exv10w2








Exhibit 10.2




Exhibit A




Performance Unit Award Notice




	 	 	 
	A. Participant:
	 	 
	 

	 	 
	 
	 	 
	B. Grant Date:

	 	July 28, 2009
	 
	 	 
	C. Performance Period:

	 	6/27/2009 through 12/31/2011
	 
	 	 
	D. Aggregate Target Dollar Award:
	 	 
	 

	 	 
	 
	 	 
	E. Initial Value Per Performance Unit:
	 	 
	 

	 	 
	 
	 	 
	F. Aggregate Target Performance Units:
	 	 
	 

	 	 
	 
	 	 
	G. Performance Measures:
	 	 







	1.	 	Growth in Diluted Earnings per Share: The compounded annual growth rate in
L-3’s Diluted EPS. “Diluted EPS” means earnings per common share on a fully diluted
basis, determined in accordance with generally accepted accounting principles and as
derived from L-3’s audited consolidated financial statements prepared in the ordinary
course of business. Diluted EPS shall be adjusted as contemplated by the terms of the
Performance Unit Agreement to exclude certain unusual or nonrecurring items.
	 
	 	 	Portion of Aggregate Target Award for this Performance
Measure: 50%


Target Units for this Performance Measure:                     
	 
	 	 	Performance Scale:





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Diluted	 	 	 	 
	 	 	EPS	 	Cumulative	 	 
	Performance	 	Growth	 	Diluted	 	Unit
	Levels	 	Rate	 	EPS Required	 	Multiplier
	Maximum
	 	 	≥ 13	%	 	≥ $	 22.47	 	 	 	200	%
	 
	 	 	10	%	 	$	21.14	 	 	 	150	%
	Target
	 	 	8	%	 	$	20.29	 	 	 	100	%
	 
	 	 	7	%	 	$	19.87	 	 	 	75	%
	Threshold
	 	 	6	%	 	$	19.46	 	 	 	50	%
	Below Threshold
	 	 	< 6	%	 	< $	19.46	 	 	 	0	%







	 	 	Note: Cumulative Diluted EPS based on 2008 Diluted EPS of $6.84 excluding certain unusual
or nonrecurring items contemplated by the Performance Unit Agreement.




 









 













	 	 	In the event that the level of actual performance exceeds the Threshold and falls between
two of the stated performance levels listed above, the Unit Multiplier will be calculated
on a straight-line basis between the two stated Unit Multipliers for those performance
levels.
	 
	 	 	Payment Method: Shares of L-3 stock. Subject to the terms of the Performance Unit
Agreement, the number of shares will be determined by multiplying (1) the Target Units for
this Performance Measure, by (2) the applicable Unit Multiplier.
	 
	2.	 	Relative Total Stockholder Return: L-3’s TSR compared to the returns of a
comparison group of companies (see Appendix 1). “TSR” means, with respect to a particular
company for particular time period, (a) the change in the per-share market price of the
company’s common stock (as quoted in the principal market on which it is traded as of the
beginning and ending of the period) plus dividends and other distributions paid per share
during such period, divided by (b) the per-share market price of the company’s common
stock as quoted as of the beginning of such period, all of which is adjusted for any
changes in company’s equity structure, including but not limited to stock splits and stock
dividends. This measure will be assessed by determining L-3’s relative percentile
positioning on TSR versus companies included in the comparison group.
	 
	 	 	Portion of Aggregate Target Award for this Performance
Measure: 50%


Target Units for this Performance Measure:                     
	 
	 	 	Performance Scale:





	 	 	 	 	 	 	 	 	 
	Performance	 	Relative	 	Unit
	Levels	 	TSR	 	Multiplier
	Maximum
	 	> 74th percentile	 	 	200	%
	 
	 	   63rd percentile	 	 	150	%
	Target
	 	   50th percentile	 	 	100	%
	Threshold
	 	   40th percentile	 	 	50	%
	Below Threshold
	 	< 40th percentile	 	 	0	%







	 	 	In the event that the level of actual performance exceeds the Threshold and falls between
two of the stated performance levels listed above, the Unit Multiplier will be calculated
on a straight-line basis between the two stated Unit Multipliers for those performance
levels.
	 
	 	 	Payment Method: Cash. Subject to the terms of the Performance Unit Agreement, the cash
amount will be determined by multiplying (1) the Target Units for this Performance Measure,
by (2) the applicable Unit Multiplier, by (3) the fair market value per share of L-3 common
stock at end of the Performance Period.




 









 












Appendix 1



The companies included for the Relative Total Stockholder Return assessment are those in the S&P
1500 Aerospace & Defense Index, excluding L-3. This list will be modified by the Compensation
Committee to reflect any changes to companies included in the Index.




       S&P 1500 Aerospace & Defense Index



	 	 	 	 	 	 	 
	 	 	Company	 	Ticker
	 	1.	 	 	AAR CORP

	 	AIR
	 	2.	 	 	AEROVIRONMENT INC.

	 	AVAV
	 	3.	 	 	ALLIANT TECHSYSTEMS INC

	 	ATK
	 	4.	 	 	AMERICAN SCIENCE AND ENGINEERING INC

	 	ASEI
	 	5.	 	 	APPLIED SIGNAL TECHNOLOGY

	 	APSG
	 	6.	 	 	AXSYS TECHNOLOGIES INC

	 	AXYS
	 	7.	 	 	BE AEROSPACE INC

	 	BEAV
	 	8.	 	 	BOEING CO

	 	BA
	 	9.	 	 	CERADYNE INC

	 	CRDN
	 	10.	 	 	CUBIC CORP

	 	CUB
	 	11.	 	 	CURTISS-WRIGHT CORP

	 	CW
	 	12.	 	 	ESTERLINE TECHNOLOGIES CORP

	 	ESL
	 	13.	 	 	GENCORP INC

	 	GY
	 	14.	 	 	GENERAL DYNAMICS CORP

	 	GD
	 	15.	 	 	GOODRICH CORP

	 	GR
	 	16.	 	 	HONEYWELL INTERNATIONAL INC

	 	HON
	 	17.	 	 	ITT CORP

	 	ITT
	 	18.	 	 	LOCKHEED MARTIN CORP

	 	LMT
	 	19.	 	 	MOOG INC

	 	MOG.A
	 	20.	 	 	NORTHROP GRUMMAN CORP

	 	NOC
	 	21.	 	 	ORBITAL SCIENCES CORP.

	 	ORB
	 	22.	 	 	PRECISION CASTPARTS CORP

	 	PCP
	 	23.	 	 	RAYTHEON CO

	 	RTN
	 	24.	 	 	ROCKWELL COLLINS INC

	 	COL
	 	25.	 	 	STANLEY INC

	 	SXE
	 	26.	 	 	TELEDYNE TECHNOLOGIES INC

	 	TDY
	 	27.	 	 	TRIUMPH GROUP INC

	 	TGI
	 	28.	 	 	UNITED TECHNOLOGIES CORP

	 	UTX