Document:

EX-10.2

Exhibit 10.2

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

(Version 0004)

          THIS AGREEMENT, effective as of the Grant Date (as defined below), is between L-3
Communications Holdings, Inc., a Delaware corporation (the “Company”), and the Optionee (as defined
below).

          WHEREAS, the Company has adopted the L-3 Communications Holdings, Inc. 2008 Long Term
Performance Plan (the “Plan”) in order to provide additional incentives to selected officers and
employees of the Company and its subsidiaries; and

          WHEREAS, the Committee responsible for administration of the Plan has determined to grant an
option to the Optionee as provided herein and the Company and the Optionee hereby wish to
memorialize the terms and conditions applicable to the Option (as defined below);

          WHEREAS, the following terms shall have the following meanings for purposes of this Option
Agreement:

     “Award Letter” shall mean the letter to the Optionee attached hereto as Exhibit A;

     “Common Stock” means the Company’s Common Stock, par value $0.01 per share;

     “Exercise Price” shall mean the “Grant Price” listed in the Award Letter;

     “Grant Date” shall mean the “Grant Date” listed in the Award Letter;

     “Option Agreement” or this “Agreement” shall mean this agreement including (unless the context
otherwise requires) the Award Letter.

     “Optionee” shall mean the “Participant” listed in the Award Letter; and

     “Shares” shall mean that number of shares of Common Stock listed in the Award Letter as
“Awards Granted.”

          NOW, THEREFORE, the parties hereto agree as follows:

1. Grant of Option.

               1.1 Effective as of the Grant Date, for good and valuable consideration, the Company hereby
irrevocably grants to the Optionee the right and option (the “Option”) to purchase all or any part
of the Shares, subject to, and in accordance with, the terms and conditions set forth in this
Option Agreement.

               1.2 The Option is not intended to qualify as an Incentive Stock Option within the meaning of
Section 422 of the Code.

               1.3 This Option Agreement shall be construed in accordance and consistent with, and subject
to, the terms of the Plan (the provisions of which are incorporated hereby by reference); and,
except as otherwise expressly set forth herein, the capitalized terms used in this Option Agreement
shall have the same definitions as set forth in the Plan. In the event of any conflict between one
or more of this Option Agreement, the Award Letter and the Plan, the Plan shall govern this Option
Agreement and the Award Letter, and the Option Agreement (to the extent not in conflict with the
Plan) shall govern the Award Letter.

 

 

2. Exercise Price.

          The price at which the Optionee shall be entitled to purchase the Shares upon the exercise of
the Option shall be the Exercise Price per share, subject to adjustment as provided in Section 9.

3. Duration of Option.

          The Option shall be exercisable to the extent and in the manner provided herein for a period
of ten (10) years from the Grant Date (the “Exercise Term”); provided, however,
that the Option may be earlier terminated as provided in Section 6 hereof.

4. Exercisability of Option.

          Unless otherwise provided in this Option Agreement or the Plan, the Option shall entitle the
Optionee to purchase, in whole at any time or in part from time to time, one-third
(1/3rd) of the total number of shares covered by the Option on the first anniversary of
the Grant Date, an additional one-third (1/3rd) of the total number of Shares covered by
the Option on the second anniversary of the Grant Date and the final one-third (1/3rd)
of the total number of Shares covered by the Option on the expiration of the third anniversary of
the Grant Date. Each such right of purchase shall be cumulative and shall continue, unless sooner
exercised or terminated as herein provided, during the remaining period of the Exercise Term. Any
fractional number of shares resulting from the application of the foregoing percentages shall be
rounded to the next higher whole number of Shares (not to exceed the total number of Shares granted
as provided in Section 1.1).

5. Manner of Exercise and Payment.

          5.1 Subject to the terms and conditions of this Option Agreement and the Plan, the Option may
be exercised by delivery of written notice to the Secretary of the Company (or his or her
designee), at its principal executive office. Such notice shall state that the Optionee or other
authorized person is electing to exercise the Option and the number of Shares in respect of which
the Option is being exercised and shall be signed by the person or persons exercising the Option.
In the event the Company has designated an Award Administrator (as defined below), the Option may
also be exercised by giving notice (including through electronic means) in accordance with the
procedures established from time to time by the Award Administrator. Any exercisable portion of
the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part,
provided that partial exercise shall be for whole shares of Common Stock only. If requested by the
Committee, such person or persons shall (i) deliver this Agreement (including the Award Letter) to
the Secretary of the Company who shall endorse thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to exercise the Option.

          5.2 The notice of exercise described in Section 5.1 shall be accompanied by either (i) payment
of the full purchase price for the Shares in respect of which the Option is being exercised and of
all applicable Withholding Taxes (as defined in Section 11) pursuant to Section 11 hereof (such
payment to be made in cash, by delivering Shares, by withholding a portion of the Shares otherwise
issuable or by any combination thereof) or (ii) instructions from the Optionee to the Company
directing the Company to deliver a specified number of Shares directly to a designated broker or
dealer pursuant to a cashless exercise election, in which case the Company must receive, prior to
the issuance of the Shares in respect of which the Option is being exercised, payment of the full
purchase price for the Shares in respect of which the Option is being exercised and all applicable
Withholding Taxes pursuant to Section 11 hereof (such payment to be made in cash, by delivering
Shares, by withholding a portion of the Shares otherwise issuable or by any combination thereof).
The value of any Shares withheld or delivered in satisfaction of the purchase price for the Shares
in respect of which the Option is being exercised and/or Withholding Taxes shall be determined by
reference to the Fair Market Value of such Shares as of the date of such

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withholding or delivery. In the event that Withholding Taxes are satisfied by withholding a
portion of the Shares otherwise issuable in connection with an exercise of the Option, the Company
shall not withhold any Shares in excess of the minimum number of Shares necessary to satisfy the
applicable Withholding Taxes.

          5.3 Upon receipt of the notice of exercise and any payment or other documentation as may be
necessary pursuant to Sections 5.1 and 5.2 relating to the Shares in respect of which the Option is
being exercised, the Company shall, subject to the Plan and this Option Agreement, take such action
as may be necessary to effect the transfer to the Optionee of the number of Shares as to which such
exercise was effective.

          5.4 The Optionee shall not be deemed to be the holder of, or to have any of the rights and
privileges of a stockholder of the Company in respect of, Shares purchased upon exercise of the
Option until (i) the Option shall have been exercised pursuant to the terms of this Option
Agreement and the Optionee shall have paid the full purchase price for the number of Shares in
respect of which the Option was exercised and any applicable Withholding Taxes and (ii) the Company
shall have issued the Shares in connection with such exercise.

6. Termination of Employment.

          6.1 If, prior to the date of the initial vesting of the Option pursuant to Section 4 hereof
(the “Initial Vesting Date”), the Optionee’s employment with the Company and its subsidiaries shall
be terminated for any reason, other than death or permanent disability (as herein defined), the
Optionee’s right to exercise the Option shall terminate as of the effective date of termination
(the “Termination Date”) and all rights hereunder shall cease (unless otherwise provided for by the
Committee in accordance with the Plan). For purposes hereof, “permanent disability” means
incapacity due to physical or mental illness as a result of which the Optionee becomes eligible for
benefits under the applicable long-term disability plan or policy of the Company or the applicable
subsidiary of the Company which is in effect at the time Optionee became incapacitated.

          6.2 If the Optionee’s employment with the Company and its subsidiaries shall be terminated by
reason of death or permanent disability, the Option shall become immediately fully exercisable as
to 100% of the Shares subject to the Option, and the Optionee or the executor or administrator of
the estate of the Optionee or the person or persons to whom the Option shall have been validly
transferred by the executor or the administrator pursuant to will or the laws of descent or
distribution shall have the right, within one year from the date of the Optionee’s death or
permanent disability, to exercise the Option, subject to any other limitation contained herein on
the exercise of the Option in effect at the date of exercise.

          6.3 If, on or after the Initial Vesting Date, the Optionee’s employment with the Company and
its subsidiaries shall be terminated for any reason other than for Cause or death or permanent
disability, the Optionee shall have the right within three months after the Termination Date to
exercise the Option to the extent that installments thereof shall have been or become exercisable
at the Termination Date and shall not have been exercised, subject to any other limitation
contained herein on the exercise of the Option in effect at the date of exercise, and (unless
otherwise provided for by the Committee in accordance with the Plan) the Optionee’s right to
exercise any installments of the Option that were not exercisable at the Termination Date (if any)
shall terminate as of the Termination Date. If the Optionee’s employment is terminated for Cause,
the Option shall terminate as of the Termination Date, whether or not exercisable. For purposes
hereof, “Cause” means the Optionee’s (i) intentional failure to perform reasonably assigned duties,
(ii) dishonesty or willful misconduct in the performance of duties, (iii) engaging in a transaction
in connection with the performance of duties to the Company or its subsidiaries which transaction
is adverse to the interests of the Company or its subsidiaries and is engaged in for personal
profit or (iv) willful violation of any law, rule or regulation in connection with the performance
of duties (other than traffic violations or similar offenses).

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          6.4 If the Optionee shall die within the three-month period referred to in 6.3 above, the
Optionee or the executor or administrator of the estate of the Optionee or the person or persons to
whom the Option shall have been validly transferred by the executor or administrator pursuant to
will or the laws of descent and distribution shall have the right, within one year from the date of
the Optionee’s death, to exercise the Option to the extent that the Option was exercisable at the
date of death, subject to any other limitation contained herein on the exercise of the Option in
effect at the date of exercise.

          6.5 The Participant’s rights with respect to the Option shall not be affected by any change in
the nature of the Participant’s employment so long as the Participant continues to be an employee
of the Company or any of its subsidiaries. Whether (and the circumstances under which) employment
has been terminated and the determination of the Termination Date for the purposes of this
Agreement shall be determined by the Committee or (with respect to any employee other than an
“Executive Officer” as defined under the Plan) its designee (who, at the date of this Agreement,
shall be the Company’s Vice President of Human Resources), whose good faith determination shall be
final, binding and conclusive; provided, that such designee may not make any such
determination with respect to his or her own employment.

7. Nontransferability.

          The Option shall not be transferable other than by will or by the laws of descent and
distribution, and during the lifetime of the Optionee, the Option shall be exercisable only by the
Optionee, except that the Option may be transferred to and exercised by a family member or family
members of the Optionee, or transferred to an irrevocable trust or trusts established for the
benefit of the Optionee’s family members during this Optionee’s lifetime. After the death of the
Optionee, any exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 6.2 or 6.4, be exercised by the Optionee’s personal representative or
by any person empowered to do so under the Optionee’s will or under the then applicable laws of
descent and distribution.

8. No Right to Continued Employment.

          Nothing in this Option Agreement or the Plan shall be interpreted or construed to confer upon
the Optionee any right to continue employment by the Company or any of its subsidiaries, nor shall
this Agreement or the Plan interfere in any way with the right of the Company or any of its
subsidiaries to terminate the Optionee’s employment at any time for any reason whatsoever, whether
or not with Cause.

9. Adjustments.

          In the event that the outstanding shares of the Common Stock are, from time to time, changed
into or exchanged for a different number or kind of shares of the capital stock of the Company or
other securities of the Company by reason of a merger, consolidation, recapitalization,
reclassification, stock split, stock dividend, combination of capital stock, or other similar
increase or decrease in the number of shares outstanding without receiving compensation therefor,
the Committee shall, in accordance with the terms of the Plan, make an appropriate and equitable
adjustment in the number and kind of Shares or other consideration as to which such Option, or
portions thereof then unexercised, shall be exercisable and the exercise price therefor. Any such
adjustment made by the Committee shall be final, binding and conclusive upon the Optionee, the
Company and all other interested persons. Any such adjustment may provide for the elimination of
any fractional share which might otherwise become subject to the Option. This paragraph shall also
apply with respect to any extraordinary dividend or other extraordinary distribution in respect of
the Common Stock (whether in the form of cash or other property).

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10. Effect of a Change in Control.

          10.1 Notwithstanding anything contained in the Plan or this Agreement to the contrary, in the
event of a Change in Control, (a) the Option becomes immediately and fully exercisable as to 100%
of the Shares subject to the Option, and (b) upon termination of an Optionee’s employment with the
Company, following a Change in Control, the Option shall remain exercisable until one year after
termination, but in no event beyond the Exercise Term. The Company reserves the right to change or
modify in any way the definition of Change in Control set forth in this Option Agreement and any
such change or modification shall be binding on the Optionee.

          10.2 For the purposes of this Option Agreement, “Change in Control” shall mean the first to
occur of the following:

	 	a.	 	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 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;
	 
	 	b.	 	The sale of all or substantially all the assets of the Company
and its subsidiaries taken as a whole; or
	 
	 	c.	 	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 of
Directors, without the approval of Continuing Directors, as constituted at the
beginning of such period. “Continuing Directors” shall mean any director of
the Company who either (i) is a member of the Board of Directors on the Grant
Date, or (ii) is nominated for election to the Board of Directors by a majority
of the Board which is comprised of directors who were, at the time of such
nomination, Continuing Directors.

11. Withholding of Taxes.

          As a condition to the issuance of Shares in respect of any exercise of the Option or any other
issuance or payment to the Optionee hereunder, the Optionee shall pay to the Company (and the
Company shall have the right to deduct from any distribution of cash to the Optionee) the minimum
amount necessary to satisfy Federal, state, local and foreign withholding tax requirements, if any
(“Withholding Taxes”) with respect to such exercise, issuance or payment.

12. Optionee bound by the Plan.

          The Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof.

13. Modification of Agreement.

          This Agreement may be modified, amended, suspended or terminated, and any terms or conditions
may be waived, but, subject to paragraphs 6.5 and 10.1 and to the terms and conditions of the Plan,
only by a written instrument executed by the parties hereto.

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14. Severability.

          Should any provision of this Agreement be held by a court of competent jurisdiction to be
unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be
affected by such holding and shall continue in full force in accordance with their terms.

15. Governing Law.

          The validity, interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York without giving effect to the conflicts of laws principles
thereof.

16. Successors in Interest.

          This Agreement shall inure to the benefit of and be binding upon any successor to the Company.
This Agreement shall inure to the benefit of the Optionee or the Optionee’s legal representatives.
All obligations imposed upon the Optionee and all rights granted to the Company under this
Agreement shall be final, binding and conclusive upon the Optionee’s heirs, executors,
administrators and successors.

17. Administration.

          The Committee shall have the power to interpret the Plan and this Option Agreement and to
adopt such rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret or revoke any such rules. All actions taken and all
interpretations and determinations made by the Committee shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the Committee shall be
personally liable for any action determination or interpretation made in good faith with respect to
the Plan or the Options. In its absolute discretion, the Board of Directors may at any time and
from time to time exercise any and all rights and duties of the Committee under the Plan and this
Option Agreement.

18. Resolution of Disputes.

          Any dispute or disagreement which may arise under, or as a result of, or in any way related
to, the interpretation, construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and conclusive on the Optionee
and Company for all purposes.

19. Data Privacy Consent.

          As a condition of the grant of the Option, the Optionee hereby consents to the collection, use
and transfer of personal data as described in this paragraph. The Optionee understands that the
Company and its subsidiaries hold certain personal information about the Optionee, including name,
home address and telephone number, date of birth, social security number, salary, nationality, job
title, ownership interests or directorships held in the Company or its subsidiaries, and details of
all stock options or other equity awards or other entitlements to shares of common stock awarded,
cancelled, exercised, vested or unvested (“Data”). The Optionee further understands that the
Company and its subsidiaries will transfer Data among themselves as necessary for the purposes of
implementation, administration and management of the Optionee’s participation in the Plan, and that
the Company and any of its subsidiaries may each further transfer Data to any third parties
assisting the Company in the implementation, administration and management of the Plan. The
Optionee understands that these recipients may be located in the European Economic Area or
elsewhere, such as the United States. The Optionee hereby authorizes them to receive, possess, use,
retain and transfer such Data as may be required for the administration of the Plan or the
subsequent holding of shares of common stock on the

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Optionee’s behalf, in electronic or other form, for the purposes of implementing,
administering and managing the Optionee’s participation in the Plan, including any requisite
transfer to a broker or other third party with whom the Optionee may elect to deposit any shares of
common stock acquired under the Plan. The Optionee may, at any time, view such Data or require any
necessary amendments to it.

20. Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.

          By accepting this Agreement and the grant of the Option evidenced hereby, the Optionee
expressly acknowledges that (a) the Plan is discretionary in nature and may be suspended or
terminated by the Company at any time; (b) the grant of the Option is a one-time benefit that does
not create any contractual or other right to receive future grants of options, or benefits in lieu
of options; (c) all determinations with respect to future option grants, if any, including the
grant date, the number of Shares granted, the exercise price and the exercise date or dates, will
be at the sole discretion of the Company; (d) the Optionee’s participation in the Plan is
voluntary; (e) the value of the Option is an extraordinary item of compensation that is outside the
scope of the Optionee’s employment contract, if any, and nothing can or must automatically be
inferred from such employment contract or its consequences; (f) Options are not part of normal or
expected compensation for any purpose and are not to be used for calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments, and the Optionee waives any claim on such basis; and (g)
the future value of the underlying Shares is unknown and cannot be predicted with certainty. In
addition, the Optionee understands, acknowledges and agrees that the Optionee will have no rights
to compensation or damages related to option proceeds in consequence of the termination of the
Optionee’s employment for any reason whatsoever and whether or not in breach of contract.

21. Subsidiary.

          As used herein, the term “subsidiary” shall mean, as to any person, any corporation,
association, partnership, joint venture or other business entity of which 50% or more of the voting
stock or other equity interests (in the case of entities other than corporations), is owned or
controlled (directly or indirectly) by that entity, or by one or more of the Subsidiaries of that
entity, or by a combination thereof.

22. Award Administrator.

          The Company may from time to time to designate a third party (an “Award Administrator”) to
assist the Company in the implementation, administration and management of the Plan and any Options
granted thereunder, including by sending Award Letters on behalf of the Company to Optionees, and
by facilitating through electronic means acceptance of Option Agreements by Optionees and Option
exercises by Optionees.

23. Book Entry Delivery of Shares.

          Whenever reference in this Agreement is made to the issuance or delivery of certificates
representing one or more Shares, the Company may elect to issue or deliver such Shares in book
entry form in lieu of certificates.

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24. Acceptance.

          This Agreement shall not be enforceable until it has been executed by the Optionee. In the
event the Company has designated an Award Administrator, the acceptance (including through
electronic means) of the Option contemplated by this Option Agreement in accordance with the
procedures established from time to time by the Award Administrator shall be deemed to constitute
the Optionee’s acknowledgment and agreement to the terms and conditions of this Option Agreement
and shall have the same legal effect in all respects of the Optionee having executed this Option
Agreement by hand.

	 	 	 	 	 
	 	 	 
	 	By:  	     L-3 COMMUNICATIONS HOLDINGS, INC.
 	 
	 	 	 	 
	 	 	
Michael T. Strianese

President and Chief Executive Officer 	 
	 
	 	 	 
	 	 	
 	 
	 	 	Steven M. Post 	 
	 	 	Senior Vice President, General Counsel and
Corporate Secretary 	 
	 

Acknowledged and Agreed

as of the date first written above:

	 	 	 	 	 
	
 	 	 
	Optionee Signature 	 	 
	 	 	 
	 

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Exhibit 10.3

L-3 COMMUNICATIONS HOLDINGS, INC.

2008 LONG TERM PERFORMANCE PLAN

RESTRICTED STOCK UNIT AGREEMENT

(Version 0003)

     This Restricted Stock Unit Agreement (this “Agreement”), effective as of the Grant Date (as
defined below), is between L-3 Communications Holdings, Inc., a Delaware corporation (the
“Corporation”), and the Participant (as defined below).

     1. Definitions. The following terms shall have the following meanings for purposes of
this Agreement:

          (a) “Award Letter” shall mean the letter to the Participant attached hereto as Exhibit A.

          (b) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

          (c) “Grant Date” shall mean the “Grant Date” listed in the Award Letter.

          (d) “Participant” shall mean the “Participant” listed in the Award Letter.

          (e) “Restricted Units” shall mean that number of restricted units listed in the Award Letter
as “Awards Granted.”

          (f) “Section 409A Change in Control Event” shall mean a change in ownership or effective
control of the Corporation, or in the ownership of a substantial portion of the assets of the
Corporation, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

          (g) “Shares” shall mean a number of shares of the Corporation’s Common Stock, par value $0.01
per share, equal to the number of Restricted Units.

     2. Grant of Units. The Corporation hereby grants the Restricted Units to the
Participant, each of which represents the right to receive one Share upon the expiration or
termination of the Restricted Period (as defined below), subject to the terms, conditions and
restrictions set forth in the L-3 Communications Holdings, Inc. 2008 Long Term Performance Plan
(the “Plan”) and this Agreement.

     3. Restricted Unit Account. The Corporation shall cause an account (the “Account” to
be established and maintained on the books of the Corporation to record the number of Restricted
Units credited to the Participant under the terms of this Agreement. The Participant’s interest in
the Account shall be that of a general, unsecured creditor of the Corporation.

     4. Restricted Period. Except as otherwise provided in paragraphs 6 and 7 hereof, the
“Restricted Period” shall mean the period beginning on the Grant Date and expiring on the third
anniversary of the Grant Date. Upon the expiration or termination of the Restricted Period, the
Shares shall be issued to the Participant in accordance with Section 13.

     5. Restrictions on Transfer During Restricted Period. Until the Restricted Period has
expired or terminated, the Restricted Units shall not be sold, assigned, transferred, pledged,
hypothecated, loaned, or otherwise disposed of, and during the Participant’s lifetime the
Participant’s rights with respect

 

 

to the Restricted Units shall be exercised only by such Participant or by his or her guardian
or legal representative, except that the Restricted Units may be transferred by will or by the laws
of descent and distribution. Any sale, assignment, transfer, pledge, hypothecation, loan or other
disposition other than in accordance with this Section 5 shall be null and void.

     6. Change in Control During Restricted Period. Upon the occurrence of a “change in
control” that constitutes a Section 409A Change in Control Event, the Restricted Period shall
automatically terminate and the Shares shall thereafter be issued to the Participant in accordance
with Section 13. In the event of any other “change in control,” the Restricted Period shall not be
immediately affected, but shall subsequently terminate (and the Shares shall thereafter be issued
to the Participant in accordance with Section 13) upon the earliest to occur of: (a) a Section 409A
Change in Control Event, (b) the Participant’s death, (c) the six-month anniversary of the
termination of the Participant’s employment with the Corporation and its subsidiaries due to
“disability” (as defined in Section 7(c) hereof) or (d) the third anniversary of the Grant Date.
For purposes of this Agreement, a “change in control” means:

          (a) 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 Corporation or any of its subsidiaries,
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
majority of the combined voting power of the Corporation’s then outstanding voting securities,
other than by any employee benefit plan maintained by the Corporation;

          (b) The sale of all or substantially all the assets of the Corporation and its subsidiaries
taken as a whole; or

          (c) 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 of Directors, without the approval of Continuing
Directors, as constituted at the beginning of such period. “Continuing Directors” shall mean any
director of the Corporation who either (i) is a member of the Board of Directors on the Grant Date,
or (ii) is nominated for election to the Board of Directors by a majority of the Board which is
comprised of directors who were, at the time of such nomination, Continuing Directors.

     7. Termination of Employment During Restricted Period.

          (a) In the event that the Participant’s employment with the Corporation and its subsidiaries
is terminated (other than by reason of death, “retirement” or “disability,” as defined below) prior
to the expiration or termination of the Restricted Period and prior to the occurrence of a “change
in control” (as defined in Section 6), the Participant shall forfeit the Restricted Units and all
of the Participant’s rights hereunder shall cease (unless otherwise provided for by the Committee
in accordance with the Plan). The Participant’s rights to the Restricted Units shall not be
affected by any change in the nature of the Participant’s employment so long as the Participant
continues to be an employee of the Corporation or any of its subsidiaries.

          (b) In the event the Participant terminates employment with the Corporation and its
subsidiaries because of “retirement” prior to the expiration or termination of the Restricted
Period and prior to the occurrence of a “change in control” (as defined in Section 6), the
Restricted Period shall not be affected and shall expire with the passage of time in accordance
with paragraph 4, except that (i) in the event that the Participant dies following retirement but
prior to the expiration of the Restricted Period, the Restricted Period shall automatically
terminate and the Shares shall thereafter be delivered to the Participant’s transferee(s) in
accordance with Sections 5 and 13 and (ii) the Restricted Period may earlier

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terminate in accordance with Section 6. For purposes of this Agreement, retirement means the
Participant (A) terminates employment with the Corporation and its subsidiaries other than for
Cause (and is not subject to termination for Cause at the time of such termination) more than one
year after the Grant Date, (B) is available for consultation with the Corporation or any of its
subsidiaries at the reasonable request of the Corporation or one of its subsidiaries and (C)
terminates employment on or after attaining age 65 and completing at least five years of service in
the aggregate with the Corporation and its subsidiaries (which service must be continuous through
the date of termination except for a single break in service that does not exceed one year in
length). For purposes of this Agreement, “Cause” means the Participant’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
Corporation or its subsidiaries which transaction is adverse to the interests of the Corporation
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).

          (c) If the Participant’s employment with the Corporation and its subsidiaries is terminated
because of death, the Restricted Period shall automatically terminate and the Shares shall
thereafter be issued to the Participant (or to the Participant’s transferee(s) under Section 5 as
the case may be) in accordance with Section 13. If the Participant’s employment with the
Corporation and its subsidiaries is terminated because of “disability,” the Restricted Period shall
not be immediately affected, but shall subsequently terminate (and the Shares shall thereafter be
issued to the Participant in accordance with Section 13) upon the earliest to occur of: (i) the
six-month anniversary of the date of termination, (ii) the Participant’s death, (iii) a Section
409A Change in Control Event or (iv) the third anniversary of the Grant Date. For purposes of this
Agreement, disability means the Participant, 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
Corporation or a subsidiary in which the Participant is eligible to participate.

          (d) Whether (and the circumstances under which) employment has been terminated and the
determination of the termination date for the purposes of this Agreement shall be determined by the
Committee or (with respect to any employee other than an “Executive Officer” as defined under the
Plan) its designee (who, at the date of this Agreement, shall be the Corporation’s Vice President
of Human Resources), whose good faith determination shall be final, binding and conclusive;
provided, that such designee may not make any such determination with respect to his or her
own employment.

     8. Dividends. If the Corporation shall pay a cash dividend on its common stock, a
cash dividend equivalent shall be paid to the Participant (subject to applicable tax withholding)
with respect to the Restricted Units credited to the Participant’s Account as of the record date
for the dividend, with each Restricted Unit to be equivalent to one share of common stock.

     9. No Right to Continued Employment. Nothing in this Agreement or the Plan shall be
interpreted or construed to confer upon the Participant any right to continue employment by the
Corporation or any of its subsidiaries, nor shall this Agreement or the Plan interfere in any way
with the right of the Corporation or any of its subsidiaries to terminate the Participant’s
employment at any time for any reason whatsoever, whether or not with cause.

     10. No Rights as a Stockholder. The Participant’s interest in the Restricted Units
shall not entitle the Participant to any rights as a stockholder of the Corporation. The
Participant shall not be deemed to be the holder of, or have any of the rights and privileges of a
stockholder of the Corporation in respect of, the Shares unless and until such Shares have been
issued to the Participant in accordance Section 13.

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     11. Adjustments Upon Change in Capitalization. In the event of any reorganization,
merger, consolidation, recapitalization, reclassification, stock split, stock dividend or similar
capital adjustment, as a result of which shares of any class shall be issued in respect of
outstanding shares of the Corporation’s Common Stock or shares of Corporation’s Common Stock shall
be changed into a different number of shares or into another class or classes or into other
property or cash, the Restricted Units, the Participant’s Account and/or the Shares shall be
adjusted to reflect such event so as to preserve (without enlarging) the value of the award
hereunder, with the manner of such adjustment to be determined by the Committee in its sole
discretion. This paragraph shall also apply with respect to any extraordinary dividend or other
extraordinary distribution in respect of the Corporation’s Common Stock (whether in the form of
cash or other property).

     12. General Restrictions. Notwithstanding anything in this Agreement to the contrary,
the Corporation shall have no obligation to issue or transfer the Shares as contemplated by this
agreement unless and until such issuance or transfer shall comply with all relevant provisions of
law and the requirements of any stock exchange on which the Corporation’s shares are listed for
trading.

     13. Issuance of Shares. Upon the expiration or termination of the Restricted Period
and payment by the Participant of any applicable taxes pursuant to Section 14 of this Agreement,
the Corporation shall, as soon as reasonably practicable (and in any event within 75 days of the
termination or expiration of the Restricted Period), but subject to any delay necessary to comply
with Section 12 hereof, issue the Shares to the Participant, free and clear of all restrictions;
provided, that if the termination of the Restricted Period results from a Section 409A
Change in Control Event, then notwithstanding the foregoing, the Shares shall be issued within 30
days of the Section 409A Change in Control Event. The Corporation shall not be required to deliver
any fractional Shares, but shall pay, in lieu thereof, the fair market value (as defined in the
Plan) as of the date the restrictions lapse of such fractional share to the Participant. The
Corporation shall pay any costs incurred in connection with issuing the Shares. Upon the issuance
of the Shares to the Participant, the Participant’s Account in respect of the Restricted Units
shall be eliminated. Notwithstanding the provisions of this Section, if the Restricted Units have
been transferred in accordance with the provisions of Section 5 prior to the issuance of the Shares
to the Participant in accordance with this Section, then the issuance of the Shares and any payment
in lieu of fractional Shares shall be made to the transferee(s).

     14. Tax Withholding. Upon the expiration or termination of the Restricted Period, the
Participant shall remit to the Corporation the minimum amount necessary to satisfy Federal, state,
local or foreign withholding tax requirements, if any (“Withholding Taxes”) as a condition to the
Corporation’s issuance of any Shares as provided in Section 13. The payment shall be in (i) cash,
(ii) the delivery of Shares, (iii) a reduction in the number of Shares otherwise issuable or
deliverable or other amounts otherwise payable to the Participant pursuant to this Agreement, or
(iv) a combination of (i), (ii) and/or (iii). The value of any Shares delivered or withheld as
payment in respect of withholding tax requirements shall be determined by reference to the Fair
Market Value of such Shares as of the date of such withholding or delivery. In the event that
Withholding Taxes are satisfied by withholding a portion of the Shares otherwise issuable or
deliverable to the Participant pursuant to this Agreement, the Corporation shall not withhold any
Shares in excess of the minimum number of Shares necessary to satisfy the applicable Withholding
Taxes.

     15. Subsidiary. As used herein, the term “subsidiary” shall mean, as to any person,
any corporation, association, partnership, joint venture or other business entity of which 50% or
more of the voting stock or other equity interests (in the case of entities other than
corporations), is owned or controlled (directly or indirectly) by that entity, or by one or more of
the Subsidiaries of that entity, or by a combination thereof.

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     16. Plan Governs. The Participant hereby acknowledges receipt of a copy of the Plan
and agrees to be bound by its terms, all of which are incorporated herein by reference. The Plan
shall govern in the event of any conflict between this Agreement and the Plan.

     17. Modification of Agreement. This Agreement may be modified, amended, suspended or
terminated, and any terms or conditions may be waived, but, subject to the terms and conditions of
the Plan and this Agreement, only by a written instrument executed by the parties hereto.

     18. Severability. Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of
this Agreement shall not be affected by such holding and shall continue in full force in accordance
with their terms.

     19. Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without giving effect to the
conflicts of laws principles thereof.

     20. Successors in Interest. This Agreement shall inure to the benefit of and be
binding upon any successor to the Corporation. This Agreement shall inure to the benefit of the
Participant or the Participant’s legal representatives. All obligations imposed upon the
Participant and all rights granted to the Corporation under this Agreement shall be final, binding
and conclusive upon the Participant’s heirs, executors, administrators and successors.

     21. Administration. The Committee shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and application of the
Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and
all interpretations and determinations made by the Committee shall be final and binding upon the
Participant, the Corporation and all other interested persons. No member of the Committee shall be
personally liable for any action determination or interpretation made in good faith with respect to
the Plan or the Restricted Units. In its absolute discretion, the Board of Directors may at any
time and from time to time exercise any and all rights and duties of the Committee under the Plan
and this Agreement.

     22. Resolution of Disputes. Any dispute or disagreement which may arise under, or as a
result of, or in any way related to, the interpretation, construction or application of this
Agreement shall be determined by the Committee. Any determination made hereunder shall be final,
binding and conclusive on the Participant and Corporation for all purposes.

     23. Data Privacy Consent. As a condition of the grant of the Restricted Units, the
Participant hereby consents to the collection, use and transfer of personal data as described in
this paragraph. The Participant understands that the Corporation and its subsidiaries hold certain
personal information about the Participant, including name, home address and telephone number, date
of birth, social security number, salary, nationality, job title, ownership interests or
directorships held in the Corporation or its subsidiaries, and details of all restricted units or
other equity awards or other entitlements to shares of common stock awarded, cancelled, exercised,
vested or unvested (“Data”). The Participant further understands that the Corporation and its
subsidiaries will transfer Data among themselves as necessary for the purposes of implementation,
administration and management of the Participant’s participation in the Plan, and that the
Corporation and any of its subsidiaries may each further transfer Data to any third parties
assisting the Corporation in the implementation, administration and management of the Plan. The
Participant understands that these recipients may be located in the European Economic Area or
elsewhere, such as the United States. The Participant hereby authorizes them to receive, possess,
use, retain and

5

 

transfer such Data as may be required for the administration of the Plan or the subsequent
holding of shares of common stock on the Participant’s behalf, in electronic or other form, for the
purposes of implementing, administering and managing the Participant’s participation in the Plan,
including any requisite transfer to a broker or other third party with whom the Participant may
elect to deposit any shares of common stock acquired under the Plan. The Participant may, at any
time, view such Data or require any necessary amendments to it.

     24. Limitation on Rights; No Right to Future Grants; Extraordinary Item of
Compensation. By accepting this Agreement and the grant of the Restricted Units contemplated
hereunder, the Participant expressly acknowledges that (a) the Plan is discretionary in nature and
may be suspended or terminated by the Corporation at any time; (b) the grant of Restricted Units is
a one-time benefit that does not create any contractual or other right to receive future grants of
restricted units, or benefits in lieu of restricted units; (c) all determinations with respect to
future grants of restricted units, if any, including the grant date, the number of Shares granted
and the restricted period, will be at the sole discretion of the Corporation; (d) the Participant’s
participation in the Plan is voluntary; (e) the value of the Restricted Units is an extraordinary
item of compensation that is outside the scope of the Participant’s employment contract, if any,
and nothing can or must automatically be inferred from such employment contract or its
consequences; (f) grants of restricted units are not part of normal or expected compensation for
any purpose and are not to be used for calculating any severance, resignation, redundancy, end of
service payments, bonuses, long-service awards, pension or retirement benefits or similar payments,
and the Participant waives any claim on such basis; and (g) the future value of the underlying
Shares is unknown and cannot be predicted with certainty. In addition, the Participant understands,
acknowledges and agrees that the Participant will have no rights to compensation or damages related
to restricted unit proceeds in consequence of the termination of the Participant’s employment for
any reason whatsoever and whether or not in breach of contract.

     25. Award Administrator. The Corporation may from time to time to designate a third
party (an “Award Administrator”) to assist the Corporation in the implementation, administration
and management of the Plan and any Restricted Units granted thereunder, including by sending Award
Letters on behalf of the Corporation to Participants, and by facilitating through electronic means
acceptance of Restricted Unit Agreements by Participants.

     26. Section 409A. This Agreement is intended to comply with the provisions of Section
409A of the Code and the regulations promulgated thereunder. Without limiting the foregoing, the
Committee shall have the right to amend the terms and conditions of this Agreement in any respect
as may be necessary or appropriate to comply with Section 409A of the Code or any regulations
promulgated thereunder, including without limitation by delaying the issuance of the Shares
contemplated hereunder.

     27. Book Entry Delivery of Shares. Whenever reference in this Agreement is made to
the issuance or delivery of certificates representing one or more Shares, the Corporation may elect
to issue or deliver such Shares in book entry form in lieu of certificates.

6

 

     28. Acceptance. This Agreement shall not be enforceable until it has been executed by
the Participant. In the event the Corporation has designated an Award Administrator, the
acceptance (including through electronic means) of the Restricted Unit award contemplated by this
Agreement in accordance with the procedures established from time to time by the Award
Administrator shall be deemed to constitute the Participant’s acknowledgment and agreement to the
terms and conditions of this Agreement and shall have the same legal effect in all respects of the
Participant having executed this Agreement by hand.

	 	 	 	 	 
	 	By: 	 	L-3 COMMUNICATIONS HOLDINGS, INC.
 	 
	 	 	 	
 	 
	 	 	 	Michael T. Strianese 	 
	 	 	 	President and Chief Executive Officer 	 
	 
	 
	 	 	 	
 	 
	 	  	  	Steven M. Post
 	 
	 	 	 	Senior Vice President, General Counsel and
   Corporate Secretary 	 
	 	 	 	 

	 	 	 	 	 
	Acknowledged and Agreed
as of the date first written above:

 	 	 
	 
	Participant Signature
 	 	 
	 	 	 
	 	 	 
	 

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