EX-10.21






Exhibit 10.21




L-3 COMMUNICATIONS HOLDINGS, INC.

AMENDED AND RESTATED

CHANGE IN CONTROL SEVERANCE PLAN




     THIS CHANGE IN CONTROL SEVERANCE PLAN, originally adopted on August 15, 2006 (the
“Effective Date”) by L-3 COMMUNICATIONS HOLDINGS, INC., a Delaware corporation, as amended
and restated as of February 19, 2009, has been established to provide for the payment of severance
benefits to Employees (as defined below).



     Section 1. Definitions. Unless the context clearly indicates otherwise, when used in
this Plan:




     (a) “Actual Bonus” means any Bonus actually paid or payable to an Eligible
Employee (excluding any reduction in amount resulting from an adverse change to the
assumptions (including the Employee’s Target Bonus) or calculation methodology for
determining the amount of such Bonus made on or after a Change in Control).




     (b) “Affiliate” means, with respect to any entity, any other corporation,
organization, association, partnership, sole proprietorship or other type of entity, whether
incorporated or unincorporated, directly or indirectly controlling or controlled by or under
direct or indirect common control with such entity.




     (c) “Annual Compensation” means the sum of (x) the greater of the Eligible
Employee’s Base Salary in effect (A) immediately prior to the date of the Change in Control
or (B) immediately prior to the date of termination of the Eligible Employee (or, if the
termination is for Good Reason, immediately prior to the event set forth in the notice of
termination given in accordance with Section 15 of this Plan), and (y) the Eligible
Employee’s Average Bonus.




     (d) “Anticipatory Termination” means a termination of an Employee made in
connection with or in anticipation of a Change in Control at the request of, or upon the
initiative of, the acquiror in the Change in Control transaction or otherwise in connection
with or anticipation of the Change in Control.




     (e) “Average Bonus” means the average of all Bonuses paid or payable to an
Eligible Employee in respect of the three Fiscal Years occurring prior to the Fiscal Year in
which the employment of the Eligible Employee is terminated (or, if the Eligible Employee
was not an Employee during each of such Fiscal Years, such lesser number of Fiscal Years
during which the Eligible Employee was an Employee); provided, that for purposes of
this calculation, any Bonus awarded to the Eligible Employee for a Fiscal Year in which the
Employee was employed for less than the full Fiscal Year shall be annualized;
provided, further, that if the Bonus for the last of the three Fiscal Years
utilized in this calculation (i) (x) has not been paid because the Employee was terminated
prior to the scheduled date for payment of such Bonus and (y) is not determinable by way of
a formula or calculation applied on a basis consistent with past practice or (ii) has been
paid based on an adverse change to the assumptions (including the Employee’s Target Bonus)
or calculation methodology for determining the amount of such Bonus made on










 




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or after a Change in Control, then the Bonus for such year shall be disregarded and the
calculation shall be made on the basis of the average of the other Fiscal Years;
provided, further, that if the Employee was not an Employee prior to the
last of the three Fiscal Years utilized in this calculation and the Bonus for such last
Fiscal Year is disregarded by operation of the immediately preceding proviso, then the term
“Average Bonus” shall mean the Eligible Employee’s Target Bonus.




     (f) “Base Salary” means an Employee’s annual rate of base salary in effect on
the date in question, determined on a “gross wages” basis (i.e. prior to reduction for any
employee-elected salary reduction contributions made to an Employer-sponsored non-qualified
deferred compensation plan or an Employer-sponsored plan pursuant to Section 401(k) or 125
of the Code), and excluding bonuses, overtime, allowances, commissions, deferred
compensation payments and any other extraordinary remuneration.




     (g) “Board” means the board of directors of the Company.




     (h) “Bonus Fraction” means, with respect to any Eligible Employee, a fraction,
the numerator of which shall equal the number of days the Eligible Employee was employed by
the Eligible Employee’s Employer in the Fiscal Year in which the Eligible Employer’s
termination occurs and the denominator of which shall equal 365.




     (i) “Bonus” means the amount payable to an Employee under the Employer’s
applicable annual cash incentive bonus plan with respect to a Fiscal Year.




     (j) “Cause” means an Employee’s:




     (1) intentional failure to perform reasonably assigned duties;




     (2) dishonesty or willful misconduct in the performance of duties;




     (3) engaging in a transaction in connection with the performance of duties to
the Company or its Affiliates which transaction is adverse to the interests of the
Company and is engaged in for personal profit or;




     (4) willful violation of any law, rule or regulation in connection with the
performance of duties (other than traffic violations or similar offenses).




For purposes of this definition, an act, or failure to act, on Employee’s part shall
be deemed “willful” if done, or omitted to be done, by Employee in bad faith and
without reasonable belief that Employee’s action or omission was in the best
interest of the Company.




     (k) “Change in Control” means:




     (1) the acquisition by any person or group (including a group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than the Company
or any of its subsidiaries, of beneficial ownership (within the meaning









 





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of Rule 13d-3 promulgated under the Exchange Act) of a majority of the combined
voting power of the Company’s then outstanding voting securities, other than by any
employee benefit plan maintained by the Company;




     (2) the sale of all or substantially all the assets of the Company and its
subsidiaries taken as a whole; or




     (3) the election, including the filling of vacancies, during any period of 24
months or less, of 50% or more of the members of the Board, without the approval of
Continuing Directors, as constituted at the beginning of such period.




For purposes of this definition, “Continuing Directors” shall mean, with respect to
any date, any director of the Company who either (i) is a member of the Board on
such date, or (ii) is subsequently nominated for election to the Board by a majority
of the Board which is comprised of directors who were, at the time of such
nomination, Continuing Directors.




     (l) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.




     (m) “Code” means the Internal Revenue Code of 1986, as amended.




     (n) “Committee” means the committee designated pursuant to Section 6 to
administer this Plan.




     (o) “Company” means L-3 Communications Holdings, Inc., a Delaware corporation
and, after a Change in Control, any successor or successors thereto.




     (p) “Director” means (a) any Director of the Company and (b) any other Employee
who participates in the Executive Benefits Plan of the Company at the benefit level provided
to Directors of the Company generally. For the avoidance of doubt, the phrase “Director of
the Company” as used in clause (a) of this definition refers to an Employee serving with a
title of Director, and not to a member of the Board.




     (q) “Disability” means an Employee, as a result of incapacity due to physical
or mental illness, becomes eligible for benefits under the long-term disability plan or
policy of the Company or a subsidiary in which the Employee is eligible to participate.




     (r) “Elected Officer” means a person who is elected or appointed as an officer
of the Company pursuant to any resolution adopted by Board on or after the date of the most
recent annual meeting of Company stockholders and prior to the date of the Change in Control
(which election or appointment is not revoked prior to such date).




     (s) “Eligible Employee” means an Employee whose employment with Employee’s
Employer (i) is terminated by the Employer for any reason other than Cause, Disability or
death (A) as an Anticipatory Termination, but only (x) if an anticipated Change in Control
actually occurs during the period in which this Plan is effective and (y) to the extent such
Change in Control also constitutes a change in ownership or









 



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effective control, or in the ownership of a substantial portion of the assets, within
the meaning of Section 409A(a)(2)(A)(v) of the Code or (B) during the two-year period
beginning on the effective date of a Change in Control, or (ii) terminates during the
two-year period beginning on the effective date of a Change in Control on account of such
Employee’s resignation for Good Reason within six months from the date the Employee first
becomes actually aware of the existence of Good Reason.




     (t) “Employee” means (1) any Elected Officer of the Company and (2) any other
employee of the Company or any of its wholly-owned subsidiaries, whose payroll expenses are
primarily allocated and recorded as a corporate expense of L-3 Communications Corporation or
any successor entity (and not as an expense of a group, division or subsidiary thereof) for
financial reporting purposes, as applied immediately prior to the date of a Change in
Control.




     (u) “Employer” means, with respect to any Employee, the legal entity that
employed such Employee prior to any termination of employment contemplated hereunder.




     (v) “Exchange Act” means the Securities Exchange Act of 1934, as amended.




     (w) “Executive” means a person qualifying as any of following immediately prior
to the date of a Change in Control: (i) the Chief Executive Officer, the Chief Financial
Officer and the General Counsel of the Company, (ii) any Executive Vice President, Senior
Vice President, Chief Operating Officer or Group President of the Company and (iii) any Vice
President or Director of the Company (as such positions are defined in this Section 1). For
the avoidance of doubt, the term “Executive” shall not include any Employee who holds a
title of Chief Executive Officer, Chief Financial Officer, General Counsel, Executive Vice
President, Senior Vice President, Vice President or Director solely with respect to a
Company group, division or subsidiary and not with respect to the Company generally.




     (x) “Fiscal Year” means any given fiscal year of the Company.




     (y) “Good Reason” means any of the following actions on or after a Change in
Control, without Employee’s express prior written approval, other than due to Employee’s
Disability or death:




     (1) (A) any reduction in Base Salary or annual or long-term incentive
opportunity (including Target Bonus, if applicable) or (B) any adverse change to the
calculation methodology for determining Bonuses or long-term incentives which is
reasonably likely to have an adverse impact on the amounts the Eligible Employee has
the potential to earn under such programs (which for the avoidance of doubt shall
not be deemed to have occurred if an acquiror fails to continue or provide any
equity-based incentive plan);




     (2) any failure by acquiror to continue to provide employee benefits that are
substantially similar in the aggregate to those afforded to the Employee









 



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immediately prior to the Change in Control; for this purpose employee benefits
shall mean pension and retirement, fringe and welfare benefits;




     (3) any material adverse change in Employee’s duties or responsibilities;




     (4) any relocation of Employee’s principal place of business of 50 miles or
more, provided that such relocation also increases Employee’s commute by at
least 25 miles; or




     (5) any failure to pay Employee’s Base Salary and other amounts earned by
Employee within ten (10) days after the date such compensation is due;




     (6) the failure of any successor or assignee (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Company in connection with any Change in Control, by
agreement in writing in form and substance reasonably satisfactory to Employee,
expressly, absolutely and unconditionally to assume and agree to perform all
obligations under this Plan.




     (z) “Plan” means the L-3 COMMUNICATIONS HOLDINGS, INC. CHANGE IN CONTROL
SEVERANCE PLAN, as in effect from time to time.




     (aa) “Plan Year” means the calendar year.




     (bb) “Release” means a release to be signed by an Eligible Employee in such
form as the Company shall reasonably determine, which shall, to the extent permitted by law,
waive all claims and actions against the Employers and such other related parties and
entities as the Company reasonably chooses to include in the release except for claims and
actions for benefits provided under (or contemplated by) the terms of this Plan (which
Release is not revoked by the Eligible Employee).




     (cc) “Severance Multiple” means, with respect to any Eligible Employee, the
highest of the following multiples applicable to such person:




     (1) the multiple of three (3), for each of the Chief Executive Officer, Chief
Financial Officer, General Counsel and any Executive Vice President of the Company;




     (2) the multiple of two and one-half (2.5), for each Senior Vice President,
Chief Operating Officer or Group President of the Company;




     (3) the multiple of two (2), for each Vice President of the Company who is also
an Elected Officer;




     (4) the multiple of one and one-half (1.5), for each Vice President of the
Company who is not also an Elected Officer; and









 



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     (5) the multiple of one (1), for each Director of the Company.




     (dd) “Target Bonus” means the greater of (1) an Employee’s target Bonus in
effect immediately prior to the date of the Change in Control or (2) an Employee’s target
Bonus in effect immediately prior to the date on which the Eligible Employee is terminated
(or, if the termination is for Good Reason, immediately prior to the event set forth in the
notice of termination given in accordance with Section 15).




     (ee) “Vice President” means (a) any Vice President of the Company and (b) any
other Employee who participates in the Executive Benefits Plan of the Company at the benefit
level provided to Vice Presidents of the Company generally.



     Section 2. Severance Benefits. Each Eligible Employee who executes a Release in the
manner prescribed by the Company within 45 days following such Eligible Employee’s date of
termination and additionally, for each Eligible Employee who is also an Elected Officer, who agrees
at such time to be subject to the restrictive covenants set forth on Exhibit A shall be entitled to
the following:




     (a) Severance Pay.




     (1) Each such Eligible Employee who is an Executive shall be entitled to
receive severance pay from his or her Employer in a lump sum amount equal to the sum
of:




     (i) the Eligible Employee’s Severance Multiple, multiplied by
the Eligible Employee’s Annual Compensation; and




     (ii) the Average Bonus (or, if determinable on the date of termination
(i.e., by way of a formula or calculation applied on a basis consistent with
past practice), the Actual Bonus for the year of termination),
multiplied by the Bonus Fraction.




     (2) Each such Eligible Employee who is not an Executive shall be entitled to
receive severance pay from his or her Employer in a lump sum amount equal to the sum
of:




     (i) the Average Bonus (or, if determinable on the date of termination
(i.e., by way of a formula or calculation applied on a basis consistent with
past practice), the Actual Bonus for the year of termination),
multiplied by the Bonus Fraction; plus




     (ii) four (4) weeks of the Eligible Employee’s Annual Compensation;
plus




     (iii) two (2) or three (3) weeks (as determined by the Chief Executive
Officer of the Company on or prior to the date of the Change in Control) of
the Eligible Employee’s Annual Compensation for each completed year of
service by the Eligible Employee with the Company, its









 



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Affiliates and any of their respective predecessor entities;
provided, however, that the sum of the amounts determined
under clauses (ii) and (iii) above shall be limited to the amount of the
Eligible Employee’s Annual Compensation (i.e., 52 weeks of the Eligible
Employee’s Annual Compensation).




     (b) Medical, Dental and Life Insurance Benefit Continuation.




     (1) For each Eligible Employee who is an Executive, for a period of years (or
fractions thereof) equal to the Severance Multiple following the Eligible Employee’s
termination of employment (the “Executive Welfare Continuation Period”), the
Eligible Employee and such Eligible Employee’s spouse and dependents (each as
defined under the applicable program) shall receive the following benefits:
(x) medical and dental insurance coverages at the same benefit levels as provided to
the Eligible Employee immediately prior to the Change in Control, for which the
Company will (A) reimburse the Eligible Employee during the first 18 months of the
Executive Welfare Continuation Period or, if shorter, the period of actual COBRA
continuation coverage received by the Eligible Employee during the Executive Welfare
Continuation Period, for the total amount of the monthly COBRA medical and dental
insurance premiums payable by the Eligible Employee for such continued benefits in
excess of the cost the Eligible Employee paid for such coverage (on a monthly
premium basis) immediately prior to such termination of employment and (B) provide
such coverage for any remaining portion of the Executive Welfare Continuation Period
at the same cost to the Eligible Employee as is generally provided to similarly
situated active employees of the Company (or, if it is not possible, or is
cost-prohibitive for the Company to provide such coverage for such remaining
portion, the Company will pay the Eligible Employee a cash lump sum payment equal to
the premiums the Company would have paid if the Eligible Employee had remained an
active employer), provided, however, that if, during the Executive
Welfare Continuation Period, the Eligible Employee becomes employed by a new
employer, continuing medical and dental coverage from the Company will become
secondary to any coverage afforded by the new employer in which the Eligible
Employee becomes enrolled); and (y) life insurance coverage at the same benefit
level as provided to the Eligible Employee immediately prior to the Change in
Control and at the same cost to the Eligible Employee as is generally provided to
similarly situated active employees of the Company (or if such coverage is no longer
provided by the Company, then at the Employee’s cost immediately prior to the Change
in Control).




     (2) For each Eligible Employee who is not an Executive, for a period not to
exceed the number of weeks of Annual Compensation payable to the Eligible Employee
pursuant to Section 2(a)(2) above, (the “Employee Welfare Continuation
Period”), the Eligible Employee and such Eligible Employee’s spouse and
dependents (each as defined under the applicable program) shall receive the
following benefits: (x) medical and dental insurance coverages at the same benefit
levels as provided to the Eligible Employee immediately prior to the









 



8



Change in Control, for which the Company will reimburse the Eligible Employee
during the first 52 weeks of the Employee Welfare Continuation Period or, if
shorter, the period of actual COBRA continuation coverage received by the Eligible
Employee during the Employee Welfare Continuation Period, for the total amount of
the monthly COBRA medical and dental insurance premiums payable by the Eligible
Employee for such continued benefits in excess of the cost the Eligible Employee
paid for such coverage (on a monthly premium basis) immediately prior to such
termination of employment, provided, however, that if, during the
Employee Welfare Continuation Period, the Eligible Employee becomes employed by a
new employer, continuing medical and dental coverage from the Company will become
secondary to any coverage afforded by the new employer in which the Eligible
Employee becomes enrolled); and (y) life insurance coverage at the same benefit
level as provided to the Eligible Employee immediately prior to the Change in
Control and at the same cost to the Eligible Employee as is generally provided to
similarly situated active employees of the Company (or if such coverage is no longer
provided by the Company, then at the Employee’s cost immediately prior to the Change
in Control).




     (c) Outplacement. Such Eligible Employee shall receive reasonable outplacement
services to be provided by a provider selected by such Eligible Employee, the cost of which
shall be borne by the Company.




     (d) Accrued Benefits. Such Eligible Employee shall be entitled to receive any
unpaid Base Salary through the date of such Eligible Employee’s termination, any Bonus
earned but unpaid as of the date of such Eligible Employee’s termination for any previously
completed Fiscal Year (which, if not determinable by way of a formula or calculation applied
on a basis consistent with past practice, shall be an amount equal to the Eligible
Employee’s Average Bonus), and all compensation previously deferred by such Eligible
Employee but not yet paid as well as all accrued interest thereon. In addition, such
Eligible Employee shall be entitled to prompt reimbursement of any unreimbursed expenses
properly incurred by such Eligible Employee in accordance with Company policies prior to the
date of such Eligible Employee’s termination. Such Eligible Employee shall also be able to
receive and enjoy such other benefits, if any, to which such Eligible Employee may be
entitled pursuant to the terms and conditions of (1) the employee compensation, incentive,
equity, benefit or fringe benefit plans, policies or programs of the Company, other than any
Company severance policy and as provided in Section 12(a) of this Plan, and (2) the
indemnification and D&O insurance plans, policies or programs of the Company.



     Section 3. Form and Time of Payment. The cash severance pay benefits payable to an
Eligible Employee under Section 2 above shall be paid to such Eligible Employee in a single lump
sum less applicable withholdings under Section 4 of this Plan within 75 days after the Eligible
Employee’s date of termination, except with respect to any additional bonus amount payable after
such time period to the extent required pursuant to Section 2(d) above and except as provided
pursuant to Section 5 of this Plan; provided, however, that the Company shall not be
required to pay or continue to pay the cash severance pay benefits in the event such Eligible









 



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Employee does not sign a Release or such Eligible Employee revokes the Release during the time
to revoke, if any.



     Section 4. Tax Withholding and Section 409A. Each Employer shall withhold from any
amount payable to an Eligible Employee pursuant to this Plan, and shall remit to the appropriate
governmental authority, any income, employment or other tax the Employer is required by applicable
law to so withhold from and remit on behalf of such Eligible Employee. Notwithstanding any other
provision of this Plan or certain compensation and benefit plans of the Employer, any payments or
benefits due under this Plan or such Employer compensation and benefit plans upon or in connection
with a termination of an Eligible Employee’s employment shall be paid, and this Plan shall be
interpreted, in a manner that shall ensure that any such payments or benefits shall not be subject
to any tax or interest under Section 409A of the Code (including, for the avoidance of doubt, by
requiring that the payment of any severance due under Section 2 of this Plan to an Employee who is
a “specified employee” within the meaning of the Section 409A of the Code be deferred until the
date that is six months following such termination of the Employee’s employment, to the extent such
delay is required to comply with Section 409A of the Code). Each payment made under this Plan
shall be designated as a “separate payment” within the meaning of Section 409A of the Code. To the
extent any reimbursements or in-kind benefits due to an Employee under this Plan constitute
“deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits
shall be paid to such Employee in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).
Notwithstanding the foregoing, neither the Company nor any of its employees or representatives
shall have any liability to any Eligible Employee to the extent that any payment or benefit
hereunder is determined to be subject to any tax or interest under Section 409A of the Code.



     Section 5. Limitation of Certain Payments.




     (a) In the event the Company determines, based upon the advice of the independent
public accountants for the Company, that part or all of the consideration, compensation or
benefits to be paid to an Employee under this Plan constitute “parachute payments” under
Section 280G(b)(2) of the Code, as amended, then, if the aggregate present value of such
parachute payments, singularly or together with the aggregate present value of any
consideration, compensation or benefits to be paid to Employee under any other plan,
arrangement or agreement which constitute “parachute payments” (collectively, the
“Parachute Amount”) exceeds 2.99 times the Employee’s “base amount,” as
defined in Section 280G(b)(3) of the Code (the “Employee Base Amount”), the amounts
constituting “parachute payments” which would otherwise be payable to or for the benefit of
Employee shall be reduced to the extent necessary so that the Parachute Amount is equal to
2.99 times the Employee Base Amount (the “Reduced Amount”); provided
that such amounts shall not be so reduced if the Company determines, based upon the advice
of an independent nationally recognized public accounting firm (which may, but need not be
the independent public accountants of the Company), that without such reduction Employee
would be entitled to receive and retain, on a net after-tax basis (including, without
limitation, any excise taxes payable under Section 4999 of the Code), an amount which is
greater than the amount, on a net after tax basis, that the Employee would be entitled to
retain upon his receipt of the Reduced Amount.









 



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     (b) If the determination made pursuant to clause (a) of this Section 5 results in a
reduction of the payments that would otherwise be paid to Employee except for the
application of clause (a) of this Section 5, the cash severance pay benefits payable under
Section 2(a) shall be reduced. Within ten days following Employer’s notice to the Employee
of its determination of the reduction in payments, the Company shall pay to or distribute to
or for the benefit of Employee such amounts as are then due to Employee under this Plan and
shall promptly pay to or distribute to or for the benefit of Employee in the future such
amounts as become due to Employee pursuant to this Plan.




     (c) As a result of potential uncertainty in the application of Section 280G of the Code
at the time of a determination hereunder, it is possible that payments will be made by the
Employer which should not have been made under clause (a) of this Section 5
(“Overpayment”) or that additional payments which are not made by the Employer
pursuant to clause (a) of this Section 5 should have been made (“Underpayment”). In
the event that there is a final determination by the Internal Revenue Service, or a final
determination by a court of competent jurisdiction, that an Overpayment has been made, any
such Overpayment shall be repaid by Employee to the Employer together with interest at the
applicable Federal rate provided for in Section 7872(f)(2) of the Code. In the event that
there is a final determination by the Internal Revenue Service, a final determination by a
court of competent jurisdiction or a change in the provisions of the Code or regulations
pursuant to which an Underpayment arises under this Plan, any such Underpayment shall be
promptly paid by the Employer to or for the benefit of Employee, together with interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Code.



     Section 6. Plan Administration. This Plan shall be administered by the Compensation
Committee of the Board or, following a Change in Control, such other successor body as is
designated by the acquiror in the Change in Control transaction (the “Committee”). Subject
to the provisions of Section 7 of this Plan, the Committee shall have discretionary and final
authority to interpret and implement the provisions of this Plan and to determine eligibility for
benefits under the Plan. The Committee shall perform all of the duties and exercise all of the
powers and discretion that the Committee deems necessary or appropriate for the proper
administration of this Plan. The Committee may adopt such rules and regulations for the
administration of this Plan as are consistent with the terms hereof, and shall keep adequate
records of its proceedings and acts. The Committee may employ such agents, accountants and legal
counsel (who may be agents, accountants and legal counsel for an Employer) as may be appropriate
for the administration of the Plan. All reasonable administration expenses incurred by the
Committee in connection with the administration of the Plan shall be paid by the Employer.



     Section 7. Dispute Resolution. Any dispute hereunder or with regard to any document
or agreement referred to herein shall be resolved by arbitration before the American Arbitration
Association in New York City, New York. The determination of the arbitrator shall be final and
binding on the parties hereto and may be entered in any court of competent jurisdiction.









 



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     Section 8. Applicable Law. This Plan shall be governed and construed in accordance
with applicable federal law; provided, however, that wherever such law does not otherwise preempt
state law, the laws of the State of New York shall govern.



     Section 9. Legal Fees. All reasonable legal fees and expenses incurred by an Eligible
Employee in connection with any non-frivolous claim made pursuant to this Plan shall be borne by
the Company.



     Section 10. Plan Amendment and Termination. Prior to the occurrence of a Change in
Control, each of the Board and the Committee shall have the right and power at any time, and from
time to time, subject to ninety (90) days advance written notice to all Employees, to amend or
terminate this Plan, in whole or in part; provided, that no such amendment or termination
shall be effective if made in connection with or in anticipation of a Change in Control at the
request of, or upon the initiative of, the acquiror in the Change in Control transaction or
otherwise in connection with or anticipation of the Change in Control. After the occurrence of a
Change in Control and during the two-year period beginning on the effective date of the Change in
Control, this Plan may not be amended or terminated without the consent of a majority of the
Employees who are employed by an Employer at the time of the proposed amendment or termination or
who are Eligible Employees receiving severance benefits pursuant to Section 2 of this Plan at such
time. Any action to amend or terminate this Plan on or after the date on which a Change in Control
occurs, without the foregoing consent, shall not be effective prior to the end of the two-year
period beginning on the effective date of the Change in Control.



     Section 11. Nature of Plan and Rights. This Plan is an unfunded employee welfare
benefit plan and no provision of this Plan shall be deemed or construed to create a trust fund of
any kind or to grant a property interest of any kind to any Employee or former Employee. Any
payment which becomes due under this Plan to an Eligible Employee shall be made by his or her
Employer out of its general assets, and the right of any Eligible Employee to receive a payment
hereunder from his or her Employer shall be no greater than the right of any unsecured general
creditor of such Employer.



     Section 12. Entire Agreement; Offset; No Interference.




     (a) This Plan constitutes the entire agreement between the parties and, except as
expressly provided herein, supersedes the provisions of all other prior agreements expressly
concerning the payment of severance benefits upon a termination of employment in connection
with or following a Change in Control; provided, that in no event shall payments or
benefits provided pursuant to any other severance agreement or policy entitle Employee to a
duplication of payments and benefits pursuant to this Plan and, in the event of an
Anticipatory Termination, any amount payable hereunder shall be offset and reduced by the
amount of any termination payments or benefits previously provided to Employee under any
other severance arrangement with the Company.




     (b) Except as expressly provided herein, this Plan shall not interfere in any way with
the right of the Company to reduce Employee’s compensation or other benefits or terminate
Employee’s employment, with or without Cause. Any rights that Employee









 



12



shall have in that regard shall be as set forth in any applicable employment agreement
between Employee and the Company.



     Section 13. Anticipatory Changes. Notwithstanding any provision in this Agreement to
the contrary, no Employee shall suffer any reduction in the level of protections or benefits that
would otherwise be enjoyed by the Employee hereunder as a result of any adverse change (including
without limitation any such change in Base Salary; Target Bonus; assumptions or calculation
methodology used for determining Actual Bonus; insurance coverages; or rank or status as an Elected
Officer, Executive or Employee), made in connection with or in anticipation of a Change in Control
at the request of, or upon the initiative of, the acquiror in the Change in Control transaction or
otherwise in connection with or anticipation of the Change in Control (each, an “Anticipatory
Change”). In the event of any such Anticipatory Change, the provisions of this Agreement shall
be applied, and any amounts under this Agreement shall be calculated, as if such Anticipatory
Change had not occurred.



     Section 14. Spendthrift Provision. No right or interest of an Eligible Employee under
this Plan may be assigned, transferred or alienated, in whole or in part, either directly or by
operation of law, and no such right or interest shall be liable for or subject to any debt,
obligation or liability of such Eligible Employee.



     Section 15. Notice. Notice of termination for Cause or for Good Reason shall be given
in accordance with this Section, and shall indicate the specific termination provision under the
Plan relied upon, the relevant facts and circumstances and the effective date of termination. For
the purpose of this Plan, any notice and all other communication provided for in this Plan shall be
in writing and shall be deemed to have been duly given when received at the respective addresses
set forth below, or to such other address as the Company or the Eligible Employee may have
furnished to the other in writing in accordance herewith.




If to the Company:




L-3 Communications Holdings, Inc.

600 Third Avenue

New York, New York 10016





If to Employee:




To the most recent address of Employee set forth in the personnel records of the Company.









 



13


     Section 16. Effectiveness. This Plan shall be effective as of the Effective Date and
shall remain in effect until terminated pursuant to Section 10 of this Plan.



	 	 	 	 	 
	 	L-3 COMMUNICATIONS HOLDINGS, INC.

 	 
	 	By:  	/s/
Steven M. Post 	 
	 	 	Name:  	Steven M. Post 	 
	 	 	Title:  	Senior Vice President, General Counsel and
Corporate Secretary 	 
	 










 



A-1


Exhibit A




CONFIDENTIALITY AND NON-COMPETITION RESTRICTIVE COVENANTS



I. While employed by the Company, and at any time thereafter, no Eligible Employee shall, without
the prior written consent of the Company, use, divulge, disclose or make accessible to any other
person, firm, partnership, corporation or other entity any Confidential Information pertaining to
the business of the Company or any of its affiliates, except when required to do so by applicable
law, by a court, by any governmental agency, or by any administrative body or legislative body
(including a committee thereof); provided, however, that the Eligible Employee shall give
reasonable notice under the circumstances to the Company that he or she has been notified that he
or she will be required to so disclose as soon as possible after receipt of such notice in order to
permit the Company to take whatever action it reasonably deems necessary to prevent such disclosure
and the Eligible Employee shall cooperate with the Company to the extent that it reasonably
requests him or her to do so. For purposes of this paragraph I, “Confidential Information” shall
mean non-public information concerning the financial data, strategic business plans, product
development (or other proprietary product data), customer lists, marketing plans and other
non-public, proprietary and confidential information of the Company, its subsidiaries, its
affiliates or customers, that, in any case, is not otherwise available to the public (other than by
the Eligible Employee’s breach of the terms hereof).



II. In consideration of the Company’s obligations under the Plan to which this Exhibit A is
attached, each Eligible Employee agrees that for a period of twelve (12) months after termination
of employment with his or her Employer, without the prior written consent of the Board, (A) he or
she will not, directly or indirectly, either as principal, manager, agent, consultant, officer,
stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged
in or have any financial interest in, any (i) entity which is in Competition with the business of
the Company or its subsidiaries or (ii) Competitive Activity and (B) he or she shall not, on his or
her own behalf or on behalf of any person, firm or company, directly or indirectly, solicit or
offer employment to any person who is or has been employed by the Company or its subsidiaries at
any time during the twelve (12) months immediately preceding such solicitation. For purposes of
this paragraph II: (a) an entity shall be deemed to be in “Competition” with the Company or its
subsidiaries if it is principally involved in the purchase, sale or other dealing in any property
or the rendering of any service purchased, sold, dealt in or rendered by the Company or its
subsidiaries as a part of the business of the Company or its subsidiaries within the same
geographic area in which the Company effects such sales or dealings or renders such services at the
Relevant Date; and (b) “Competitive Activity” shall mean any business into which the Company or any
of its subsidiaries has taken substantial steps to engage, as of the Relevant Date, which would be
deemed to be in Competition with the business of the Company or its subsidiaries if such steps had
been completed prior to the Relevant Date; and (c) the term “Relevant Date” shall mean the
effective date of termination of Employee’s employment with his or her Employer.



III. Notwithstanding anything contained in this Exhibit A, nothing herein shall (i) prohibit any
Eligible Employee from serving as an officer, employee or independent consultant of any business
unit or subsidiary which would not otherwise be in Competition with the Company or








 



A-2


its subsidiaries or a Competitive Activity, but which business unit is a part of, or which
subsidiary is controlled by, or under common control with, an entity that would be in competition
with the Company or its subsidiaries, so long as the Eligible Employee does not engage in any
activity which is in Competition with any business of the Company or its subsidiaries or is
otherwise a Competitive Activity or (ii) be construed so as to preclude the Eligible Employee from
investing in any publicly or privately held company, provided the Eligible Employee’s beneficial
ownership of any class of such company’s securities does not exceed 5% of the outstanding
securities of such class.



IV. In the event the Company determines that an Eligible Employee has breached the covenants
contained in this Exhibit A, the Company may, in addition to pursuing any other remedies it may
have in law or in equity, cease making any payments otherwise required by this Plan and/or obtain
an injunction against the Eligible Employee from any court having jurisdiction over the matter
restraining any further violation of this Exhibit A by the Eligible Employee. Further, if in the
opinion of any court of competent jurisdiction any of the restraints identified herein is not
reasonable in any respect, such court shall have the right, power and authority to excise or modify
such provision or provisions of this covenant as to the court shall appear not reasonable and to
enforce the remainder of the covenant as so amended.