXE business.

In October 2010, Honeywell’s representatives contacted our management to inquire about a potential business transaction, including a sale of our company or certain businesses.

On October 6, 2010, Dr. Mackay attended a meeting with a strategic party ( “Party A” ), with whom the Company has had a business relationship. At this meeting, Party A suggested that they might be interested in acquiring our Company.

Also on October 6, 2010, Mr. Mowell, Dr. Mackay and other members of our management team met with Merrill Lynch, Pierce, Fenner & Smith Inc. ( “BofA Merrill Lynch” ) to discuss the possible engagement of BofA Merrill Lynch to assist our board in reviewing strategic alternatives and in matters relating to MMI.

On October 7, 2010, our board’s governance committee met to discuss the potential agenda items for a board meeting to be held on October 21-22, which had been previously scheduled for the purpose of reviewing our Company’s overall business strategy. In addition, the governance committee discussed the letter received from MMI.

On October 12, 2010, Gary Shell, our chief financial officer, and Dr. Mackay met with a strategic party ( “Party B” ) to discuss the possibility of exploring a strategic transaction pursuant to which EMS would acquire Party B.

On October 15, 2010, our board’s governance committee met again to discuss the letter received from MMI. King & Spalding provided an overview of the process our board should consider in response to the MMI letter, and recommended that our board consider engaging a financial advisor to help assist the board in reviewing the Company’s strategic alternatives. Also at the meeting, Dr. Mackay reviewed our management’s plans for the continued integration of our Company’s business units that are believed to have complementary attributes, including customers, markets, technologies, suppliers and skills. He also reported that improved financial results in the second and third quarters of 2010 were evidence, in his judgment, that our Company’s integration efforts were producing positive results. BofA Merrill Lynch then provided the governance committee with an overview of BofA Merrill Lynch’s experience and discussed the role it could play in assisting the board. Following discussion, the governance committee determined to recommend to the board that BofA Merrill Lynch be engaged as financial advisor to the board and the Company.

At an industry conference held from October 19 to October 21, 2010, our management engaged in a general business discussion with Honeywell’s management. During this discussion, Honeywell’s management expressed their interest in a potential business transaction. Our management indicated that we were not interested in pursuing a transaction at that time.

At an October 22, 2010 special board meeting, our board discussed the recent activities of MMI. King & Spalding provided an overview of the process our board should consider in response to the MMI letter, and BofA Merrill Lynch provided an overview of its experience and discussed the role

it could play in assisting the board. Our board also discussed its current strategic planning process and the recent performance of the Company. Following further discussion, our board determined to engage BofA Merrill Lynch as financial advisor, and we subsequently entered into an engagement letter with BofA Merrill Lynch.

During the Fall of 2010, BofA Merrill Lynch met with our management from time to time to review and discuss our stand-alone strategic and business plans, financial projections of the Company based on such plans, and potential strategic alternatives for the Company, including possible acquisitions by us.

At a November 4, 2010 board meeting, Mr. Shell reviewed with the board our financial projections, including the process followed to develop these projections and the material assumptions and expectations underlying the projections. BofA Merrill Lynch then provided our board with a preliminary review of our Company and our strategic alternatives, including, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units. In addition, BofA Merrill Lynch reviewed various potential alternatives, including pursuing our Company’s current strategic plan, recapitalizations funded by the sale of one or more of our business units, the acquisition of a mobile-connectivity company, and the sale of our Company to either a strategic or financial buyer. Our board also reviewed correspondence received from MMI and decided that Mr. Mowell, John Bolton (another of our directors), Dr. Mackay, and Mr. Shell should meet with MMI to obtain a better understanding of MMI’s perspectives on enhancing shareholder value.

On November 16, 2010, Mr. Mowell was invited to dinner by Party A. Mr. Mowell was given a general overview of Party A’s business and Party A suggested that if our board reached a point where it was willing to consider a transaction, they would be interested. Mr. Mowell indicated that our board had not decided to pursue a transaction at this time, but should a transaction be considered, it was Mr. Mowell’s expectation that Party A would be contacted as part of such a process.

On November 17, 2010, Mr. Mowell, Mr. Bolton, Dr. Mackay and Mr. Shell met with MMI and discussed MMI’s perspectives on enhancing shareholder value.

Over the next few months, in connection with MMI’s public statements, our management and certain members of our board engaged in discussions with investors from time to time regarding our performance and other matters relating to our Company described in our public filings with the SEC. These discussions and the feedback we received from investors were reported to our board on a regular basis.

At a December 3, 2010 special board meeting, our board discussed the November 17 meeting with MMI. Dr. Mackay also presented, and our board discussed, our Company’s strategic and business plans, and Mr. Shell presented, and our board discussed, the financial projections based on our strategic and business plans, as well as the material assumptions and expectations underlying the projections. BofA Merrill Lynch provided our board with an updated review of our Company and our strategic alternatives, including, among other matters, information about our market trading values over a number of years and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units. In addition, BofA Merrill Lynch reviewed various potential alternatives, including pursuing our Company’s current strategic plan, recapitalizations funded by the sale of one or more of our business units, the acquisition of a mobile-connectivity Company, and the sale of our Company to either a strategic or financial buyer. Dr. Mackay briefly reviewed the status of two potential acquisitions, and noted that one target was not currently interested in selling and there was insufficient information on the other target. Following review and discussion, our board concluded that, based on current information and circumstances, it was in the best interests of our shareholders for our Company to pursue its strategic and business plans, and not to pursue a sale transaction at that time.

On December 6, 2011, one of our directors, John Kreick, was contacted by a third strategic party ( “Party C” ). Dr. Kreick informed Party C that our board was not pursuing a sale transaction

at that time. However, a meeting was scheduled for February 14, 2011, between Party C, Mr. Mowell and Dr. Kreick, to discuss potential joint business opportunities.

On December 8, 2010, an investment banker presented an acquisition opportunity to Mr. Mowell which was viewed to be inconsistent with our Company’s long-term strategic plan.

On December 9, 2010, Dr. Mackay participated in a telephone conference with a strategic party ( “Party D” ). During this discussion, Party D suggested that they might be interested in acquiring our LXE business.

On December 10, 2010, Party A requested another meeting with Mr. Mowell to discuss potential business opportunities, including a joint-venture or acquisition of our Company by Party A. Mr. Mowell advised Party A that the board was not interested in pursuing a sale transaction at this time.

On December 17, 2010, the board appointed Dr. Mackay to be a member of our board.

On December 20, 2010, Dr. Mackay met with a strategic party ( “Party E” ), with whom the Company has a business relationship. During the meeting, Party E presented Dr. Mackay with a draft letter indicating Party E’s preliminary, non-binding, interest in acquiring 100% of our outstanding stock.

In December 2010, our management engaged in a general business discussion with Honeywell’s management, in which Honeywell expressed their interest in a potential business transaction. Our management indicated that we may be amenable to having a meeting regarding joint business opportunities in the early part of 2011.

At a January 4, 2011 special board meeting, Dr. Mackay reported on his discussions with Party E. At the meeting, our board, with the assistance of BofA Merrill Lynch and King & Spalding, reviewed and discussed Party E’s draft letter setting forth its non-binding indication of interest. BofA Merrill Lynch provided our board with an overview of our Company and of Party E’s indication of interest and reviewed certain preliminary financial analyses, including, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units, as well as comparable transactions. In addition, BofA Merrill Lynch reviewed various potential strategic alternatives. BofA Merrill Lynch also compared Party E’s indicated price range with the ranges of values derived from BofA Merrill Lynch’s preliminary valuation analyses. After review and discussion, our board determined that the transaction proposed by Party E was not in the best interests of our shareholders as compared to continuing to pursue our Company’s strategic and business plans.

Also at the January 4, 2011 special board meeting, our board reviewed and approved a change to our Company’s rights plan, which removed the requirement that significant actions affecting the plan, including redemption of the rights, be approved by a majority of the directors who did not have an interested-party relationship with an “acquiring person” as defined in the plan.

During the first four months of 2011, following additional public expressions by MMI of its view that our Company and/or one or more of its business units should be sold, we received inquiries from several additional financial sponsors expressing interest in our Company or in one or more of our business units.

In February 2011, Party C contacted BofA Merrill Lynch to convey its interest in a potential transaction to the extent our board of directors entertained a sale process.

On February 1, 2011, MMI delivered a letter to us indicating its intention to nominate four director candidates for election to our board at our 2011 annual meeting of shareholders (the “2011 Annual Meeting” ).

On February 2, 2011, we issued a press release in response to MMI’s announcement that it had submitted four director nominees to our board at the 2011 Annual Meeting. The press release stated that we believe we are well positioned for growth, and noted that our board comprises ten directors with a broad array of qualifications (three of whom were added in the previous nineteen months), including extensive industry and executive level public company experience, and that our board and

management believe that our directors are well qualified to further advance the interests of our shareholders.

Over the next several months, in connection with the proxy contest with MMI, our management and certain members of our board engaged in discussions with investors from time to time regarding our performance and other matters relating to our Company described in our public filings with the SEC. These discussions and the feedback we received from investors were reported to our board on a regular basis.

On February 8, 2011, Mr. Mowell received a call from Party A. Party A inquired again as to whether our board was considering a sale of our Company in view of MMI’s activity. Mr. Mowell referred Party A to our February 2, 2011 press release and stated that we intend to continue to pursue our strategic and business plans at this time.

On February 14, 2011, Dr. Mackay met with Party E to discuss its interest in acquiring our Company. Dr. Mackay informed Party E that our board had determined to pursue our Company’s strategic and business plans, but that if our board did determine to pursue a sale transaction at some point in the future, he expected that Party E would be provided an opportunity to participate in the process.

On February 14, 2011, Dr. Kreick and Mr. Mowell met with Party C. Party C described its business and then discussed its acquisition strategy. Party C acknowledged that our board had determined not to pursue a sale transaction at this time, but asked that we contact Party C if our circumstances changed.

At a February 16-17, 2011 board meeting, the board discussed a potential acquisition opportunity by the Company of another company ( “Party F” ) and decided that additional information on Party F would be required before the board could make a decision as to whether to pursue this opportunity. In addition, at the February 16-17, 2011 board meeting, our board resolved that the 2011 Annual Meeting should be held on May 12, 2011.

In late February 2011, Party E contacted BofA Merrill Lynch to convey that if our board did determine to pursue a sale transaction at some point in the future, Party E would like the opportunity to participate in the process.

On March 4, 2011, BofA Merrill Lynch was contacted by Honeywell. Honeywell requested a meeting with our Company and its advisors to further discuss a potential transaction. EMS representatives advised Honeywell that our Company was not interested in pursuing a transaction at that time, that our board was previously advised of Honeywell’s interest, and that we would again report the matter to our board.

On March 9, 2011, Mr. Mowell participated in a telephone conference with a strategic party ( “Party G” ). Party G was aware of MMI’s activity and called to indicate its interest in us. Mr. Mowell stated that our board had determined to continue with our strategic and business plans at this time. Party G proposed to schedule a meeting at a future date.

At a March 17, 2011 special board meeting, our board considered the acquisition of Party F and discussed matters relating to integration, potential synergies, Party F’s customer list and the potential purchase price. After further consideration and review, our board authorized management to proceed with a non-binding indication of interest, subject to additional due diligence, for the acquisition of Party F.

On March 23, 2011, Mr. Helle received an email from a potentially interested party inquiring about our review of strategic alternatives and a possible divestiture. After this initial contact no further contacts were received from this party.

On April 1, 2011, Mr. Mowell had discussions with Party A. Mr. Mowell reiterated that our board had determined to continue with our Company’s strategic and business plans and had no plans to pursue a sale transaction at this time.

In early April 2011, BofA Merrill Lynch was contacted by a strategic party ( “Party H” ). Party H suggested that it might be interested in acquiring our Company.

On April 6, 2011, Mr. Mowell met with Kirkland & Ellis LLP ( “Kirkland & Ellis” ) to discuss MMI’s proxy contest and related matters. Subsequent to the meeting, we engaged Kirkland & Ellis as an additional legal advisor to the Company and the board.

On April 7, 2011, Mr. Mowell had discussions with Party G and Party G provided Mr. Mowell with an overview of Party G’s business. Mr. Mowell concluded the meeting by stating that our board had determined to continue with our strategic and business plans at this time.

On April 8, 2011, Mr. Mowell received a letter from Party A indicating its preliminary interest in an all-cash offer for us. The letter from Party A noted that Party A would be prepared immediately to begin a brief diligence process of two to three weeks that would enable Party A to make a definitive proposal that would not be subject to further diligence, financing or other conditions (with the exception of customary regulatory approvals). The letter from Party A also noted that, in consideration of the substantial resources that it expected to expend, its proposal was conditional upon our Company agreeing to an exclusive period of at least 30 days to evaluate and negotiate the terms of a transaction. In addition, Party A noted in the letter that it understood our board’s need to fulfill its fiduciary responsibilities and suggested a period following execution of a definitive agreement during which our board would be able to conduct appropriate market checks.

At an April 11, 2011 special board meeting, our board discussed the letter received from Party A, and scheduled a meeting for April 14 during which the board would be able to receive advice from BofA Merrill Lynch, King & Spalding and Kirkland & Ellis, and would be able to further evaluate Party A’s proposal. Our board also discussed the status of the MMI proxy context and directed King & Spalding and Kirkland & Ellis to engage with counsel to MMI to determine whether it was possible to resolve the proxy context at this time through the potential addition of one of MMI’s nominees to our board.

Over the next several weeks, we engaged in various discussions with MMI regarding the settlement of the proxy contest and were unable to reach a settlement on terms acceptable to the parties.

At an April 14, 2011 special board meeting, Dr. Mackay and Mr. Shell reviewed with the board inquiries that had been received over time from various industry participants and financial sponsors expressing a potential interest in our Company. BofA Merrill Lynch then reviewed and discussed the letter received from Party A and provided our board with an overview of our Company and of Party A’s indication of interest and reviewed certain preliminary financial analyses. This review included, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units, as well as comparable transactions. In addition, BofA Merrill Lynch reviewed various other potential strategic alternatives. BofA Merrill Lynch also compared Party A’s indicated price range with the ranges of values derived from BofA Merrill Lynch’s preliminary financial analyses, and discussed the perspectives of investors and analysts regarding our Company’s financial projections. BofA Merrill Lynch, King & Spalding and Kirkland & Ellis then reviewed with the board various alternatives that the board could consider, including continuing to pursue the Company’s strategic and business plans, negotiating with Party A, or conducting a broad process (either confidential or public) to explore a sale of the Company or certain business units in an effort to maximize shareholder value.

At this April 14 meeting, our board engaged in extensive discussions concerning the value presented by Party A’s offer, the risks associated with pursuing the Company’s strategic and business plans, and the different processes that could be followed in identifying a potential acquirer if the board did determine to consider pursuing a transaction. After determining that a transaction should be considered at this time, in view of various factors, including the value presented by Party A’s indication of interest, the information provided by BofA Merrill Lynch and the risks associated with pursuing the Company’s strategic and business plans, the board also noted that while negotiating a sale with a single bidder (such as Party A) had certain benefits in terms of timing, risks and confidentiality, a broader process would provide the greatest confidence in achieving maximum shareholder value. After review and discussion, our board determined that it was in the best

interests of all shareholders to initiate a publicly announced, formal process to explore strategic alternatives, including a sale of the Company or certain business units.

In addition, at the April 14 meeting, our board was apprised of the status of discussions with MMI regarding a possible resolution of the proxy contest, and considered the issues and potential distractions associated with maintaining the scheduled May 12, 2011 date for the 2011 Annual Meeting during the pendency of a publicly announced, formal process to evaluate strategic alternatives. Our board determined that it was in the best interests of our shareholders to postpone the 2011 Annual Meeting from May 12, 2011 until June 30, 2011.

After the market close on April 18, 2011, strategic parties that had previously expressed an interest in purchasing all or part of the Company were contacted on a confidential basis and informed that the Company intended to issue an announcement the following morning that it was initiating a formal process to evaluate strategic alternatives. Management contacted strategic parties with whom the Company has a business relationship and BofA Merrill Lynch contacted the other strategic parties. BofA Merrill Lynch also followed up with those parties that management contacted.

On the morning of April 19, 2011, we issued a press release announcing that our board had determined to initiate a formal process to explore strategic alternatives. Our press release also stated that in light of the decision to initiate a formal process, our board had postponed the 2011 Annual Meeting from May 12, 2011 until June 30, 2011.

Shortly after the April 19, 2011 announcement, at the direction of the Company, BofA Merrill Lynch contacted Party A. BofA Merrill Lynch informed Party A that our board had determined not to negotiate with Party A on an exclusive basis, but BofA Merrill Lynch noted that Party A was invited to participate in the process that was being conducted on behalf of the board.

In connection with the April 19, 2011 announcement, at the direction of the Company, BofA Merrill Lynch contacted numerous potential buyers to gauge their interest in conducting a transaction, including parties that had previously inquired about a transaction with the Company. In addition, BofA Merrill Lynch received calls from numerous potential parties who were interested in purchasing all or part of our Company. In all, BofA Merrill Lynch contacted, or was contacted by, 42 potential buyers, which included 25 strategic parties and 17 financial sponsors. All of the parties that had previously expressed interests in a transaction with the Company, including Honeywell, Party A, Party E, and Party H were contacted during this process.

At an April 21, 2011 special board meeting, BofA Merrill Lynch reported on its initial discussions with potential buyers interested in purchasing all or part of our Company. Our board determined to hold regular meetings to allow it to receive updates regarding, and to monitor, the strategic review process.

Over the course of the next few weeks, we entered into 23 confidentiality agreements with potential buyers, which included 12 strategic parties and 11 financial sponsors. The potential buyers who entered into confidentiality agreements received certain non-public information and engaged in due diligence regarding our Company. 14 of these potential buyers (including nine strategic parties and five financial sponsors) participated in management meetings and/or Q&A calls with our management. We entered into a nondisclosure agreement with Honeywell on April 25, 2011 and Honeywell representatives attended one of our management presentations on April 27, 2011.

At an April 26, 2011 special board meeting, Dr. Mackay reported that high-level management meetings had been scheduled for the next two weeks with several qualified and interested buyers. Dr. Mackay also reported that we had abandoned our efforts to acquire Party F in view of the strategic review process.

On April 26, 2011, BofA Merrill Lynch distributed a letter to potential buyers interested in a possible transaction involving our Company, which outlined the procedures for submission of a non-biding indication of interest by May 9, 2011.

At an April 28, 2011 special board meeting, BofA Merrill Lynch reported on discussions with potential buyers and the schedule for management meetings with additional potential buyers. BofA Merrill Lynch provided information about the potential buyers’ perspectives on acquiring all or part

of our Company, the due diligence process being conducted by potential buyers and their respective abilities to finance a proposed transaction.

On May 2, 2011, MMI delivered to our board and made publicly available a letter that questioned our board’s decision to postpone the 2011 Annual Meeting and suggested that certain procedures should be implemented in connection with the strategic review process.

Also on May 2, 2011, a special board meeting was held to further consider the strategic review process, including matters identified in MMI’s letter, and to discuss an appropriate response to MMI’s letter. BofA Merrill Lynch reported on the strategic review process, including that it had been in contact with numerous potential buyers and that the auction process would soon proceed into the next round where potential buyers would have access to a virtual data room containing additional due diligence information about our Company and our business. BofA Merrill Lynch confirmed that no potential buyers had expressed any significant concern about the timing or nature of the process, or about the adequacy of their access to our management or information about our Company. BofA Merrill Lynch also informed our board that each potential buyer had been given the opportunity to submit a bid to acquire all or certain portions of the Company.

On May 3, 2011, we issued a press release that responded to the allegations made by MMI in its letter dated May 2, 2011.

At a May 5, 2011 special board meeting, BofA Merrill Lynch reviewed the meetings with potential buyers and the process generally during the past week and informed our board that BofA Merrill Lynch expected to receive non-binding indications of interest from a number of potential buyers in advance of the next board meeting.

By May 11, 2011, six potential buyers, which consisted of four strategic parties (including Honeywell, Party A, Party E and Party H) and two financial sponsors (including “Party I” ), expressed interest in acquiring all or part of our Company by submitting non-binding indications of interest to BofA Merrill Lynch ranging from $26 to $31 per share. In addition, three financial sponsors (including “Party J” ) expressed interest in acquiring our global resource management business, and Party D expressed interest in our LXE business.

At a May 12, 2011 board meeting, BofA Merrill Lynch updated the board on the status of the strategic review process. BofA Merrill Lynch reviewed the details of each indication of interest, including pricing, financial capability, transaction structure and other factors likely to affect a potential transaction. BofA Merrill Lynch also discussed with our board considerations relating to those parties interested in only certain of our business units, and noted the tax issues that would be associated with a partial sale of our Company’s businesses. BofA Merrill Lynch also reviewed certain preliminary financial analyses, including, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units, as well as comparable transactions. BofA Merrill Lynch also compared the price ranges reflected in the indications of interest with the ranges of values derived from BofA Merrill Lynch’s preliminary financial analyses. BofA Merrill Lynch then discussed recommended potential next steps in the strategic review process. After review and discussion, our board unanimously authorized BofA Merrill Lynch to continue the strategic review process.

Following the May 12, 2011 board meeting, five potential buyers were invited to the next round of the process, and these potential buyers were provided access to the virtual data room and additional opportunities to meet with members of our management in connection with their due diligence process. These five potential buyers included three strategic parties (including Honeywell, Party E and Party H) and two financial sponsors (Party I and Party J). Our board also invited Party A to participate in the next round of the process, which offer was declined by Party A. In addition, and as authorized by the board, BofA Merrill Lynch continued conversations with additional interested parties to determine their willingness and ability to engage further in the process.

Over the next few weeks, the potential buyers engaged in due diligence with respect to our Company and our business, including through meetings with members of our management and review of the materials provided in the virtual data room.

On May 19, 2011, BofA Merrill Lynch circulated a final bid instruction letter to the potential buyers, requesting them to submit best and final proposals by June 9, 2011.

On May 24, 2011, a draft of the proposed merger agreement was distributed to potential buyers.

At a May 26, 2011 special board meeting, BofA Merrill Lynch updated our board on the status of the strategic review process and reported on the details of each potential buyer’s interest in acquiring all or part of our Company. BofA Merrill Lynch explained that three strategic parties (Honeywell, Party E and Party H) had shown significant interest in our Company. BofA Merrill Lynch also reported that after further meetings Party D was interested in only one of our divisions and was not invited to participate in the next round of the process, Party I remained actively interested, and discussions were ongoing with certain other parties which ultimately did not result in any firm indications of interest or proposals. Our board discussed a potential schedule for the remainder of the strategic review process.

Due diligence by the interested parties continued during the week of May 30, 2011, including through additional meetings with members of our management.

At a June 2, 2011 special board meeting, BofA Merrill Lynch updated the board on the strategic review process and reported that Honeywell and Party H and Party I remained actively interested in acquiring our entire Company while Party E appeared increasingly interested in acquiring only a part of our Company. BofA Merrill Lynch discussed with our board the possibility of facilitating joint bids by those parties interested in only parts of our Company, but noted the tax impact of such a transaction, as well as the complexity of such a transaction from a deal-certainty perspective.

Due diligence by the interested parties continued during the week of June 5, 2011, including through additional meetings with members of our management.

On June 6, 2011, we received comments on the draft merger agreement from Honeywell and Party H. After reviewing the merger agreements, on June 7, 2011, King & Spalding and Kirkland & Ellis reached out to the respective counsel to Honeywell and Party H to discuss the material issues in the merger agreement, including issues affecting deal certainty (such as buyer’s commitments regarding regulatory matters, the closing conditions, termination rights and the definition of “material adverse effect”), the ability of our board to consider superior proposals following the signing of the merger agreement, and the nature and size of any termination fees. Honeywell initially proposed that we pay Honeywell a termination fee of 4.5% of the equity value of the deal if our board were to terminate our merger agreement to undertake a superior proposal. Our counsel indicated to Honeywell that this termination fee should be lower.

From June 7 through June 10, 2011, our management, King & Spalding and Kirkland & Ellis continued in the negotiations of the respective merger agreements with Honeywell’s counsel and Party H’s counsel.

On June 8, 2011, Mr. Mowell attended a meeting with Party H’s chief executive officer to discuss Party H’s interest in a potential transaction with us.

On June 9, 2011, we received written proposals from two strategic bidders. Honeywell submitted a proposal to acquire our Company for $33 in cash per Share, which would be funded by cash on hand. As part of its proposal, Honeywell noted that it was willing to agree to lower the termination fee from 4.5% to 4.0% of our equity value, and was willing to consider our position on certain key terms in the merger agreement, including termination provisions and changes to the definitions of “material adverse effect” and “superior proposal.” Honeywell noted in its proposal that it anticipated that the transaction would be able to close during the third quarter of 2011. Honeywell also noted in its proposal that it was interested in retaining Constandino Koutrouki, our vice president and general manager of global resource management.

The other strategic bidder, Party H, submitted a proposal with a purchase price lower than the price proposed by Honeywell. Counsel to Party H also reached out to our counsel to clarify Party H’s position on certain key terms in its draft merger agreement.

On June 9 and June 10, 2011, four other potential buyers provided written or verbal indications of interest in acquiring all or part of our Company. Party I provided a verbal indication of interest at a price lower than Honeywell’s price, and noted that it would require another two to three weeks to complete its due diligence. Party I did not provide a mark-up of the merger agreement or debt or equity financing commitment papers.

Party E provided a verbal indication of interest in our aviation and defense and space businesses, subject to completion of due diligence. Party E’s proposal contemplated another two to three weeks for due diligence, and Party E did not provide a mark-up of the merger agreement. Party J provided a verbal indication of interest in our global resource management business, subject to due diligence. Party J did not provide a mark-up of the merger agreement or debt or equity financing commitment papers. In addition, although Party D was not invited to participate in this round of the process, it provided a written indication of its interest in our LXE business, based on information it had reviewed to date.

At a June 10, 2011 special board meeting, our board reviewed and discussed the proposals received from the various bidders. BofA Merrill Lynch reviewed the proposals and noted that Honeywell’s proposal was higher than the other proposals for the entire Company, and represented a 59% premium to the closing price of the Shares on April 18, 2011 (which is one trading day prior to the Company’s announcement that it was reviewing strategic alternatives). BofA Merrill Lynch also noted, among other matters, that the indications of interest received by the Company with respect to acquisitions of specific business units of the Company were informal and/or preliminary, were subject to additional due diligence, and on a combined basis reflected preliminary values (after taking into account the tax consequences of any such transaction) below the price proposed to be paid by Honeywell for the entire Company. BofA Merrill Lynch reviewed with our board certain financial analyses, including, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units, as well as comparable transactions. BofA Merrill Lynch also compared the price ranges reflected in the proposals (including Honeywell’s proposal) with the ranges of values derived from BofA Merrill Lynch’s financial analyses. BofA Merrill Lynch then discussed recommended potential next steps in the process.

Also, at the June 10, 2011 special board meeting, King & Spalding and Kirkland & Ellis reported on the negotiations of the merger agreements with Honeywell and Party H and discussed the key terms of the respective merger agreements and the remaining issues to be negotiated. In particular, Kirkland & Ellis reviewed with the board the risks relating to obtaining regulatory clearance for a transaction with each of Honeywell and Party H, and discussed potential approaches to address such risks in the merger agreement. After review and discussion, our board unanimously agreed that BofA Merrill Lynch, King & Spalding and Kirkland & Ellis should seek to complete the negotiations of the merger agreement with Honeywell, while continuing the discussions with other participants in the process, particularly Party H, to assess their ability and willingness to improve their bids.

On the evening of June 10, 2011, King & Spalding and Kirkland & Ellis circulated revised drafts of the merger agreements to Honeywell’s counsel and Party H’s counsel.

On June 11, 2011 and June 12, 2011, King & Spalding, Kirkland & Ellis, Honeywell and Honeywell’s counsel engaged in around-the-clock discussions regarding the terms of the merger agreement. During these discussions, the Company’s counsel emphasized the Company’s need to maximize deal certainty and preserve the board’s ability to comply with its fiduciary duties in the event of a superior proposal, and Honeywell emphasized that given the size and scope of the proposed transaction, Honeywell was not willing to commit to do all things necessary to obtain regulatory approvals, including agreeing to divestitures and similar restrictions. As a result of these negotiations, Honeywell agreed to lower the termination fee payable by the Company from 4% to 3.75% of equity value. In addition, counsel to both parties discussed the possibility of a termination fee payable by Honeywell in the event the merger agreement is terminated as a result of Honeywell’s refusal to agree to certain divestitures or other restrictions required or requested by regulators in connection with obtaining antitrust clearance for the transaction.

On June 11, 2011, Party H informed BofA Merrill Lynch that it could not increase its price into the range proposed by Honeywell, and thus was suspending its involvement in our process.

At a special board meeting on the evening of June 12, 2011, BofA Merrill Lynch, King & Spalding and Kirkland & Ellis updated the board on the status of discussions with Honeywell. BofA Merrill Lynch also reported that Party H had decided to suspend its involvement in the process at this time. King & Spalding and Kirkland & Ellis reported the status of the negotiations of the merger agreement with Honeywell. In particular, the legal advisors reviewed with the board the matters related to obtaining regulatory approval for a transaction with Honeywell, and discussed the proposed termination fee by Honeywell. After extensive discussion, the board authorized the legal advisors to pursue discussions of a termination fee by Honeywell. King & Spalding and Kirkland & Ellis also noted that Honeywell had previously requested that, in the context of a negotiated merger agreement with Honeywell, our board postpone the 2011 Annual Meeting.

In addition, BofA Merrill Lynch reviewed the financial aspects of the transaction and reviewed with our board certain financial analyses, including, among other matters, information about our market trading values over a number of years, and comparisons of various valuation and operating metrics to those of companies similar to our Company’s business units, as well as comparable transactions. BofA Merrill Lynch also compared the price ranges reflected in the Honeywell proposal with the ranges of values derived from BofA Merrill Lynch’s financial analyses. BofA Merrill Lynch then delivered to the board of directors an oral opinion, which was confirmed by delivery of a written opinion dated June 12, 2011, to the effect that, as of that date and based on and subject to various assumptions and limitations described in its opinion, the $33.00 per share consideration to be received by holders of EMS common stock was fair, from a financial point of view, to such holders. After review and further discussion, our board unanimously approved the transaction with Honeywell.

Following the June 12, 2011 special board meeting, King & Spalding, Kirkland & Ellis and Honeywell’s counsel continued to negotiate the remaining open issues on the merger agreement, including Honeywell’s commitment to obtain regulatory approval and the circumstances under which it would be required to pay a termination fee. The negotiations continued into early Monday morning, June 13, 2011.

On Monday morning, June 13, 2011, we entered into a definitive merger agreement with Honeywell in which Honeywell agreed to purchase all of our outstanding shares for $33 per share, and we issued a press release relating to the transaction.

Reasons for the Board of Directors’ Recommendation

In evaluating the Merger Agreement and the other transactions contemplated thereby, including the Offer and the Merger, the board of directors consulted with the Company’s senior management and legal counsel and financial advisors, and considered a number of factors in recommending that all holders of Shares accept the Offer, tender their Shares pursuant to the Offer and, if required under the GBCC, approve the Merger.

The material favorable factors considered by the board of directors were the following:

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Financial Terms. Historical trading prices with respect to the Shares, including that the Offer Price:

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represents a premium of 33% to the closing price of the Shares on June 10, 2011 (which is the trading day prior to the Company’s announcement that it had entered into the Merger Agreement);

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represents a premium of 59% to the closing price of the Shares on April 18, 2011 (which is one trading day prior to the Company’s announcement that it was starting a formal process to review strategic alternatives); and

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represents a premium of 45% to the 52 week high of the Shares prior to April 18, 2011.

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Cash Consideration; Certainty of Value. The form of consideration to be paid in the transaction is cash, which provides certainty of value and immediate liquidity to the Company’s shareholders while avoiding potential long-term business risk.

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The Company’s Operating and Financial Condition; Prospects of the Company. The current and historical financial condition, results of operations, and business of the Company, as well as the Company’s strategic and business plans and prospects if it were to remain an independent Company. The board of directors also considered the risks and uncertainties involved in achieving the Company’s prospects on a standalone basis and their potential impact on the trading price of the Shares, including risks relating to the execution of the strategic and business plans, the highly competitive and rapidly evolving environment in which the Company operates and is expected to operate in the future, and the uncertainties in industry trends and economic and market conditions, some of which are beyond the Company’s control. The board of directors also considered the fact that the transaction with Honeywell would allow shareholders to receive a significant premium to market price and no longer be subject to such risks and uncertainties.

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Strategic Alternatives. The possible alternatives to the acquisition by Parent and perceived risks of those alternatives, including remaining an independent Company, pursuing a leveraged buyout, a recapitalization, purchases of other businesses or strategic mergers, and a sale of certain portions of the Company. The board of directors discussed the potential benefits to the Company’s shareholders of these alternatives and the timing and the likelihood of accomplishing the goals of such alternatives, as well as the board of directors’ assessment that none of these alternatives was reasonably likely to present superior opportunities for creating greater value for the Company’s shareholders, taking into account risks of execution as well as business, competitive, industry and market risks.

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Robust Auction Process. The proposed acquisition by Honeywell was the result of a robust auction process, which included the active solicitation of 42 parties, the participation of 23 parties in the diligence process and receipt of proposals from 6 parties, none of whom indicated that they would be in a position to make a binding proposal (individually, or in the case of partial bids for the Company, collectively) with a higher value than the transaction with Parent. The board of directors also considered the fact that the auction process was publicly announced on April 19, 2011, making it likely that any potential bidder for all or part of the Company would have been aware of the opportunity.

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Terms of the Merger Agreement . The board of directors concluded that the provisions of the Merger Agreement, including the respective representations and warranties and covenants, closing conditions and termination rights of the parties and termination fees payable by the Company and Honeywell all supported its recommendation with respect to the Offer. More specifically, the board of directors considered the following provisions, among others:

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Cash Tender Offer. The acquisition is structured as a cash tender offer for all of the Shares followed by a merger for the same consideration, which can often be completed more promptly than would have been the case with a one-step merger, thereby allowing the Company’s shareholders to receive the cash consideration for their Shares more promptly and reduce the period of uncertainty during the pendency of the transaction on the Company’s shareholders, employees, customers and business partners.

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No Financing Condition; Specific Performance. Parent’s and Purchaser’s obligations under the Merger Agreement are not subject to any financing condition, Parent’s representations in the Merger Agreement that it has and will have all funds necessary to consummate the Offer and the Merger, Parent’s financial strength, and the fact that the Company has a right to specifically enforce the Merger Agreement in the situation where all of the conditions to the Offer and the Merger have been satisfied or waived.

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Fiduciary Termination Right. The Company’s right under the Merger Agreement (i) to furnish information to, and engage in discussions with, third parties in response to certain unsolicited bona fide acquisition proposals, and (ii) to recommend or accept a proposal from a third party for a business combination with the Company which the board of

directors determines, after consultation with its legal and financial advisors, to be more favorable to the Company’s shareholders from a financial point of view than the transaction with Parent.

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Termination Fee Payable by Parent. The termination fee of $19.6 million payable by Parent to the Company if Parent fails to agree to certain required or requested actions in connection with obtaining antitrust clearance (subject to other specified conditions), which would constitute the Company’s sole and exclusive remedy in such event.

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Reasonableness of Termination Fee Payable by Company. The termination fee of $19.6 million payable by the Company to Parent in the event the Merger Agreement is terminated in certain circumstances (including a termination of the Merger Agreement by the Company in order to enter into a superior proposal), which the board of directors determined is within the customary range of termination fees for transactions of this type.

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Conditions to Consummation of the Offer and the Merger; Likelihood of Closing. The reasonable likelihood of the consummation of the Offer and the Merger and that Parent’s obligations to purchase Shares in the Offer and to close the Merger are subject to limited conditions.

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Top-Up Option. Under certain circumstances following the consummation of the Offer, Purchaser may, and upon the Company’s request must, exercise the Top-Up Option to purchase from the Company, at a price per share equal to the Offer Price, up to a number of additional Shares sufficient to cause Purchaser to own one Share more than 90% of the Shares then outstanding, which could permit Purchaser to consummate the Merger more quickly as a short form merger under the GBCC.

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Extension of Offer. The fact that unless earlier terminated the Merger Agreement requires Purchaser to extend the Offer if, at the then-scheduled expiration date of the Offer, the conditions to the Offer are not satisfied or waived and it is reasonably expected that such condition or conditions may be satisfied prior to September 30, 2011 (subject to extension to December 31, 2011 (the “Outside Date” ) for purposes of obtaining the required regulatory approvals.

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Opinion of the Company’s Financial Advisor. The opinion of BofA Merrill Lynch, dated June 12, 2011, to the board of directors as to the fairness, from a financial point of view and as of the date of the opinion, of the $33.00 per share consideration to be received by holders of EMS common stock, as more fully described below in the section entitled “Item 4. The Solicitation or Recommendation—Opinion of EMS’ Financial Advisor. ”

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Business Reputation of Parent. The business reputation and capabilities of Parent and its management, including Parent’s history of successfully executing multiple acquisitions and proven track record for integrating acquired businesses, and the substantial financial resources of Parent and, by extension, Purchaser, which the board of directors believed supported the conclusion that a transaction with Parent and Purchaser could be completed relatively quickly and in an orderly manner.

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Dissenters’ Rights. The availability of dissenters’ rights for shareholders who do not tender their Shares in the Offer and who otherwise comply with all of the procedural requirements under the GBCC, which allows such shareholders to demand appraisal of their Shares.

The board of directors weighed the foregoing factors against the following negative considerations:

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Failure to Close. The risk that the transaction might not be completed, including as a result of the failure of regulatory approvals or other closing conditions to be satisfied, and the effect of the resulting public announcement of termination of the Merger Agreement on:

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The market price of the Shares, which could be affected by many factors, including (i) the reason for which the Merger Agreement was terminated and whether such termination results from factors adversely affecting the Company, (ii) the possibility that

the marketplace would consider the Company to be an unattractive acquisition candidate and (iii) the possible sale of Shares by short-term investors following the announcement of termination of the Merger Agreement.

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The Company’s operating results, particularly in light of the costs incurred in connection with the transaction.

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The Company’s ability to attract and retain key personnel during the pendency of a transaction.

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Relationships with the Company’s employees, vendors, customers, partners and others that do business with the Company during the pendency of a transaction.

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Potential Termination Fee Payable by the Company. If the Merger Agreement is terminated under certain circumstances (including a termination of the Merger Agreement by the Company in order to enter into a superior proposal), the Company will be required to pay Parent a $19.6 million termination fee, which would constitute Parent’s sole and exclusive remedy in such event.

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No Shareholder Participation in Future Company Growth. The fact that the Company’s shareholders who tender their Shares (or whose Shares are converted to cash in the Merger, if it occurs) will not participate in any future earnings or growth of the Company and will not benefit from any future appreciation in the value of the Company.

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No Solicitation. The fact that the Merger Agreement prohibits the Company from actively soliciting other potential acquisition proposals, and restricts its ability to respond to certain potential acquisition proposals, unless certain conditions are satisfied.

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Restrictions on the Operation of the Company’s Business. The covenants in the Merger Agreement requiring the business of the Company and its subsidiaries prior to the consummation of the Merger to be conducted in all material respects in the ordinary course of business consistent with past practice, as well as various other operational restrictions on the Company and its subsidiaries prior to the consummation of the Merger, which could delay or prevent the Company from undertaking business opportunities that could arise prior to the consummation of the Offer.

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Tax Effect. The Offer and the Merger will be taxable transactions and, therefore, the holders of Shares generally will be required to pay income tax on any gains they recognize as a result of the receipt of cash in the Offer or the Merger.

The board of directors also considered that certain of the Company’s directors and officers may have conflicts of interest in connection with the Offer and the Merger, as they may receive certain benefits that are different from, and in addition to, those of the Company’s other shareholders. See “Item 3. Past Contracts, Transactions, Negotiations and Agreements.” In addition, the board of directors also considered the existing relationships between BofA Merrill Lynch, Parent and the Company as further described in “—Opinion of EMS’ Financial Advisor” below.

This discussion of the information and factors considered by the board of directors includes the material positive and negative factors considered by the board, but is not intended to be exhaustive and may not include all of the factors considered by the board. The board of directors did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination, and did not quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination that the Offer, the Merger, the Merger Agreement and the other transactions contemplated by the Merger Agreement are fair to and in the best interests of the Company and its shareholders. Rather, the board of directors conducted an overall analysis of the factors described above, including thorough discussion with, and questioning of, the Company’s management and outside advisors, and determined that, in the aggregate, the potential benefits considered outweighed the potential risks or possible negative consequences of the transaction with Honeywell, and that the Offer and the Merger represent the best reasonably available alternative to maximize shareholder value. In addition, individual members of the board of directors may have given different weight to different factors. It should be noted that the explanation of the reasoning of the board of directors

and certain information presented in this section, is forward-looking in nature and, therefore, that information should be read in light of the factors discussed in “Item 8. Additional Information—Forward-Looking Statements.”

Opinion of EMS’ Financial Advisor

EMS has retained BofA Merrill Lynch to act as EMS’ financial advisor in connection with the Transaction. BofA Merrill Lynch is an internationally recognized investment banking firm which is regularly engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. EMS selected BofA Merrill Lynch to act as EMS’ financial advisor in connection with the Transaction on the basis of BofA Merrill Lynch’s experience in transactions similar to the Transaction, its reputation in the investment community and its familiarity with EMS and its business.

On June 12, 2011, at a meeting of EMS’ board of directors held to evaluate the Transaction, BofA Merrill Lynch delivered to EMS’ board of directors an oral opinion, which was confirmed by delivery of a written opinion dated June 12, 2011, to the effect that, as of the date of the opinion and based on and subject to various assumptions and limitations described in its opinion, the $33.00 per share consideration to be received by holders of EMS common stock was fair, from a financial point of view, to such holders.

The full text of BofA Merrill Lynch’s written opinion to EMS’ board of directors, which describes, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken, is attached as Annex II to this document and is incorporated by reference herein in its entirety. The following summary of BofA Merrill Lynch’s opinion is qualified in its entirety by reference to the full text of the opinion. BofA Merrill Lynch delivered its opinion to EMS’ board of directors for the benefit and use of EMS’ board of directors (in its capacity as such) in connection with and for purposes of its evaluation of the $33.00 per share consideration from a financial point of view. BofA Merrill Lynch’s opinion does not address any other aspect of the Transaction and no opinion or view was expressed as to the relative merits of the Transaction in comparison to other strategies or transactions that might be available to EMS or in which EMS might engage or as to the underlying business decision of EMS to proceed with or effect the Transaction. BofA Merrill Lynch’s opinion does not address any other aspect of the Transaction and does not constitute a recommendation to any shareholder as to how to vote or act in connection with the proposed Transaction or any related matter.

In connection with rendering its opinion, BofA Merrill Lynch:


(1)				reviewed certain publicly available business and financial information relating to EMS;

(2)				reviewed certain internal financial and operating information with respect to the business, operations and prospects of EMS furnished to or discussed with BofA Merrill Lynch by the management of EMS, including certain financial forecasts relating to EMS prepared by the management of EMS, referred to herein as EMS management forecasts;

(3)				discussed the past and current business, operations, financial condition and prospects of EMS with members of senior management of EMS;

(4)				reviewed the trading history for EMS common stock and a comparison of that trading history with the trading histories of other companies BofA Merrill Lynch deemed relevant;

(5)				compared certain financial and stock market information of EMS with similar information of other companies BofA Merrill Lynch deemed relevant;

(6)				compared certain financial terms of the Transaction to financial terms, to the extent publicly available, of other transactions BofA Merrill Lynch deemed relevant;

(7)				considered the results of BofA Merrill Lynch’s efforts to solicit, at the direction of EMS, indications of interest and definitive proposals from third parties with respect to a possible acquisition of all or a portion of EMS;


(8)				reviewed a draft, dated June 12, 2011, of the merger agreement, (the “Draft Agreement” ); and

(9)				performed such other analyses and studies and considered such other information and factors as BofA Merrill Lynch deemed appropriate.

In arriving at its opinion, BofA Merrill Lynch assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with it and relied upon the assurances of the management of EMS that they were not aware of any facts or circumstances that would make such information or data inaccurate or misleading in any material respect. With respect to the EMS financial forecasts, BofA Merrill Lynch was advised by EMS, and assumed, that they were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of EMS as to the future financial performance of EMS. For further discussion of these financial forecasts, see “ Item 8. Additional Information—Projected Financial Information. ” BofA Merrill Lynch did not make or was not provided with any independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of EMS, nor did it make any physical inspection of the properties or assets of EMS. BofA Merrill Lynch did not evaluate the solvency or fair value of EMS or Honeywell under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. BofA Merrill Lynch assumed, at the direction of EMS, that the Transaction would be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction or condition, including any divestiture requirements or amendments or modifications, would be imposed that would have an adverse effect on EMS or the contemplated benefits of the Transaction. BofA Merrill Lynch also assumed, at the direction of EMS, that the Merger Agreement did not differ in any material respect from the Draft Agreement reviewed by BofA Merrill Lynch.

BofA Merrill Lynch expressed no view or opinion as to any terms or other aspects of the Transaction (other than the $33.00 per share consideration to the extent expressly specified in its opinion), including, without limitation, the form or structure of the Transaction. BofA Merrill Lynch’s opinion was limited to the fairness, from a financial point of view, of the $33.00 per share consideration to be received by the holders of EMS Common Stock and no opinion or view was expressed with respect to any consideration received in connection with the Transaction by the holders of any other class of securities, creditors or other constituencies of any party. In addition, no opinion or view was expressed with respect to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to any of the officers, directors or employees of any party to the Transaction, or class of such persons, relative to the $33.00 per share consideration. Furthermore, no opinion or view was expressed as to the relative merits of the Transaction in comparison to other strategies or transactions that might be available to EMS or in which EMS might engage or as to the underlying business decision of EMS to proceed with or effect the Transaction. BofA Merrill Lynch did not express any opinion as to the prices at which EMS common stock would trade at any time, including following announcement or consummation of the Transaction. In addition, BofA Merrill Lynch expressed no opinion or recommendation as to whether any shareholder should tender Shares in the Offer or how any shareholder should act in connection with the Transaction or any related matter. Except as described above, EMS imposed no other limitations on the investigations made or procedures followed by BofA Merrill Lynch in rendering its opinion.

BofA Merrill Lynch’s opinion was necessarily based on financial, economic, monetary, market and other conditions and circumstances as in effect on, and the information made available to BofA Merrill Lynch as of, the date of its opinion. It should be understood that subsequent developments may affect its opinion, and BofA Merrill Lynch does not have any obligation to update, revise or reaffirm its opinion. The issuance of BofA Merrill Lynch’s opinion was approved by BofA Merrill Lynch’s Americas Fairness Opinion Review Committee.

The following represents a brief summary of the material financial analyses presented by BofA Merrill Lynch to EMS’ board of directors in connection with its opinion. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses performed by BofA Merrill Lynch, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses performed by BofA Merrill Lynch. Considering the data set forth in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by BofA Merrill Lynch.

EMS Financial Analyses

Selected Publicly Traded Companies Analysis. BofA Merrill Lynch reviewed publicly available financial and stock market information for EMS and the following fifteen publicly traded companies in the Global Resource Management and Aero-Connectivity industries:

The Global Resource Management (“GRM”) companies were:

•

Datalogic S.p.A.

•

Intermec Inc.

•

Motorola Solutions, Inc.

•

Psion PLC

•

Thrane & Thrane A/S

•

Zebra Technologies Corporation

The Aero-Connectivity companies were:

•

Anaren, Inc.

•

Cobham PLC

•

Com Dev International, Ltd.

•

Comtech Telecommunications Corporation

•

Gilat Satellite Networks, Ltd.

•

Globecomm Systems, Inc.

•

Harris Corporation

•

Teledyne Technologies, Inc.

•

Viasat, Inc.

BofA Merrill Lynch reviewed, among other things, per share equity values, based on closing stock prices on June 10, 2011, of the selected publicly traded companies as a multiple of calendar year 2012 estimated earnings per share, commonly referred to as EPS. BofA Merrill Lynch also reviewed enterprise values of the selected publicly traded companies, calculated as equity values based on closing stock prices on June 10, 2011, plus debt, less cash, as a multiple of calendar year 2011 estimated earnings before interest, taxes, depreciation and amortization, commonly referred to as EBITDA. BofA Merrill Lynch then applied calendar year 2012 EPS multiples of 13.0x and 16.0x derived from the selected publicly traded companies to EMS’ calendar year 2012 estimated EPS. In addition, BofA Merrill Lynch applied calendar year 2011 EBITDA multiples of 6.5x to 8.5x derived from the selected publicly traded GRM companies to EMS’ GRM segment calendar year 2011 estimated EBITDA and applied calendar year 2011 EBITDA multiples of 6.0x to 8.0x derived from the selected Aero-Connectivity publicly traded companies to EMS’ Aero-Connectivity segment calendar year 2011 estimated EBITDA. Estimated financial data of the selected publicly traded companies were based on publicly available research analysts’ estimates, and estimated financial data of EMS were based on the EMS financial forecasts. This analysis indicated the following

approximate implied per share equity value reference ranges for EMS, rounded to the nearest $0.25, as compared to the $33.00 per share consideration:


Implied Per Share Equity Value Reference Ranges for EMS		Consideration
2012E EPS	2011E EBITDA
$22.75 - $28.00	$19.50 - $24.75	$33.00

No company used in this analysis is identical or directly comparable to EMS. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the public trading or other values of the companies to which EMS was compared.

Selected Precedent Transactions Analysis. BofA Merrill Lynch reviewed, to the extent publicly available, financial information relating to the following seven selected transactions involving companies in the GRM Sector and six selected transactions involving companies in the Aero-Connectivity sector:

The GRM transactions were:

Acquiror

Target

•

Esterline Technologies Corporation

•

CMC Electronics Inc.

•

Esterline Technologies Corporation

•

Racal Acoustics Ltd

•

Francisco Partners

•

Metrologic Instruments, Inc.

•

Harris Corporation

•

Tyco Electronics Wireless Systems

•

Honeywell International Inc.

•

Hand Held Products, Inc.

•

Honeywell International Inc.

•

Metrologic Instruments, Inc.

•

Trimble Navigation Limited

•

@Road, Inc.

The Aero-Connectivity transactions were:

Acquiror

Target

•

Comtech Telecommunications Corporation

•

CPI International Inc.

•

Comtech Telecommunications Corporation

•

Radyne Corporation

•

Kratos Defense & Security Solutions, Inc.

•

Integral Systems Inc.

•

The Boeing Company

•

Digital Receiver Technology, Inc.

•

The Carlyle Group

•

ARINC Incorporated

•

Veritas Capital

•

CPI International, Inc.

BofA Merrill Lynch reviewed transaction values, calculated as the enterprise value implied for the target company based on the consideration payable in the selected transaction, as a multiple of the target company’s EBITDA over the last twelve months prior to announcement of the transaction, referred to herein as LTM EBITDA. For purposes of its analysis, BofA Merrill Lynch valued EMS’ GRM and Aero-Connectivity segments separately. BofA Merrill Lynch applied LTM EBITDA multiples of 8.5x to 11.5x derived from the selected GRM transactions to EMS’ GRM segment LTM EBITDA, and applied LTM EBITDA multiples of 8.0x to 11.0x derived from the selected Aero-Connectivity transactions to EMS’ Aero-Connectivity segment LTM EBITDA. Estimated financial data of the selected transactions were based on publicly available information at the time of announcement of the relevant transaction. Estimated financial data of EMS were based on the EMS management forecasts. This analysis indicated the following approximate implied per share equity value reference ranges for EMS (disregarding potential income taxes payable by EMS as a result of a separate sale of EMS’ GRM and Aero-Connectivity segments), rounded to the nearest $0.25, as compared to the $33.00 per share consideration:


Implied Per Share Equity Value Reference Ranges for EMS (disregarding potential tax leakage)		Consideration
$23.00 - $30.25		$33.00

No company, business or transaction used in this analysis is identical or directly comparable to EMS or the Transaction. Accordingly, an evaluation of the results of this analysis is not entirely mathematical. Rather, this analysis involves complex considerations and judgments concerning differences in financial and operating characteristics and other factors that could affect the acquisition or other values of the companies, business segments or transactions to which EMS and the Transaction were compared.

Discounted Cash Flow Analysis (Terminal Multiple Method). BofA Merrill Lynch performed a discounted cash flow analysis of EMS to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that EMS was forecasted to generate during EMS’ fiscal years 2011 through 2014 based on the EMS management forecasts, using a terminal multiple method. BofA Merrill Lynch calculated terminal values for EMS by applying terminal forward multiples of 6.5x to 8.5x, 6.0x to 8.0x and 6.3x to 8.3x to EMS’ fiscal year 2014 estimated EBITDA for the GRM segment, Aero-Connectivity segment and other costs respectively. The cash flows and terminal values were then discounted to present value as of March 31, 2011 using discount rates varying by segment ranging from 12.5% to 16.0%, which were based on an estimate of EMS’ weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference ranges for EMS, rounded to the nearest $0.25, as compared to the $33.00 per share consideration:


Implied Per Share Equity Value Reference Range for EMS		Consideration
$28.00 - $37.25		$33.00

Discounted Cash Flow Analysis (Perpetuity Growth Method). BofA Merrill Lynch performed a discounted cash flow analysis of EMS to calculate the estimated present value of the standalone unlevered, after-tax free cash flows that EMS was forecasted to generate during EMS’ fiscal years 2011 through 2014 based on the EMS management forecasts using a perpetuity growth method. BofA Merrill Lynch calculated terminal values for EMS by applying terminal perpetuity growth rates of 3.0% to 4.0% to EMS’ fiscal year 2014 estimated free cash flow. The cash flows and terminal values were then discounted to present value as of March 31, 2011 using discount rates varying by segment ranging from 12.5% to 16.0%, which were based on an estimate of EMS’ weighted average cost of capital. This analysis indicated the following approximate implied per share equity value reference ranges for EMS, rounded to the nearest $0.25, as compared to the $33.00 per share consideration:


Implied Per Share Equity Value Reference Range for EMS		Consideration
$20.00 - $27.50		$33.00

Other Factors

In rendering its opinion, BofA Merrill Lynch also reviewed and considered other factors, including:

•

historical trading prices and trading volumes of EMS common stock during the five-year period ended June 10, 2011;

•

historical average annual multiples of next twelve months ( “NTM” ) EBITDA and NTM P/E since 2005 of EMS and selected publicly traded companies;

•

the implied per share equity value reference range for EMS of approximately $24.25 to $30.00 (rounded to the nearest $0.25) resulting from an illustrative leveraged buyout purchase analysis, which was based on a maximum equity contribution of 57% of purchase price, an exit multiple of 7x-10x calendar year 2014 EBITDA and maximum leverage of 4.5x LTM EBITDA for the 12 months ended March 31, 2011; and

•

review of publicly available research analyst reports.

Miscellaneous

As noted above, the discussion set forth above is a summary of the material financial analyses presented by BofA Merrill Lynch to EMS’ board of directors in connection with its opinion and is not a comprehensive description of all analyses undertaken by BofA Merrill Lynch in connection with its opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. BofA Merrill Lynch believes that its analyses summarized above must be considered as a whole. BofA Merrill Lynch further believes that selecting portions of its analyses and the factors considered or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying BofA Merrill Lynch’s analyses and opinion. The fact that any specific analysis has been referred to in the summary above is not meant to indicate that such analysis was given greater weight than any other analysis referred to in the summary.

In performing its analyses, BofA Merrill Lynch considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of EMS and Honeywell. The estimates of the future performance of EMS and Honeywell in or underlying BofA Merrill Lynch’s analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than those estimates or those suggested by BofA Merrill Lynch’s analyses. These analyses were prepared solely as part of BofA Merrill Lynch’s analysis of the fairness, from a financial point of view, of the $33.00 per share consideration and were provided to EMS’ board of directors in connection with the delivery of BofA Merrill Lynch’s opinion. The analyses do not purport to be appraisals or to reflect the prices at which a company might actually be sold or the prices at which any securities have traded or may trade at any time in the future. Accordingly, the estimates used in, and the ranges of valuations resulting from, any particular analysis described above are inherently subject to substantial uncertainty and should not be taken to be BofA Merrill Lynch’s view of the actual values of EMS or Honeywell.

The type and amount of consideration payable in the Transaction was determined through negotiations between EMS and Honeywell, rather than by any financial advisor, and was approved by EMS’ board of directors. The decision to enter into the Agreement was solely that of EMS’ board of directors. As described above, BofA Merrill Lynch’s opinion and analyses were only one of many factors considered by EMS’ board of directors in its evaluation of the proposed Transaction and should not be viewed as determinative of the views of EMS’ board of directors or management with respect to the Transaction or the $33.00 per share consideration.

EMS has agreed to pay BofA Merrill Lynch for its services in connection with the Transaction an aggregate fee currently estimated to be approximately $7.6 million, a portion of which was payable in connection with its opinion and a significant portion of which is contingent upon the consummation of the Transaction. EMS also has agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

BofA Merrill Lynch and its affiliates comprise a full service securities firm and commercial bank engaged in securities, commodities and derivatives trading, foreign exchange and other brokerage activities, and principal investing as well as providing investment, corporate and private banking, asset and investment management, financing and financial advisory services and other commercial services and products to a wide range of companies, governments and individuals. In the ordinary course of their businesses, BofA Merrill Lynch and its affiliates invest on a principal basis or on behalf of customers or manage funds that invest, make or hold long or short positions, finance positions or trade or otherwise effect transactions in the equity, debt or other securities or financial

instruments (including derivatives, bank loans or other obligations) of EMS, Honeywell and certain of their respective affiliates.

BofA Merrill Lynch and its affiliates in the past have provided and currently are providing investment banking, commercial banking and other financial services to EMS and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as (x) bookrunner or arranger for various debt offerings and leveraged loan syndications and (y) administrative agent for and lender under certain letters of credit and credit facilities for EMS and (ii) having provided or providing certain currency derivatives trading and treasury management products and services to EMS. Since January 1, 2009, BofA Merrill Lynch and its affiliates have received approximately $2.7 million from EMS in connection with investment banking, commercial banking and other financial services.

In addition, BofA Merrill Lynch and its affiliates in the past have provided, currently are providing, and in the future may provide investment banking, commercial banking and other financial services to Honeywell and have received or in the future may receive compensation for the rendering of these services, including (i) having acted or acting as (x) book-running manager or arranger for various debt offerings and (y) lender under certain letters of credit and documentation agent for and lender in connection with a revolving credit facility for Honeywell and (ii) having provided or providing certain currency derivatives trading and treasury management products and services to Honeywell. Since January 1, 2009, BofA Merrill Lynch and its affiliates have received approximately $13.8 million from Honeywell in connection with investment banking, commercial banking and other financial services. In addition, certain affiliates of BofA Merrill Lynch maintain significant commercial (including vendor and/or customer) relationships with Honeywell and/or certain of its affiliates.

Intent to Tender

To the best of the Company’s knowledge, after reasonable inquiry, each executive officer and director of the Company currently intends to tender all Shares held of record or beneficially owned by such person with respect to which he has sole dispositive power to the Purchaser in the Offer.

Item 5. Persons/Assets, Retained, Employed, Compensated or Used.

Information with respect to the retention of BofA Merrill Lynch by the Company under the caption “Item 4. The Solicitation or Recommendation—Opinion of EMS’ Financial Advisor” is incorporated herein by reference.

Under the terms of BofA Merrill Lynch’s engagement, EMS has agreed to pay BofA Merrill Lynch for its services in connection with the Transaction an aggregate fee currently estimated to be approximately $7.6 million, a portion of which was payable in connection with its opinion and a significant portion of which is contingent upon the consummation of the Transaction. EMS also has agreed to reimburse BofA Merrill Lynch for its expenses incurred in connection with BofA Merrill Lynch’s engagement and to indemnify BofA Merrill Lynch, any controlling person of BofA Merrill Lynch and each of their respective directors, officers, employees, agents and affiliates against specified liabilities, including liabilities under the federal securities laws.

Except as described above, neither the Company nor any person acting on its behalf has employed, retained or agreed to compensate any person to make solicitations or recommendations to the security holders of the Company with respect to the Offer or the Merger.

Item 6. Interest in Securities of the Subject Company.

Securities Transactions

Other than as set forth below, no transactions in the Shares have been effected during the past 60 days by the Company or, to the Company’s knowledge, by any of the Company’s directors, executive officers, affiliates or subsidiaries, except for the following transactions:

Name

Transaction
Date

Number of Shares,
Options to
Purchase Shares,
and Units Acquired
or Disposed of

Nature of Transaction

John B. Mowell

6/1/2011

⁽¹⁾

3,000

Acquisition—Stock option exercise for $15.66 per Share

John R. Bolton

5/12/2011

159.81