such breach within ten (10) days after written notice of the alleged breach is provided to theParticipant.          (e) “Change in Control” shall be deemed to have occurred if: (i) any person (asdefined in Section 3(a)(9) of the Exchange Act, and as used in Sections 13(d) and 14(d) thereof,including any “group” as defined in Section 13(d)(3) thereof (a “Person”), but excluding theCompany, any Affiliate, any employee benefit plan sponsored or maintained by the Company or anyAffiliate (including any trustee of such plan acting as trustee), and any Person who owns 20% ormore of the total number of votes that may be cast for the election of directors of the Company(the “Voting Shares”) as of the Effective Date, becomes the beneficial owner of 35% of the “VotingShares”; (ii) the Company undergoes any merger, consolidation, reorganization, recapitalization orother similar business transaction, sale of all or substantially all of the Company’s assets orcombination of the foregoing transactions (a “Transaction”), other than a Transaction involvingonly the Company and one or more Affiliates, and immediately following such Transaction theshareholders of the Company immediately prior to the Transaction do not continue to own at least amajority of the voting power in the resulting entity; (iii) the persons who are the originalmembers of the Board pursuant to the Plan of Reorganization (the “Incumbent Directors”) shall cease(for any reason other than death) to constitute at least a majority of members of the Board or theboard of directors of any successor to the Company, provided that any director who was not adirector as of the Effective Date shall be deemed to be an Incumbent Director if such director waselected to the Board by, or on the recommendation of or with the approval of, at least a majorityof the directors who then qualified as Incumbent Directors, either actually or by prior operationof this definition; or (iv) the shareholders of the Company approve a plan of liquidation ordissolution of the Company, or any such plan is actually implemented.          (f) “Code” means the Internal Revenue Code of 1986, as amended from time to time,including regulations thereunder and successor provisions and regulations thereto.          (g) “Committee” means a committee of two or more directors designated by the Board toadminister the Plan; provided, however, that directors appointed as members of the Committee shallnot be employees of the Company or any subsidiary. In appointing members of the Committee, theBoard will consider whether a member is or will be a Qualified Member, but such members are notrequired to be Qualified Members at the time of appointment or during their term of service on theCommittee, and no action of the Committee shall be void or invalid due to the participation of amember who is not a Qualified Member. If no Committee has been appointed, or if the Committee hasbeen disbanded, or if the Board makes a determination to assume any or all powers of the Committee,any reference herein shall be deemed to be a reference to the Board; provided, however that if theBoard acts as the Committee, each member of the Board who is not a an independent member of theBoard under the NASDAQ independence requirements shall recuse himself or herself from any suchBoard action, unless such action is for the purpose of granting awards hereunder to members of theBoard who are independent members of the Board not employed by the Company and the Board determinesto act as the full Board.          (h) “Company” means Loral Space & Communications Inc., a Delaware corporation.
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          (i) “Disability” means the permanent and total disability of a person within themeaning of Section 22(e)(3) of the Code.          (j) “Dividend Equivalents” shall have the meaning set forth in Section 9 hereof.          (k) “Effective Date” shall have the meaning set forth in Section 21 hereof.          (l) “Eligible Person” means each employee of the Company or of any Affiliate,including each such person who may also be a director of the Company, each non-employee director ofthe Company or an Affiliate, each other person who provides substantial services to the Companyand/or its Affiliates and who is designated as eligible by the Committee, and any person who hasbeen offered employment by the Company or an Affiliate, provided that such prospective employee maynot receive any payment or exercise any right relating to an Award until such person has commencedemployment with the Company or an Affiliate. An employee on an approved leave of absence may beconsidered as still in the employ of the Company or an Affiliate for purposes of eligibility forparticipation in the Plan.          (m) “Employer” means either the Company or an Affiliate that the Participant(determined without regard to any transfer of an Award) is employed by or provides services to, asapplicable.          (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time totime, including rules thereunder and successor provisions and rules thereto.          (o) “Expiration Date” means the date upon which the term of an Option, as determinedunder 6(b) hereof, or SAR, as determined under Section 7(a)(ii) hereof expires.          (p) “Fair Market Value” means on any date (A) if the Stock is listed on a nationalsecurities exchange, the closing sale price reported as having occurred on the primary exchangewith which the Stock is listed and traded on such date, or, if there is no such sale on that date,then on the last preceding date on which such a sale was reported, (B) if the Stock is not listedon any national securities exchange but is traded in the over-the-counter market bulletin board orpink sheets on a last sale basis, the closing sale price reported on such date, or, if there is nosuch sale on that date then on the last preceding date on which such a sale was reported; provided,however, that for purposes of the Initial Option Grant, the Fair Market Value shall be the weightedaverage of the aggregate sale prices of the Stock reported for the ten trading days immediatelypreceding the grant date; and further provided, however, that if such definition of Fair MarketValue for Options granted in connection with the Plan of Reorganization does not comply with thedefinition of fair market value for purposes of Section 409A of the Code or if such definitionwould give rise to variable accounting treatment of such Options, then Fair Market Value for suchOptions shall have the meaning attributable thereto in clauses (A) or (B) above, as applicable, orsuch other meaning which complies with Section 409A and does not give rise to variable accountingtreatment. If the Stock is not listed on an exchange or traded in the over-the-counter market, orrepresentative quotes are not otherwise available, the Fair Market Value shall mean the amountdetermined by the Board in good faith to be the fair market value per share of Stock, on a fullydiluted basis.
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          (q) “Good Reason” with respect to any Participant (A) shall have the meaning set forthin the current effective employment or consulting agreement between the Company or an Affiliate, asapplicable, and the Participant or (B) in the event that there is no such employment or consultingagreement or if there is no such definition in any such employment or consulting agreement, shallmean, (i) the assignment to the Participant of any duties inconsistent in any substantial respectwith the Participant’s position, authority or responsibilities to or with the Company or anAffiliate, as applicable, or any duties which are illegal or unethical or any diminution of any ofthe Participant’s significant duties; (ii) any reduction in base salary, or to the extentguaranteed by a contract with the Company or an Affiliate, as applicable, the Participant’s targetannual bonus or any of the benefits provided for in any such contract to the extent such reductionis not permitted under the terms of any such contract; (iii) the relocation by the Company of theParticipant’s primary place of employment with the Company to a location not within a thirty (30)mile radius of such place of employment as of the Effective Date; provided, however, that suchrelocation shall not be considered Good Reason if such location is closer to the Participant’s homethan the Participant’s primary place of employment as of the Effective Date; (iv) any materialbreach of any employment or consulting agreement with the Participant by the Company, or anAffiliate, as appropriate; or (v) the failure of the Company to obtain the assumption in writing ofits obligation to perform any employment or consulting agreement with the Participant by anysuccessor to all or substantially all of the assets of the Company.          (r) “Initial Option Grant” shall mean the automatic award of options under the Plan asset forth in Section 6(h).          (s) “Mature Shares” means (A) shares of Stock for which the Participant has goodtitle, free and clear of all liens and encumbrances, and which the Participant either (i) has heldfor at least six months or (ii) has purchased on the open market or (B) such shares as determinedby the Committee.          (t) “New Skynet” shall have the meaning ascribed thereto in the Plan ofReorganization.          (u) “New Skynet Sale Event” means a sale of all or substantially all of the commonstock or assets of New Skynet.          (v) “New SS/L” shall have the meaning ascribed thereto in the Plan of Reorganization.          (w) “New SS/L Sale Event” means a sale of all or substantially all of the common stockor assets of New SS/L.          (x) “Option” means a conditional right, granted to a Participant under Section 6hereof, to purchase Stock at a specified price during specified time periods.          (y) “Option Agreement” means a written agreement between the Company and a Participantevidencing the terms and conditions of an individual Option grant.
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          (z) “Other Stock-Based Awards” means Awards granted to a Participant under Section 11hereof.          (aa) “Participant” means an Eligible Person who has been granted an Award under thePlan which remains outstanding, or if applicable, such other person or entity who holds anoutstanding Award.          (bb) “Plan” means this Loral Space & Communications Inc. 2005 Stock Incentive Plan.          (cc) “Plan of Reorganization” means the [Fourth] Amended Joint Plan of Reorganizationunder Chapter 11 of the Bankruptcy Code of Loral Space & Communications Ltd. et al.          (dd) “Proprietary Information” with respect to any Participant means all confidentialspecifications, know-how, strategic or technical data, marketing research data, product researchand development data, manufacturing techniques, confidential customer lists, sources of supply andtrade secrets, all of which are confidential to the Company, or any of its Affiliates, and may beproprietary and are owned or used by the Company, or any of its Affiliates, including any and allof such enumerated items coming within the scope of the business of the Company, or any of itsAffiliates, as to which the Participant may have access, whether conceived or developed by othersor by the Participant, alone or with others, during the Participant’s period of service with theCompany, and whether or not conceived or developed during regular working hours. However,Proprietary Information shall not include any records, data or information which are in the publicdomain during the Participant’s service with the Company or after the Participant’s service withthe Company has terminated, *provided*the same are not in the public domain as a consequence ofdisclosure by the Participant.          (ee) “Qualified Member” means a member of the Committee who is a “Non-EmployeeDirector” within the meaning of Rule 16b-3 and an “outside director” within the meaning ofRegulation 1.162-27(c) under Code Section 162(m).          (ff) “Restricted Stock” means Stock granted to a Participant under Section 8 hereof,that is subject to certain restrictions and to a risk of forfeiture.          (gg) “Restricted Stock Agreement” means a written agreement between the Company and aParticipant evidencing the terms and conditions of an individual Restricted Stock grant.          (hh) “Restricted Stock Unit” means a notional unit representing the right to receiveone share of Stock on the Settlement Date.          (ii) “Restricted Stock Unit Agreement” means a written agreement between the Companyand a Participant evidencing the terms and conditions of an individual Restricted Stock Unit grant.
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          (jj) “Rule 16b-3” means Rule 16b-3, as from time to time in effect and applicable tothe Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16of the Exchange Act.          (kk) “Section 409A” shall mean Section 409A of the Code and the rules, regulations,Treasury Notices and other formal guidance promulgated by the IRS or the U.S. Treasury thereunder.          (ll) “Securities Act” means the Securities Act of 1933, as amended from time to time,including rules thereunder and successor provisions and rules thereto.          (mm) “Senior Management Employee” means an employee of the Company designated by theChief Executive Officer of the Company as a Senior Management Employee.          (nn) “Settlement Date” shall have the meaning set forth in Section 9 hereof.          (oo) “Stock” means the Company’s Common Stock, $.01 par value, and such othersecurities as may be substituted for Stock pursuant to Section 12 hereof.          (pp) “Stock Appreciation Right” or “SAR” means a conditional right granted toa Participant under Section 7 hereof.     3. **Administration.**          (a) Authority of the Committee. Except as otherwise provided below, the Plan shall beadministered by the Committee. The Committee shall have full and final authority, in each casesubject to and consistent with the provisions of the Plan, to (i) select Eligible Persons to becomeParticipants; (ii) grant Awards; (iii) determine the type, number, and other terms and conditionsof, and all other matters relating to, Awards; (iv) prescribe Award agreements (which need not beidentical for each Participant) and rules and regulations for the administration of the Plan; (v)construe and interpret the Plan and Award agreements and correct defects, supply omissions, orreconcile inconsistencies therein; and (vi) make all other decisions and determinations as theCommittee may deem necessary or advisable for the administration of the Plan. The foregoingnotwithstanding, the Board shall perform the functions of the Committee for purposes of grantingAwards under the Plan to non-employee directors. In any case in which the Board is performing afunction of the Committee under the Plan, each reference to the Committee herein shall be deemed torefer to the Board, except where the context otherwise requires. Any action of the Committee shallbe final, conclusive and binding on all persons, including, without limitation, the Company, itsAffiliates, Eligible Persons, Participants and beneficiaries of Participants.          (b) Manner of Exercise of Committee Authority*.*At any time that a member of theCommittee is not a Qualified Member, (i) any action of the Committee relating to an Award intendedby the Committee to qualify as “performance-based compensation” within the meaning of Section162(m) of the Code and regulations thereunder may be taken by a subcommittee, designated by theCommittee or the Board, composed solely of two or more Qualified Members; and (ii) any actionrelating to an Award granted or to be granted to a Participant who is then subject to Section 16 ofthe Exchange Act in respect of the Company
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may be taken either by such a subcommittee or by the Committee but with each such member whois not a Qualified Member abstaining or recusing himself or herself from such action, providedthat, upon such abstention or recusal, the Committee remains composed of two or more QualifiedMembers. Such action, authorized by such a subcommittee or by the Committee upon the abstention orrecusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of thePlan. The express grant of any specific power to the Committee, and the taking of any action bythe Committee, shall not be construed as limiting any power or authority of the Committee.          (c) Delegation. The Committee may delegate to officers or employees of the Company orany Affiliate, or committees thereof, the authority, subject to such terms as the Committee shalldetermine, to perform such functions, including but not limited to administrative functions, as theCommittee may determine appropriate. The Committee may appoint agents to assist it inadministering the Plan. Notwithstanding the foregoing or any other provision of the Plan to thecontrary, any Award granted under the Plan to any person or entity who is not an employee of theCompany or any of its Affiliates shall be expressly approved by the Committee.     4. **Shares Available Under the Plan.**          (a) Number of Shares Available for Delivery. Subject to adjustment as provided inSection 12 hereof, the total number of shares of Stock reserved and available for delivery inconnection with Awards under the Plan shall be 2,972,452. Shares of Stock delivered under the Planshall consist of authorized and unissued shares or previously issued shares of Stock reacquired bythe Company on the open market or by private purchase.          (b) Share Counting Rules. The Committee may adopt reasonable counting procedures toensure appropriate counting, avoid double counting (as, for example, in the case of tandem orsubstitute awards) and make adjustments if the number of shares of Stock actually delivered differsfrom the number of shares previously counted in connection with an Award. To the extent that anAward expires or is canceled, forfeited, settled in cash or otherwise terminated or concludedwithout a delivery to the Participant of the full number of shares to which the Award related, theundelivered shares will again be available for Awards. Shares withheld in payment of the exerciseprice or taxes relating to an Award and shares equal to the number surrendered in payment of anyexercise price or taxes relating to an Award shall be deemed to constitute shares not delivered tothe Participant and shall be deemed to again be available for Awards under the Plan; provided,however, that, where shares are withheld or surrendered more than ten years after the date of themost recent shareholder approval of the Plan or any other transaction occurs that would result inshares becoming available under this Section 4(b), such shares shall not become available if and tothe extent that it would constitute a material revision of the Plan subject to shareholder approvalunder then applicable rules of the principle stock exchange or automated quotation system on whichthe shares are then listed or designated for trading.     5. **Eligibility; Limitations on Awards.**
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          (a) Grants to Eligible Persons. Awards may be granted under the Plan only to EligiblePersons.          (b) 162(m) Limitation. Subject to Section 12 relating to adjustments, no Employeeshall be eligible to be granted Options or Stock Appreciation Rights covering more than 1,000,000shares of Stock during any calendar year.     6. **Options.**          (a) General. Except as provided in the Initial Option Grant, Options grantedhereunder shall be in such form and shall contain such terms and conditions as the Committee shalldeem appropriate. The provisions of separate Options shall be set forth in an Option Agreement,which agreements need not be identical.          (b) Term. Except as provided in the Initial Option Grant, the term of each Optionshall be set by the Committee at the time of grant; provided, however, that no Option grantedhereunder shall be exercisable after the expiration of ten (10) years from the date it was granted.          (c) Exercise Price. Except as provided in the Initial Option Grant, the exerciseprice per share of Stock for each Option shall be set by the Committee at the time of grant butshall not be less than the par value of a share of Stock.          (d) Payment for Stock. Payment for shares of Stock acquired pursuant to Optionsgranted hereunder shall be made in full, upon exercise of the Options in immediately availablefunds in United States dollars, by certified or bank cashier’s check or, in the discretion of theCommittee, (i) by surrender to the Company of Mature Shares held by the Participant; (ii) bydelivering to the Committee a copy of irrevocable instructions to a stockbroker to deliver promptlyto the Company an amount of sale or loan proceeds sufficient to pay the aggregate Option exerciseprice; (iii) through a net exercise of the Options whereby the Participant instructs the Company towithhold that number of shares of Stock having a Fair Market Value equal to the aggregate exerciseprice of the Options being exercised and deliver to the Participant the remainder of the sharessubject to exercise or (iv) by any other means approved by the Committee. Anything herein to thecontrary notwithstanding, the Company shall not directly or indirectly extend or maintain credit,or arrange for the extension of credit, in the form of a personal loan to or for any director orexecutive officer of the Company through the Plan in violation of Section 402 of the Sarbanes-OxleyAct of 2002 (“Section 402 of SOX”), and to the extent that any form of payment would, inthe opinion of the Company’s counsel, result in a violation of Section 402 of SOX, such form ofpayment shall not be available.          (e) Vesting. Except as provided in the Initial Option Grant, Options shall vest andbecome exercisable in such manner and on such date or dates set forth in the Option Agreement, asmay be determined by the Committee; provided, however, that notwithstanding any vesting datescontained herein or otherwise set by the Committee, the Committee may in its sole discretionaccelerate the vesting of any Option, which acceleration shall not affect the terms and conditionsof any such Option other than with respect to vesting. Unless otherwise specifically determined bythe Committee and except for Options that are specifically subject to
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automatic accelerated vesting upon termination of employment, the vesting of an Option shalloccur only while the Participant is employed or rendering services to the Company or an Affiliateand all vesting shall cease upon a Participant’s termination of employment or services for anyreason. If an Option is exercisable in installments, such installments or portions thereof whichbecome exercisable shall remain exercisable until the Option expires either on the Expiration Dateor earlier following a termination of employment as set forth in the Option Agreement. Unlessotherwise determined by the Committee, Options shall vest only as to full shares of Stock, roundeddown to the nearest full share, except that the last tranche to vest with respect to any OptionAward shall encompass the full number of shares subject to the Option Award.          (f) Transferability of Options. An Option shall not be transferable except by will orby the laws of descent and distribution and shall be exercisable during the lifetime of theParticipant only by the Participant. Notwithstanding the foregoing, Options shall be transferableto the extent provided in the Option Agreement or as otherwise determined by the Committee.          (g) Termination of Employment or Service. Except as provided in the Initial OptionGrant or as may otherwise be provided by the Committee in the Option Agreement other than withrespect to the Initial Option Grant:          (i) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer terminates for any reason other than (A) by the Employer forCause, or (B) by reason of the Participant’s death or Disability, (1) all vesting withrespect to the Options shall cease, (2) any unvested Options shall expire as of the date ofsuch termination, and (3) any vested Options shall remain exercisable until the earlier ofthe Expiration Date or the date that is three (3) months after the date of such termination.          (ii) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer terminates by reason of such Participant’s death orDisability, (A) all vesting with respect to the Options shall cease, (B) any unvestedOptions shall expire as of the date of such termination, and (C) any vested Options shallexpire on the earlier of the Expiration Date or the date that is twelve (12) months afterthe date of such termination due to death or Disability of the Holder. In the event of aParticipant’s death, the Options shall remain exercisable by the person or persons to whom aParticipant’s rights under the Options pass by will or the applicable laws of descent anddistribution until its expiration, but only to the extent the Options were vested by suchParticipant at the time of such termination due to death.          (iii) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer is terminated by the Employer for Cause, all Options (whetheror not vested) shall immediately expire as of the date of such termination.          (h) Initial Option Grant. On the date that is thirty days following the EffectiveDate, the individuals listed on the schedule approved by the Board of Directors of Loral Space &Communications Ltd. to be granted Options pursuant to the Plan upon the Company’s emergence
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from bankruptcy (the “Approved List”) shall automatically be granted Options with respect tothe number of shares listed across from each individuals name on the Approved List. The Optionsgranted to those individuals identified as Senior Management on the Approved List shall have suchterms and conditions as set forth in the Option Agreement for Senior Management, attached asExhibit A hereto. The Options granted to those individuals identified as Non-Senior Management onthe Approved List shall have such terms and conditions as set forth in the Option Agreement forNon-Senior Management, attached as Exhibit B hereto.     7. **Stock Appreciation Rights.**          (a) General. The Committee is authorized to grant SARs to Participants on thefollowing terms and conditions:          (i) *Right to Payment.*A SAR shall confer on the Participant to whom it is granted aright to receive, upon exercise, or if necessary to conform to the requirements of 409A, oneach vesting date thereof, the value of the excess of (A) the Fair Market Value of one shareof Stock on the date of exercise over (B) the grant price of the SAR as determined by theCommittee.          (ii) *Term*. The term of each SAR shall be set by the Committee at the time of grant;provided, however, that no SAR granted hereunder shall be exercisable after the expirationof ten (10) years from the date it was granted.          (iii) *Grant Price*. The grant price per share of Stock for each SAR shall be set by theCommittee at the time of grant.          (iv) *Other Terms.*The Committee shall determine at the date of grant or thereafter:(A) the time or times at which and the circumstances under which a SAR may be exercised inwhole or in part (including based on achievement of performance goals and/or future servicerequirements); (B) the method of exercise; (C) the method of settlement; (D) whether cash orStock will be payable to the Participant upon exercise of the SAR; (E) the method by orforms in which Stock will be delivered or deemed to be delivered to Participants; (F)whether or not a SAR shall be alone, in tandem or in combination with any other Award; and(G) and any other terms and conditions of any SAR.          (b) Termination of Employment or Service. Except as may otherwise be provided by theCommittee in the applicable Award agreement:          (i) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer terminates for any reason other than (A) by the Employer forCause, or (B) by reason of the Participant’s death or Disability, (1) all vesting withrespect to the SARs shall cease, (2) any unvested SARs shall expire as of the date of suchtermination, and (3) any vested SAR shall remain exercisable until the earlier of theExpiration Date or the date that is ninety (90) days after the date of such termination.
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          (ii) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer terminates by reason of such Participant’s death orDisability, (A) all vesting with respect to the SARs shall cease, (B) any unvested SARsshall expire as of the date of such termination, and (C) any vested SARs shall expire on theearlier of the Expiration Date or the date that is twelve (12) months after the date of suchtermination due to death or Disability of the Holder. In the event of a Participant’sdeath, the SARs shall remain exercisable by the person or persons to whom a Participant’srights under the SARs pass by will or the applicable laws of descent and distribution untilits expiration, but only to the extent the SARs were vested by such Participant at the timeof such termination due to death.          (iii) If prior to the Expiration Date, a Participant’s employment or service, asapplicable, with the Employer is terminated by the Employer for Cause, all SARs (whether ornot vested) shall immediately expire as of the date of such termination, and suchParticipant shall have no further rights with respect thereto.     8. **Restricted Stock.**          (a) General. Restricted Stock granted hereunder shall be in such form and shallcontain such terms and conditions as the Committee shall deem appropriate. The terms andconditions of each Restricted Stock grant shall be evidenced by a Restricted Stock Agreement, whichagreements need not be identical. Subject to the restrictions set forth in Section 8(b), except asotherwise set forth in the applicable Restricted Stock Agreement, the Participant shall generallyhave the rights and privileges of a stockholder as to such Restricted Stock, including the right tovote such Restricted Stock. The Committee shall determine whether or not dividends shall accrue onshares of Restricted Stock. At the discretion of the Committee, cash dividends and stockdividends, if any, with respect to the Restricted Stock may be either currently paid to theParticipant or withheld by the Company for the Participant’s account. A Participant’s RestrictedStock Agreement may provide that cash dividends or stock dividends so withheld shall be subject toforfeiture to the same degree as the shares of Restricted Stock to which they relate. Except asotherwise determined by the Committee, no interest will accrue or be paid on the amount of any cashdividends withheld.          (b) Restrictions on Transfer. In addition to any other restrictions set forth in aParticipant’s Restricted Stock Agreement, until such time that the Restricted Stock has vestedpursuant to the terms of the Restricted Stock Agreement, which vesting the Committee may in itssole discretion accelerate at any time, the Participant shall not be permitted to sell, transfer,pledge, or otherwise encumber the Restricted Stock. Notwithstanding anything contained herein tothe contrary, the Committee shall have the authority to remove any or all of the restrictions onthe Restricted Stock whenever it may determine that, by reason of changes in applicable laws orother changes in circumstances arising after the date of the Restricted Stock Award, such action isappropriate.          (c) Certificates. Restricted Stock granted under the Plan may be evidenced in suchmanner as the Committee shall determine. If certificates representing Restricted Stock areregistered in the name of the Participant, the Committee may require that such certificates bear anappropriate legend referring to the terms, conditions and restrictions applicable to such
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Restricted Stock, that the Company retain physical possession of the certificates, and thatthe Participant deliver a stock power to the Company, endorsed in blank, relating to the RestrictedStock. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, thatthe Restricted Stock shall be held in book entry form rather than delivered to the Participantpending the release of the applicable restrictions.          (d) Termination of Employment or Service. Except as may otherwise be provided by theCommittee in the Restricted Stock Agreement, if, prior to the time that the Restricted Stock hasvested, a Participant’s employment or service, as applicable, terminates for any reason, (i) allvesting with respect to the Restricted Stock shall cease, and (ii) at any time following suchtermination, and upon written notice to the Participant, the Company shall have the right torepurchase from the Participant any unvested shares of Restricted Stock at a purchase price equalto the original purchase price paid for the Restricted Stock, or if the original purchase price is$0, such unvested shares of Restricted Stock shall be forfeited by the Participant for noconsideration.          9. **Restricted Stock Units**          (a) General. Restricted Stock Units granted hereunder shall be in such form and shallcontain such terms and conditions as the Committee shall deem appropriate. The terms andconditions of each Restricted Stock Unit grant shall be evidenced by a Restricted Stock UnitAgreement. No shares of Stock shall be issued at the time a Restricted Stock Unit grant is made,and the Company will not be required to set aside a fund for the payment of any such Award;provided, however, that for purposes of Section 4(a) hereof, a share of Stock shall be deemedawarded at the time of grant. The Committee shall determine whether or not dividends shall accrueon Restricted Stock Units. If the Committee so determines, recipients of Restricted Stock Unitsshall be entitled to an amount equal to the cash dividends paid by the Company upon one share ofStock for each Restricted Stock Unit then credited to such recipient’s account (“DividendEquivalents”). The Committee shall, in its sole discretion, determine whether to credit to theaccount of, or to currently pay to, such Participant the Dividend Equivalents. A Participant’sRestricted Stock Unit Agreement may provide that Dividends Equivalents shall be subject toforfeiture to the same degree as the shares of Restricted Stock Units to which they relate. Exceptas otherwise determined by the Committee, no interest will accrue or be paid on DividendEquivalents credited to a recipient’s account.          (b) Conditions of Grant. Restricted Stock Units awarded to any Eligible Person shallbe subject to (i) forfeiture until the expiration of the restricted period, to the extent providedin the Restricted Stock Unit Agreement, and to the extent such Awards are forfeited, all rights ofthe recipient to such Awards shall terminate without further obligation on the part of the Company,and (ii) such other terms and conditions as may be set forth in the applicable Award agreement.Notwithstanding anything contained herein to the contrary, the Committee shall have the authorityto remove any or all of the restrictions on the Restricted Stock Units whenever it may determinethat, by reason of changes in applicable laws or other changes in circumstances arising after thedate of the Restricted Stock Unit Award, such action is appropriate.          (c) Settlement of Restricted Stock Units. Upon a date or dates on or following theexpiration of the restricted period as shall be determined by the Committee and set
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forth in a Participant’s Restricted Stock Unit Agreement (the “Settlement Date(s)”),unless earlier forfeited, the Company shall settle the Restricted Stock Unit by delivering (i) anumber of shares of Stock equal to the number of Restricted Stock Units then vested and nototherwise forfeited, and (ii) if applicable, a number of shares of Stock having a value equal toany unpaid Dividend Equivalents accrued with respect to the Restricted Stock Units. The Companymay, in the Committee’s sole discretion, settle a Restricted Stock Unit Award in (A) cash, (B) inthe delivery of shares of Stock or other property, (C) partially in cash and partially in thedelivery of shares of Stock and/or other property, or (D) partially in the delivery of shares ofStock and partially in the delivery of other property. A settlement in cash or other propertyshall be based on the value of the shares of Stock otherwise to be delivered on the SettlementDate.          (d) Creditor’s Rights. A holder of Restricted Stock Units shall have no rights otherthan those of a general creditor of the Company. Restricted Stock Units represent an unfunded andunsecured obligation of the Company, subject to the terms and conditions of the applicableRestricted Stock Unit Agreement.          (e) Termination of Employment or Service. Except as may otherwise be provided in bythe Committee in the Restricted Stock Unit Agreement, if, prior to the time that the RestrictedStock Unit has vested, a Participant’s employment or service, as applicable, terminates for anyreason, all Restricted Stock Units that have not vested on or prior the date of such terminationshall be forfeited, and vested Restricted Stock Units shall be settled as soon as practicablefollowing the date of such termination; provided, however, if such Participant’s employment orservice, as applicable, was terminated by the Employer for Cause, all Restricted Stock Units,whether or not then vested, shall be forfeited, and such Participant shall have no further rightswith respect thereto.     10. **Bonus Stock and Awards in Lieu of Obligations.**     The Committee is authorized to grant Stock as a bonus, or to grant Stock or other Awards inlieu of obligations of the Company or a subsidiary of the Company under the Plan or under otherplans or compensatory arrangements, subject to such terms and conditions as shall be determined bythe Committee.     11. **Other Stock-Based Awards.**     The Committee is authorized, subject to limitations under applicable law, to grant toParticipants such other Awards that may be denominated or payable in, valued in whole or in part byreference to, or otherwise based on, or related to, Stock, as deemed by the Committee to beconsistent with the purposes of the Plan.     12. **Adjustment for Recapitalization, Merger, etc.**          (a) Capitalization Adjustments. In the event of any change in the outstanding Stockor in the capital structure of the Company by reason of stock dividends or extraordinary dividendspayable in cash or any other form of consideration, stock splits, reverse stock splits,recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, or otherrelevant changes in capitalization or any change in applicable laws or any change in circumstanceswhich results in or would result in any substantial dilution or enlargement of the
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rights granted to, or available for, Participants in the Plan, the Committee shall make suchsubstitution or adjustment, if any, as is equitable and proportional (as determined by theCommittee in good faith), as to (i) the number and/or kind of Stock or other securities issued orreserved for issuance (including the maximum number and/or kind of Stock or other securities withrespect to which one person may be granted Options or SARs in any given year) pursuant to the Planor any outstanding Award, and/or (ii) the exercise price of any Option or SAR. Absent manifesterror, any adjustment shall be conclusively determined by the Committee; provided, in each case,the fair value of the Award immediately following any such adjustment shall be equal to the fairvalue of the Award immediately prior to such adjustment.          (b) Fractional Shares. Any such adjustment may provide for the elimination of anyfractional share which might otherwise become subject to an Award.          13. **Change in Control**          (a) Change in Control of the Company. In the event of a Change in Control alloutstanding Awards shall become immediately vested and exercisable, the restrictions thereon shalllapse and all such Awards shall become immediately payable or subject to settlement. In the eventof a Change in Control, it will not be a violation of Section 19 hereunder for the Committee tocancel any or all outstanding Awards in exchange for a cash payment to each Award holder having avalue equal to the value of each such Award at the time of such Change in Control. Furthermore, itwill not be a violation of Section 19 hereunder for the Committee to cancel, without any suchpayment, any or all outstanding Awards having no value at the time of such Change in Control.          (b) New Skynet or New SS/L Sale Event/Subsidiary Employees. In the event of a NewSkynet Sale Event, all outstanding Awards held by employees or service providers of New Skynetshall become immediately vested and exercisable, the restrictions thereon shall lapse and all suchAwards shall become immediately payable or subject to settlement. In the event of a New SS/L SaleEvent, all outstanding Awards held by employees or service providers of New SS/L shall becomeimmediately vested and exercisable, the restrictions thereon shall lapse and all such Awards shallbecome immediately payable or subject to settlement. Moreover, notwithstanding any limits on theexercisability of any Option following a Participant’s termination of employment with New Skynet orNew SS/L, as applicable, as set forth in any Option Agreement, Options held by employees or serviceproviders of New Skynet or New SS/L, as applicable, shall remain exercisable for the shorter of (i)one year following the New Skynet Sale Event or New SS/L Sale Event, as applicable or (ii) theremaining term of the Option as set forth in the Option Agreement.          (c) New Skynet or New SS/L Sale Event/Corporate Headquarters Employees. In the eventof a New Skynet Sale Event or a New SS/L Sale Event, (i) 50% of all outstanding unvested Awardsheld by employees of the Company assigned to the Company’s corporate headquarters shall becomeimmediately vested and exercisable, the restrictions thereon shall lapse and all such Awards shallbecome immediately payable or subject to settlement if the New Skynet Sale Event or a New SS/L SaleEvent occurs on or prior to the first anniversary of the Effective Date, or (ii) one-third of alloutstanding unvested Awards held by employees of the Company assigned to the Company’s corporateheadquarters shall become immediately vested
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and exercisable, the restrictions thereon shall lapse and all such Awards shall becomeimmediately payable or subject to settlement if the New Skynet Sale Event or a New SS/L Sale Eventoccurs after the first anniversary but on or prior to the second anniversary of the Effective Date.          (d) Change in Control under Section 409A. Notwithstanding anything herein to thecontrary, to the extent that any Award hereunder, either in whole or in part, is deemed to providefor the deferral of compensation within the meaning of Section 409A, there shall be no distributionof any such deferred compensation on account of a Change in Control, a New Skynet Sale Event or aNew SS/L Sale Event unless such event also constitutes a “Change in Control Event” within themeaning of Section 409A or such distribution is otherwise allowable under Section 409A.          14. **Use of Proceeds.**     The proceeds received from the sale of Stock pursuant to the Plan shall be used for generalcorporate purposes.          15. **Rights and Privileges as a Stockholder.**     Except as otherwise specifically provided in the Plan, no person shall be entitled to therights and privileges of stock ownership in respect of shares of Stock which are subject to Awardshereunder until such shares have been issued to that person.          16. **Employment or Service Rights.**     No individual shall have any claim or right to be granted an Award under the Plan or, havingbeen selected for the grant of an Award, to be selected for a grant of any other Award. Neitherthe Plan nor any action taken hereunder shall be construed as giving any individual any right to beretained in the employ or service of the Company or an Affiliate.          17. **Compliance With Laws.**     The obligation of the Company to make payment of Awards in Stock or otherwise shall be subjectto all applicable laws, rules, and regulations, and to such approvals by governmental agencies asmay be required. Notwithstanding any terms or conditions of any Award to the contrary, the Companyshall be under no obligation to offer to sell or to sell and shall be prohibited from offering tosell or selling any shares of Stock pursuant to an Award unless such shares have been properlyregistered for sale pursuant to the Securities Act with the Securities and Exchange Commission orunless the Company has received an opinion of counsel, satisfactory to the Company, that suchshares may be offered or sold without such registration pursuant to an available exemptiontherefrom and the terms and conditions of such exemption have been fully complied with. TheCompany shall be under no obligation to register for sale or resale under the Securities Act any ofthe shares of Stock to be offered or sold under the Plan or any shares of Stock issued uponexercise or settlement of Awards. If the shares of Stock offered for sale or sold under the Planare offered or sold pursuant to an exemption from registration under the Securities Act, theCompany may restrict the transfer of such shares and may legend
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the Stock certificates representing such shares in such manner as it deems advisable to ensurethe availability of any such exemption.          18. **Withholding Obligations.**     As a condition to the exercise or vesting, as applicable, of any Award, the Committee mayrequire that a Participant satisfy, through deduction or withholding from any payment of any kindotherwise due to the Participant, or through such other arrangements as are satisfactory to theCommittee, the minimum amount of all Federal, state and local income and other taxes of any kindrequired to be withheld in connection with such vesting or exercise. The Committee, in itsdiscretion, may permit shares of Stock to be used to satisfy tax withholding requirements and suchshares shall be valued at their Fair Market Value as of the settlement date of the Award.          19. **Amendment of the Plan or Awards.**          (a) Amendment of Plan. The Board at any time, and from time to time, may amend thePlan; provided, however, that without further stockholder approval the Board shall not make anyamendment to the Plan which would increase the maximum number of shares of Stock which may beissued pursuant to Awards under the Plan, except as contemplated by Section 12 hereof, or, whichwould otherwise violate the shareholder approval requirements of the national securities exchangeon which the Stock is listed or Nasdaq, as applicable.          (b) No Impairment of Rights. Rights under any Award granted before amendment of thePlan shall not be impaired by any amendment of the Plan unless the Participant consents in writing.          (c) Amendment of Stock Awards. The Committee, at any time, and from time to time, mayamend the terms of any one or more Awards; provided, however, that the rights under any Award shallnot be impaired by any such amendment unless the Participant consents in writing.          20. **Termination or Suspension of the Plan.**     The Plan shall terminate on the day before the tenth (10th) anniversary of the datethe Plan is adopted by the Board and no Awards may be granted under the Plan after it isterminated; provided, however, that the Plan shall continue to be administered with respect tooutstanding Awards until all such Awards have been fully exercised or otherwise expire by theirterms.          21. **Effective Date of the Plan.**     The Plan shall become effective as of the effective date of the Plan of Reorganization.          22. **Miscellaneous.**          (a) Awards to Participants Outside of the United States. The Committee may modify theterms of any Award under the Plan made to or held by a Participant who is then resident orprimarily employed outside of the United States in any manner deemed by the Committee to benecessary or appropriate in order that such Award shall conform to laws,
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regulations and customs of the country in which the Participant is then resident or primarilyemployed, or so that the value and other benefits of the Award to the Participant, as affected byforeign tax laws and other restrictions applicable as a result of the Participant’s residence oremployment abroad, shall be comparable to the value of such Award to a Participant who is residentor primarily employed in the United States. An Award may be modified under this Section 22(a) in amanner that is inconsistent with the express terms of the Plan, so long as such modifications willnot contravene any applicable law or regulation or result in actual liability under Section 16(b)of the Exchange Act for the Participant whose Award is modified.          (b) No Liability of Committee Members. No member of the Committee shall be personallyliable by reason of any contract or other instrument executed by such member or on his behalf inhis capacity as a member of the Committee nor for any mistake of judgment made in good faith, andthe Company shall indemnify and hold harmless each member of the Committee and each other employee,officer or director of the Company to whom any duty or power relating to the administration orinterpretation of the Plan may be allocated or delegated, against any cost or expense (includingcounsel fees) or liability (including any sum paid in settlement of a claim) arising out of any actor omission to act in connection with the Plan unless arising out of such person’s own fraud orwillful bad faith; provided, however, that approval of the Board shall be requiredfor the payment of any amount in settlement of a claim against any such person. The foregoingright of indemnification shall not be exclusive of any other rights of indemnification to whichsuch persons may be entitled under the Company’s Certificate of Incorporation or By-Laws, as amatter of law, or otherwise, or any power that the Company may have to indemnify them or hold themharmless.          (c) Payments Following Accidents or Illness. If the Committee shall find that anyperson to whom any amount is payable under the Plan is unable to care for his affairs because ofillness or accident, or is a minor, or has died, then any payment due to such person or his estate(unless a prior claim therefor has been made by a duly appointed legal representative) may, if theCommittee so directs the Company, be paid to his spouse, child, relative, an institutionmaintaining or having custody of such person, or any other person deemed by the Committee to be aproper recipient on behalf of such person otherwise entitled to payment. Any such payment shall bea complete discharge of the liability of the Committee and the Company therefor.          (d) Designation and Change of Beneficiary. Each Participant may file with the Companya written designation of one or more persons as the beneficiary who shall be entitled to receivethe rights or amounts payable with respect to an Award due under the Plan upon his death. AParticipant may, from time to time, revoke or change his beneficiary designation without theconsent of any prior beneficiary by filing a new designation with the Committee. The last suchdesignation received by the Company shall be controlling; provided, however, thatno designation, or change or revocation thereof, shall be effective unless received by the Companyprior to the Participant’s death, and in no event shall it be effective as of a date prior to suchreceipt. If no beneficiary designation is filed by the Participant, the beneficiary shall bedeemed to be his or her spouse or, if the Participant is unmarried at the time of death, his or herestate. Any beneficiary of the Participant receiving an Award hereunder shall remain subject tothe terms of the Plan and the applicable Award agreement.
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          (e) Governing Law. The Plan shall be governed by and construed in accordance with theinternal laws of the State of Delaware without reference to the principles of conflicts of lawsthereof.          (f) Funding. No provision of the Plan shall require the Company, for the purpose ofsatisfying any obligations under the Plan, to purchase assets or place any assets in a trust orother entity to which contributions are made or otherwise to segregate any assets, nor shall theCompany maintain separate bank accounts, books, records or other evidence of the existence of asegregated or separately maintained or administered fund for such purposes. Participants shallhave no rights under the Plan other than as unsecured general creditors of the Company, except thatinsofar as they may have become entitled to payment of additional compensation by performance ofservices, they shall have the same rights as other employees under general law.          (g) Reliance on Reports. Each member of the Committee and each member of the Boardshall be fully justified in relying, acting or failing to act, and shall not be liable for havingso relied, acted or failed to act in good faith, upon any report made by the independent publicaccountant of the Company and its Affiliates and upon any other information furnished in connectionwith the Plan by any person or persons other than himself.          (h) Titles and Headings. The titles and headings of the sections in the Plan are forconvenience of reference only, and in the event of any conflict, the text of the Plan, rather thansuch titles or headings shall control.          (i) Section 409A Compliance. Awards issued hereunder are generally intended to beexempt from Section 409A. To the extent that any payments or benefits provided hereunder areconsidered nonqualified deferred compensation subject to Section 409A, the Company intends for theprovisions of this Plan and the Award agreements issued hereunder providing for such payments andbenefits to comply with Section 409A as to form and operation. To the extent that there are anyambiguities in this Plan document or any Award agreement issued hereunder, they shall beinterpreted and administered consistent with such intent. Notwithstanding the immediately priorsentence, (i) if any term or provision of this Plan or any Award agreement issued hereunderrelating to any payments or benefits considered to be nonqualified deferred compensation is foundto be noncompliant with Section 409A or to cause such nonqualified deferred compensation to benoncompliant with Section 409A or (ii) any term or provision of this Plan or any Award agreementissued hereunder relating to Awards that are intended to be exempt from Section 409A is found tocause the Award to be subject to and not to be exempt from Section 409A, in each case, in anyjurisdiction, such provision shall be struck as void *ab initio*, and a compliant or exempt term orprovision, as applicable, shall be deemed substituted for such noncompliant or nonexempt term orprovision, as applicable, that preserves, to the maximum lawful extent, the intent of the Company,and any court or arbitrator so holding shall have authority and shall be instructed to substitutesuch compliant or exempt term or provision; provided, however, that if any suchnoncompliance or nonexemption, as applicable, is due to a deficiency of one or more terms orprovisions, such appropriate terms or provisions shall be deemed to be added to cure suchnoncompliance or nonexemption, as applicable, that preserves, to the maximum lawful extent, theintent of the Company, and any such court or arbitrator shall have authority and shall beinstructed to supplement the Plan and/or Award
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agreement with such compliant or exempt terms or provisions, as applicable. The Companyreserves the right to amend this Plan and Awards granted hereunder to cause the Plan and/or suchAwards to comply with or be exempt from Section 409A. Notwithstanding anything herein to thecontrary, the Company does not hereby guarantee or represent that this Plan and the Awards issuedhereunder will be either exempt from or compliant with Section 409A, or that the Plan or Awardswill not subject the recipients of such Awards to the taxes, penalties and interest imposed underSection 409A for failure to comply therewith, and none of the Company, any Affiliate, the Committeenor any employee, officer, or director of the Company or any Affiliate shall be liable to any Awardrecipient or any other person or entity for any taxes, penalties or interest thereon imposed on orincurred by any Award recipient or any other person due to the Plan’s or any Award’s failure tocomply with Section 409A as to either form or operation. Notwithstanding anything herein to thecontrary, in the event that any one or more payments hereunder, which are considered to benonqualified deferred compensation subject to Section 409A, are to be made to an individual onaccount of the individual’s separation from service with Loral or an Affiliate, and at the time ofsuch payment such individual is a “specified employee” as defined in Treasury Regulation §1.409A-1(i), such payment(s) shall be delayed for such period of time as may be necessary asrequired pursuant to Treasury Regulation § 1.409A-1(c)(3)(v), and on the earliest date on whichsuch payment(s) may be made following such delay without violating the requirements TreasuryRegulation § 1.409A-1(c)(3)(v), all such delayed payments shall be paid to the individual in a lumpsum on such date.
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