L-3 COMMUNICATIONS HOLDINGS,
INC.
2008 LONG TERM PERFORMANCE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
(Version 0005)
THIS AGREEMENT , effective as of the Grant Date (as defined
below), is between L-3 Communications Holdings, Inc., a Delaware
corporation (the “Company”), and the Optionee (as
defined below).
WHEREAS , the Company has adopted the L-3 Communications
Holdings, Inc. 2008 Long Term Performance Plan (the
“Plan”) in order to provide additional incentives to
selected officers and employees of the Company and its
subsidiaries; and
WHEREAS , the Committee responsible for administration of
the Plan has determined to grant an option to the Optionee as
provided herein and the Company and the Optionee hereby wish to
memorialize the terms and conditions applicable to the Option (as
defined below);
WHEREAS , the following terms shall have the following
meanings for purposes of this Option Agreement:
“Award
Letter” shall mean the letter to the Optionee attached hereto
as Exhibit A;
“Common
Stock” means the Company’s Common Stock, par value
$0.01 per share;
“Exercise
Price” shall mean the “Grant Price” listed in the
Award Letter;
“Grant
Date” shall mean the “Grant Date” listed in the
Award Letter;
“Option
Agreement” or this “Agreement” shall mean this
agreement including (unless the context otherwise requires) the
Award Letter.
“Optionee”
shall mean the “Participant” listed in the Award
Letter; and
“Shares”
shall mean that number of shares of Common Stock listed in the
Award Letter as “Awards Granted.”
NOW, THEREFORE , the parties hereto agree as
follows:
1.1
Effective as of the Grant Date, for good and valuable
consideration, the Company hereby irrevocably grants to the
Optionee the right and option (the “Option”) to
purchase all or any part of the Shares, subject to, and in
accordance with, the terms and conditions set forth in this Option
Agreement.
1.2
The Option is not intended to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.
1.3
This Option Agreement shall be construed in accordance and
consistent with, and subject to, the terms of the Plan (the
provisions of which are incorporated hereby by reference); and,
except as otherwise expressly set forth herein, the capitalized
terms used in this Option Agreement shall have the same definitions
as set forth in the Plan. In the event of any conflict between one
or more of this Option Agreement, the Award Letter and the Plan,
the Plan shall govern this Option Agreement and the Award Letter,
and the Option Agreement (to the extent not in conflict with the
Plan) shall govern the Award Letter.
The
price at which the Optionee shall be entitled to purchase the
Shares upon the exercise of the Option shall be the Exercise Price
per share, subject to adjustment as provided in
Section 9.
The
Option shall be exercisable to the extent and in the manner
provided herein for a period of ten (10) years from the Grant
Date (the “Exercise Term”); provided ,
however , that the Option may be earlier terminated as
provided in Section 6 hereof.
4.
Exercisability of Option.
Unless
otherwise provided in this Option Agreement or the Plan, the Option
shall entitle the Optionee to purchase, in whole at any time or in
part from time to time, one-third (1/3 rd )
of the total number of shares covered by the Option on the first
anniversary of the Grant Date, an additional one-third (1/3
rd ) of the total number of Shares covered by the
Option on the second anniversary of the Grant Date and the final
one-third (1/3 rd )
of the total number of Shares covered by the Option on the
expiration of the third anniversary of the Grant Date. Each such
right of purchase shall be cumulative and shall continue, unless
sooner exercised or terminated as herein provided, during the
remaining period of the Exercise Term. Any fractional number of
shares resulting from the application of the foregoing percentages
shall be rounded to the next higher whole number of Shares (not to
exceed the total number of Shares granted as provided in
Section 1.1).
5. Manner of
Exercise and Payment.
5.1
Subject to the terms and conditions of this Option Agreement and
the Plan, the Option may be exercised by delivery of written notice
to the Secretary of the Company (or his or her designee), at its
principal executive office. Such notice shall state that the
Optionee or other authorized person is electing to exercise the
Option and the number of Shares in respect of which the Option is
being exercised and shall be signed by the person or persons
exercising the Option. In the event the Company has designated an
Award Administrator (as defined below), the Option may also be
exercised by giving notice (including through electronic means) in
accordance with the procedures established from time to time by the
Award Administrator. Any exercisable portion of the Option or the
entire Option, if then wholly exercisable, may be exercised in
whole or in part, provided that partial exercise shall be for whole
shares of Common Stock only. If requested by the Committee, such
person or persons shall (i) deliver this Agreement (including
the Award Letter) to the Secretary of the Company who shall endorse
thereon a notation of such exercise and (ii) provide
satisfactory proof as to the right of such person or persons to
exercise the Option.
5.2
The notice of exercise described in Section 5.1 shall be
accompanied by either (i) payment of the full purchase price
for the Shares in respect of which the Option is being exercised
and of all applicable Withholding Taxes (as defined in
Section 11) pursuant to Section 11 hereof (such payment
to be made in cash, by delivering Shares, by withholding a portion
of the Shares otherwise issuable or by any combination thereof) or
(ii) instructions from the Optionee to the Company directing
the Company to deliver a specified number of Shares directly to a
designated broker or dealer pursuant to a cashless exercise
election, in which case the Company must receive, prior to the
issuance of the Shares in respect of which the Option is being
exercised, payment of the full purchase price for the Shares in
respect of which the Option is being exercised and all applicable
Withholding Taxes pursuant to Section 11 hereof (such payment
to be made in cash, by delivering Shares, by withholding a portion
of the Shares otherwise issuable or by any combination thereof).
The value of any Shares withheld or delivered in satisfaction of
the purchase price for the Shares in respect of which the Option is
being exercised and/or Withholding Taxes shall be determined by
reference to the Fair Market Value of such Shares as of the date of
such
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withholding or
delivery. In the event that Withholding Taxes are satisfied by
withholding a portion of the Shares otherwise issuable in
connection with an exercise of the Option, the Company shall not
withhold any Shares in excess of the minimum number of Shares
necessary to satisfy the applicable Withholding Taxes.
5.3
Upon receipt of the notice of exercise and any payment or other
documentation as may be necessary pursuant to Sections 5.1 and
5.2 relating to the Shares in respect of which the Option is being
exercised, the Company shall, subject to the Plan and this Option
Agreement, take such action as may be necessary to effect the
transfer to the Optionee of the number of Shares as to which such
exercise was effective.
5.4
The Optionee shall not be deemed to be the holder of, or to have
any of the rights and privileges of a stockholder of the Company in
respect of, Shares purchased upon exercise of the Option until
(i) the Option shall have been exercised pursuant to the terms
of this Option Agreement and the Optionee shall have paid the full
purchase price for the number of Shares in respect of which the
Option was exercised and any applicable Withholding Taxes and
(ii) the Company shall have issued the Shares in connection
with such exercise.
6.
Termination of Employment.
6.1
If, prior to the date of the initial vesting of the Option pursuant
to Section 4 hereof (the “Initial Vesting Date”),
the Optionee’s employment with the Company and its
subsidiaries shall be terminated for any reason, other than death
or permanent disability (as herein defined), the Optionee’s
right to exercise the Option shall terminate as of the effective
date of termination (the “Termination Date”) and all
rights hereunder shall cease (unless otherwise provided for by the
Committee in accordance with the Plan). For purposes hereof,
“permanent disability” means incapacity due to physical
or mental illness as a result of which the Optionee becomes
eligible for benefits under the applicable long-term disability
plan or policy of the Company or the applicable subsidiary of the
Company which is in effect at the time Optionee became
incapacitated.
6.2
If the Optionee’s employment with the Company and its
subsidiaries shall be terminated by reason of death or permanent
disability, the Option shall become immediately fully exercisable
as to 100% of the Shares subject to the Option, and the Optionee or
the executor or administrator of the estate of the Optionee or the
person or persons to whom the Option shall have been validly
transferred by the executor or the administrator pursuant to will
or the laws of descent or distribution shall have the right, within
one year from the date of the Optionee’s death or permanent
disability, to exercise the Option, subject to any other limitation
contained herein on the exercise of the Option in effect at the
date of exercise.
6.3
If, on or after the Initial Vesting Date, the Optionee’s
employment with the Company and its subsidiaries shall be
terminated for any reason other than for Cause or death or
permanent disability, the Optionee shall have the right within
three months after the Termination Date (or, if the
Optionee’s employment with the Company and its subsidiaries
is terminated by reason of a qualified retirement as herein
defined, within three years after the Termination Date) to exercise
the Option to the extent that installments thereof shall have been
or become exercisable at the Termination Date and shall not have
been exercised, subject to any other limitation contained herein on
the exercise of the Option in effect at the date of exercise, and
(unless otherwise provided for by the Committee in accordance with
the Plan) the Optionee’s right to exercise any installments
of the Option that were not exercisable at the Termination Date (if
any) shall terminate as of the Termination Date. If the
Optionee’s employment is terminated for Cause, the Option
shall terminate as of the Termination Date, whether or
not
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