EX-10.4






[EMPLOYEE VERSION]




RESTRICTED STOCK AGREEMENT

UNDER THE

LORAL SPACE & COMMUNICATIONS INC.

2005 STOCK INCENTIVE PLAN




THIS AGREEMENT, made as of the      day of      ,      by and between LORAL SPACE &
COMMUNICATIONS INC. (the “Company”) and      (the “Grantee”).



W I T N E S S E T H :




WHEREAS, the Grantee is now employed by the Company (as hereinafter defined) in a key
capacity, and the Company desires to have him or her remain in such employment and to afford him or
her the opportunity to acquire, or enlarge, his or her stock ownership in the Company so that he or
she may have a direct proprietary interest in the Company’s success.



NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the parties
hereto hereby agree as follows:



1. Grant of Restricted Stock. Subject to the restrictions, terms and conditions set
forth herein and in the Company’s 2005 Stock Incentive Plan (the “Plan”), the Company hereby grants
to the Grantee      shares of the Company’s common stock, par value per share $0.01 (the
“Restricted Stock”). Capitalized terms not otherwise defined herein shall have the same meaning as
set forth in the Plan.



2. Restrictions and Vesting.



(a) Except as provided in this Agreement, shares of Restricted Stock are not transferable and
are subject to a substantial risk of forfeiture until vested as set forth in Section 2(b). The
Grantee’s interest in the Restricted Stock shall become transferable and nonforfeitable as of the
vesting dates provided in Section 2(b) (each, a “Vesting Date”), provided the Grantee is an
employee of the Company on the Vesting Date and has been so employed throughout the period
beginning on the date of this Agreement and ending on the applicable Vesting Date. If the
Grantee’s employment is terminated for any reason, any unvested shares of Restricted Stock shall be
forfeited by the Grantee without consideration.



(b) The Restricted Stock shall vest, become transferable and no longer be subject to a
substantial risk of forfeiture pursuant to the following schedule: (i) twenty-five percent (25%) of
the shares of Restricted Stock (rounded down to the nearest whole share) shall vest and the
transfer restrictions thereon shall lapse on June 30, 2007; (ii) six and a quarter percent (6.25%)
of the shares of Restricted Stock (rounded down to the nearest whole share) shall vest and the
transfer restrictions thereon shall lapse at the end of each of the next eleven (11) fiscal
quarters; and (iii) the remaining number of unvested shares of Restricted Stock shall vest and the
transfer restrictions thereon shall lapse on June 30, 2010.



3. Issuance of Restricted Stock. Restricted Stock may be issued, at the Company’s
option, as follows: (i) certificates evidencing the Restricted Stock may be issued by the Company
(and, if so, shall be registered in the Grantee’s name on the stock transfer books of the Company
promptly after the date hereof, but shall remain in the physical custody of the Company or its
designee at all times prior to the vesting of such Restricted Stock pursuant to Section 2(b)) or
(ii) may be registered in book entry form on the stock transfer books of the Company without
issuance of physical certificates. As a condition to the grant of the Restricted Stock hereby, the
Grantee shall deliver to the Company the stock powers (attached hereto as Exhibit A), duly endorsed
in blank, relating to the unvested Restricted Stock (the “Stock Powers”) within ten (10) business
days following date of receipt of this Agreement by the Grantee. Failure to deliver the Stock
Powers shall cause the Restricted Stock to be forfeited back to the Company.



4. Rights as a Stockholder. The Grantee shall be the record owner of the shares of
Restricted Stock until or unless such Restricted Stock is forfeited pursuant to Section 2 hereof,
and as record owner shall generally be entitled to all rights of a Stockholder with respect to the
Restricted Stock; provided, however, that the Company will retain custody of all dividends and
distributions, if any (“Retained Distributions”), made or declared on the Restricted Stock (and
such Retained Distributions shall be subject to forfeiture and the same restrictions, terms and
vesting and other conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall have been made,
paid or declared shall have become vested, and such Retained Distributions shall not bear interest
or be segregated in a separate account. As soon as practicable following each Vesting Date,
certificates for the Restricted Stock which vested on such Vesting Date, and any applicable
Retained Distributions, shall be delivered to the Grantee or to the Grantee’s legal guardian or
representative and the stock power relating thereto shall be cancelled.



5. Legend on Certificates. The certificates representing the vested Restricted Stock
delivered to the Grantee as contemplated by Section 4 above shall be subject to such stop transfer
orders and other restrictions as the Company may deem advisable under the rules, regulations, and
other requirements of the Securities and Exchange Commission, any stock exchange upon which such
shares are listed, and any applicable federal or state laws, and the Company may cause a legend or
legends to be put on any such certificates to make appropriate reference to such restrictions as
the Company deems appropriate.



6. No Right to Continued Employment. This Agreement does not confer upon the Grantee
any right to continuance of employment by the Company, nor shall it interfere in any way with the
right of the Company to terminate his or her employment at any time.



7. Transferability. The Restricted Stock may not, at any time prior to becoming
vested pursuant to Section 2(b), be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by the Grantee and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance shall be void and unenforceable.



8. Tax Withholding. The Grantee agrees as a condition of this Agreement, to pay to
the Company, or make arrangements satisfactory to the Company regarding payment to the Company of,
the aggregate amount of federal, state and local income and payroll taxes that the Company is
required to withhold in connection with any lapse of restrictions on the Restricted Stock.
Alternatively, the Company may, in its sole discretion, withhold shares of Restricted Stock having
a value equal to all or a portion of the aggregate amount of federal, state and local income and
payroll taxes that the Company is required to withhold, in which case the Grantee agrees to pay to
the Company, or make arrangements satisfactory to the Company regarding payment to the Company of,
the amount of tax withholding not covered by the withholding of shares of Restricted Stock.



9. Notice. Every notice or other communication relating to this Agreement shall be in
writing, and shall be mailed to or delivered to the party for whom it is intended at such address
as may from time to time be designated by it in a notice mailed or delivered to the other party as
herein provided; provided that, unless and until some other address be so designated, all notices
or communications by the Grantee to the Company shall be mailed or delivered to the Company at its
New York office and all notices or communications by the Company to the Grantee may be given to the
Grantee personally or may be mailed to the Grantee’s home address as reflected on the books of the
Company.



10. Arbitration. All disputes between the parties arising out of, or in connection
with the validity, interpretation, construction, meaning or execution of the Plan or of this
Agreement or any settlement thereof, shall be finally settled by arbitration to be held in New York
City and conducted in accordance with the Rules of the American Arbitration Association. Judgment
upon the award rendered may be entered in any court having jurisdiction or application may be made
to such court for judicial acceptance of the award and an order of enforcement, as the case may be.



11. Governing Law. The validity, interpretation and performance of this Agreement
shall be controlled by and construed under the laws of Delaware, without giving effect to the
principles of conflicts of law.



12. Special Tax Election.



(a) Under Section 83 of the Code, the excess of the Fair Market Value of the Restricted Stock
on the date any forfeiture restrictions applicable to such shares lapse over the purchase price
paid for those shares will be reportable as ordinary income on the lapse date. For this purpose,
the term “forfeiture restrictions” includes vesting provisions applicable to the Restricted Stock
as provided in Section 2 hereof. The Grantee may elect under Section 83(b) of the Code to be taxed
at the time the Restricted Stock is acquired, rather than when and as such Restricted Stock ceases
to be subject to such forfeiture restrictions. Such election must be filed with the Internal
Revenue Service within thirty (30) days after the date of this Agreement.



(b) A BRIEF EXPLANATION OF THE ELECTION AND THE FORM FOR MAKING THIS ELECTION IS ATTACHED AS
EXHIBIT B HERETO. THE GRANTEE UNDERSTANDS THAT FAILURE TO MAKE THIS FILING WITHIN THE APPLICABLE
THIRTY (30) DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME AS THE FORFEITURE
RESTRICTIONS LAPSE.



(c) THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b) OF THE CODE, EVEN IF THE GRANTEE REQUESTS
THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON HIS OR HER BEHALF.



* * *





1






IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first
above written.




LORAL SPACE & COMMUNICATIONS INC.




By:     

Name: Michael B. Targoff

Title: Vice Chairman and Chief Executive Officer





     


Grantee



Address of Grantee:



     



     



Social Security No.:     —     —     



2




EXHIBIT A




[NOTE: THERE SHOULD BE ONE STOCK POWER SIGNED FOR EACH VESTING TRANCHE]




STOCK POWER




FOR VALUE RECEIVED      hereby sell(s), assign(s) and transfer(s) unto Loral Space &
Communications Inc. (the “Company”),      (     ) shares of the Common Stock of the
Company standing in his or her name on the books of the Company represented by Certificate No.
     herewith and do(es) hereby irrevocably constitute and appoint      
attorney to transfer the said stock on the books of the Company with full power of substitution in
the premises.



Dated:      




Signature



Instruction: Please do not fill in any blanks other than the signature line. Please sign exactly
as you would like your name to appear on the issued stock certificate.



3




EXHIBIT B




EXPLANATION OF A




SECTION 83(b) TAX ELECTION




In general, Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that
a Grantee of shares subject to any forfeiture restrictions will recognize income equal to the
excess of the Fair Market Value of the shares on the date any forfeiture restrictions applicable to
such shares lapse over the amount paid for such shares. For this purpose, the term “forfeiture
restrictions” includes the restrictions placed upon the Restricted Stock pursuant to Section 2 of
the Restricted Stock Agreement to which this explanation is attached as Exhibit B.



The Grantee, however, may elect under Section 83(b) of the Code to be taxed at the time the
Restricted Stock is acquired, rather than on each date the Restricted Stock ceases to be subject to
forfeiture restrictions. The election must be filed with the Internal Revenue Service within
thirty (30) days after the date of grant and a copy must be filed with the Company. A second copy
must be attached to the Grantee’s tax return for the taxable year in which the election occurred.
A form for making this election is attached as part of this exhibit. FAILURE TO MAKE THIS FILING
WITHIN THE APPLICABLE THIRTY (30) DAY PERIOD WILL RESULT IN THE RECOGNITION OF ORDINARY INCOME BY
THE GRANTEE AS THE FORFEITURE RESTRICTIONS LAPSE.



THE DISCUSSION ABOVE IS INTENDED ONLY AS A SUMMARY AND DOES NOT PURPORT TO BE A COMPLETE DISCUSSION
OF ALL POTENTIAL TAX EFFECTS RELEVANT TO GRANTEES UNDER THE PLAN. SUCH DISCUSSION IS BASED UPON
CURRENT LAW AND INTERPRETATIONAL AUTHORITIES WHICH ARE SUBJECT TO CHANGE AT ANY TIME. IT IS
STRONGLY URGED THAT GRANTEES CONSULT WITH THEIR OWN TAX ADVISORS CONCERNING THE TAX CONSEQUENCES OF
RECEIPT OF MAKING A SECTION 83(b) TAX ELECTION WITH RESPECT TO THEIR PERSONAL TAX CIRCUMSTANCES.



4




ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY IN

GROSS INCOME IN YEAR OF TRANSFER UNDER CODE § 83(b)




The undersigned hereby elects pursuant to § 83(b) of the Internal Revenue Code with respect to
the property described below and supplies the following information in accordance with the
regulations promulgated thereunder:



1. The name, address and taxpayer identification number of the undersigned are:



Name:


Address:



SS#:



2. Description of property with respect to which the election is being made:



The undersigned has received      shares of Common Stock of Loral Space & Communications Inc.
(the “Company”).



3. The date on which property was transferred is      ,      .



4. The taxable year to which this election relates is calendar year      .



5. The nature of the restriction(s) to which the property is subject is:



The property is subject to subject to vesting requirements based upon the taxpayer’s employment
with the Company.



6. Fair market value:



The aggregate fair market value at time of transfer (determined without regard to any restrictions
other than restrictions which by their terms will never lapse) of the property with respect to
which this election is being made is $     .



7. Amount paid for property:



The amount paid by taxpayer for the property is $     .



8. Furnishing statement to employer:



A copy of this statement has been furnished to the Company, the employer of the undersigned.



Dated:     



Taxpayer’s Signature




5