L-3 COMMUNICATIONS
CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT
PLAN
(Restated January 1,
2005)
The purpose of
this L-3 Communications Corporation Supplemental Executive
Retirement Plan is to provide supplemental retirement income for a
select group of management and highly compensated employees of L-3
Communications Corporation and certain of its subsidiaries and
divisions by providing benefits equal to those benefits that can
not be provided under certain tax-qualified pension plans because
of the limitations of Sections 401(a)(17) and 415 of the
Internal Revenue Code of 1986, as amended.
The Plan was
effective as of May 1, 1997. It was amended and restated in
1999 and 2000. The Plan is amended and restated effective
January 1, 2005 to comply with the requirements of Section
409A of the Code, except for Sections 3.4 and 3.5 which are
amended effective January 1, 2009.
Additional
SERP Participant – An employee of a Participating Company
who is not eligible to participate in an L-3 sponsored defined
benefit pension plan and designated by the Board or the
Compensation Committee thereof as eligible to participate in the
SERP.
Adjusted
Compensation – The Participant’s
“compensation” as defined in the applicable Pension
Plan provided that (1) base salary deferred by a Participant
under any deferred compensation plan sponsored by the Company shall
be taken into account, (2) management incentive bonuses,
whether or not deferred by a Participant under any deferred
compensation plan sponsored by the Company shall be taken into
account, and (3) the limitations under Section 401(a)(17)
of the Code shall not apply.
Beneficiary — The Participant’s beneficiary with
respect to the Pension Benefit payable under the Pension Plan or
such Beneficiary elected at the time of benefit
commencement.
Board
— The Board of Directors of L-3 Communications
Corporation.
Code
— The Internal Revenue Code of 1986, as amended.
Committee
— The committee described in Section 6.1, which
administers this SERP.
Company
— L-3 Communications Corporation.
Holdings
– L-3 Communications Holdings, Inc.
Participant – The individuals who are described in
(a) or (b) below:
(a) An
employee of a Participating Company who participates in a Pension
Plan and (1) whose Adjusted Compensation for a calendar year,
including all amounts deferred by the employee under any deferred
compensation plan sponsored by the Company, exceeds the maximum
dollar amount for that year under Section 401(a)(17) of the
Code, or (2) for whom benefits under the Pension Plan are
limited by Sections 401(a)(17) or 415 of the Code, provided
that the employee meets any other requirements as determined by the
Committee in its sole and exclusive discretion. An employee who
satisfies the requirements for participation in this SERP for any
calendar year shall continue to be a Participant for all subsequent
years regardless of whether he or she meets the participation
requirements of this paragraph for any such subsequent
year.
(b) An
employee who is an Additional SERP Participant.
The Committee
shall limit participation in this SERP to 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, as determined by the Committee, in its sole and exclusive
discretion.
Participating
Company — The Company and any affiliate thereof that
maintains a Pension Plan listed in Appendix A.
Pension
Benefit — The Participant’s accrued benefit under
the Pension Plan.
Pension
Plan — The tax-qualified defined benefit plan, among
those listed in Appendix A, in which the Participant participates
(or, in the case of an Additional SERP Participant, would have been
eligible to participate had he or she been an employee of the
Participating Company on the date prior to the date the Pension
Plan was frozen to newly hired employees).
Section 409A Change of Control Event — A change
in ownership or effective control of Holdings, or in the ownership
of a substantial portion of the assets of Holdings, within the
meaning of Section 409A(a)(2)(A)(v) of the Code.
SERP
— This L-3 Communications Corporation Supplemental Executive
Retirement Plan.
Supplemental
Pension Benefit — The benefit, if any, to which a
Participant is entitled under the terms of this SERP.
L-3 Communications Corporation
Supplemental Executive Retirement Plan
2
ELIGIBILITY FOR AND AMOUNT OF
BENEFITS
3.1 Eligibility
for Benefits . A Participant who terminates employment and is
entitled to a Pension Benefit under the terms of the Pension Plan
(or, in the case of an Additional SERP Participant, would have been
entitled to a Pension Benefit had he or she been an employee of the
Participating Company on the date prior to the date the Pension
Plan was frozen to newly hired employees) shall be entitled to a
Supplemental Pension Benefit in an amount determined in accordance
with Section 3.2 or any applicable Appendix and payable in
accordance with Sections 3.4
, 3.5 and
3.6.
3.2. Amount of
Benefit for General SERP Participants . Except as otherwise
provided in Section 3.3, Appendix B-1 or B-2, the
Supplemental Pension Benefit shall be equal to the excess, if any,
of:
(a) the
benefit that would have been paid under the applicable Pension Plan
to such Participant (or his or her Beneficiary), in the normal form
of benefit payable to a single participant pursuant to the terms of
the Pension Plan, based on Adjusted Compensation and irrespective
of the limitations of Sections 401(a)(17) and 415 of the Code,
less
(b) the
Pension Benefit that is actually payable under the Pension Plan to
such Participant (or his or her Beneficiary), in the normal form of
benefit payable to a single participant, based on
“compensation” as defined in the Pension Plan and
taking into account the limitations of Sections 401(a)(17) and
415 of the Code.
The
Supplemental Pension Benefit resulting from (a) less
(b) in this Section 3.2 is then further reduced based
upon early commencement and optional form elected, if any. The
reduction factors utilized for an early commencement are equivalent
to the early reduction factors provided under the Pension Plan. For
a surviving spouse Beneficiary where the Participant is deceased
prior to commencement of the Pension Plan or Supplemental Pension
Plan Benefit the Supplemental Pension Benefit will be reduced for
early commencement, if applicable, and payable as a survivor
benefit of a 50% joint and survivor annuity.
3.3 Amount of
Benefit for Additional SERP Participants . The Supplemental
Pension Benefit for an Additional SERP Participant shall be the
benefit that would have been paid under the Pension Plan to such
Participant (or his or her Beneficiary), based on Adjusted
Compensation and irrespective of the limitations of
Sections 401(a)(17) and 415 of the Code, if the Additional
SERP Participant had been eligible to participate in the Pension
Plan had it not been frozen to newly hired employees (but without
regard to the Pension Plan provisions reflecting the limitations of
Sections 401(a)(17) and 415 of the Code).
L-3 Communications Corporation
Supplemental Executive Retirement Plan
3
3.4. Form of
Benefit Payments .
(a) Except
as otherwise provided in subsections (b) or (c) below,
any Supplemental Pension Benefit to which a Participant is entitled
under this SERP shall be paid in the form of a life
annuity.
(b) A
Participant may elect not more than 90 days prior to the event
that gives rise to the right to benefit payments to receive any
Supplemental Pension Benefit to which he or she is entitled in the
form of a 50%, 75% or 100% joint and survivor annuity, or a life
annuity with ten years certain, each of which shall be the
actuarial equivalent of the Participant’s Supplemental
Pension Benefit payable as a life annuity using a 6% interest rate
and the mortality table under Rev. Rul. 2001-62. Upon the death of
a Participant who has commenced a Supplemental Pension Benefit and
has elected a 50%, 75% or 100% joint and survivor annuity or a life
annuity with ten years certain, benefits shall continue to be paid
to the Participant’s Beneficiary, provided that such
Beneficiary survives the Participant.
(c) If
the present value of the Participant’s Supplemental Pension
Benefit is $5,000 or less at the time payments are to commence, the
entire amount of such Supplemental Pension Benefit, payable as a
life annuity, shall be paid to the Participant in one payment. The
present value of the Participant’s Supplement Pension Benefit
shall be determined using the actuarial assumptions under Section
417(e) of the Code as such actuarial assumptions are incorporated
in the Pension Plan and in effect on the date of
payment.
3.5 Time of
Benefit Payments .
(a) Except
as otherwise provided in subsection (b) or (c) below, a
Supplemental Pension Benefit to which a Participant is entitled
under this SERP shall be payable on the later of
Participant’s termination of employment date or the
Participant’s earliest retirement date under the applicable
Pension Plan. The Participant’s earliest retirement date
under the applicable Pension Plan shall mean the earliest date on
which the Participant may begin to receive payment of his Pension
Benefit.
(b) If
the Supplemental Pension Benefit becomes payable due to termination
of employment (other than due to death), the first payment shall be
made on the date that is six months following the termination of
employment date. In such case, the amount of Supplemental Pension
Benefit shall be determined as of the termination of employment
date but actuarially increased to reflect the six-month delay in
payment using the actuarial factors set forth in
Section 3.4(b) or (c) (as applicable) or, with respect to a
Supplemental Pension Benefit payable in the form set forth in
Section 3.4(a), the same actuarial assumptions provided for
under Section 3.4(b).
(c) Notwithstanding
the foregoing, if a Participant elects on or after January 1,
2008 and on or before December 31, 2008, in accordance with
Notice 2007-86, 2007-46 IRB 990, the date on which benefit payments
are to commence, payment of his or her Supplemental Pension Benefit
shall be paid in accordance with such election. Such election will
be effective
L-3 Communications Corporation
Supplemental Executive Retirement Plan
4
only if it
applies to amounts that would not otherwise be payable in 2008 and
does not cause any amount to be paid prior to January 1,
2009.
3.6. Payment on
Change of Control .
(a) Notwithstanding
any other provision of this SERP to the contrary, in the event of a
Change of Control, a Participant who has not begun receiving
benefits under this SERP and either (1) has a vested right to
a Pension Benefit under the terms of the Pension Plan at the time
of the Change of Control or (2) in the case of an Additional
SERP Participant has completed five years of service with the
Company at the time of the Change of Control shall be entitled to
receive a Supplemental Pension Benefit in the amount determined
under Section 3.2 or 3.3 or Appendix B-1 or B-2, in each
case as of the date immediately preceding
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