L-3 COMMUNICATIONS HOLDINGS,
INC.
2008 DIRECTORS STOCK INCENTIVE PLAN
The L-3
Communications Holdings, Inc. 2008 Directors Stock Incentive Plan
(the “Plan”) is designed:
(a) to
promote the long-term financial interests and growth of L-3
Communications Holdings, Inc. (the “Corporation”) and
its Subsidiaries by attracting and retaining Non-Employee Directors
with the training, experience and ability to enable them to make a
substantial contribution to the success of the Corporation’s
business; and
(b) to
further the alignment of interests of Non-Employee Directors with
those of the stockholders of the Corporation through opportunities
for increased stock, or stock-based, ownership in the
Corporation.
As used in the
Plan, the following words shall have the following
meanings:
(a) “Award”
means any award granted pursuant to Section 3.
(b) “Award
Agreement” means an agreement described in Section 6 by
the Corporation for the benefit of a Participant, setting forth (or
incorporating by reference) the terms and conditions of an Award
granted to a Participant.
(c) “Board
of Directors” means the Board of Directors of the
Corporation.
(d) “Code”
means the Internal Revenue Code of 1986, as amended.
(e) “Committee”
means the Compensation Committee of the Board of
Directors.
(f) “Common
Stock” or “Share” means common stock, par value
$.01 per share of the Corporation, subject to adjustments made
under Sections 8 and 9 or by operation of law.
(g) “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
(h) “Fair
Market Value” means, unless otherwise defined in an Award
Agreement, the closing price of the Common Stock as reported on the
composite tape of New York Stock Exchange issues (or if, at the
date of determination, the Common Stock is not so listed or if the
principal market on which it is traded is not the New York Stock
Exchange, such other reporting system as shall be selected by the
Committee) on the relevant date, or, if no sale of the Common Stock
is reported for that date, the next preceding day for which there
is a reported sale. The Committee shall determine the Fair Market
Value of any security that is not publicly traded, using criteria
as it shall determine, in its sole direction, to be appropriate for
the valuation.
(i) “Non-Employee
Director” means a director of the Corporation who is not
(i) an employee of the Corporation or any of its Subsidiaries,
(ii) a director, officer or employee of any entity that owns,
beneficially or of record, directly or indirectly, 10% or more of
the Common Stock outstanding on the date of grant of the Award or
(iii) a person that owns, beneficially or of record, directly
or indirectly, 10% or more of the Common Stock outstanding on the
date of grant of the Award.
(j) “Participant”
means a Non-Employee Director to whom one or more grants of Awards
have been made and such grants have not all been forfeited or
terminated under the Plan.
(k) “Subsidiary”
shall mean any corporation in an unbroken chain of corporations
beginning with the Corporation if each of the corporations, or
group of commonly controlled corporations, other than the last
corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
(a) Type
of Awards. Participants may be granted any of the following types
of Awards, either singly, in tandem or in combination with other
Awards, at such times and for such number of shares of Common Stock
as shall be determined from time to time by the Board of Directors
(and/or the Committee to the extent such authority is delegated
thereto in whole or in part by the Board of Directors):
(1) Options.
An Option is an Award in the form of an option to purchase shares
of Common Stock that is not intended to comply with requirements of
Section 422 of the Code. The exercise price of each Option
granted under this Plan shall not be less than the Fair Market
Value of the Common Stock on the date that the Option is granted.
No dividend equivalents may be paid on unissued shares of Common
Stock underlying an Award of Options.
(2) Restricted
Stock. Restricted Stock is an Award of issued shares of Common
Stock (other than Minimum Ownership Stock) that are subject to
restrictions on transfer and/or such other restrictions on
incidents of ownership as the Committee may determine. Unless
otherwise provided by the Committee in the applicable Award
Agreement, the vesting period for Awards of Restricted Stock shall
be three years following date of grant.
(3) Restricted
Stock Units. A Restricted Stock Unit is an Award of bookkeeping
credits that automatically convert into shares of Common Stock upon
satisfaction of a stated vesting period or requirement. Restricted
Stock Units are not outstanding shares of Common Stock and do not
entitle a Participant to voting or other rights with respect to
Common Stock; provided, however, that the applicable Award
Agreement may provide for the payment of dividend equivalents on
unissued shares of Common Stock underlying an Award of Restricted
Stock Units, on either a current or deferred or contingent basis,
and either in cash or in additional shares of Common
Stock.
(4) Minimum
Ownership Stock. Minimum Ownership Stock is an Award of shares of
Common Stock that are issued to the Participant in lieu of cash
compensation otherwise payable to the Participant in order to
satisfy the Corporation’s applicable stock ownership
guidelines from time to time in effect. Minimum Ownership Stock
shall not be subject to any vesting period or requirement, but may
be subject to restrictions on transfer and/or such other
restrictions on incidents of ownership as the Committee may
determine.
(b) At
or prior to the time of the grant of each Award the Committee shall
determine, and shall include or incorporate by reference in the
Award Agreement, such other conditions or restrictions on the grant
or exercise of the Award as the Committee deems
appropriate.
4. Shares of
Common Stock Subject to the Plan
(a) Subject
to the provisions of Section 8 and this Section 4, the
maximum number of shares of Common Stock that may be issued
pursuant to all Awards under the Plan is 300,000. Any unexercised,
unconverted or undistributed portion of any expired, cancelled,
terminated or forfeited Award, or any alternative form of
consideration under an Award that is not paid in connection with
the settlement of an Award or any portion of an Award (including
any shares under an Award that are not issued in consideration for
a cash settlement of equivalent value), shall again be available
for Awards under the Plan, whether or not the Participant has
received benefits of ownership (such as dividends or dividend
equivalents or voting rights) during the period in which the
Participant’s ownership was restricted or otherwise not
vested. For the avoidance of doubt, the following shares of Common
Stock shall not become available for reissuance under the Plan:
(1) shares tendered by Participants as full or partial payment
to the Corporation upon exercise of Options and (2) shares
withheld by, or otherwise remitted to, the Corporation to satisfy a
Participant’s tax withholding obligations in connection with
an Award.
(b) Shares
of Common Stock deliverable under the terms of the Plan may be, in
whole or in part, authorized and unissued shares of Common Stock,
or issued shares of Common Stock held in the Corporation’s
treasury, or both.
(c) The
Corporation shall at all times reserve a number of shares of Common
Stock (authorized and unissued shares of Common Stock, issued
shares of Common Stock held in the Corporation’s treasury, or
both) equal to the maximum number of shares of Common Stock that
may be subject to outstanding Award grants and future Award grants
under the Plan.
5.
Administration of the Plan
(a) The
Plan shall be administered by the Committee or a subcommittee
appointed by the Committee. The Committee may adopt its own rules
of procedure, and action of a majority of the members of the
Committee taken at a meeting, or action taken without a meeting by
unanimous written consent, shall constitute action by the
Committee. The Committee shall have the power and authority to
administer, construe and interpret the Plan, to make rules for
carrying it out and to make changes in such rules. Any such
interpretations, rules and administration shall be consistent with
the basic purposes of the Plan.
(b) The
participating members of the Committee administering the Plan shall
include only those members of the Committee who are
“Non-Employee Directors” (as defined in Rule 16b-3
promulgated under the Exchange Act).
(c) Unless
in contravention to any laws, rules and regulations governing the
Plan, including the Exchange Act, the Committee may delegate to the
chief executive officer and to other senior officers of the
Corporation its duties under the Plan subject to such conditions
and limitations as the Committee shall prescribe; provided that
under no circumstances may the chief executive officer or any other
senior officer be delegated any authority (including the authority
to approve or award the grant of an Award), except as permitted
under New York and Delaware law.
(d) The
Committee may employ attorneys, consultants, accountants,
appraisers, brokers or other persons in respect of the
administration of the Plan, who may be employees of the Corporation
or outside advisers to the Corporation. The Committee, the
Corporation, and the officers and directors of the Corporation
shall be entitled to rely upon the advice, opinions or valuations
of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final
and binding upon all Participants, the Corporation and all other
interested persons. No member of the Committee shall be personally
liable for any action, determination or interpretation made in good
faith with respect to the Plan or Award grants, and all members of
the Committee shall be fully protected, indemnified and held
harmless by the Corporation with respect to any such action,
determination or interpretation.
Award grants may
be made under this Plan only to Non-Employee Directors of the
Corporation.
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