Exhibit 10.26
MPRI Long Term Deferred Incentive Plan
(Restated Effective January 1, 2009)
1. Introduction.
     The MPRI division of L-3 Services, Inc. offers the MPRI Long Term Deferred
Incentive Plan for the individuals listed on Appendix A. This plan document
reflects the terms of the Plan and is effective January 1, 2009.
     The Plan is frozen. The last and final Annual Award Credit was made on
January 1, 2007.
2. Definitions.
     (a) “Account” means an account established solely for recordkeeping
purposes on behalf of each Participant to reflect the Annual Bonus Award.
     (b) “Annual Award Credit” means the annual amount, if any, credited to the
Account maintained for each Participant based on the formula set forth in
Section 3.
     (c) “Board” means the Board of Directors of L-3 Services, Inc.
     (d) “Code” means the Internal Revenue Code of 1986, as amended.
     (e) “Committee” means the committee described in Section 7, which
administers this Plan.
     (f) “Company” means the MPRI division of L-3 Services, Inc., and its
predecessors.
     (g) “EBIT” means the earnings before interest and taxes for the Company for
each twelve-month period beginning on July 1 and ending on June 30 or such other
period specified in the applicable Employment Agreement.
     (h) “Employment Agreement” means, with respect to each Participant, the
employment agreement(s) entered into between each Participant and the Company on
the date(s) indicated on Appendix A.
     (i) “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.
     (j) “Participant” means the individuals listed on Appendix A.

 

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     (k) “Plan” means this MPRI Long Term Deferred Incentive Plan as restated
effective January 1, 2009.
3. Annual Award Credit.
     (a) Amount of Annual Award Credit. No Annual Award Credits have been, or
will be, made after January 1, 2007. The amount of a Participant’s Annual Award
Credit made prior to that date was determined under the terms of the
Participant’s Employment Agreement and was conditioned on the Company’s EBIT
exceeding the amount set forth in the Employment Agreement. The Annual Award
Credit, if any, for a twelve-month period was credited to the Participant’s
Account on the July 1st immediately following the end of such twelve-month
period. The Annual Award Credit, if any, for a period of less than twelve months
was credited to the Participant’s Account on the day immediately following the
end of the period.
     (b) Interest on Annual Award Amount. Each Annual Award Amount shall be
credited with interest beginning on the day (or if such day is not a business
day, the next following business day) on which the Annual Award Amount was
credited to the Participant’s Account and ending on the last business day of the
month immediately preceding the day on which such Annual Award Amount is
distributed. Earnings shall be compounded and credited to a Participant’s
Deferral Account each day based on the U.S. Prime Rate in effect on the first
business day of each calendar quarter preceding the date on which the earnings
are credited as reported in the Wall Street Journal or such other source as may
be designated by the Committee.
4. Vesting.
     The Annual Award Credit for each year shall become vested at the rate of
one-third on the first anniversary of the date the Annual Award Credit is
credited to the Participant’s Account, one-third on the second anniversary of
the date the Annual Award Credit is credited to the Participant’s Account, and
one-third on the third anniversary of the date the Annual Award Credit is
credited to the Participant’s Account.
     5. Payment of Annual Award Credit.
     (a) Time of Payment. Each Annual Award Credit will be distributed on
termination of employment or a specified date as elected by the Participant in
accordance with Notice 2007-86, 2007- 46 IRB 990, which election is irrevocable.
In the event that a Participant failed to make a valid election with respect to
an Annual Award Credit in accordance with Notice 2007-86, 2007- 46 IRB 990, the
Participant shall be deemed to have elected to receive such Annual Award Credit
on termination of employment. With respect to each Annual Award Credit that is
payable on termination of employment, the amount payable shall be paid on the
date that is six months following the termination of employment date.

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     (b) Form of Payment. Each Annual Award Credit will be distributed either in
a lump sum or annual installments over five, ten, fifteen or twenty years as
elected by the Participant in accordance with Notice 2007-86, 2007- 46 IRB 990,
which election is irrevocable. In the event that a Participant failed to make a
valid election with respect to an Annual Award Credit in accordance with Notice
2007-86, 2007- 46 IRB 990, the Participant shall be deemed to have elected to
receive such Annual Award Credit in a lump sum.
     (c) Payment on Death. Each Participant must designate a beneficiary to
receive a distribution of his vested Account balance if the Participant dies
before such amount is fully distributed to him. In the absence of a valid or
effective beneficiary designation, the Participant’s surviving spouse will be
his beneficiary or, if there is no surviving spouse, the Participant’s estate
will be his beneficiary. Upon the Participant’s death prior to full distribution
of his Account balance, the vested Account balance shall be paid to the
Participant’s beneficiary in accordance with the Participant’s election or
deemed election under this Section 5.
6. Employment Termination.
     In the event of a voluntary termination of employment with the Company and
its affiliates, or in the event of a termination by the Company other than for
Cause, as defined in the Employment Agreement or due to Disability, as defined
in the Employment Agreement, or death, any unvested Annual Award Credit will
continue to vest in accordance with Section 4, provided that the Participant
abides by the covenants set forth in Section 7 of the Employment Agreement. In
the event of a termination by the Company for Cause, any unvested Annual Award
Credit shall be forfeited. No additional Annual Award Credits will be credited
to the Participant’s Account following the termination of employment date.
7. Administration.
     (a) This Plan shall be administered by the L-3 Retirement Plan
Administrative Committee of L-3 Communications Corporation or such other
committee (comprised of members of the Board or executives of the Company) as
may be designated by the Board to administer this Plan. The committee that
administers this Plan is referred to in this document as the “Committee”.
     (b) The Committee has the full and exclusive discretion to interpret and
administer the Plan. All actions, interpretations and decisions of the Committee
are conclusive and binding on all persons, and will be given the maximum
possible deference allowed by law. Neither the Committee nor any member thereof
shall be liable to any person for any action taken or omitted in connection with
the interpretation or administration of the Plan.
     (c) The Committee may delegate to any officer or employee of the Company or
its affiliates the authority to execute and deliver those instruments and
documents and

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to take, or refrain from taking, all actions deemed necessary, advisable or
convenient for the effective administration of the Plan in accordance with its
terms and purposes. The Committee may also appoint any other agent and delegate
to such agent such powers and duties in connection with the administration of
the Plan as the Committee may deem appropriate. In making any determination or
in taking or not taking any action under the Plan, the Committee may obtain and
rely upon the advice of experts, including professional advisors to the
Committee or the Company or its affiliates. No individual who is a Participant
may participate in any decision specifically relating to his or her individual
rights or benefits under the Plan.
8. Amendment or Termination.
     The Committee may amend or terminate the Plan provided that any such
amendment does not reduce or increase any benefit to which a Participant has
accrued and is otherwise entitled to under the terms of the Plan, nor accelerate
the timing of any payment under the Plan, except as permitted under Code
Section 409A. The Plan shall
     terminate on the date when no Participant (or Beneficiary) has any right to
or expectation of payment of further benefits under the Plan.
9. Claims Procedure.
     (a) Any person claiming a benefit, requesting an interpretation or ruling
under this Plan, or requesting information under this Plan shall present the
request in writing to the Committee, which shall respond in writing within
90 days. The Committee may, however, extend the reply period for an additional
ninety 90 days for special circumstances. If the claim or request is denied, the
written notice of denial shall state (1) the reason for denial, with specific
reference to the plan provisions on which the denial is based, (2) a description
of any additional material or information required and an explanation of why it
is necessary, and (3) an explanation of the claims review procedure.
     (b) Within 60 days after the receipt by a claimant of the written decision
described above or the expiration of the claims review period described above
including any extension, the claimant may request review by giving written
notice to the Committee. The claim or request shall be reviewed by the
Committee, which may, but shall not be required to, grant the claimant a
hearing. On review, the claimant may have representation, examine pertinent
documents, and submit issues and comments in writing. If the claimant does not
request a review within such sixty-day period, he or she shall be barred from
challenging the original determination.
     (c) The decision on review shall normally be made within 60 days after the
Committee’s receipt of a request for review. If an extension of time is required
for a hearing or other special circumstances, the claimant shall be notified and
the time limit shall be 120 days. The decision shall be in writing and shall
state the reason and the relevant plan provisions. All decisions on review shall
be final and binding on all parties concerned.

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     (d) In the event of any dispute over benefits under this Plan, all remedies
available to the disputing individual under this Section 9 must be exhausted,
within the specified deadlines, before legal recourse of any type is sought.
10. Unfunded Status of the Plan.
     This Plan constitutes a contractual promise by the Company to make payments
in the future, and a Participant’s rights shall be those of a general, unsecured
creditor of the Company. A Participant shall not have any beneficial interest in
this Plan. Notwithstanding the foregoing, to assist the Company in meeting its
obligations under this Plan, the Company may set aside assets in a trust
described in Revenue Procedure 92-64, 1992-2 C.B. 422 (generally known as a
“rabbi trust”), and the Committee may direct that the Company’s obligations
under this Plan be satisfied by payments out of such trust or trusts. It is the
Company’s intention that this Plan be unfunded for federal income tax purposes
and for purposes of Title I of the Employee Retirement Income Security Act of
1974.
11. Nonalienability of Benefits.
     A Participant’s rights to benefit payments under this Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Participant
or his Beneficiary.
12. No Guarantee of Employment.
     This Plan shall in no way obligate the Company to continue the employment
of a Participant with the Company or limit the right of the Company at any time
and for any reason to terminate the Participant’s employment. In no event shall
this Plan constitute an employment contract between the Company and a
Participant or in any way limit the right of the Company to change a
Participant’s compensation or other benefits.
13. Other Plan Benefits.
     Amounts under this Plan shall not be treated as compensation for purposes
of calculating the amount of a Participant’s benefits or contributions under any
pension, retirement, or other plan maintained by the Company (or affiliate),
except as provided in such other plan.
14. Tax Withholding.
     To the extent required by law, the Company shall withhold from benefit
payments hereunder any Federal, state, or local income or payroll taxes required
to be withheld and shall furnish the recipient and the applicable government
agency or agencies with such reports, statements, or information as may be
legally required.
15. Receipt and Release for Payments.

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     Any payment to a Participant, Beneficiary, or to any such person’s legal
representative shall be in full satisfaction of all claims that can be made
under the Plan against the Company. The Company may require such Participant,
Beneficiary, or legal representative as a condition precedent to such payment,
to execute a receipt and release thereof in such form as shall be determined by
the Company.
16. Successors.
     The provisions of this Plan shall be binding upon and inure to the benefit
of the Company, its successors, and its assigns, and to the Participants and
their heirs, executors, administrators, and legal representatives.
17. Governing Law.
     The validity of this Plan and any of its provisions shall be construed,
administered, and governed in all respects under and by the laws of the
Commonwealth of Virginia (including its statute of limitations and all
substantive and procedural law, and without regard to its conflict of laws
provisions), except as to matters of Federal law. If any provision of this
instrument shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
18. Status of Plan as ERISA “Top Hat” Plan.
     The Plan is intended to be an unfunded plan maintained primarily for the
purpose of providing deferred compensation for a select group of management or
highly compensated employees and individuals within the meaning of Title I of
the ERISA. The Plan will be administered and construed to effectuate this
intent.
     IN WITNESS WHEREOF, the Company, by its duly authorized officer, has
executed this MPRI Long Term Deferred Incentive Plan on the date indicated
below.

             
 
      L-3 Services, Inc.    
 
           
Date: 12/22/2008
  By:   /s/ Kenneth W. Manne     
 
     
 
   
 
  Title:   Vice President     
 
     
 
   

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