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                                                                    EXHIBIT 10.7

                       LORAL SPACE & COMMUNICATIONS INC.
                            2005 STOCK INCENTIVE PLAN

      1.    PURPOSE.

      The purpose of the Plan is to assist the Company in attracting, retaining,
motivating and rewarding Eligible Persons, and to promote the creation of
long-term value for stockholders by closely aligning the interests of
Participants with those of stockholders. The Plan authorizes the award of
stock-based incentives to Participants to encourage such persons to expend their
maximum efforts in the creation of stockholder value. The Plan is also intended
to qualify certain compensation awarded under the Plan for tax deductibility
under Section 162(m) of the Code to the extent deemed appropriate by the
Committee which administers the Plan.

      2.    DEFINITIONS.

      For purposes of the Plan, the following terms shall be defined as set
forth below:

            (a) "Affiliate" means, any other entity that, directly or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with the Company.

            (b) "Award" means any award of an Option, SAR, Restricted Stock,
Restricted Stock Unit, Stock granted as a bonus or in lieu of another award, or
Other Stock-Based Award.

            (c) "Board" means the Board of Directors of the Company.

            (d) "Cause" with respect to any Participant (A) shall have the
meaning set forth in the current effective employment or consulting agreement
between the Company or an Affiliate, as applicable, and the Participant or (B)
in the event that there is no such employment or consulting agreement or if
there is no such definition in any such employment or consulting agreement,
shall mean, (i) the Participant shall have been after the Effective Date
convicted of, or shall have pleaded guilty or nolo contendere to, any felony or
any other crime that would have constituted a felony under the laws of the State
of New York; (ii) the Participant shall have been indicted for any felony or any
other crime that would have constituted a felony under the laws of the State of
New York in connection with or arising from the Participant's employment with
the Company; (iii) the Participant shall have breached any material provision of
any noncompetition, nonsolitation or confidentiality agreement with the Company
or any Affiliate; (iv) the Participant shall have committed any fraud,
embezzlement, misappropriation of funds, or breach of fiduciary duty against the
Company or any Affiliate, in each case of a material nature; (v) the Participant
shall have engaged in any willful misconduct resulting in or reasonably likely
to result in a material loss to the Company or substantial damage to its
reputation; or (vi) the Participant willfully breaches in any material respect
any material provision of the Company's Code of Conduct and, to the extent any
such breach is curable, the Participant has failed to cure such breach within
ten (10) days after written notice of the alleged breach is provided to the
Participant.

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            (e) "Change in Control" shall be deemed to have occurred if: (i) any
person (as defined 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 the Company, any Affiliate, any
employee benefit plan sponsored or maintained by the Company or any Affiliate
(including any trustee of such plan acting as trustee), and any Person who owns
20% or more 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 "Voting Shares"; (ii) the Company undergoes
any merger, consolidation, reorganization, recapitalization or other similar
business transaction, sale of all or substantially all of the Company's assets
or combination of the foregoing transactions (a "Transaction"), other than a
Transaction involving only the Company and one or more Affiliates, and
immediately following such Transaction the shareholders of the Company
immediately prior to the Transaction do not continue to own at least a majority
of the voting power in the resulting entity; (iii) the persons who are the
original members 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 the board of directors
of any successor to the Company, provided that any director who was not a
director as of the Effective Date shall be deemed to be an Incumbent Director if
such director was elected to the Board by, or on the recommendation of or with
the approval of, at least a majority of the directors who then qualified as
Incumbent Directors, either actually or by prior operation of this definition;
or (iv) the shareholders of the Company approve a plan of liquidation or
dissolution 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 to administer the Plan; provided, however, that
directors appointed as members of the Committee shall not be employees of the
Company or any subsidiary. In appointing members of the Committee, the Board
will consider whether a member is or will be a Qualified Member, but such
members are not required to be Qualified Members at the time of appointment or
during their term of service on the Committee, and no action of the Committee
shall be void or invalid due to the participation of a member who is not a
Qualified Member. If no Committee has been appointed, or if the Committee has
been 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 the Board acts as the Committee, each
member of the Board who is not a an independent member of the Board under the
NASDAQ independence requirements shall recuse himself or herself from any such
Board action.

            (h) "Company" means Loral Space & Communications Inc., a Delaware
corporation.

            (i) "Disability" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.

            (j) "Dividend Equivalents" shall have the meaning set forth in
Section 9 hereof.

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            (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 of the Company or an Affiliate, each other person who
provides substantial services to the Company and/or its Affiliates and who is
designated as eligible by the Committee, and any person who has been offered
employment by the Company or an Affiliate, provided that such prospective
employee may not receive any payment or exercise any right relating to an Award
until such person has commenced employment with the Company or an Affiliate. An
employee on an approved leave of absence may be considered as still in the
employ of the Company or an Affiliate for purposes of eligibility for
participation 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, as applicable.

            (n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, including rules thereunder and successor provisions
and rules thereto.

            (o) "Expiration Date" means the date upon which the term of an
Option, as determined under 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 national securities exchange, the mean between the highest and lowest sale
prices reported as having occurred on the primary exchange with which the Stock
is listed and traded on the date prior to 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 listed on any national securities exchange but
is quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ-NMS") on a last sale
basis, the average between the high bid price and low ask price reported on the
date prior to 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, or (C) if the Stock is
not listed on any national securities exchange or quoted in NASDAQ-NMS, but is
traded in the over-the-counter market bulletin board or pink sheets on a last
sale basis, the average between the high bid price and low ask price reported on
the date prior to 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; provided, however,
that for purposes of the Initial Option Grant, the Fair Market Value shall be
the weighted average of the aggregate sale prices of the Stock reported for the
ten trading days immediately preceding the grant date; and further provided,
however, that if such definition of Fair Market Value for Options granted in
connection with the Plan of Reorganization does not comply with the definition
of fair market value for purposes of Section 409A of the Code or if such
definition would give rise to variable accounting treatment of such Options,
then Fair Market Value for such Options shall have the meaning attributable
thereto in clauses (A), (B) or (C) above, as applicable, or such other meaning
which complies with Section 409A and does not give rise to variable accounting
treatment. If the Stock is not listed on an exchange, quoted on NASDAQ-NMS or
traded in the over-the-counter market, or representative quotes are not
otherwise available, the Fair Market Value shall mean the amount determined by
the Board in good faith to be the fair market value per share of Stock, on a
fully diluted basis.

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            (q) "Good Reason" with respect to any Participant (A) shall have the
meaning set forth in the current effective employment or consulting agreement
between the Company or an Affiliate, as applicable, and the Participant or (B)
in the event that there is no such employment or consulting agreement or if
there is no such definition in any such employment or consulting agreement,
shall mean, (i) the assignment to the Participant of any duties inconsistent in
any substantial respect with the Participant's position, authority or
responsibilities to or with the Company or an Affiliate, as applicable, or any
duties which are illegal or unethical or any diminution of any of the
Participant's significant duties; (ii) any reduction in base salary, or to the
extent guaranteed by a contract with the Company or an Affiliate, as applicable,
the Participant's target annual bonus or any of the benefits provided for in any
such contract to the extent such reduction is not permitted under the terms of
any such contract; (iii) the relocation by the Company of the Participant'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 such relocation shall not be considered Good Reason if such
location is closer to the Participant's home than the Participant's primary
place of employment as of the Effective Date; (iv) any material breach of any
employment or consulting agreement with the Participant by the Company, or an
Affiliate, as appropriate; or (v) the failure of the Company to obtain the
assumption in writing of its obligation to perform any employment or consulting
agreement with the Participant by any successor 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 as set forth in Section 6(h).

            (s) "Mature Shares" means (A) shares of Stock for which the
Participant has good title, free and clear of all liens and encumbrances, and
which the Participant either (i) has held for at least six months or (ii) has
purchased on the open market or (B) such shares as determined by the Committee.

            (t) "New Skynet" shall have the meaning ascribed thereto in the Plan
of Reorganization.

            (u) "New Skynet Sale Event" means a sale of all or substantially all
of the common stock 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 stock or assets of New SS/L.

            (x) "Option" means a conditional right, granted to a Participant
under Section 6 hereof, to purchase Stock at a specified price during specified
time periods.

            (y) "Option Agreement" means a written agreement between the Company
and a Participant evidencing 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 11 hereof.

            (aa) "Participant" means an Eligible Person who has been granted an
Award under the Plan which remains outstanding, or if applicable, such other
person or entity who holds an outstanding Award.

            (bb) "Plan" means this Loral Space & Communications Inc. 2005 Stock
Incentive Plan.

            (cc) "Plan of Reorganization" means the Fourth Amended Joint Plan
of Reorganization under Chapter 11 of the Bankruptcy Code of Loral Space &
Communications Ltd. et al.

            (dd) "Proprietary Information" with respect to any Participant means
all confidential specifications, know-how, strategic or technical data,
marketing research data, product research and development data, manufacturing
techniques, confidential customer lists, sources of supply and trade secrets,
all of which are confidential to the Company, or any of its Affiliates, and may
be proprietary and are owned or used by the Company, or any of its Affiliates,
including any and all of such enumerated items coming within the scope of the
business of the Company, or any of its Affiliates, as to which the Participant
may have access, whether conceived or developed by others or by the Participant,
alone or with others, during the Participant's period of service with the
Company, 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 public domain during the Participant's service with
the Company or after the Participant's service with the Company has terminated,
provided the same are not in the public domain as a consequence of disclosure by
the Participant.

            (ee) "Qualified Member" means a member of the Committee who is a
"Non-Employee Director" within the meaning of Rule 16b-3 and an "outside
director" within the meaning of Regulation 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 a Participant evidencing the terms and conditions of an
individual Restricted Stock grant.

            (hh) "Restricted Stock Unit" means a notional unit representing the
right to receive one share of Stock on the Settlement Date.

            (ii) "Restricted Stock Unit Agreement" means a written agreement
between the Company and 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 to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

            (kk) "Section 409A" shall mean Section 409A of the Code and the
rules and regulations promulgated thereunder, including Treasury Regulation
2005-1.

            (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 the Chief 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 other securities as may be substituted for Stock pursuant to Section 12
hereof.

            (pp) "Stock Appreciation Right" or "SAR" means a conditional right
granted to a Participant under Section 7 hereof.

      3. ADMINISTRATION.

            (a) Authority of the Committee. Except as otherwise provided below,
the Plan shall be administered by the Committee. The Committee shall have full
and final authority, in each case subject to and consistent with the provisions
of the Plan, to (i) select Eligible Persons to become Participants; (ii) grant
Awards; (iii) determine the type, number, and other terms and conditions of, and
all other matters relating to, Awards; (iv) prescribe Award agreements (which
need not be identical 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, or reconcile inconsistencies
therein; and (vi) make all other decisions and determinations as the Committee
may deem necessary or advisable for the administration of the Plan. The
foregoing notwithstanding, the Board shall perform the functions of the
Committee for purposes of granting Awards under the Plan to non-employee
directors. In any case in which the Board is performing a function of the
Committee under the Plan, each reference to the Committee herein shall be deemed
to refer to the Board, except where the context otherwise requires. Any action
of the Committee shall be final, conclusive and binding on all persons,
including, without limitation, the Company, its Affiliates, Eligible Persons,
Participants and beneficiaries of Participants.

            (b) Manner of Exercise of Committee Authority. At any time that a
member of the Committee is not a Qualified Member, (i) any action of the
Committee relating to an Award intended by the Committee to qualify as
"performance-based compensation" within the meaning of Section 162(m) of the
Code and regulations thereunder may be taken by a subcommittee, designated by
the Committee or the Board, composed solely of two or more Qualified Members;
and (ii) any action relating to an Award granted or to be granted to a
Participant who is then subject to Section 16 of the Exchange Act in respect of
the Company may be taken either by such a subcommittee or by the Committee but
with each such member

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who is not a Qualified Member abstaining or recusing himself or herself from
such action, provided that, upon such abstention or recusal, the Committee
remains composed of two or more Qualified Members. Such action, authorized by
such a subcommittee or by the Committee upon the abstention or recusal of such
non-Qualified Member(s), shall be the action of the Committee for purposes of
the Plan. The express grant of any specific power to the Committee, and the
taking of any action by the 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 or any Affiliate, or committees thereof, the authority, subject
to such terms as the Committee shall determine, to perform such functions,
including but not limited to administrative functions, as the Committee may
determine appropriate. The Committee may appoint agents to assist it in
administering the Plan. Notwithstanding the foregoing or any other provision of
the Plan to the contrary, any Award granted under the Plan to any person or
entity who is not an employee of the Company 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 in Section 12 hereof, the total number of shares of Stock reserved
and available for delivery in connection with Awards under the Plan shall be
1,390,452. Shares of Stock delivered under the Plan shall consist of authorized
and unissued shares or previously issued shares of Stock reacquired by the
Company on the open market or by private purchase.

            (b) Share Counting Rules. The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double counting (as,
for example, in the case of tandem or substitute awards) and make adjustments if
the number of shares of Stock actually delivered differs from the number of
shares previously counted in connection with an Award. To the extent that an
Award expires or is canceled, forfeited, settled in cash or otherwise terminated
or concluded without a delivery to the Participant of the full number of shares
to which the Award related, the undelivered shares will again be available for
Awards. Shares withheld in payment of the exercise price or taxes relating to an
Award and shares equal to the number surrendered in payment of any exercise
price or taxes relating to an Award shall be deemed to constitute shares not
delivered to the 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 the most recent shareholder
approval of the Plan or any other transaction occurs that would result in shares
becoming available under this Section 4(b), such shares shall not become
available if and to the extent that it would constitute a material revision of
the Plan subject to shareholder approval under then applicable rules of the
principle stock exchange or automated quotation system on which the shares are
then listed or designated for trading.

      5. ELIGIBILITY; LIMITATIONS ON AWARDS.

            (a) Grants to Eligible Persons. Awards may be granted under the Plan
only to Eligible Persons.

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            (b) 162(m) Limitation. Subject to Section 12 relating to
adjustments, no Employee shall be eligible to be granted Options or Stock
Appreciation Rights covering more than 500,000 shares of Stock during any
calendar year.

      6. OPTIONS.

            (a) General. Except as provided in the Initial Option Grant, Options
granted hereunder shall be in such form and shall contain such terms and
conditions as the Committee shall deem 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 Option shall be set by the Committee at the time of grant; provided,
however, that no Option granted hereunder 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 exercise price per share of Stock for each Option shall be set by the
Committee at the time of grant but shall not be less than the par value of a
share of Stock.

            (d) Payment for Stock. Payment for shares of Stock acquired pursuant
to Options granted hereunder shall be made in full, upon exercise of the Options
in immediately available funds in United States dollars, by certified or bank
cashier's check or, in the discretion of the Committee, (i) by surrender to the
Company of Mature Shares held by the Participant; (ii) by delivering to the
Committee a copy of irrevocable instructions to a stockbroker to deliver
promptly to the Company an amount of sale or loan proceeds sufficient to pay the
aggregate Option exercise price; (iii) through a net exercise of the Options
whereby the Participant instructs the Company to withhold that number of shares
of Stock having a Fair Market Value equal to the aggregate exercise price of the
Options being exercised and deliver to the Participant the remainder of the
shares subject to exercise or (iv) by any other means approved by the Committee.
Anything herein to the contrary 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 or executive officer of
the Company through the Plan in violation of Section 402 of the Sarbanes-Oxley
Act of 2002 ("Section 402 of SOX"), and to the extent that any form of payment
would, in the opinion of the Company's counsel, result in a violation of Section
402 of SOX, such form of payment shall not be available.

            (e) Vesting. Except as provided in the Initial Option Grant, Options
shall vest and become exercisable in such manner and on such date or dates set
forth in the Option Agreement, as may be determined by the Committee; provided,
however, that notwithstanding any vesting dates contained herein or otherwise
set by the Committee, the Committee may in its sole discretion accelerate the
vesting of any Option, which acceleration shall not affect the terms and
conditions of any such Option other than with respect to vesting. Unless
otherwise specifically determined by the Committee and except for Options that
are specifically subject to automatic accelerated vesting upon termination of
employment, the vesting of an Option shall occur only while the Participant is
employed or rendering services to the Company or an Affiliate and all vesting
shall cease upon a Participant's termination of employment or services

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for any reason. If an Option is exercisable in installments, such installments
or portions thereof which become exercisable shall remain exercisable until the
Option expires either on the Expiration Date or earlier following a termination
of employment as set forth in the Option Agreement. Unless otherwise determined
by the Committee, Options shall vest only as to full shares of Stock, rounded
down to the nearest full share, except that the last tranche to vest with
respect to any Option Award 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 or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Participant only by the Participant.
Notwithstanding the foregoing, Options shall be transferable to 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 Option Grant or as may otherwise be provided by the Committee in the
Option Agreement other than with respect to the Initial Option Grant:

                  (i) If prior to the Expiration Date, a Participant's
      employment or service, as applicable, with the Employer terminates for any
      reason other than (A) by the Employer for Cause, or (B) by reason of the
      Participant's death or Disability, (1) all vesting with respect to the
      Options shall cease, (2) any unvested Options shall expire as of the date
      of such termination, and (3) any vested Options shall remain exercisable
      until the earlier of the 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, as applicable, with the Employer terminates by
      reason of such Participant's death or Disability, (A) all vesting with
      respect to the Options shall cease, (B) any unvested Options shall expire
      as of the date of such termination, and (C) any vested Options shall
      expire on the earlier of the Expiration Date or the date that is twelve
      (12) months after the date of such termination due to death or Disability
      of the Holder. In the event of a Participant's death, the Options shall
      remain exercisable by the person or persons to whom a Participant's rights
      under the Options pass by will or the applicable laws of descent and
      distribution until its expiration, but only to the extent the Options were
      vested by such Participant at the time of such termination due to death.

                  (iii) If prior to the Expiration Date, a Participant's
      employment or service, as applicable, with the Employer is terminated by
      the Employer for Cause, all Options (whether or 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 Effective Date, 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 from bankruptcy (the "Approved List")
shall automatically be granted Options with respect to the number of shares
listed across from each individuals name on the Approved List. The Options
granted to those individuals identified as Senior Management on the Approved
List shall

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have such terms and conditions as set forth in the Option Agreement for Senior
Management, attached as Exhibit A hereto. The Options granted to those
individuals identified as Non-Senior Management on the Approved List shall have
such terms and conditions as set forth in the Option Agreement for Non-Senior
Management, attached as Exhibit B hereto.

      7. STOCK APPRECIATION RIGHTS.

            (a) General. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

                  (i) Right to Payment. A SAR shall confer on the Participant to
      whom it is granted a right to receive, upon exercise, or if necessary to
      conform to the requirements of 409A, on each vesting date thereof, the
      value of the excess of (A) the Fair Market Value of one share of Stock on
      the date of exercise over (B) the grant price of the SAR as determined by
      the Committee.

                  (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 expiration of 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 the Committee 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 in whole or in part (including based on
      achievement of performance goals and/or future service requirements); (B)
      the method of exercise; (C) the method of settlement; (D) whether cash or
      Stock will be payable to the Participant upon exercise of the SAR; (E) the
      method by or forms 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 the Committee in the applicable Award agreement:

                  (i) If prior to the Expiration Date, a Participant's
      employment or service, as applicable, with the Employer terminates for any
      reason other than (A) by the Employer for Cause, or (B) by reason of the
      Participant's death or Disability, (1) all vesting with respect to the
      SARs shall cease, (2) any unvested SARs shall expire as of the date of
      such termination, and (3) any vested SAR shall remain exercisable until
      the earlier of the Expiration Date or the date that is ninety (90) days
      after the date of such termination.

                  (ii) If prior to the Expiration Date, a Participant's
      employment or service, as applicable, with the Employer terminates by
      reason of such Participant's death or Disability, (A) all vesting with
      respect to the SARs shall cease, (B) any unvested SARs shall expire as of
      the date of such termination, and (C) any vested SARs shall expire on

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      the earlier of the Expiration Date or the date that is twelve (12) months
      after the date of such termination due to death or Disability of the
      Holder. In the event of a Participant's death, the SARs shall remain
      exercisable by the person or persons to whom a Participant's rights under
      the SARs pass by will or the applicable laws of descent and distribution
      until its expiration, but only to the extent the SARs were vested by such
      Participant at the time of such termination due to death.

                  (iii) If prior to the Expiration Date, a Participant's
      employment or service, as applicable, with the Employer is terminated by
      the Employer for Cause, all SARs (whether or not vested) shall immediately
      expire as of the date of such termination, and such Participant shall have
      no further rights with respect thereto.

      8. RESTRICTED STOCK.

            (a) General. Restricted Stock granted hereunder shall be in such
form and shall contain such terms and conditions as the Committee shall deem
appropriate. The terms and conditions of each Restricted Stock grant shall be
evidenced by a Restricted Stock Agreement, which agreements need not be
identical. Subject to the restrictions set forth in Section 8(b), except as
otherwise set forth in the applicable Restricted Stock Agreement, the
Participant shall generally have the rights and privileges of a stockholder as
to such Restricted Stock, including the right to vote such Restricted Stock. The
Committee shall determine whether or not dividends shall accrue on shares of
Restricted Stock. At the discretion of the Committee, cash dividends and stock
dividends, if any, with respect to the Restricted Stock may be either currently
paid to the Participant or withheld by the Company for the Participant's
account. A Participant's Restricted Stock Agreement may provide that cash
dividends or stock dividends so withheld shall be subject to forfeiture to the
same degree as the shares of Restricted Stock to which they relate. Except as
otherwise determined by the Committee, no interest will accrue or be paid on the
amount of any cash dividends withheld.

            (b) Restrictions on Transfer. In addition to any other restrictions
set forth in a Participant's Restricted Stock Agreement, until such time that
the Restricted Stock has vested pursuant to the terms of the Restricted Stock
Agreement, which vesting the Committee may in its sole 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 to the contrary, the Committee shall have the authority to remove any or
all of the restrictions on the Restricted Stock whenever it may determine that,
by reason of changes in applicable laws or other changes in circumstances
arising after the date of the Restricted Stock Award, such action is
appropriate.

            (c) Certificates. Restricted Stock granted under the Plan may be
evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant, the
Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, that the Company retain physical possession of the
certificates, and that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock. Notwithstanding the
foregoing, the Committee may determine, in its sole discretion, that

                                       11
<PAGE>

the Restricted Stock shall be held in book entry form rather than delivered to
the Participant pending the release of the applicable restrictions.

            (d) Termination of Employment or Service. Except as may otherwise be
provided by the Committee in the Restricted Stock Agreement, if, prior to the
time that the Restricted Stock has vested, a Participant's employment or
service, as applicable, terminates for any reason, (i) all vesting with respect
to the Restricted Stock shall cease, and (ii) at any time following such
termination, and upon written notice to the Participant, the Company shall have
the right to repurchase from the Participant any unvested shares of Restricted
Stock at a purchase price equal to 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 no consideration.

            9. RESTRICTED STOCK UNITS

            (a) General. Restricted Stock Units granted hereunder shall be in
such form and shall contain such terms and conditions as the Committee shall
deem appropriate. The terms and conditions of each Restricted Stock Unit grant
shall be evidenced by a Restricted Stock Unit Agreement. 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 deemed awarded at the time of grant. The Committee shall
determine whether or not dividends shall accrue on Restricted Stock Units. If
the Committee so determines, recipients of Restricted Stock Units shall be
entitled to an amount equal to the cash dividends paid by the Company upon one
share of Stock for each Restricted Stock Unit then credited to such recipient's
account ("Dividend Equivalents"). The Committee shall, in its sole discretion,
determine whether to credit to the account of, or to currently pay to, such
Participant the Dividend Equivalents. A Participant's Restricted Stock Unit
Agreement may provide that Dividends Equivalents shall be subject to forfeiture
to the same degree as the shares of Restricted Stock Units to which they relate.
Except as otherwise determined by the Committee, no interest will accrue or be
paid on Dividend Equivalents credited to a recipient's account.

            (b) Conditions of Grant. Restricted Stock Units awarded to any
Eligible Person shall be subject to (i) forfeiture until the expiration of the
restricted period, to the extent provided in the Restricted Stock Unit
Agreement, and to the extent such Awards are forfeited, all rights of the
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 authority to remove any or all of the
restrictions on the Restricted Stock Units whenever it may determine that, by
reason of changes in applicable laws or other changes in circumstances arising
after the date of the Restricted Stock Unit Award, such action is appropriate.

            (c) Settlement of Restricted Stock Units. Upon a date or dates on or
following the expiration of the restricted period as shall be determined by the
Committee and set 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) a number of shares of Stock equal to the
number of Restricted Stock Units then vested and not otherwise

                                       12
<PAGE>

forfeited, and (ii) if applicable, a number of shares of Stock having a value
equal to any unpaid Dividend Equivalents accrued with respect to the Restricted
Stock Units. The Company may, in the Committee's sole discretion, settle a
Restricted Stock Unit Award in (A) cash, (B) in the delivery of shares of Stock
or other property, (C) partially in cash and partially in the delivery of shares
of Stock and/or other property, or (D) partially in the delivery of shares of
Stock and partially in the delivery of other property. A settlement in cash or
other property shall be based on the value of the shares of Stock otherwise to
be delivered on the Settlement Date.

            (d) Creditor's Rights. A holder of Restricted Stock Units shall have
no rights other than those of a general creditor of the Company. Restricted
Stock Units represent an unfunded and unsecured obligation of the Company,
subject to the terms and conditions of the applicable Restricted Stock Unit
Agreement.

            (e) Termination of Employment or Service. Except as may otherwise be
provided in by the Committee in the Restricted Stock Unit Agreement, if, prior
to the time that the Restricted Stock Unit has vested, a Participant's
employment or service, as applicable, terminates for any reason, all Restricted
Stock Units that have not vested on or prior the date of such termination shall
be forfeited, and vested Restricted Stock Units shall be settled as soon as
practicable following the date of such termination; provided, however, if such
Participant's employment or service, 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 rights with
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 in lieu of obligations of the Company or a subsidiary of the
Company under the Plan or under other plans or compensatory arrangements,
subject to such terms and conditions as shall be determined by the Committee.

      11. OTHER STOCK-BASED AWARDS.

      The Committee is authorized, subject to limitations under applicable law,
to grant to Participants such other Awards that may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on, or
related to, Stock, as deemed by the Committee to be consistent with the purposes
of the Plan.

      12. ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.

            (a) Capitalization Adjustments. The aggregate number of shares of
Stock which may be granted or purchased pursuant to Awards granted hereunder,
the number of shares of Stock covered by each outstanding Award, the maximum
number of shares of Stock with respect to which any one person may be granted
Options or Stock Appreciation Rights in any calendar year, and the price per
share thereof in each such Award shall be equitably and proportionally adjusted
or substituted, as determined by the Committee in good faith and in its sole
discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Awards or as otherwise determined by the Committee
in good faith to be fair and equitable (i) in the event of changes in the
outstanding Stock or in the capital structure of the

                                       13
<PAGE>

Company by reason of stock dividends or extraordinary dividends payable in cash
or any other form of consideration, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
of grant of any such Award, (ii) in the event of any change in applicable laws
or any change in circumstances which results in or would result in any
substantial dilution or enlargement of the rights granted to, or available for,
Participants in the Plan, or (iii) for any other reason which the Committee
determines, in its sole discretion and acting in good faith, to otherwise
warrant equitable adjustment. Absent manifest error, any adjustment shall be
conclusively determined by the Committee; provided, in each case, the fair value
of the Option immediately following any such adjustment shall be equal to the
fair value of the Option immediately prior to such adjustment.

            (b) Capital Distribution. In the event that there is a capital
distribution to all holders of Stock (whether as a result of a borrowing or
other form of distribution) then the number of shares of Stock available for
delivery in connection with Awards under the Plan and exercise price and number
of shares of Stock subject to exercise of all outstanding Options shall be
equitably adjusted to reflect the change in value of the outstanding Stock as a
result of such distribution.

            (c) Fractional Shares. Any such adjustment may provide for the
elimination of any fractional 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 all outstanding Awards shall become immediately vested and exercisable,
the restrictions thereon shall lapse and all such Awards shall become
immediately payable or subject to settlement. In the event of a Change in
Control, it will not be a violation of Section 19 hereunder for the Committee to
cancel any or all outstanding Awards in exchange for a cash payment to each
Award holder having a value equal to the value of each such Award at the time of
such Change in Control. Furthermore, it will not be a violation of Section 19
hereunder for the Committee to cancel, without any such payment, 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 New Skynet Sale Event, all outstanding Awards held by employees or
service providers of New Skynet shall become immediately vested and exercisable,
the restrictions thereon shall lapse and all such Awards shall become
immediately payable or subject to settlement. In the event of a New SS/L Sale
Event, all outstanding Awards held by employees or service providers of New SS/L
shall become immediately vested and exercisable, the restrictions thereon shall
lapse and all such Awards shall become immediately payable or subject to
settlement. Moreover, notwithstanding any limits on the exercisability of any
Option following a Participant's termination of employment with New Skynet or
New SS/L, as applicable, as set forth in any Option Agreement, Options held by
employees or service providers 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) the remaining term of the
Option as set forth in the Option Agreement.

                                       14
<PAGE>

            (c) New Skynet or New SS/L Sale Event/Corporate Headquarters
Employees. In the event of a New Skynet Sale Event or a New SS/L Sale Event, (i)
50% of all outstanding unvested Awards held by employees of the Company assigned
to the Company's corporate headquarters shall become immediately vested and
exercisable, the restrictions thereon shall lapse and all such Awards shall
become immediately payable or subject to settlement if the New Skynet Sale Event
or a New SS/L Sale Event occurs on or prior to the first anniversary of the
Effective Date, or (ii) one-third of all outstanding unvested Awards held by
employees of the Company assigned to the Company's corporate headquarters shall
become immediately vested and exercisable, the restrictions thereon shall lapse
and all such Awards shall become immediately payable or subject to settlement if
the New Skynet Sale Event or a New SS/L Sale Event occurs 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 the contrary, to the extent that any Award hereunder, either in whole
or in part, is deemed to provide for the deferral of compensation within the
meaning of Section 409A, there shall be no distribution of any such deferred
compensation on account of a Change in Control, a New Skynet Sale Event or a New
SS/L Sale Event unless such event also constitutes a "Change in Control Event"
within the meaning 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 general corporate purposes.

            15. RIGHTS AND PRIVILEGES AS A STOCKHOLDER.

      Except as otherwise specifically provided in the Plan, no person shall be
entitled to the rights and privileges of stock ownership in respect of shares of
Stock which are subject to Awards hereunder 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, having been selected for the grant of an Award, to be selected for
a grant of any other Award. Neither the Plan nor any action taken hereunder
shall be construed as giving any individual any right to be retained 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 subject to all applicable laws, rules, and regulations, and
to such approvals by governmental agencies as may be required. Notwithstanding
any terms or conditions of any Award to the contrary, the Company shall be under
no obligation to offer to sell or to sell and shall be prohibited from offering
to sell or selling any shares of Stock pursuant to an Award unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an opinion
of counsel,

                                       15
<PAGE>

satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms and
conditions of such exemption have been fully complied with. The Company shall be
under no obligation to register for sale or resale under the Securities Act any
of the shares of Stock to be offered or sold under the Plan or any shares of
Stock issued upon exercise or settlement of Awards. If the shares of Stock
offered for sale or sold under the Plan are offered or sold pursuant to an
exemption from registration under the Securities Act, the Company may restrict
the transfer of such shares and may legend the Stock certificates representing
such shares in such manner as it deems advisable to ensure the availability of
any such exemption.

            18. WITHHOLDING OBLIGATIONS.

      As a condition to the exercise or vesting, as applicable, of any Award,
the Committee may require that a Participant satisfy, through deduction or
withholding from any payment of any kind otherwise due to the Participant, or
through such other arrangements as are satisfactory to the Committee, the
minimum amount of all Federal, state and local income and other taxes of any
kind required to be withheld in connection with such vesting or exercise. The
Committee, in its discretion, may permit shares of Stock to be used to satisfy
tax withholding requirements and such shares 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 the Plan; provided, however, that without further stockholder approval
the Board shall not make any amendment to the Plan which would increase the
maximum number of shares of Stock which may be issued pursuant to Awards under
the Plan, except as contemplated by Section 12 hereof, or, which would otherwise
violate the shareholder approval requirements of the national securities
exchange on which the Stock is listed or Nasdaq, as applicable.

            (b) No Impairment of Rights. Rights under any Award granted before
amendment of the Plan 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, may amend the terms of any one or more Awards; provided, however,
that the rights under any Award shall not 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 date the Plan is adopted by the Board and no Awards may be granted under the
Plan after it is terminated; provided, however, that the Plan shall continue to
be administered with respect to outstanding Awards until all such Awards have
been fully exercised or otherwise expire by their terms.

            21. EFFECTIVE DATE OF THE PLAN.

      The Plan shall become effective as of the effective date of the Plan of
Reorganization.

                                       16
<PAGE>

            22. MISCELLANEOUS.

            (a) Awards to Participants Outside of the United States. The
Committee may modify the terms of any Award under the Plan made to or held by a
Participant who is then resident or primarily employed outside of the United
States in any manner deemed by the Committee to be necessary or appropriate in
order that such Award shall conform to laws, regulations and customs of the
country in which the Participant is then resident or primarily employed, or so
that the value and other benefits of the Award to the Participant, as affected
by foreign tax laws and other restrictions applicable as a result of the
Participant's residence or employment abroad, shall be comparable to the value
of such Award to a Participant who is resident or primarily employed in the
United States. An Award may be modified under this Section 22(a) in a manner
that is inconsistent with the express terms of the Plan, so long as such
modifications will not 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 personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the 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 or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or willful bad faith; provided, however, that approval of the Board
shall be required for the payment of any amount in settlement of a claim against
any such person. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company's Certificate of Incorporation or By-Laws, as a matter of law,
or otherwise, or any power that the Company may have to indemnify them or hold
them harmless.

            (c) Payments Following Accidents or Illness. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness 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 the Committee so
directs the Company, be paid to his spouse, child, relative, an institution
maintaining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.

            (d) Designation and Change of Beneficiary. Each Participant may file
with the Company a written designation of one or more persons as the beneficiary
who shall be entitled to receive the rights or amounts payable with respect to
an Award due under the Plan upon his death. A Participant may, from time to
time, revoke or change his beneficiary designation without the consent of any
prior beneficiary by filing a new designation with the Committee. The last such
designation received by the Company shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received

                                       17
<PAGE>

by the Company prior to the Participant's death, and in no event shall it be
effective as of a date prior to such receipt. If no beneficiary designation is
filed by the Participant, the beneficiary shall be deemed to be his or her
spouse or, if the Participant is unmarried at the time of death, his or her
estate. Any beneficiary of the Participant receiving an Award hereunder shall
remain subject to the terms of the Plan and the applicable Award agreement.

            (e) Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without reference to
the principles of conflicts of laws thereof.

            (f) Funding. No provision of the Plan shall require the Company, for
the purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes. Participants shall
have no rights under the Plan other than as unsecured general creditors of the
Company, except that insofar as they may have become entitled to payment of
additional compensation by performance of services, 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 Board shall be fully justified in relying, acting or failing to
act, and shall not be liable for having so relied, acted or failed to act in
good faith, upon any report made by the independent public accountant of the
Company and its Affiliates and upon any other information furnished in
connection with 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 for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.

            (i) Section 409A Compliance. To the extent that any payments or
benefits provided hereunder are considered deferred compensation subject to
Section 409A, the Company intends for this Agreement to comply with the
standards for nonqualified deferred compensation established by 409A (the "409A
Standards"). To the extent that any terms of the Plan would subject Participants
to gross income inclusion, interest or an additional tax pursuant to Section
409A, those terms are to that extent superseded by the 409A Standards. The
Company reserves the right to amend Awards granted hereunder to cause such
Awards to comply with or be exempt from Section 409A.

                                       18
<PAGE>

                                                                       EXHIBIT A

                  [FORM OF SENIOR MANAGEMENT OPTION AGREEMENT]

<PAGE>

                                                                       EXHIBIT B

                [FORM OF NON-SENIOR MANAGEMENT OPTION AGREEMENT]