Document:

EX-10.4

 EXHIBIT 10.4 

This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933. 

LOCKHEED MARTIN CORPORATION 

SUPPLEMENTAL SAVINGS PLAN 

(Amended and Restated Generally Effective January 1, 2015) 

ARTICLE I 
 PURPOSES OF
THE PLAN 
 The purposes of the Lockheed Martin Corporation Supplemental Savings Plan (the “Supplemental Savings Plan” or
“Plan”) are to provide certain key management employees of Lockheed Martin Corporation and its Subsidiaries (as such term is defined herein) (the “Company”) the opportunity to defer compensation that cannot be contributed under
the Lockheed Martin Salaried Corporation Savings Plan (the “Qualified Savings Plan”) because of the limitation of Code section 402(g), and to provide those employees with matching credits equal to the matching contributions that would have
been made by the Company on their behalf under the Qualified Savings Plan if the amounts deferred had been contributed to the Qualified Savings Plan. 

The Plan was amended and restated, effective January 1, 2005, in order to comply with the requirements of Code section 409A. The 2005
amendment and restatement of the Plan, as further amended and restated from time to time, applies only to the portion of a Participant’s Account Balance (and any earnings or losses attributable to those amounts) that is deferred or becomes
vested on or after January 1, 2005. Notwithstanding anything to the contrary herein, the portion of a Participant’s Account Balance that was deferred and vested prior to January 1, 2005 (and any earnings or losses attributable to
those amounts) shall be governed by the terms of the Plan in effect on December 31, 2004, which is attached hereto as Appendix A. 

Since 2005, the Plan has been amended and restated from time to time to provide for the treatment of Roth 401(k) contributions, to make
installment distribution options consistent among the nonqualified plans sponsored by the Company, to clarify additional provisions in accordance with the final Treasury regulations issued under Code section 409A, to modify the eligibility
provisions of the plan, and to make other administrative clarifications. The Plan was amended and restated, effective November 15, 2010, to eliminate deferrals under the Plan based on Compensation in excess of the limitations of Code section
401(a)(17) or 415(c)(1)(A) and to clarify additional provisions in accordance with the final Treasury regulations issued under Code section 409A. The Plan was amended and restated, effective February 23, 2011, to make distribution options
consistent among the nonqualified plans sponsored by the Company. The Plan is hereby amended and restated to name the Company’s current incentive plans for select management or highly compensated employees listed in the Plan’s eligibility
provisions and to clarify the Plan’s eligibility provisions. The Plan is hereby amended and restated, generally effective January 1, 2015, to provide the Committee with the discretionary authority to cash out Account Balances that do not
exceed the limit under Code section 402(g) for the year in which the cash out occurs in circumstances permitted under Code section 409A. 

 ARTICLE II 

DEFINITIONS 
 Unless the
context indicates otherwise, the following words and phrases shall have the meanings hereinafter indicated: 
 1. ACCOUNT — The
bookkeeping account maintained by the Company for each Participant which is credited with the Participant’s Deferred Compensation, Matching Credits, and earnings (or losses) attributable to the Investment Options selected by the Participant,
and which is debited to reflect distributions. The portions of a Participant’s Account allocated to different Investment Options will be accounted for separately. 

2. ACCOUNT BALANCE — The total amount credited to a Participant’s Account at any time, including the portions of the Account
allocated to each Investment Option. 
 3. BENEFICIARY — The person or persons designated by the Participant as his or her beneficiary
under the Qualified Savings Plan. 
 4. BOARD — The Board of Directors of Lockheed Martin Corporation. 

5. CODE — The Internal Revenue Code of 1986, as amended. 

6. COMMITTEE — The committee described in Section 1 of Article IX. 

7. COMPANY — Lockheed Martin Corporation and its Subsidiaries (as such term is defined herein). 

8. COMPANY STOCK INVESTMENT OPTION — The Investment Option under which the Participant’s Account is credited as if invested under the
investment option in the Qualified Savings Plan for the common stock of the Company. 
 9. COMPENSATION — An employee’s base salary
from the Company, as defined in the Qualified Savings Plan. 
 10. DEFERRAL AGREEMENT — The written agreement executed by an Eligible
Employee on the form provided by the Company under which the Eligible Employee elects to defer Compensation for a Year in accordance with Article III. 

11. DEFERRED COMPENSATION — The amount of Compensation deferred and credited to a Participant’s Account under the Supplemental
Savings Plan. 

  
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 12. ELIGIBLE EMPLOYEE – 

(a) A salaried employee: 
 (i) who
is eligible to participate in the Qualified Savings Plan as of the thirtieth (30th) day preceding the last day on which a Deferral Agreement may be made for a Year, and 

(ii) (a) who is a participant in the Lockheed Martin Corporation Management Incentive Compensation Plan, the Applied NanoStructured Solutions,
LLC Management Incentive Compensation Plan, or the Lockheed Martin Corporation Attorney Incentive Plan, as of November 1 of the Year preceding the Year for which a Deferral Agreement is to take effect, or 

(b) whose annual rate of Compensation equals or exceeds $200,000 (increased by $5,000 for each Year after 2009 for employees who have no
Deferral Agreement in effect) as of November 1 of the Year preceding the Year for which a Deferral Agreement is to take effect, and 

(iii) who satisfies such additional requirements for participation in this Supplemental Savings Plan as the Committee may from time to time
establish. In the exercise of its authority under this provision, the Committee shall limit participation in the Plan to employees whom the Committee believes to be a select group of management or highly compensated employees within the meaning of
Title I of the Employee Retirement Income Security Act of 1974, as amended. For example, the Committee may limit participation in the Plan to employees who are engaged full-time in activities related to the management of the Corporation or its
Subsidiaries, affiliates, programs, or employees. 
 (b) Notwithstanding Article II, section 12(a)(ii)(b) above, an employee who was an
active Participant in the Plan in 2009, shall remain an Eligible Employee on November 1, 2009 (and November 1 of each succeeding year), provided that (a) his or her annual rate of Compensation on November 1, 2009 (and
November 1 of each succeeding year) equals or exceeds $150,000, (b) he or she continues to participate in the Plan for each Year after 2009, and (c) he or she satisfies section (iii) above (hereinafter referred to as
“grandfathered Participants”). If such a grandfathered Participant cancels his or her Deferral Agreement for any Year after 2009 (including due to termination of employment), such grandfathered Participant shall no longer be an Eligible
Employee until such time as he or she has satisfied Article II, section 12(a)(i), (ii), and (iii) above. 
 13. EXCHANGE ACT — The
Securities Exchange Act of 1934. 
 14. INVESTMENT OPTION — A measure of investment return pursuant to which Deferred Compensation
credited to a Participant’s Account shall be further credited with earnings (or losses). The Investment Options available under this Supplemental Savings Plan shall correspond to the investment options available under the Qualified Savings Plan
(other than the ESOP Fund or the Self-Managed Account, which are not available under this Plan). 

  
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 15. MATCHING CREDIT — Any amount credited to a Participant’s Account under Article IV.

 16. PARTICIPANT — An Eligible Employee for whom Compensation has been deferred under this Supplemental Savings Plan; the term shall
include a current or former employee whose Account Balance has not been fully distributed. 
 17. QUALIFIED SAVINGS PLAN — The Lockheed
Martin Corporation Salaried Savings Plan or any successor plan. 
 18. SECTION 16 PERSON — A Participant who at the relevant time is
subject to the reporting and short-swing liability provisions of Section 16 of the Exchange Act. 
 19. TERMINATION OF EMPLOYMENT —
A separation from service as such term is defined in Code section 409A and the regulations thereunder. 
 20. SUBSIDIARY — 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 corporation), 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. 
 21. SUPPLEMENTAL SAVINGS
PLAN — The Lockheed Martin Corporation Supplemental Savings Plan, which was originally adopted by the Board of Directors of Lockheed Corporation, effective January 1, 1984, as the Lockheed Corporation Supplemental Savings Plan, and which
was amended and restated (and re-named) pursuant to action of the Board on July 25, 1996, and as further amended from time to time. 

22. YEAR — The calendar year. 

ARTICLE III 
 ELECTION
OF DEFERRED AMOUNT 
 1. Timing of Deferral Elections. An Eligible Employee may elect to defer Compensation for a Year by
executing and delivering to the Company a Deferral Agreement by the deadline established by the Committee or its delegate (no later than the end of the immediately preceding Year). An Eligible Employee’s Deferral Agreement shall be irrevocable
when delivered to the Company and shall remain irrevocably in effect for all succeeding Years, except that the Deferral Agreement may be modified or revoked with respect to any succeeding Year by the Eligible Employee’s execution and delivery
to the Company of a new or modified Deferral Agreement by the deadline established by the Committee or its delegate (no later than the end of the Year immediately preceding such succeeding Year). 

2. Amount of Deferred Compensation. Unless an Eligible Employee elects to make no deferral for a Year, the Eligible Employee’s
Deferred Compensation for a Year shall equal (i) his or her Compensation from the time when his or her Deferral Agreement takes effect during 

  
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the Year (as specified under Section 3 of this Article III) until the last day of the Year, multiplied by (ii) the percentage of Compensation that the Eligible Employee has elected to
contribute to the Qualified Savings Plan (whether in the form of pre-tax salary reduction contributions, Roth 401(k) contributions, after-tax contributions, or a combination thereof) for that Year. An Eligible Employee who has elected to make a
deferral for a Year under this Supplemental Savings Plan shall be precluded from modifying his or her rate of contributions to the Qualified Savings Plan for that Year after the date on which his or her Deferral Agreement for that Year (including
any continuing Deferral Agreement) has become irrevocable under Section 1 of this Article III. 
 3. Time when Deferral Agreement
Takes Effect. The Eligible Employee’s Deferral Agreement shall take effect with respect to Compensation for a Year after the Eligible Employee’s pre-tax salary reduction contributions and/or Roth 401(k) contributions, if applicable,
under the Qualified Savings Plan for such Year equal the applicable limit under Code section 402(g). An Eligible Employee’s Deferral Agreement shall first take effect and apply to that portion of Compensation for a Year earned by the Eligible
Employee for a particular payroll period that exceeds the amount at which, or with respect to which, the triggering event occurs. 

ARTICLE IV 
 MATCHING
CREDITS 
 The Company shall credit to the Account of a Participant as Matching Credits the same percentage of the Participant’s
Deferred Compensation as it would have contributed as matching contributions to the Qualified Savings Plan if the amount of the Participant’s Deferred Compensation had been contributed as pre-tax salary reduction, Roth 401(k), or after-tax
contributions to the Qualified Savings Plan. 
 ARTICLE V 

CREDITING OF ACCOUNTS 
 1.
Crediting of Deferred Compensation. Deferred Compensation shall be credited to a Participant’s Account as of the day on which such amount would have been credited to the Participant’s account under the Qualified Savings Plan if the
Participant’s Deferred Compensation had been contributed as pre-tax salary reduction, Roth 401(k), or after-tax contributions to the Qualified Savings Plan. 

2. Crediting of Matching Credits. Matching Credits shall be credited to a Participant’s Account as of the day on which the Deferred
Compensation to which they relate is credited under Section 1. 
 3. Crediting of Earnings. Earnings (or losses) shall be
credited to a Participant’s Account based on the Investment Option or Options to which his or her Account has been allocated, beginning with the day as of which any amounts (or any reallocation of amounts) are credited to the Participant’s
Account. Any amount distributed from a Participant’s Account shall 

  
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be credited with earnings (or losses) through the date that is four (4) business days before the date on which the distribution is made. The manner in which earnings (or losses) are credited
under each of the Investment Options shall be determined in the same manner as under the Qualified Savings Plan. 
 4. Selection of
Investment Options. A Participant may elect to allocate his or her Account among the Investment Options available under the Qualified Savings Plan (other than the options designated as the ESOP Fund or the Self-Managed Account). The procedures
for directing allocations and reallocations among the Investment Options in the Supplemental Savings Plan (including the procedures relating to timing, frequency, amount, and the investment of Matching Credits) shall be the same as the procedures
for making allocations under the Qualified Savings Plan. In the event a Participant does not make an investment allocation for the Supplemental Savings Plan, his elections will be deemed to be the elections made by the Participant in the Qualified
Savings Plan (except that an election for the ESOP Fund or the Self-Managed Account shall be disregarded, and such amounts shall be allocated to the default investment option applicable to the Qualified Savings Plan until reallocated by the
Participant). 
 ARTICLE VI 

PAYMENT OF BENEFITS 
 1.
General. The Company’s liability to pay benefits to a Participant or Beneficiary under this Supplemental Savings Plan shall be measured by and shall in no event exceed the Participant’s Account Balance, which shall be fully vested
and nonforfeitable at all times. All benefit payments shall be made in cash and, except as otherwise provided, shall reduce allocations to the Investment Options in the same proportions that the Participant’s Account Balance is allocated among
those Investment Options. 
 2. Commencement of Payment. The payment of benefits to a Participant shall commence as soon as
administratively feasible (but no more than 90 days) following the Participant’s Termination of Employment with the Company. Notwithstanding the foregoing, benefits paid under this Plan to a Participant who is reasonably determined by the
Company to be a “specified employee” within the meaning of Code section 409A(a)(2)(B)(i), shall not commence before six (6) months following the month in which the Participant terminates employment. 

3. Form of Payment. At the time an Eligible Employee first completes a Deferral Agreement, he or she shall elect the form of payment of
his or her Account Balance from among the following options: 
 (a) A lump sum. 

  
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 (b) Annual payments, as designated by the Participant for a period not to exceed 25 years (or 25
annual payments). The amount of each annual payment shall be determined by dividing the Participant’s Account Balance on the date such payment is processed by the number of years remaining in the designated installment period. 

Such election shall be irrevocable except as provided in Section 4 of this Article 6. Such election shall be made in writing in the form
and manner designated by the Company. Notwithstanding the foregoing, if the Account Balance of a Participant who is entitled to begin payment equals $10,000 or less, the Participant’s Account Balance shall be paid in a single lump sum payment
in full discharge of all liabilities with respect to such benefits. 
 Further notwithstanding the foregoing, if at any time the Account
Balance of a Participant who is not an active employee of the Corporation and who is entitled to begin payment or who has begun payment pursuant to an annual installment payment election under Section 3(b) is not greater than the applicable
dollar limit under Code section 402(g)(1)(B) for the calendar year, then the Claims Administrator (or its delegate) may determine, in writing, that the Company shall pay the Participant’s Account Balance in a single lump sum payment, provided
that the payment (I) results in termination and liquidation of the entirety of the Participant’s interest under the Plan and any other agreement, program or arrangement that is treated as a single nonqualified deferred compensation plan
under Treas. Reg. § 1.409A-1(c)(2) with respect to the Participant and (II) is not greater than the applicable dollar amount under Code section 402(g)(1)(B) for the year in which the lump sum payment is made. 

4. Prospective Change of Payment Election. 

(a) A Participant may modify his or her payment election at the time the Participant enters into a Deferral Agreement for a Year. Any such
modification shall apply to all amounts credited to the Participant’s Account under this Supplemental Savings Plan. 
 (b) In the event
a Participant does not make a valid election with respect to the form of benefit, the Participant will be deemed to have elected that payment of benefits be made in a lump sum. 

(c) A Participant’s election (including a “deemed election” in accordance with the preceding paragraph) shall remain in effect
unless and until such election is modified by a subsequent election in accordance with (d) below. 
 (d) Notwithstanding anything to the
contrary in this Article VI, a Participant may make a new election with respect to the commencement of payment and form of payment. A new election under this section shall be made by executing and delivering to the Company an election in such form
as prescribed by the Company. To constitute a valid election by a Participant making a prospective change to a previous election, (i) the prospective election must be executed and delivered to the Company at least twelve (12) months before
the Participant’s Termination of Employment, and (ii) the first payment must be delayed by at least sixty (60) months from the date the first payment would be due under the Participant’s previous election, and (iii) such
change in election shall not be given effect until twelve (12) months from the date that the change in election is delivered to the Company. In the event an election fails to satisfy the provisions set forth in this paragraph, such election
shall be void and, if such an election is void, payment shall be made in accordance with the most recent election which was valid. 

  
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 (e) Notwithstanding the above, for periods prior to January 1, 2009 (or such later date as
may be provided by the Internal Revenue Service in guidance of general applicability), the Senior Vice President, Human Resources may provide alternative rules for elections with respect to the commencement of payment and form of payment that
conform to the rules provided in Notice 2005-1, and subsequent Internal Revenue Service guidance providing transition relief under Code section 409A. 

5. Death Benefits. Upon the death of a Participant before a complete distribution of his or her Account Balance, the Account Balance
will be paid to the Participant’s Beneficiary in an immediate lump sum. Such lump sum shall be paid as soon as administratively practicable (but no later than 90 days) after the death of the Participant. 

6. Acceleration Upon Conflict of Interest. Notwithstanding a Participant’s form of payment election under Section 3 of this
Article VI, if, following a Participant’s termination of employment with the Company, the Participant takes a position (or accepts a position) with a governmental entity, agency, or instrumentality and that employer has determined or indicated
that the Participant’s continued participation in the Plan may constitute a conflict of interest precluding the Participant from continuing in his position (or from accepting an offered position) with that employer or subjecting the Participant
to penalty, sanction, or otherwise limiting the Participant’s responsibilities for that employer, then, to the extent reasonably necessary, the Participant’s Account Balance shall be distributed to him or her in a lump sum as soon as
practical (but no later than 90 days) following the later of (i) the date on which the Participant commences employment with the government employer; or (ii) the date on which it is determined that the conflict of interest may exist;
provided, however, that if a distribution in accordance with the provisions of this Section 6 from the portion of the Participant’s Account allocated to the Company Stock Investment Option would otherwise result in a nonexempt short-swing
transaction under Section 16(b) of the Exchange Act, the date of distribution with respect to such portion to such Section 16 Person shall be delayed until the earliest date upon which the Company reasonably anticipates that the
distribution either would not result in a nonexempt short-swing transaction or would otherwise not result in liability under Section 16(b) of the Exchange Act. This Section 6 of Article VI shall apply, however, only to the extent that the
accelerated payment upon a conflict of interest determination conforms to Code section 409A. 
 7. Acceleration upon Change in
Control. 
 (a) Notwithstanding any other provision of this Supplemental Savings Plan, the Account Balance of each Participant shall be
distributed in a single lump sum within fifteen (15) calendar days following a “Change in Control.” 
 (b) For purposes of
this Supplemental Savings Plan, a Change in Control shall include and be deemed to occur upon the following events: 
 (1) A tender offer or
exchange offer is consummated for the ownership of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding voting securities entitled to vote in the election of directors of the Company.

  
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 (2) The Company is merged, combined, consolidated, recapitalized or otherwise reorganized with
one or more other entities that are not the Company’s Subsidiaries and, as a result of the merger, combination, consolidation, recapitalization or other reorganization, less than 75% of the outstanding voting securities of the surviving or
resulting corporation shall immediately after the event be owned in the aggregate by the stockholders of the Company (directly or indirectly), determined on the basis of record ownership as of the date of determination of holders entitled to vote on
the action (or in the absence of a vote, the day immediately prior to the event). 
 (3) Any person (as this term is used in Sections
3(a)(9) and 13(d)(3) of the Exchange Act, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities entitled to vote in the election of directors of the Company. 

(4) At any time within any period of two years after a tender offer, merger, combination, consolidation, recapitalization, or other
reorganization or a contested election, or any combination of these events, the “Incumbent Directors” shall cease to constitute at least a majority of the authorized number of members of the Board. For purposes hereof, “Incumbent
Directors” shall mean the persons who were members of the Board immediately before the first of these events and the persons who were elected or nominated as their successors or pursuant to increases in the size of the Board by a vote of at
least three-fourths of the Board members who were then Board members (or successors or additional members so elected or nominated). 
 (5)
The stockholders of the Company approve a plan of liquidation and dissolution or the sale or transfer of substantially all of the Company’s business and/or assets as an entirety to an entity that is not a Company Subsidiary. 

Notwithstanding the foregoing, no distribution shall be made solely on account of a Change in Control and prior to the benefit commencement
date specified in Section 2 of Article VI unless the Change in Control is an event qualifying for a distribution of deferred compensation under both the definition of Change in Control in this Plan and in Section 409A(a)(2)(A)(v) of the
Code. 
 (c) Notwithstanding the provisions of Section 7(a), if a distribution in accordance with the provisions of Section 7(a)
would result in a nonexempt transaction under Section 16(b) of the Exchange Act with respect to any Section 16 Person, then the date of distribution to such Section 16 Person shall be delayed until the earliest date upon which the
distribution either would not result in a nonexempt transaction or would otherwise not result in liability under Section 16(b) of the Exchange Act. 

  
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 (d) This Section 7 shall apply only to a Change in Control of Lockheed Martin Corporation
and shall not cause immediate payout of an Account Balance in any transaction involving the Company’s sale, liquidation, merger, or other disposition of any Company Subsidiary. 

(e) The Committee may cancel or modify this Section 7 at any time prior to a Change in Control. In the event of a Change in Control, this
Section 7 shall remain in force and effect, and shall not be subject to cancellation or modification for a period of five years, and any defined term used in Section 7 shall not, for purposes of Section 7, be subject to cancellation
or modification during the five year period. 
 8. Deductibility of Payments. Subject to the provisions of Code section 409A, in the
event that the Company reasonably anticipates that the payment of benefits in accordance with the Participant’s election under Section 3 of this Article VI would prevent the Company from claiming an income tax deduction with respect to any
portion of the benefits paid under Code section 162(m), the Committee shall have the right to delay the timing of distributions from the Participant’s Account as necessary to maximize the Company’s tax deductions. In the exercise of its
discretion to adopt a delayed distribution schedule, the Committee shall undertake to have distributions made at such times and in such amounts that the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made
during such year, the deduction will not be barred by Code section 162(m) or upon a Termination of Employment in accordance with Treasury Regulation section 1.409A-2(b)(7)(i), consistent with the objective of maximum deductibility for the Company.
The Committee shall have no authority to reduce a Participant’s Account Balance or to pay aggregate benefits less than the Participant’s Account Balance in the event that all or a portion thereof would not be deductible by the Company. All
scheduled payments under this Plan and any other plan of deferred compensation that would be aggregated with this Plan must be delayed in order for any such payment to be delayed pursuant to this Section 8. 

9. Change of Law. Notwithstanding anything herein to the contrary, if the Committee determines in good faith, based on consultation with
counsel and in accordance with the requirements of Code section 409A, that the Federal income tax treatment or legal status of this Supplemental Savings Plan has or may be adversely affected by a change in the Internal Revenue Code, Title I of the
Employee Retirement Income Security Act of 1974, or other applicable law or by an administrative or judicial construction thereof, the Committee may direct that the Accounts of affected Participants or of all Participants be distributed as soon as
practicable after such determination is made, to the extent deemed necessary or advisable by the Committee to cure or mitigate the consequences, or possible consequences of, such change in law or interpretation thereof. 

10. Tax Withholding. To the extent required by law, the Company shall withhold from benefit payments hereunder, or with respect to any
amounts credited to a Participant’s Account hereunder, any Federal, state, or local income or payroll taxes required to be withheld and shall furnish the recipient and the applicable government agency or agencies with such reports, statements,
or information as may be legally required. However, the amount of Deferred Compensation or Matching Credits to be credited to a Participant’s Account will not be reduced or adjusted by the amount of any tax that the Company is required to
withhold with respect thereto. 

  
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 ARTICLE VII 

EXTENT OF PARTICIPANTS’ RIGHTS 

1. Unfunded Status of Plan. This Supplemental Savings Plan constitutes a mere contractual promise by the Company to make payments in
the future, and each Participant’s rights shall be those of a general, unsecured creditor of the Company. No Participant shall have any beneficial interest in any specific assets that the Company may hold or set aside in connection with this
Supplemental Savings Plan. Notwithstanding the foregoing, to assist the Company in meeting its obligations under this Supplemental Savings Plan, the Company may set aside assets in a trust or trusts described in Revenue Procedure 92-64, 1992-2 C.B.
422 (generally known as a “rabbi trust”), and the Company may direct that its obligations under this Supplemental Savings Plan be satisfied by payments out of such trust or trusts. It is the Company’s intention that this Supplemental
Savings Plan be unfunded for Federal income tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. 

2. Nonalienability of Benefits. A Participant’s rights under this Plan shall not be assignable or transferable and any purported
transfer, assignment, pledge or other encumbrance or attachment of any payments or benefits under this Plan, or any interest therein shall not be permitted or recognized, other than the designation of, or passage of payment rights to, a Beneficiary.
Notwithstanding, any portion of a Participant’s benefit under this Plan may be paid to a spouse, former spouse, or child pursuant to the terms of a domestic relations order (which shall be interpreted and administered in accordance with Code
sections 414(p)(1)(B) and 409A), provided that the form of payment designated in such order is a lump sum payment described in Section 3(a) of Article VI of this Plan. 

ARTICLE VIII 
 AMENDMENT
OR TERMINATION 
 1. Amendment. The Board or its authorized delegate may amend, modify, suspend or discontinue this Supplemental
Savings Plan at any time subject to any shareholder approval that may be required under applicable law, provided, however, that no such amendment shall have the effect of reducing a Participant’s Account Balance or postponing the time when a
Participant is entitled to receive a distribution of his or her Account Balance. 
 2. Termination. The Board reserves the right to
terminate this Plan at any time and to pay all Participants their Account Balances in any form and at such times that the Board reasonably determines in its discretion is appropriate and conforms to the requirements of Code section 409A; provided,
however, that if a distribution in accordance with the provisions of this Section 2 would otherwise result in a nonexempt short-swing transaction under Section 16(b) of the Exchange Act, the date of distribution with respect to any
Section 16 Person shall be delayed until the earliest date upon which the distribution either would not result in a nonexempt transaction or would otherwise not result in liability under Section 16(b) of the Exchange Act. 

  
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 ARTICLE IX 

ADMINISTRATION 
 1. The
Committee. This Supplemental Savings Plan shall be administered by the Management Development and Compensation Committee of the Board or such other committee of the Board as may be designated by the Board and constituted so as to permit this
Supplemental Savings Plan to comply with the requirements of Rule 16b-3 of the Exchange Act. The members of the Committee shall be designated by the Board. A majority of the members of the Committee (but not fewer than two) shall constitute a
quorum. The vote of a majority of a quorum or the unanimous written consent of the Committee shall constitute action by the Committee. The Committee and the Claims Administrator shall have full authority to interpret the Plan, and interpretations of
the Plan by the Committee or the Claims Administrator shall be final and binding on all parties. Notwithstanding anything contained in the Plan or in any document issued under the Plan, it is intended that the Plan will at all times conform to the
requirements of Code section 409A and any regulations or other guidance issued thereunder, and that the provisions of the Plan will be interpreted to meet such requirements. If any provision of the Plan is determined not to conform to such
requirements, the Plan shall be interpreted to omit such offending provision. 
 2. Delegation and Reliance. The Committee may
delegate to the officers or employees of the Company the authority to execute and deliver those instruments and documents, to do all acts and things, and to take all other steps deemed necessary, advisable or convenient for the effective
administration of this Supplemental Savings Plan in accordance with its terms and purpose, except that the Committee has not delegated (and may not delegate) any authority the delegation of which would cause this Supplemental Savings Plan to fail to
satisfy the applicable requirements of Rule 16b-3. In making any determination or in taking or not taking any action under this Supplemental Savings Plan, the Committee or its delegate may obtain and rely upon the advice of experts, including
professional advisors to the Company. No member of the Committee or officer of the Company who is a Participant hereunder may participate in any decision specifically relating to his or her individual rights or benefits under the Supplemental
Savings Plan. 
 3. Exculpation and Indemnity. Neither the Company nor any member of the Board or of the Committee, nor any other
person participating in any determination of any question under this Supplemental Savings Plan, or in the interpretation, administration or application thereof, shall have any liability to any party for any action taken or not taken in good faith
under this Supplemental Savings Plan or for the failure of the Supplemental Savings Plan or any Participant’s rights under the Supplemental Savings Plan to achieve intended tax consequences, to qualify for exemption or relief under
Section 16 of the Exchange Act and the rules thereunder, or to comply with any other law, compliance with which is not required on the part of the Company. 

  
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 4. Facility of Payment. If a minor, person declared incompetent, or person incapable of
handling the disposition of his or her property is entitled to receive a benefit, make an application, or make an election hereunder, the Committee or the Claims Administrator may direct that such benefits be paid to, or such application or election
be made by, the guardian, legal representative, or person having the care and custody of such minor, incompetent, or incapable person. Any payment made, application allowed, or election implemented in accordance with this Section shall completely
discharge the Company and the Committee (or the Claims Administrator) from all liability with respect thereto. 
 5. Proof of Claims.
The Committee or the Claims Administrator may require proof of the death, disability, incompetency, minority, or incapacity of any Participant or Beneficiary and of the right of a person to receive any benefit or make any application or election.

 6. Claim Procedures. The procedures when a claim under this Plan is wholly or partially denied by Claims Administrator are as
follows: 
 (a) The Claims Administrator shall, within 90 days after receipt of a claim, furnish to claimant a written notice setting forth,
in a manner calculated to be understood by claimant: (1) the specific reason or reasons for the denial; (2) specific reference to pertinent Plan provisions on which the denial is based; (3) a description of any additional materials or
information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (4) an explanation of the steps to be taken if the claimant wishes to have the denial reviewed; and (5) a
statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse determination on review. The 90 day period may be extended for not more than an additional 90 days if special circumstances make such
an extension necessary. The Claims Administrator shall give the claimant, before the end of the initial 90 day period, a written notice of such extension, stating such special circumstances and the date by which the Claims Administrator expects to
render a decision. 
 (b) By a written application filed with the Claims Administrator within 60 days after receipt by claimant of the
written notice described in paragraph (a), the claimant or his duly authorized representative may request review of the denial of his claim. 

(c) In connection with such review, the claimant or his duly authorized representative may submit issues, comments, documents, records and
other information relating to the claim for benefits to the Claims Administrator. In addition, the claimant will be provided, upon request and free of charge, reasonable access to and copies of all documents, records, or other information
“relevant” to claimant’s claim for benefits. A document, record, or other information is “relevant” if it: (1) was relied upon in making the benefit determination; (2) was submitted, considered or generated in the
course of making the benefit determination, without regard to whether such document, record or information was relied upon in making the benefit determination; or (3) demonstrates compliance with administrative processes and safeguards required
under Federal law. 

  
 13 

 (d) The Plan will provide an impartial review that takes into account all comments, records and
other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Claims Administrator shall make a decision and furnish such decision
in writing to the claimant within 60 days after receipt by the Claims Administrator of the request for review. This period may be extended to not more than 120 days after such receipt if special circumstances make such an extension necessary. The
claimant will be notified in writing prior to the expiration of the original 60 day period if such an extension is required, and such notice will include the reason for the extension and the date by which it is expected that a decision will be
reached. The decision on review shall be in writing, set forth in a manner calculated to be understood by the claimant and shall include: (1) the specific reasons for the decision; (2) specific reference to the pertinent Plan provisions on
which the decision is based; (3) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information “relevant” to the claimant’s
claim for benefits; (4) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; (5) a statement describing any voluntary
appeal procedures and the claimant’s right to obtain information about such procedures, if any; and (6) a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit
determination on review. 
 (e) If in the event that the reviewing committee must make a determination of disability in order to decide a
claim, the reviewing committee shall follow the special claims procedures for disability benefits described in Department of Labor Regulation section 2560.503-1(d). The reviewing committee shall render a decision within a reasonable time (not to
exceed 90 days) after the claimant’s request for review, rather than within 120 days as set forth in the above paragraph. 
 (f) The
Claims Administrator shall be the Lockheed Martin Corporation Savings Plan Administrative Committee. Notwithstanding the foregoing, with respect to claims and appeals brought by elected officers of the Company, the Claims Administrator shall be the
Committee. 
 ARTICLE X 

GENERAL AND MISCELLANEOUS PROVISIONS 

1. Neither this Supplemental Savings Plan nor a Participant’s Deferral Agreement, either singly or collectively, shall in any way
obligate the Company to continue the employment of a Participant with the Company, nor does either this Supplemental Savings Plan or a Deferral Agreement limit the right of the Company at any time and for any reason to terminate the
Participant’s employment. In no event shall this Plan or a Deferral Agreement, either singly or collectively, by their terms or implications constitute an employment contract of any nature whatsoever between the Company and a Participant. In no
event shall this Plan or a Deferral Agreement, either singly or collectively, by their terms or implications in any way limit the right of the Company to change an Eligible Employee’s compensation or other benefits. 

  
 14 

 2. Any amount credited to a Participant’s Account under this Supplemental Savings Plan shall
not be treated as compensation for purposes of calculating the amount of a Participant’s benefits or contributions under any pension, retirement, or other plan maintained by the Company, except as provided in such other plan. 

3. Any written notice to the Company referred to herein shall be made by mailing or delivering such notice to the Company at 6801 Rockledge
Drive, Bethesda, Maryland 20817, to the attention of the Senior Vice President, Human Resources. Any written notice to a Participant shall be made by delivery to the Participant in person, through electronic transmission, or by mailing such notice
to the Participant at his or her place of residence or business address. 
 4. In the event it should become impossible for the Company or
the Committee to perform any act required by this Plan, the Company or the Committee may perform such other act as it in good faith determines will most nearly carry out the intent and the purpose of this Supplemental Savings Plan. 

5. By electing to become a Participant hereunder, each Eligible Employee shall be deemed conclusively to have accepted and consented to all the
terms of this Supplemental Savings Plan and all actions or decisions made by the Company, the Board, or Committee with regard to the Supplemental Savings Plan. 

6. The provisions of this Supplemental Savings Plan and the Deferral Agreements hereunder shall be binding upon and inure to the benefit of the
Company, its successors, and its assigns, and to the Participants and their heirs, executors, administrators, and legal representatives. 

7. A copy of this Supplemental Savings Plan shall be available for inspection by Participants or other persons entitled to benefits under the
Plan at reasonable times at the offices of the Company. 
 8. The validity of this Supplemental Savings Plan or any of its provisions shall
be construed, administered, and governed in all respects under and by the laws of the State of Maryland, except as to matters of Federal law. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully effective. 
 9. This Supplemental Savings Plan and its operation,
including but not limited to, the mechanics of deferral elections, the issuance of securities, if any, or the payment of cash hereunder is subject to compliance with all applicable Federal and state laws, rules and regulations (including but not
limited to state and Federal insider trading, registration, reporting and other securities laws) and such other approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. 

  
 15 

 10. This Supplemental Savings Plan is intended to constitute an “excess benefit plan”
within the meaning of Rule 16b-3(b)(2) under the Securities Exchange Act of 1934, and it shall be construed and applied accordingly. It is the intent of the Company that this Supplemental Savings Plan satisfy and be interpreted in a manner, that, in
the case of Participants who are or may be Section 16 Persons, satisfies any applicable requirements of Rule 16b-3 of the Exchange Act or other exemptive rules under Section 16 of the Exchange Act and will not subject Section 16
Persons to short-swing profit liability thereunder. If any provision of this Supplemental Savings Plan would otherwise frustrate or conflict with the intent expressed in this Section 10, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of any remaining irreconcilable conflict with this intent, the provision shall be deemed disregarded. Similarly, any action or election by a Section 16 Person with
respect to the Supplemental Savings Plan to the extent possible shall be interpreted and deemed amended so as to avoid liability under Section 16 or, if this is not possible, to the extent necessary to avoid liability under Section 16,
shall be deemed ineffective. Notwithstanding anything to the contrary in this Supplemental Savings Plan, the provisions of this Supplemental Savings Plan may at any time be bifurcated by the Board or the Committee in any manner so that certain
provisions of this Supplemental Savings Plan are applicable solely to Section 16 Persons. Notwithstanding any other provision of this Supplemental Savings Plan to the contrary, if a distribution which would otherwise occur is prohibited or
proposed to be delayed because of the provisions of Section 16 of the Exchange Act or the provisions of the Supplemental Savings Plan designed to ensure compliance with Section 16, the Section 16 Person involved may affirmatively
elect in writing to have the distribution occur in any event; provided that the Section 16 Person shall concurrently enter into arrangements satisfactory to the Committee in its sole discretion for the satisfaction of any and all liabilities,
costs and expenses arising from this election. 
 ARTICLE XI 

EFFECTIVE DATE 
 This
amendment and restatement of the Supplemental Savings Plan shall generally become effective on January 1, 2015. Subsequent amendments to the Supplemental Savings Plan are effective as of the date stated in the amendment or the adopting
resolution. 
  

	
	LOCKHEED MARTIN CORPORATION
	
	 /s/ Patricia L. Lewis

	By: Patricia L. Lewis
	Senior Vice President, Human Resources
	
	 3/16/15

	Date

  
 16 

 APPENDIX A 

This Appendix A shall apply only to the portion of a Participant’s Account Balance (and any earnings or losses attributable to those
amounts) that was deferred and vested prior to January 1, 2005. This Appendix A shall not apply to the portion of a Participant’s Account Balance that is deferred or becomes vested on or after January 1, 2005 (and any earnings or
losses attributable to those amounts). 
 ARTICLE I 

PURPOSES OF THE PLAN 
 The
purposes of the Lockheed Martin Corporation Supplemental Savings Plan (the “Supplemental Savings Plan”) are to provide certain key management employees of Lockheed Martin Corporation and its subsidiaries (the “Company”) the
opportunity to defer compensation that cannot be contributed under the Lockheed Martin Salaried Savings Program (the “Qualified Savings Plan”) because of the limitations of Code section 401(a)(17), 402(g), or 415(c)(1)(A), and to provide
those employees with matching credits equal to the matching contributions that would have been made by the Company on their behalf under the Qualified Savings Plan if the amounts deferred had been contributed to the Qualified Savings Plan. 

ARTICLE II 
 DEFINITIONS

 Unless the context indicates otherwise, the following words and phrases shall have the meanings hereinafter indicated: 

1. ACCOUNT — The bookkeeping account maintained by the Company for each Participant which is credited with the Participant’s Deferred
Compensation, Matching Credits, and earnings (or losses) attributable to the Investment Options selected by the Participant, and which is debited to reflect distributions. The portions of a Participant’s Account allocated to different
Investment Options will be accounted for separately. 
 2. ACCOUNT BALANCE — The total amount credited to a Participant’s Account
at any time, including the portions of the Account allocated to each Investment Option. 
 3. BENEFICIARY — The person or persons
designated by the Participant as his or her beneficiary under the Qualified Savings Plan. 
 4. BOARD — The Board of Directors of
Lockheed Martin Corporation. 
 5. CODE — The Internal Revenue Code of 1986, as amended. 

  
 17 

 6. COMMITTEE — The committee described in Section 1 of Article IX. 

7. COMPANY — Lockheed Martin Corporation and its subsidiaries. 

8. COMPANY STOCK INVESTMENT OPTION — The Investment Option under which the Participant’s Account is credited as if invested under the
investment option in the Qualified Savings Plan for the common stock of the Company. 
 9. COMPENSATION — An employee’s base salary
from the Company, as defined in the Qualified Savings Plan. 
 10. DEFERRAL AGREEMENT — The written agreement executed by an Eligible
Employee on the form provided by the Company under which the Eligible Employee elects to defer Compensation for a Year. 
 11. DEFERRED
COMPENSATION — The amount of Compensation deferred and credited to a Participant’s Account under the Supplemental Savings Plan for a Year. 

12. ELIGIBLE EMPLOYEE — A salaried employee who is eligible to participate in the Qualified Savings Plan as of the thirtieth
(30th) day preceding the last day on which a Deferral Agreement may be made for a Year, and whose annual rate of Compensation equals or exceeds $150,000 as of November 1 of the Year preceding the Year for which a Deferral Agreement is to
take effect, and who satisfies such additional requirements for participation in this Supplemental Savings Plan as the Committee may from time to time establish. In the exercise of its authority under this provision, the Committee shall limit
participation in the Plan to employees whom the Committee believes to be a select group of management or highly compensated employees within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended. 

13. EXCHANGE ACT — The Securities Exchange Act of 1934. 

14. INVESTMENT OPTION — A measure of investment return pursuant to which Deferred Compensation credited to a Participant’s Account
shall be further credited with earnings (or losses). The Investment Options available under this Supplemental Savings Plan shall correspond to the investment options available under the Qualified Savings Plan. 

15. MATCHING CREDIT — Any amount credited to a Participant’s Account under Article IV. 

16. PARTICIPANT — An Eligible Employee for whom Compensation has been deferred under this Supplemental Savings Plan; the term shall
include a former employee whose Account Balance has not been fully distributed. 
 17. QUALIFIED SAVINGS PLAN — The Lockheed Martin
Salaried Savings Plan or any successor plan. 

  
 18 

 18. SECTION 16 PERSON — A Participant who at the relevant time is subject to the reporting
and short-swing liability provisions of Section 16 of the Exchange Act. 
 19. SUPPLEMENTAL SAVINGS PLAN — The Lockheed Martin
Corporation Supplemental Savings Plan, which was originally adopted by the Board of Directors of Lockheed Corporation, effective January 1, 1984, as the Lockheed Corporation Supplemental Savings Plan, and which has been amended and restated
(and re-named) pursuant to action of the Board on July 25, 1996, and as further amended from time to time. 
 20. YEAR — The
calendar year. 
 ARTICLE III 

ELECTION OF DEFERRED AMOUNT 

1. Timing of Deferral Elections. An Eligible Employee may elect to defer Compensation for a Year by executing and delivering to the
Company a Deferral Agreement no later than November 30 of the preceding Year. An Eligible Employee’s Deferral Agreement shall be irrevocable when delivered to the Company and shall remain irrevocably in effect for all succeeding Years,
except that the Deferral Agreement may be modified or revoked with respect to any succeeding year by the Eligible Employee’s execution and delivery to the Company of a new or modified Deferral Agreement on or before November 30 of such
succeeding Year. Notwithstanding the foregoing, deferral elections for the 1997 Year may be made as late as February 28, 1997, in recognition of the fact that the right to enter into Deferral Agreements for the 1997 Year has generally been
suspended pending the distribution of prospectuses for the Plan, as amended and restated; provided, however, no Deferral Agreement for the 1997 Year shall take effect, or apply to Compensation earned, before the date that the Eligible
Employee’s Deferral Agreement is executed and delivered to the Company. 
 2. Amount of Deferred Compensation. Unless an Eligible
Employee elects to make no deferral for a Year, the Eligible Employee’s Deferred Compensation for a Year shall equal (i) his or her Compensation from the time when his or her Deferral Agreement takes effect during the Year (as elected
under Section 3 of this Article III) until the last day of the Year, multiplied by (ii) the percentage of Compensation that the Eligible Employee has elected to contribute to the Qualified Savings Plan (whether in the form of pre-tax
salary reduction contributions, after-tax contributions, or a combination thereof) for that Year. An Eligible Employee who has elected to make a deferral for a Year under this Supplemental Savings Plan shall be precluded from modifying his or her
rate of contributions to the Qualified Savings Plan for that Year after the date on which his or her Deferral Agreement for that Year (including any continuing Deferral Agreement) has become irrevocable under Section 1 of this Article III. 

3. Time when Deferral Agreement Takes Effect. The Eligible Employee may elect to have his or her Deferral Agreement take effect after
the occurrence of either of the following triggering events: 

  
 19 

 (a) the Eligible Employee’s pre-tax salary reduction contributions under the
Qualified Savings Plan for the Year equal the applicable limit under Code section 402(g), or 
 (b) the Compensation paid to
the Eligible Employee for the Year equals the applicable compensation limit under Code section 401(a)(17), or, if earlier, the annual additions (within the meaning of Code section 415(c)(2)) of the Eligible Employee for the Year under the Qualified
Savings Plan and any other plan maintained by the Company equal the applicable limit under Code section 415(c)(1)(A). 
 An Eligible Employee’s
Deferral Agreement shall first take effect and apply to that portion of Compensation earned by the Eligible Employee for a particular payroll period that exceeds the amount at which, or with respect to which, the triggering event occurs. 

ARTICLE IV 
 MATCHING
CREDITS 
 The Company shall credit to the Account of a Participant as Matching Credits the same percentage of the Participant’s
Deferred Compensation as it would have contributed as matching contributions to the Qualified Savings Plan if the amount of the Participant’s Deferred Compensation had been contributed as pre-tax salary reduction or after-tax contributions to
the Qualified Savings Plan. 
 ARTICLE V 

CREDITING OF ACCOUNTS 
 1.
Crediting of Deferred Compensation. Deferred Compensation shall be credited to a Participant’s Account as of the day on which such amount would have been credited to the Participant’s account under the Qualified Savings Plan if the
Participant’s Deferred Compensation had been contributed as pre-tax salary reduction or after-tax contributions to the Qualified Savings Plan. 

2. Crediting of Matching Credits. Matching Credits shall be credited to a Participant’s Account as of the day on which the Deferred
Compensation to which they relate are credited under Section 1. 
 3. Crediting of Earnings. Earnings (or losses) shall be
credited to a Participant’s Account based on the Investment Option or Options to which his or her Account has been allocated, beginning with the day as of which any amounts (or any reallocation of amounts) are credited to the Participant’s
Account. Any amount distributed from a Participant’s Account shall be credited with earnings (or losses) through the day on which the distribution is processed. The manner in which earnings (or losses) are credited under each of the Investment
Options shall be determined in the same manner as under the Qualified Savings Plan. 

  
 20 

 4. Selection of Investment Options. The amounts credited to a Participant’s Account
under this Supplemental Savings Plan shall be allocated among the Investment Options in the same percentages as the Participant’s account under the Qualified Savings Plan is allocated among those Investment Options. In the event that an Account
is maintained for a Participant under this Supplemental Savings Plan at a time when an account is no longer maintained for the Participant under the Qualified Savings Plan, the Participant may allocate and reallocate his or her Account Balance among
the Investment Options in accordance with the procedures and limitations on allocations and reallocations under the Qualified Savings Plan. 

ARTICLE VI 
 PAYMENT OF
BENEFITS 
 1. General. The Company’s liability to pay benefits to a Participant or Beneficiary under this Supplemental
Savings Plan shall be measured by and shall in no event exceed the Participant’s Account Balance, which shall be fully vested and nonforfeitable at all times. All benefit payments shall be made in cash and, except as otherwise provided, shall
reduce allocations to the Investment Options in the same proportions that the Participant’s Account Balance is allocated among those Investment Options. 

2. Commencement of Payment. The payment of benefits to a Participant shall commence as soon as administratively feasible following the
Participant’s termination of employment with the Company and his or her entitlement to commence receiving benefits under the Qualified Savings Plan. 

3. Form of Payment. At the time an Eligible Employee first completes a Deferral Agreement, he or she shall irrevocably elect the form of
payment of his or her Account Balance from among the following options: 
  

	 	(a)	A lump sum. 

  

	 	(b)	Annual payments for a period of 5, 10, 15, or 20 years, as designated by the Participant. The amount of each annual payment shall be determined by dividing the Participant’s Account Balance on the date such payment
is processed by the number of years remaining in the designated installment period. The installment period may be shortened, in the sole discretion of the Committee, if the Committee at any time determines that the amount of the annual payments that
would be made to the Participant during the designated installment period would be too small to justify the maintenance of the Participant’s Account and the processing of payments. 

4. Prospective Change of Payment Election. The Committee may, in its discretion, permit a Participant to modify his or her payment
election under Section 3 of this Article VI at the time the Participant enters into a Deferral Agreement for a Year; if accepted, any such modification shall apply to all amounts credited to the Participant’s Account under this
Supplemental Savings Plan. No such modification will be effective if made within one year of the date of the Participant’s termination of employment. 

  
 21 

 5. Death Benefits. Upon the death of a Participant before a complete distribution of his
or her Account Balance, the Account Balance will be paid to the Participant’s Beneficiary in an immediate lump sum. 
 6.
Acceleration Upon Conflict of Interest. Notwithstanding a Participant’s form of payment election under Section 3 of this Article VI, if following a Participant’s termination of employment with the Company, the Participant takes
a position (or accepts a position) with a governmental entity, agency, or instrumentality and that employer has determined or indicated that the Participant’s continued participation in the Plan may constitute a conflict of interest precluding
the Participant from continuing in his position (or from accepting an offered position) with that employer or subjecting the Participant to penalty, sanction, or otherwise limiting the Participant’s responsibilities for that employer, then the
Participant’s Account Balance shall be distributed to him or her in a lump sum as soon as practical following the later of (i) the date on which the Participant commences employment with the government employer; or (ii) the date on
which it is determined that the conflict of interest may exist. 
 7. Acceleration upon Change in Control. 

(a) Notwithstanding any other provision of this Supplemental Savings Plan, the Account Balance of each Participant shall be
distributed in a single lump sum within fifteen (15) calendar days following a “Change in Control.” 
 (b) For
purposes of this Supplemental Savings Plan, a Change in Control shall include and be deemed to occur upon the following events: 

(1) A tender offer or exchange offer is consummated for the ownership of securities of the Company representing 25% or more of
the combined voting power of the Company’s then outstanding voting securities entitled to vote in the election of directors of the Company. 

(2) The Company is merged, combined, consolidated, recapitalized or otherwise reorganized with one or more other entities that
are not Subsidiaries and, as a result of the merger, combination, consolidation, recapitalization or other reorganization, less than 75% of the outstanding voting securities of the surviving or resulting corporation shall immediately after the event
be owned in the aggregate by the stockholders of the Company (directly or indirectly), determined on the basis of record ownership as of the date of determination of holders entitled to vote on the action (or in the absence of a vote, the day
immediately prior to the event). 

  
 22 

 (3) Any person (as this term is used in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act, but excluding any person described in and satisfying the conditions of Rule 13d-1(b)(1) thereunder), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company’s then outstanding securities entitled to vote in the election of directors of the Company. 

(4) At any time within any period of two years after a tender offer, merger, combination, consolidation, recapitalization, or
other reorganization or a contested election, or any combination of these events, the “Incumbent Directors” shall cease to constitute at least a majority of the authorized number of members of the Board. For purposes hereof,
“Incumbent Directors” shall mean the persons who were members of the Board immediately before the first of these events and the persons who were elected or nominated as their successors or pursuant to increases in the size of the Board by
a vote of at least three-fourths of the Board members who were then Board members (or successors or additional members so elected or nominated). 

(5) The stockholders of the Company approve a plan of liquidation and dissolution or the sale or transfer of substantially all
of the Company’s business and/or assets as an entirety to an entity that is not a Subsidiary. 
 (c) Notwithstanding the
provisions of Section 7(a), if a distribution in accordance with the provisions of Section 7(a) would result in a nonexempt transaction under Section 16(b) of the Exchange Act with respect to any Section 16 Person, then the date
of distribution to such Section 16 Person shall be delayed until the earliest date upon which the distribution either would not result in a nonexempt transaction or would otherwise not result in liability under Section 16(b) of the
Exchange Act. 
 (d) This Section 7 shall apply only to a Change in Control of Lockheed Martin Corporation and shall not
cause immediate payout of an Account Balance in any transaction involving the Company’s sale, liquidation, merger, or other disposition of any subsidiary. 

(e) The Committee may cancel or modify this Section 7 at any time prior to a Change in Control. In the event of a Change
in Control, this Section 6 shall remain in force and effect, and shall not be subject to cancellation or modification for a period of five years, and any defined term used in Section 7 shall not, for purposes of Section 7, be subject
to cancellation or modification during the five year period. 
 8. Deductibility of Payments. In the event that the payment of
benefits in accordance with the Participant’s election under Section 3 of this Article VI would prevent the Company from claiming an income tax deduction with respect to any portion of the benefits paid, the Committee shall have the right
to modify the timing of distributions from the Participant’s Account as necessary to maximize the Company’s tax deductions. In the exercise of its discretion to adopt a modified distribution schedule, the Committee shall undertake to have
distributions made at such times and in such amounts as most closely approximate the 

  
 23 

 
Participant’s election, consistent with the objective of maximum deductibility for the Company. The Committee shall have no authority to reduce a Participant’s Account Balance or to pay
aggregate benefits less than the Participant’s Account Balance in the event that all or a portion thereof would not be deductible by the Company. 

9. Change of Law. Notwithstanding anything to the contrary herein, if the Committee determines in good faith, based on consultation with
counsel, that the Federal income tax treatment or legal status of this Supplemental Savings Plan has or may be adversely affected by a change in the Internal Revenue Code, Title I of the Employee Retirement Income Security Act of 1974, or other
applicable law or by an administrative or judicial construction thereof, the Committee may direct that the Accounts of affected Participants or of all Participants be distributed as soon as practicable after such determination is made, to the extent
deemed necessary or advisable by the Committee to cure or mitigate the consequences, or possible consequences of, such change in law or interpretation thereof. 

10. Tax Withholding. To the extent required by law, the Company shall withhold from benefit payments hereunder, or with respect to any
amounts credited to a Participant’s Account hereunder, any Federal, state, or local income or payroll taxes required to be withheld and shall furnish the recipient and the applicable government agency or agencies with such reports, statements,
or information as may be legally required. However, the amount of Deferred Compensation or Matching Credits to be credited to a Participant’s Account will not be reduced or adjusted by the amount of any tax that the Company is required to
withhold with respect thereto. 
 ARTICLE VII 

EXTENT OF PARTICIPANTS’ RIGHTS 

1. Unfunded Status of Plan. This Supplemental Savings Plan constitutes a mere contractual promise by the Company to make payments in
the future, and each Participant’s rights shall be those of a general, unsecured creditor of the Company. No Participant shall have any beneficial interest in any specific assets that the Company may hold or set aside in connection with this
Supplemental Savings Plan. Notwithstanding the foregoing, to assist the Company in meeting its obligations under this Supplemental Savings Plan, the Company may set aside assets in a trust or trusts described in Revenue Procedure 92-64, 1992-2 C.B.
422 (generally known as a “rabbi trust”), and the Company may direct that its obligations under this Supplemental Savings Plan be satisfied by payments out of such trust or trusts. It is the Company’s intention that this Supplemental
Savings Plan be unfunded for Federal income tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. 

2. Nonalienability of Benefits. A Participant’s rights to benefit payments under this Supplemental Savings Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or the Participant’s Beneficiary. 

  
 24 

 ARTICLE VIII 

AMENDMENT OR TERMINATION 

1. Amendment. The Board or its authorized delegate may amend, modify, suspend or discontinue this Supplemental Savings Plan at any time
subject to any shareholder approval that may be required under applicable law, provided, however, that no such amendment shall have the effect of reducing a Participant’s Account Balance or postponing the time when a Participant is entitled to
receive a distribution of his or her Account Balance. 
 2. Termination. The Board reserves the right to terminate this Supplemental
Savings Plan at any time and to pay all Participants their Account Balances in a lump sum immediately following such termination or at such time thereafter as the Board may determine; provided, however, that if a distribution in accordance with the
provisions of this Section 2 would otherwise result in a nonexempt transaction under Section 16(b) of the Exchange Act, the date of distribution with respect to any Section 16 Person shall be delayed until the earliest date upon which
the distribution either would not result in a nonexempt transaction or would otherwise not result in liability under Section 16(b) of the Exchange Act. 

ARTICLE IX 

ADMINISTRATION 
 1. The
Committee. This Supplemental Savings Plan shall be administered by the Compensation Committee of the Board or such other committee of the Board as may be designated by the Board and constituted so as to permit this Supplemental Savings Plan to
comply with the requirements of Rule 16b-3 of the Exchange Act. The members of the Committee shall be designated by the Board. A majority of the members of the Committee (but not fewer than two) shall constitute a quorum. The vote of a majority of a
quorum or the unanimous written consent of the Committee shall constitute action by the Committee. The Committee and the Claims Administrator shall have full authority to interpret the Plan, and interpretations of the Plan by the Committee or Claims
Administrator shall be final and binding on all parties. 
 2. Delegation and Reliance. The Committee may delegate to the officers or
employees of the Company the authority to execute and deliver those instruments and documents, to do all acts and things, and to take all other steps deemed necessary, advisable or convenient for the effective administration of this Supplemental
Savings Plan in accordance with its terms and purpose, except that the Committee may not delegate any authority the delegation of which would cause this Supplemental Savings Plan to fail to satisfy the applicable requirements of Rule 16b-3. In
making any determination or in taking or not taking any action under this Supplemental Savings Plan, the Committee may obtain and rely upon the advice of experts, including professional advisors to the Company. No member of the Committee or officer
of the Company who is a Participant hereunder may participate in any decision specifically relating to his or her individual rights or benefits under the Supplemental Savings Plan. 

  
 25 

 3. Exculpation and Indemnity. Neither the Company nor any member of the Board or of the
Committee, nor any other person participating in any determination of any question under this Supplemental Savings Plan, or in the interpretation, administration or application thereof, shall have any liability to any party for any action taken or
not taken in good faith under this Supplemental Savings Plan or for the failure of the Supplemental Savings Plan or any Participant’s rights under the Supplemental Savings Plan to achieve intended tax consequences, to qualify for exemption or
relief under Section 16 of the Exchange Act and the rules thereunder, or to comply with any other law, compliance with which is not required on the part of the Company. 

4. Facility of Payment. If a minor, person declared incompetent, or person incapable of handling the disposition of his or her property
is entitled to receive a benefit, make an application, or make an election hereunder, the Committee or the Claims Administrator may direct that such benefits be paid to, or such application or election be made by, the guardian, legal representative,
or person having the care and custody of such minor, incompetent, or incapable person. Any payment made, application allowed, or election implemented in accordance with this Section shall completely discharge the Company and the Committee (or the
Claims Administrator) from all liability with respect thereto. 
 5. Proof of Claims. The Committee or the Claims Administrator may
require proof of the death, disability, incompetency, minority, or incapacity of any Participant or Beneficiary and of the right of a person to receive any benefit or make any application or election. 

6. Claim Procedures. The procedures when a claim under this Plan is denied by the Claims Administrator are as follows: 

 

	 	(A)	The Claims Administrator shall: 

  

	 	(i)	notify the claimant within a reasonable time of such denial, setting forth the specific reasons therefore; and 

  

	 	(ii)	afford the claimant a reasonable opportunity for a review of the decision. 

  

	 	(B)	The notice of such denial shall set forth, in addition to the specific reasons for the denial, the following: 

  

	 	(i)	identification of pertinent provisions of this Plan; 

  

	 	(ii)	such additional information as may be relevant to the denial of the claim; and 

  
 26 

	 	(iii)	an explanation of the claims review procedure and advice that the claimant may request an opportunity to submit a statement of issues and comments. 

 

	 	(C)	Within sixty days following advice of denial of a claim, upon request made by the claimant, the Claims Administrator shall take appropriate steps to review its decision in light of any further information or comments
submitted by the claimant. The Claims Administrator may hold a hearing at which the claimant may present the basis of any claim for review. 

  

	 	(D)	The Claims Administrator shall render a decision within a reasonable time (not to exceed 120 days) after the claimant’s request for review and shall advise the claimant in writing of its decision, specifying the
reasons and identifying the appropriate provisions of the Plan. 

  

	 	(E)	The Claims Administrator shall be the Lockheed Martin Corporation Savings Plan Administrative Committee. Notwithstanding the foregoing, with respect to claims and appeals brought by elected officers of the Company, the
Claims Administrator shall be the Committee. 

 ARTICLE X 

GENERAL AND MISCELLANEOUS PROVISIONS 

1. Neither this Supplemental Savings Plan nor a Participant’s Deferral Agreement, either singly or collectively, shall in any way
obligate the Company to continue the employment of a Participant with the Company, nor does either this Supplemental Savings Plan or a Deferral Agreement limit the right of the Company at any time and for any reason to terminate the
Participant’s employment. In no event shall this Plan or a Deferral Agreement, either singly or collectively, by their terms or implications constitute an employment contract of any nature whatsoever between the Company and a Participant. In no
event shall this Plan or a Plan Agreement, either singly or collectively, by their terms or implications in any way limit the right of the Company to change an Eligible Employee’s compensation or other benefits. 

2. Any amount credited to a Participant’s Account under this Supplemental Savings Plan shall not be treated as compensation for purposes
of calculating the amount of a Participant’s benefits or contributions under any pension, retirement, or other plan maintained by the Company, except as provided in such other plan. 

3. Any written notice to the Company referred to herein shall be made by mailing or delivering such notice to the Company at 6801 Rockledge
Drive, Bethesda, Maryland 20817, to the attention of the Vice President, Human Resources. Any written notice to a Participant shall be made by delivery to the Participant in person, through electronic transmission, or by mailing such notice to the
Participant at his or her place of residence or business address. 

  
 27 

 4. In the event it should become impossible for the Company or the Committee to perform any act
required by this Plan, the Company or the Committee may perform such other act as it in good faith determines will most nearly carry out the intent and the purpose of this Supplemental Savings Plan. 

5. By electing to become a Participant hereunder, each Eligible Employee shall be deemed conclusively to have accepted and consented to all the
terms of this Supplemental Savings Plan and all actions or decisions made by the Company, the Board, or Committee with regard to the Supplemental Savings Plan. 

6. The provisions of this Supplemental Savings Plan and the Deferral Agreements hereunder shall be binding upon and inure to the benefit of the
Company, its successors, and its assigns, and to the Participants and their heirs, executors, administrators, and legal representatives. 

7. A copy of this Supplemental Savings Plan shall be available for inspection by Participants or other persons entitled to benefits under the
Plan at reasonable times at the offices of the Company. 
 8. The validity of this Supplemental Savings Plan or any of its provisions shall
be construed, administered, and governed in all respects under and by the laws of the State of Maryland, except as to matters of Federal law. If any provisions of this instrument shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully effective. 
 9. This Supplemental Savings Plan and its operation,
including but not limited to, the mechanics of deferral elections, the issuance of securities, if any, or the payment of cash hereunder is subject to compliance with all applicable Federal and state laws, rules and regulations (including but not
limited to state and Federal insider trading, registration, reporting and other securities laws) and such other approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or
advisable in connection therewith. 
 10. This Supplemental Savings Plan is intended to constitute an “excess benefit plan” within
the meaning of Rule 16b-3(b)(2) under the Securities Exchange Act of 1934, and it shall be construed and applied accordingly. It is the intent of the Company that this Supplemental Savings Plan satisfy and be interpreted in a manner, that, in the
case of Participants who are or may be Section 16 Persons, satisfies any applicable requirements of Rule 16b-3 of the Exchange Act or other exemptive rules under Section 16 of the Exchange Act and will not subject Section 16 Persons
to short-swing profit liability thereunder. If any provision of this Supplemental Savings Plan would otherwise frustrate or conflict with the intent expressed in this Section 10, that provision to the extent possible shall be interpreted and
deemed amended so as to avoid such conflict. To the extent of any remaining irreconcilable conflict with this intent, the 

  
 28 

 
provision shall be deemed disregarded. Similarly, any action or election by a Section 16 Person with respect to the Supplemental Savings Plan to the extent possible shall be interpreted and
deemed amended so as to avoid liability under Section 16 or, if this is not possible, to the extent necessary to avoid liability under Section 16, shall be deemed ineffective. Notwithstanding anything to the contrary in this Supplemental
Savings Plan, the provisions of this Supplemental Savings Plan may at any time be bifurcated by the Board or the Committee in any manner so that certain provisions of this Supplemental Savings Plan are applicable solely to Section 16 Persons.
Notwithstanding any other provision of this Supplemental Savings Plan to the contrary, if a distribution which would otherwise occur is prohibited or proposed to be delayed because of the provisions of Section 16 of the Exchange Act or the
provisions of the Supplemental Savings Plan designed to ensure compliance with Section 16, the Section 16 Person involved may affirmatively elect in writing to have the distribution occur in any event; provided that the Section 16
Person shall concurrently enter into arrangements satisfactory to the Committee in its sole discretion for the satisfaction of any and all liabilities, costs and expenses arising from this election. 

ARTICLE XI 
 EFFECTIVE
DATE 
 This amendment and restatement of the Supplemental Savings Plan shall generally become effective on January 1, 1997.
Subsequent amendments to the Supplemental Savings Plan are effective as of the date stated in the amendment or the adopting resolution. 

  
 29Exhibit 4.1

 

Reference is made to that certain Warrant to purchase [ ] shares of Common Stock of the Company (as defined herein), issued by the Company to Investor (as defined herein).  The Company and Investor hereby agree that it is desirable to amend and restate said Warrant as of April 21, 2015 to, among other things, reflect certain Stock Events (as defined herein) and amend the Exercise Price (as defined herein).  Accordingly, said Warrant is hereby amended and restated in its entirety as follows:

 

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

THE HOLDER OF THIS WARRANT IS ENTITLED TO THE BENEFITS OF THE AMENDED AND RESTATED LOCK-UP AGREEMENT DATED AS OF MARCH 28, 2013 AMONG THE COMPANY AND THE RESTRICTED STOCKHOLDERS (AS DEFINED THEREIN).

 

This Warrant is issued in replacement of the original Warrant certificate issued on February 21, 2012, pursuant to the Securities Purchase Agreement dated as of February 21, 2012, as amended from time to time (the “Purchase Agreement”), and any replacement certificate issued with respect thereto prior to the date hereof.  If any provision of this Warrant is found to conflict with the Purchase Agreement, the provisions of such Purchase Agreement shall prevail.

 

	
No. WR-[   ]
    	
CUSIP: 98919T 118
    

 

ZAZA ENERGY CORPORATION

 

COMMON STOCK PURCHASE WARRANT

 

ZaZa Energy Corporation, a Delaware corporation (together with any corporation which shall succeed to or assume the obligations of ZaZa Energy Corporation hereunder, the “Company”), hereby certifies that, for value received, [        ] (the “Investor”), or its assigns, is entitled, subject to the terms set forth below, to purchase from the Company at any time during the Exercise Period (as defined in Section 12 hereof) up to [  ] fully paid and non-assessable shares of Common Stock (as defined in Section 12 hereof), at a purchase price per share equal to the Exercise Price (as defined in Section 12 hereof).  The number of shares of Common Stock for which this Warrant is exercisable and the Exercise Price are subject to adjustment as provided herein.

 

This Warrant is issued pursuant to the Securities Purchase Agreement (as amended and in effect from time to time, the “Purchase Agreement”), dated as of February 21, 2012, between the Company and the purchasers named therein, a copy of which is on file at the principal office of the 

 

 

Company.  The holder of this Warrant shall be entitled to all of the benefits and shall be subject to all of the obligations of the Purchase Agreement.

 

1.                                      DEFINITIONS.  Terms defined in the Purchase Agreement and not otherwise defined herein are used herein with the meanings so defined.  Certain terms are used in this Warrant as specifically defined in Section 12 hereof.

 

2.                                      EXERCISE OF WARRANT.

 

2.1.                            Exercise.  This Warrant may be exercised prior to its expiration pursuant to Section 2.5 hereof by the holder hereof at any time or from time to time during the Exercise Period, by submitting the form of subscription attached hereto (“the Exercise Notice”) duly executed by such holder, to the Company at its principal office, indicating whether the holder is electing to purchase a specified number of shares by paying the Aggregate Exercise Price as provided in Section 2.2 or is electing to exercise this Warrant as to a specified number of shares pursuant to the net exercise provisions of Section 2.3.  On or before the first Trading Day following the date on which the Company has received the Exercise Notice, the Company shall transmit by facsimile an acknowledgement of confirmation of receipt of the Exercise Notice.  This Warrant shall be deemed exercised for all purposes as of the close of business on the day on which the holder has delivered the Exercise Notice to the Company.  The Aggregate Purchase Price, if any, shall be paid by wire transfer to the Company within two business days of the date of exercise and prior to the time the Company issues the certificates evidencing the shares issuable upon such exercise.  In the event the Warrant is not exercised in full, the Company may, at its expense, require the Holder, after such partial exercise, to promptly return this Warrant to the Company and the Company will forthwith issue and deliver to or upon the order of the holder hereof a new Warrant or Warrants of like tenor, in the name of the holder hereof or as such holder (upon payment by such holder of any applicable transfer taxes) may request, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares (without giving effect to any adjustment therein) for which this Warrant shall have been exercised.

 

2.2.                            Payment of Exercise Price by Wire Transfer.  If the holder elects to purchase a specified number of shares by paying the Aggregate Exercise Price, the holder shall pay such amount by wire transfer of immediately available funds to an account designated in advance by the Company.

 

2.3.                            Net Exercise.  The holder may also elect to exercise this Warrant at any time or from time to time, by receiving shares of Common Stock equal to the number of shares determined pursuant to the following formula:

 

X  =   Y (A - B)

        A

 

where,

 

X =                                                     the number of shares of Common Stock to be issued to Holder;

 

Y =                                                     the number of shares of Common Stock as to which this Warrant is to be exercised (as indicated on the subscription form);

 

2

 

A =                                                     the volume weighted average price of the Common Stock quoted on the Nasdaq Capital Market or any other U.S. exchange on which the Common Stock is listed, whichever is applicable, as posted by Bloomberg L.P. (or such other reference reasonably relied upon by the Company if not so published) for the five (5) Trading Days ending on the Trading Day immediately preceding the date of exercise; and

 

B =                                                     the Exercise Price.

 

2.4.                            Antitrust Notification.  If the holder of this Warrant determines, in its sole judgment upon the advice of counsel, that an exercise of this Warrant pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), the Company shall file, within seven (7) business days after receiving notice from such holder of the applicability of the HSR Act and a request to so file, with the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”) the notification and report form and any supplemental information required to be filed by it pursuant to the HSR Act in connection with the exercise of this Warrant.  Any such notification and report form and supplemental information will be in full compliance with the requirements of the HSR Act.  The Company will furnish to such holder promptly (but in no event more than five (5) business days) such information and assistance as such holder may reasonably request in connection with the preparation of any filing or submission required to be filed by such holder under the HSR Act.  The Company shall respond promptly after receiving any inquiries or requests for additional information from the FTC or the DOJ (and in no event more than three (3) business days after receipt of such inquiry or request).  The Company shall keep such holder apprised periodically and at such holder’s request of the status of any communications with, and any inquiries or requests for additional information from, the FTC or the DOJ.  The Company shall bear all filing or other fees required to be paid by the Company and such holder (or the “ultimate parent entity” of such holder, if any) under the HSR Act or any other applicable law in connection with such filings and all costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by the Company and such holder in connection with the preparation of such filings and responses to inquiries or requests.  In the event that this Section 2.4 is applicable to any exercise of this Warrant, the purchase by such holder of the Exercise Shares subject to such exercise, and the payment by such holder of the Exercise Price therefor, shall be subject to the expiration or earlier termination of the waiting period under the HSR Act (with the exercise date of this Warrant being deemed to be the date immediately following the date of such expiration or early termination).

 

2.5.                            Termination.  This Warrant shall terminate upon the earlier to occur of (i) exercise in full or (ii) the expiration of the Exercise Period.

 

2.6                               Required Conversion.  If (a) for a forty-five (45) consecutive Trading Day period from and after the date that is forty-five (45) Trading Days prior to the third anniversary of the Closing but prior to the expiration of this Warrant, the daily volume weighted average price of the Common Stock quoted on the Nasdaq Capital Market or any other U.S. exchange on which the Common Stock is listed, whichever is applicable, as posted by Bloomberg L.P. (or such other reference reasonably relied upon by the Company if not so published) is greater than or equal to $100.00 per share and (b) for each of those forty-five (45) consecutive trading days at least an average of Five Thousand (5,000) shares of the Common Stock are traded per day during such period (in each case, as appropriately adjusted for stock splits, combinations, reorganizations,

 

3

 

reclassifications and the like) (the “Early Termination Event”), then the Company shall have the right, by giving written notice in accordance with Section 18 of the Early Termination Event to the Holder within thirty (30) calendar days of the occurrence of the Early Termination Event, to require such Holder to exercise this Warrant in full pursuant to this Section 2; provided, however, that if on any day during such forty-five consecutive Trading Day period when the condition set forth in the preceding clause (a) is satisfied, the condition set forth in the preceding clause (b) is not satisfied, the Company shall be entitled to treat such day as if it was not a Trading Day for the purposes of determining whether an Early Termination Event has occurred.  If, on the 10th business day following written notice from the Company notifying the Holder of the occurrence of the Early Termination Event, the Holder has not elected to exercise this Warrant in full for all the then unexercised Warrant Shares, this Warrant shall be deemed automatically exercised on such 10th business day pursuant to the net exercise provisions in Section 2.3 above; provided, however, that until the Holder has complied with the Warrant delivery and any other obligations under Section 2.1, the Company shall have no obligation to deliver share certificates.

 

3.                                      REGISTRATION RIGHTS.  The holder of this Warrant has certain rights to require the Company to register its resale of the Warrant Shares under the Securities Act and any blue sky or securities laws of any jurisdictions within the United States at the time and in the manner specified in the Purchase Agreement.

 

4.                                      DELIVERY OF STOCK CERTIFICATES ON EXERCISE.  As soon as practicable after any exercise of this Warrant and in any event within three (3) Trading Days thereafter, the Company shall, at its expense (including the payment by it of any applicable issue or stamp taxes), cause to be issued in the name of and delivered to the holder, or as the holder may direct, a certificate or certificates evidencing the number of fully paid and nonassessable shares of Common Stock (or Other Securities, as applicable) (which number shall be rounded up to the nearest whole share in the event any fractional share may otherwise be issuable upon such exercise) to which the holder shall be entitled on such exercise, in such denominations as may be requested by the holder, which certificate or certificates shall be free of restrictive and trading legends (except for any such legends as may be required under the Securities Act).  In lieu of delivering physical certificates for the shares of Common Stock (or Other Securities) issuable upon any exercise of this Warrant, provided the Company’s transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program or a similar program, upon request of the holder, the Company shall use commercially reasonable efforts to cause its transfer agent to electronically transmit such shares of Common Stock (or Other Securities) issuable upon exercise of this Warrant to the holder (or its designee), by crediting the account of the holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided that the same time periods herein as for stock certificates shall apply) as instructed by the holder (or its designee).

 

5.                                      ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS.

 

5.1.  Distribution of Assets; Spin-Off.  If the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a Spin-Off, dividend, reclassification, corporate rearrangement or other similar transaction, but excluding cash dividends which are prohibited by Section 5.2 hereof and excluding stock dividends or stock splits adjustments in respect of which are

 

4

 

provided for in Section 7 hereof) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case:

 

(a)                                 (i) the Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which:

 

(A)                               the numerator shall be the Market Price of the Common Stock on the Trading Day immediately preceding such record date minus the Fair Market Value of the Distribution applicable to one share of Common Stock, and

 

(B)                               the denominator shall be the Market Price of the Common Stock on the Trading Day immediately preceding such record date;

 

and (ii) the number of Warrant Shares obtainable upon exercise of this Warrant shall be increased to a number of shares equal to the number of shares of Common Stock obtainable immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive the Distribution multiplied by the reciprocal of the fraction set forth in the immediately preceding clause (i) of this Section 5.1(a); and

 

(b)                                 Notwithstanding the provisions of the foregoing clause (a), in the event of a Spin-Off in which the Distribution is of common stock of a subsidiary of the Company, then (i) the Exercise Price in effect immediately prior to the close of business on the record date fixed for the determination of holders of Common Stock entitled to receive such Distribution shall be reduced, effective as of the close of business on such record date, to a price determined by multiplying such Exercise Price by a fraction of which:

 

(A)                               the numerator shall be the Market Price of the Common Stock on the Trading Day immediately preceding such record date minus the Fair Market Value of the Distribution applicable to one share of Common Stock, and

 

(B)                               the denominator shall be the Market Price of the Common Stock on the Trading Day immediately preceding such record date;

 

and (ii) the holder of this Warrant shall receive an additional warrant to purchase common stock of such company, the terms of which shall be identical to those of this Warrant, except that such warrant shall be exercisable into the number of shares of common stock of such company that would have been issuable or distributed to the holder of this Warrant pursuant to the Distribution had the holder exercised this Warrant for cash for the full number of shares of Common Stock on the face of this Warrant (notwithstanding the requirement that this Warrant be exercised pursuant to the net exercise provisions of Section 2.3) immediately prior to such record date and with an exercise price equal to the amount by which the Exercise Price of this Warrant was decreased with respect to the Distribution pursuant to the terms of the preceding clause (i) of this Section 5.1(b).

 

5

 

5.2.  Cash Dividends.  For so long as any Warrants are outstanding, no cash dividend shall be declared or paid or set aside for payment on any shares of the Company’s Common Stock or any parity or junior stock thereto.

 

5.3.  Other Events.  If any event occurs of the type contemplated by the provisions of this Section 5 but not expressly provided for by such provisions, then the Company’s Board of Directors, acting in good faith and consistent with their fiduciary duties, shall make an appropriate adjustment in the Exercise Price and the number of shares of Common Stock obtainable upon exercise of this Warrant so as to protect the rights of the holders of the Warrant.

 

6.                                      ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.

 

6.1.  Certain Adjustments.  In case at any time or from time to time, the Company shall (i) effect a capital reorganization, reclassification or recapitalization, (ii) consolidate with or merge into any other person, or (iii) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then in each such case, this Warrant shall thereafter be exercisable for the same kind and amounts of securities (including shares of stock) or other assets, or both, which were issuable or distributable to the holders of outstanding Common Stock upon such reorganization, reclassification, recapitalization, consolidation, merger or transfer, in respect of that number of shares of Common Stock for which this Warrant could have been exercised immediately prior to such reorganization, reclassification, recapitalization, consolidation, merger or transfer; and, in any such case, appropriate adjustments (as determined in good faith by the Board of Directors of the Company) shall be made to assure that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any securities or other assets thereafter deliverable upon the exercise of this Warrant.

 

6.2.  Continuation of Terms.  Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 6, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 8 hereof.

 

7.                                      ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND AMOUNT OF OUTSTANDING COMMON STOCK.

 

7.1.  General.  If at any time there shall occur any stock split, stock dividend, reverse stock split or other subdivision of the Company’s Common Stock (“Stock Event”), then the number of shares of Common Stock to be received by the holder of this Warrant shall be appropriately adjusted such that the proportion of the number of shares issuable hereunder to the total number of shares of the Company (on a fully diluted basis) prior to such Stock Event is equal to the proportion of the number of shares issuable hereunder after such Stock Event to the total number of shares of the Company (on a fully-diluted basis) after such Stock Event.  The Exercise Price shall be proportionately decreased or increased upon the occurrence of any Stock Event; provided that in no

 

6

 

event will the Exercise Price be less than the par value of the Common Stock.  For the avoidance of doubt, all Common Stock numbers and dollar amounts reflected in this Warrant have been adjusted to reflect the one for ten reverse stock split effectuated by the Company on August 19, 2014.

 

7.2.                            Other Securities.  In case any Other Securities shall have been issued, or shall then be subject to issue upon the conversion or exchange of any stock (or Other Securities) of the Company (or any other issuer of Other Securities or any other entity referred to in Section 6 hereof) or to subscription, purchase or other acquisition pursuant to any rights or options granted by the Company (or such other issuer or entity), the holder hereof shall be entitled to receive upon exercise hereof such amount of Other Securities (in lieu of or in addition to Common Stock) as is determined in accordance with the terms hereof, treating all references to Common Stock herein as references to Other Securities to the extent applicable, and the computations, adjustments and readjustments provided for in this Section 7 with respect to the number of shares of Common Stock issuable upon exercise of this Warrant shall be made as nearly as possible in the manner so provided and applied to determine the amount of Other Securities from time to time receivable on the exercise of the Warrant, so as to provide the holder of the Warrant with the benefits intended by this Section 7 and the other provisions of this Warrant.

 

7.3.                            Adjustments for Dilutive and Other Events.

 

(a)                                 Issuance of Additional Shares of Common Stock.  If at any time on or after the Closing Day other than during the Post-Amendment Period, the Company shall issue any Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 7.3(b) below), at a price per share (the “Offering Price”) which is lower than the greater of (x) the Exercise Price or (y) 90% of the Market Price on the date of entry into the definitive agreement providing for such issuance or if at any time during the Post-Amendment Period, the Company shall issue any Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 7.3(b) below), at an Offering Price which is lower than $15.96 per share, then the number of shares of Common Stock to be received by the holder of this Warrant upon the exercise hereof shall be adjusted to that number determined by multiplying (a) the number of shares of Common Stock purchasable hereunder immediately prior thereto by (b) a fraction (i) the numerator of which shall be the sum of (A) the number of shares of Common Stock Deemed Outstanding immediately prior to the issuance of such shares of Common Stock plus (B) the number of shares of Common Stock issued in the subject transaction and (ii) the denominator of which shall be an amount equal to the sum of (x) the number of shares of Common Stock Deemed Outstanding immediately prior to the issuance of such shares of Common Stock plus (y) the quotient of (1) the Offering Price multiplied by the number of shares of Common Stock so issued by the Company, divided by (2) the Reference Price in effect immediately prior to the issuance of such shares (without taking into account any provision in the immediately following paragraph that deems the Reference Price to be $15.96 per share).  The provisions of this Section 7.3 shall not apply to (i) any issuance of additional Common Stock for which an adjustment is provided under Section 7.1 hereof, and (ii) the issuance of up to 700,000 shares of Common Stock, whether upon the grant of restricted stock, the grant or exercise of options, or otherwise, pursuant to equity compensation plans for officers, directors, employee and consultants that are approved (or subject to approval) by the shareholders of the Company; provided that grants of options, restricted stock grants, or other awards for not more than 200,000 shares of Common Stock (as appropriately adjusted for stock splits, combinations, reorganizations, reclassifications and the like) shall be

 

7

 

scheduled to vest under such equity compensation plans in any calendar year (collectively, the “Excluded Compensation Issuances”).

 

When any adjustment is required to be made to the number of shares hereunder pursuant to this Section 7.3(a), the Exercise Price shall be reduced to a price (calculated to the nearest cent) as is equal to the quotient obtained by dividing (x) the product of the Exercise Price multiplied by the number of shares of Common Stock issuable upon exercise of this Warrant, in each case as in effect immediately before such adjustment, by (y) the number of shares of Common Stock issuable upon exercise of this Warrant immediately after giving effect to such adjustment; provided, however, with respect to any issuance by the Company during the Post-Amendment Period, solely for the purpose of calculating this adjustment to the Exercise Price, the Reference Price shall be deemed to be $15.96 per share and the number used in the preceding clause (y) (the number of shares of Common Stock issuable upon exercise of this Warrant immediately after giving effect to such adjustment) shall be calculated using such Reference Price; provided further that with respect to any issuance by the Company during the Post-Amendment Period, the numbers used in the preceding clause (x) shall not be recalculated to exclude the impact of any adjustment made during the Post-Amendment Period.

 

(b)           Issue of Options and Convertible Securities Deemed Issue of Additional Shares of Common Stock.  If the Company at any time or from time to time on or after the Closing Day shall issue any Options (other than Excluded Compensation Issuances) or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue, or, in case a record date shall have been fixed for such issuance, as of the close of business on such record date, provided that Additional Shares of Common Stock shall not be deemed to have been issued unless the consideration per share (determined pursuant to Section 7.3(c) below) of such Additional Shares of Common Stock would be less than the Reference Price in effect on the date of and immediately prior to such issue, or such record date, as the case may be, and provided further that in any such case in which Additional Shares of Common Stock are deemed to be issued (i) no further adjustment in the number of shares of Common Stock for which this Warrant is exerciseable shall be made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the exercise of such Options or conversion or exchange of such Convertible Securities, and (ii) upon the expiration or termination of any unexercised Option, the number of shares of Common Stock for which this Warrant is then exerciseable shall be readjusted, and the Additional Shares of Common Stock deemed issued as the result of the original issue of such Option shall not be deemed issued for the purpose of such readjustment; provided, however, that with respect to any Options or Convertible Securities issued by the Company for which there is a subsequent adjustment which increases the number of shares of Common Stock issuable upon conversion or exercise of such Options or Convertible Securities or an adjustment which decreases the exercise price or conversion price of such Options or Convertible Securities, then an adjustment to the number of shares of Common Stock for which this Warrant is exerciseable shall be made under this Section 7.3 upon any such adjustment to such Options or Convertible Securities as if such Options or Convertible Securities were deemed to have been cancelled and reissued.

 

8

 

(c)           Determination of Consideration.  For purposes of this Section 7.3, the consideration received by the Company for the issue of any Additional Shares of Common Stock shall be computed as follows:

 

(i)            Cash and Property:  Such consideration shall:

 

(A)  insofar as it consists of cash, be equal to the total cash received by the Company, excluding amounts paid or payable for accrued interest or accrued dividends;

 

(B)  insofar as it consists of property other than cash, be computed at the Fair Market Value thereof at the time of entry into the definitive agreement providing for such issue determined as provided below; and

 

(C)  in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received that is allocated to such Additional Shares of Common Stock, computed as provided in or pursuant to clauses (A) and (B) above.

 

If the Company shall issue (or shall be deemed to issue) Additional Shares of Common Stock for no consideration (other than Excluded Compensation Issuances), such Additional Shares of Common Stock shall be deemed to have been issued for consideration equal to $.01 per share.

 

(ii)           Options and Convertible Securities.  The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to Section 7.3(b), relating to Options and Convertible Securities, shall be determined by dividing

 

(A)          the total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

 

(B)          the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities.

 

8.             NO DILUTION OR IMPAIRMENT.  The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger, 

 

9

 

dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Warrant, but will at all times in good faith assist in the carrying out of all such terms and in taking all such action as may be necessary or appropriate in order to protect the rights of the holder of the Warrant against dilution.  Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any shares of stock receivable on the exercise of the Warrant above the amount payable therefor on such exercise, (ii) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock on the exercise of the Warrant from time to time outstanding, including by (A) preparing an Information Statement on Schedule 14C (the “Information Statement”) relating to the approval by written consent of the issuance of the Warrant Shares under this Warrant, and all other shares issuable by the Company pursuant to other instruments dated as of February 21, 2012, as required by Nasdaq Listing Rule 5635, (B) filing the Information Statement with the Securities and Exchange Commission (the “SEC”), (C) using its best efforts to cause the Information Statement to be cleared by the SEC as promptly as practicable and (D) disseminating the Information Statement to the shareholders of the Company, and (iii) subject to Section 15, will not transfer all or substantially all of its properties and assets to any other entity (corporate or otherwise), or consolidate with or merge into any other entity or permit any such entity to consolidate with or merge with the Company (if the Company is not the surviving entity), unless such other entity shall expressly assume in writing and will be bound by all the terms of this Warrant and the Purchase Agreement.

 

9.             CERTIFICATE AS TO ADJUSTMENTS.  In each case of any event that may require any adjustment or readjustment in the shares of Common Stock issuable on the exercise of this Warrant, the Company at its expense will promptly prepare a certificate setting forth such adjustment or readjustment, or stating the reasons why no adjustment or readjustment is being made, and showing, in detail, the facts upon which any such adjustment or readjustment is based, including a statement of (i) the number of shares of Common Stock Deemed Outstanding, and (ii) the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted and readjusted (if required by Section 7) on account thereof.  The Company will forthwith mail a copy of each such certificate to each holder of a Warrant, and will, on the written request at any time of any holder of a Warrant, furnish to such holder a like certificate setting forth the calculations used to determine such adjustment or readjustment.

 

10.          NOTICES OF RECORD DATE.  In the event of:

 

(a)           any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or

 

(b)           any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer of all or substantially all the assets of the Company to or any consolidation or merger of the Company with or into any other Person or any other Fundamental Change; or

 

10

 

(c)           any voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such event, the Company will mail or cause to be mailed to the holder of this Warrant a notice specifying (i) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up is anticipated to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or Other Securities) shall be entitled to exchange their shares of Common Stock (or Other Securities) for securities or other property deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or winding-up.  Such notice shall be mailed at least thirty (30) days prior to the date specified in such notice on which any such action is to be taken.

 

11.          RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT.  The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, a number of shares of Common Stock equal to the total number of shares of Common Stock from time to time issuable upon exercise of this Warrant, and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant.

 

12.          DEFINITIONS.  As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 

Additional Shares of Common Stock means all shares of Common Stock issued (or, pursuant to Section 7.3(b) hereof, deemed to be issued) by the Company after the Closing Day, including without limitation any treasury shares sold or otherwise transferred by the Company, but excluding shares of Common Stock issued or issuable by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock for which an adjustment is made pursuant to Section 7.1 hereof, but excluding shares of Common Stock issued or issuable as Excluded Compensation Issuances.

 

Aggregate Exercise Price means, in connection with the exercise of this Warrant at any time, an amount equal to the product obtained by multiplying (i) the Exercise Price times (ii) the number of shares of Common Stock for which this Warrant is being exercised at such time.

 

Common Stock means (i) the Company’s Common Stock, $.01 par value per share, (ii) any other capital stock of any class or classes (however designated) of the Company, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and (iii) any other securities into which or for which any of the securities described in clauses (i), or (ii) above have been converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

Common Stock Deemed Outstanding means, at any given time, the number of shares of Common Stock actually outstanding at such time, plus the number of shares of Common Stock 

 

11

 

issuable at such time upon conversion of any Convertible Securities and Options (other than this Warrant and any other warrants issued under the Purchase Agreement) then outstanding to the extent such Convertible Security or Option is (i) convertible, exercisable or exchangeable at such time and (ii) convertible, exercisable or exchangeable at a price that is less than the Fair Market Value of a share of Common Stock issuable upon such conversion, exercise or exchange at such time.

 

Convertible Securities means any evidences of Indebtedness, shares (other than Common Stock) or other securities directly or indirectly convertible into or exchangeable for Common Stock.

 

Excluded Event means (i) the issuance of shares of Common Stock, or warrants convertible into shares of Common Stock, in exchange for the Seller Subordinated Debt and/or any tax reimbursements pursuant to the Reimbursement Agreements, dated September 11, 2012, entered into between the Company and any of the Permitted Holders so long as such issuance and the related transactions occur on terms duly approved by a majority of the disinterested members of the Board of Directors of the Company or a majority of the members of a committee of disinterested directors established for such purpose and (ii) the acquisition of any shares of Common Stock or preferred stock convertible into, or warrants exercisable for, shares of Common Stock, or any combination of the foregoing, from the Company prior to July 31, 2015.

 

Exercise Period means the period commencing on August 21, 2012 and ending on the eighth anniversary of such date.

 

Exercise Price means $2.50 per share.

 

Exercise Shares means the shares of Common Stock for which this Warrant is then being exercised.

 

Fair Market Value means, with respect to any security or other property, the fair market value of such security or other property as determined unanimously by the Board of Directors, acting in good faith.  If the Board of Directors is unable to unanimously agree to the fair market value, it will have an independent third-party appraisal conducted by a nationally-recognized valuation company and the determination of such company shall be final.

 

Fundamental Change means an event or series of events by which any of the following occurs:

 

(i)            a “person” or “group” within the meaning of Section 13(d) of the Exchange Act (other than a “person” or “group” comprised solely of Permitted Holders) files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate beneficial owner of common equity of the Company representing more than 50% of the voting power of the outstanding Common Stock; provided, however, that notwithstanding anything herein to the contrary, a Fundamental Change shall be deemed to have occurred if the Permitted Holders, as a group, acquire beneficial ownership in excess of the Permitted Holders Threshold of shares of Common Stock (as appropriately adjusted for stock splits and similar transactions); provided, however, that Transfers, under the Company’s long term incentive plan, to Messrs. Brooks, Kearby or Hearn, as part of the compensation earned by such person as a director or officer of the Company shall not be counted 

 

12

 

towards determining whether a Fundamental Change under this clause (i) has occurred, so long as such Transfers do not exceed 100,000 shares (as appropriately adjusted for stock splits and similar transactions) in the aggregate to such Persons per calendar year; provided further, however, that if at any time the Permitted Holders, taken as a group, cease to have beneficial ownership of at least 50% of the voting power of the then outstanding Common Stock, a Fundamental Change will be deemed to have occurred if the Permitted Holders thereafter become the direct or indirect ultimate beneficial owners of common equity of the Company representing 50% or more of the voting power of the outstanding Common Stock, unless the Permitted Holders, taken as a group, exceed such voting power upon the consummation of an Excluded Event as a result of the receipt of shares pursuant to such Excluded Event (in which case they will from and after such time be subject to the Permitted Holders Threshold limitation in the manner set forth above);

 

(ii)           the consummation of: (A) any sale, lease or other transfer in one transaction or a series of related transactions of all or substantially all of the consolidated assets of the Company and the Subsidiaries, taken as a whole, to any Person or Persons (other than, so long as any amounts remain outstanding with respect to the Notes, one of the Guarantors to the extent permitted pursuant to Purchase Agreement, and after all amounts with respect to the Notes have been discharged, one of the Subsidiaries); or (B) any transaction or series of related transactions in connection with which (whether by means of exchange, liquidation, consolidation, merger, combination, reclassification, recapitalization, acquisition or otherwise) all of the Common Stock is exchanged for, converted into, acquired for, or constitutes solely the right to receive, other securities, other property, assets or cash, but excluding any merger, consolidation, share exchange or acquisition of the Company with or by another person pursuant to which the persons that beneficially owned, directly or indirectly, the Company’s voting shares immediately prior to such transaction beneficially own, directly or indirectly, immediately after such transaction, shares of the surviving, continuing or acquiring corporation’s stock representing more than 50% of the total outstanding voting power of all outstanding classes of stock of the surviving, continuing or acquiring corporation in substantially the same proportions (relative to each other) as immediately prior to such transaction; or

 

(iii)          the Company’s stockholders approve and adopt a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets.

 

Market Price means, with respect to the Common Stock, on any given day, the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock on the Nasdaq Capital Market on such date.  If the Common Stock is not traded on the Nasdaq Capital Market on any date of determination, the Market Price of the Common Stock on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock is so listed or quoted, or if the Common Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock on that date as determined by a nationally recognized independent investment banking firm retained by the Company for this purpose.

 

13

 

Option means any rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.

 

Other Securities refers to any stock (other than Common Stock) and other securities of the Company or any other entity (corporate or otherwise) (i) which the holder of this Warrant at any time shall be entitled to receive, or shall have received, on the exercise of this Warrant, in lieu of or in addition to Common Stock, or (ii) which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities, in each case pursuant to Section 5 or 6 hereof.

 

Permitted Holders means Todd Brooks, John Hearn, Gaston Kearby, their respective heirs and any Permitted Transferees (as defined in the Amended and Restated Lock-Up Agreement, dated as of March 28, 2013, by and between the Company and the Restricted Stockholders (defined therein) of the foregoing.

 

Permitted Holders Threshold means a number of shares of Common Stock equal to 7,597,685 plus the number of shares of Common Stock issued to the Permitted Holders pursuant to any Excluded Events or into which any warrants issued to the Permitted Holders pursuant to any Excluded Event are exercisable or exchangeable.

 

Post-Amendment Period means the period commencing on April 21, 2015 and ending on July 31, 2015.

 

Preliminary Fundamental Change means, with respect to the Company, (A) the execution of a definitive agreement for a transaction or (B) the recommendation that stockholders tender in response to a tender or exchange offer, in the case of both (A) and (B), that would reasonably be expected to result in a Fundamental Change.

 

Principal Market means, at any time, the securities exchange, quotation system or over-the-counter trading facility on which the Common Stock is then principally traded or quoted at such time.

 

Reference Price means, on any date of determination, the greater of (i) the Market Price per share as of such date and (ii) the Exercise Price.

 

Spin-Off means a transaction in which the Company spins off or otherwise divests itself of a part of its business or operations or disposes all or a part of its assets in a transaction in which the Company does not receive compensation for such business, operations or assets, but causes securities of a subsidiary of the Company or another entity to be distributed or otherwise issued to security holders of the Company,

 

Trading Day means, at any time, a day on which the Principal Market is open for the general trading or quotation of securities and the Common Stock is traded or quoted thereon without suspension or interruption.

 

13.          LIMITATION ON BENEFICIAL OWNERSHIP.  Notwithstanding the foregoing, the holder shall not be entitled to receive shares of Common Stock upon exercise of this Warrant to the extent (but only to the extent) that such receipt would cause the holder to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and

 

14

 

regulations promulgated thereunder) of a number of shares of Common Stock which exceeds the Maximum Percentage of the shares of Common Stock outstanding at such time.  This limitation on beneficial ownership shall be terminated (i) upon 61 days’ notice to the Company by the holder or (ii) immediately on the date that is 30 days prior to the expiration of the Exercise Period.  Any purported delivery of shares of Common Stock upon exercise of this Warrant shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the holder becoming the beneficial owner of more than the Maximum Percentage of the shares of Common Stock outstanding at such time.  If any delivery of shares of Common Stock owed to the holder upon exercise of this Warrant is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such shares of Common Stock as promptly as practicable after the holder gives notice to the Company that such delivery would not result in such limitation being triggered.  For purposes of this Section 13, (a) the term “Maximum Percentage” shall mean initially 5%; provided, that if at any time after the Closing Day the Holder Group beneficially owns in excess of 5% of the outstanding shares of Common Stock (excluding any shares issuable under this Warrant and any other convertible security including a similar limitation), then the Maximum Percentage shall automatically increase to 10% so long as the Holder Group owns in excess of 5% of the outstanding shares of Common Stock (excluding any shares issuable under this Warrant and any other convertible security including a similar limitation), and (b) the term “Holder Group” shall mean the holder of this Warrant plus any other person with which such holder is considered to be part of a group under Section 13 of the Exchange Act or with which such holder otherwise files reports under Sections 13 and/or 16 of the Exchange Act.  The limitations in this Section 13 shall not have an effect on any calculation or payment due to the Holder of this Warrant pursuant to Section 15 hereof.

 

14.                               Intentionally Omitted.

 

15.                               FUNDAMENTAL CHANGE.  Upon the occurrence of a Fundamental Change, the Company shall, upon the consummation of such Fundamental Change, make an offer to repurchase all of this Warrant at the option value of the Warrant using Black-Scholes calculation methods and making the assumptions described in the Black-Scholes methodology described in Exhibit A.  Such offer shall be made within ten (10) business days following the consummation of such Fundamental Change, and shall remain open for a period of not less than twenty (20) business days nor more than thirty (30) business days.  Payment of such purchase price by the Company to the holder of this Warrant, if tendered pursuant to such offer to purchase, shall be due in cash promptly upon termination of such offer period.  The Company will comply with all the applicable provisions of Rule 13e-4 and any other tender offer rules under the Exchange Act, if required, in connection with any offer by the Company to repurchase this Warrant and to the extent necessary to comply therewith, the time periods specified herein shall be extended accordingly.  The fact that this Warrant may be exercised on a cashless net exercise basis as provided in Section 2.3 shall not have any effect on any calculation or payment due to the Holder of this Warrant pursuant to this Section 15.  The Company agrees that it will not take any action resulting in a Preliminary Fundamental Change or a Fundamental Change in the absence of definitive documentation providing for such repurchase of the Warrant pursuant to this Section 15.

 

16.                               WARRANT AGENT.  The Company may, by written notice to the holder of this Warrant, appoint an agent for the purpose of issuing Common Stock on the exercise of this Warrant pursuant to Section 2 hereof, and exchanging or replacing this Warrant pursuant to the Purchase Agreement,

 

15

 

or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

 

17.                               REMEDIES.  The Company stipulates that the remedies at law of the holder of this Warrant in the event of any default or threatened default by the Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.

 

18.                               NOTICES.  All notices and other communications from the Company to the holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, or sent by overnight courier (or sent in the form of a telex or telecopy) at such address as may have been furnished to the Company in writing by such holder or, until any such holder furnishes to the Company an address, then to, and at the address of, the last holder of this Warrant who has so furnished an address to the Company.

 

19.                               MISCELLANEOUS.  In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.  This Warrant and any term hereof may be changed, waived, discharged or terminated only by a statement in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.  This Warrant shall be governed by and construed in accordance with the domestic substantive laws (and not the conflict of law rules) of the State of New York.  The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.

 

16

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer.

 

	
Dated   as of April     , 2015
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ZAZA   ENERGY CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   Todd A. Brooks
    
	
 
    	
 
    	
Title:   President and Chief Executive Officer
    
				

 

[SIGNATURE PAGE TO WARRANT]

 

 

FORM OF SUBSCRIPTION

 

(To be signed only on exercise

of Common Stock Purchase Warrant)

 

TO:                           ZaZa Energy Corporation

 

1.                                      The undersigned Holder of the attached Warrant hereby elects to exercise its purchase right under such Warrant to purchase shares of Common Stock of ZaZa Energy Corporation, a Delaware corporation (the “Company”), as follows (check one or more, as applicable):

 

o                                    to exercise the Warrant to purchase                      shares of Common Stock and to pay the Aggregate Exercise Price therefor by wire transfer of United States funds to the account of the Company, which transfer has been made prior to or as of the date of delivery of this Form of Subscription pursuant to the instructions of the Company;

 

and/or

 

o                                    to exercise the Warrant with respect to                          shares of Common Stock pursuant to the net exercise provisions specified in Section 2.3 of the Warrant.

 

2.                                      Please issue a stock certificate or certificates representing the appropriate number of shares of Common Stock in the name of the undersigned or in such other name(s) as is specified below:

 

	
Name:
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TIN:
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
Dated:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Signature   must conform exactly to name of
   Holder
   as specified on the face of the Warrant)
    	
 
    	
 
    	
 
    

 

2

 

FORM OF ASSIGNMENT

(To be signed only on transfer of Warrant)

 

For value received, the undersigned hereby sells, assigns, and transfers unto                          the right represented by the within Warrant to purchase         shares of Common Stock of ZaZa Energy Corporation, a Delaware corporation, to which the within Warrant relates, and appoints                                attorney to transfer such right on the books of ZaZa Energy Corporation, with full power of substitution in the premises.

 

	
 
    	
 
    	
[insert   name of Holder]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
[insert   address of Holder]
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Signed   in the presence of:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
						

 

3

 

EXHIBIT A

 

Black-Scholes Assumptions

 

For the purpose of this Exhibit A:

 

“Acquiror” means (A) the third party that has entered into definitive document for a transaction, or (B) the offeror in the event of a tender or exchange offer, which could reasonably result in a Fundamental Change upon consummation.

 

	
Underlying Security Price:
    	
 
    	
·                  In the event of a merger   or acquisition, (A) in the event of an “all cash” deal, the cash per   share offered to the Company’s stockholders by the Acquiror; (B) in the   event of an “all stock” deal, (1) in the event of a fixed exchange ratio   transaction, the product of (i) the average of the Market Price of the   Acquiror’s common stock for the ten trading day period ending on the day   preceding the date of the Preliminary Fundamental Change and (ii) the   number of Acquiror’s shares being offered for one share of Common Stock and   (2) in the event of a fixed value transaction, the value offered by the Acquiror   for one share of Common Stock; (C) in the event of a transaction   contemplating various forms of consideration for each share of Common Stock,   the cash portion, if any, shall be valued as clause (A) above and the   stock portion shall be valued as clause (B) above and any other forms of   consideration shall be valued by the Board of Directors of the Company in   good faith, without applying any discounts to such consideration. 

·                  In the event of all other   Fundamental Change events, the average of the Market Price of the Common   Stock for the ten trading day period beginning on the date of the Preliminary   Fundamental Change.

 
    
	
Exercise   Price:
    	
 
    	
The   Exercise Price as adjusted and then in effect for the Warrant.
    
	
Dividend   Rate:
    	
 
    	
The   Company’s annualized dividend yield as of the date of the Preliminary   Fundamental Change (such date, the “Reference   Date”) in the event of a Fundamental Change.
    
	
Interest   Rate:
    	
 
    	
The   applicable U.S. 5 year treasury note risk free rate as of the Reference   Date.
    
	
Model   Type:
    	
 
    	
Black-Scholes
    
	
Exercise   Type:
    	
 
    	
American
    
	
Put   or Call:
    	
 
    	
Call
    
	
Trade   Date:
    	
 
    	
The   Reference Date
    
	
Expiration   Date:
    	
 
    	
The   expiration of the Exercise Period
    
	
Settle   Date:
    	
 
    	
The   Reference Date plus one business day
    
	
Exercise   Delay:
    	
 
    	
0
    
	
Volatility:
    	
 
    	
The   average daily volatility over the previous six months for the Common Stock as   listed by Bloomberg L.P., as of the Reference Date; provided, however, that   if the Underlying Security Price on the Reference Date is at least $100 per   share, then the Volatility shall be no more than 40%.
    

 

Such valuation of the Warrant based on the Black-Scholes methodology shall not be discounted in any way. If the holder disputes such Black-Scholes valuation pursuant to this Exhibit A as calculated by the Company, the Company and the holder will choose a mutually-agreeable firm to compute the valuation of the Warrant using the guidelines above, and such valuation shall be final. The fees and expenses of such firm shall be borne equally by the Company and the holder.  In the event that a new warrant is issued by a company in a Spin-Off from the Company pursuant to Section 5.1(b) of the Warrant, references in this Exhibit A to such spun-off

 

 

company’s “Dividend Rate” and “Volatility” shall refer those of the Company unless at the time of such measurement, such spun-off company has been trading in the public markets for at least 6 months.

 

2

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