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PERFORMANCE SHARE AGREEMENT
This Performance Share Agreement (the "Agreement") is made as of the
9th day of August 2000 by and between Orbital Sciences Corporation, a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Human Resources and Nominating Committee of the Board of
Directors of the Company (the "Committee") has determined that it is desirable
and in the best interests of the Company to grant to the Executive the right
to receive performance share units (the "Performance Shares"), in order to
provide the Executive with further incentive to enhance the profitability and
financial strength of the Company by linking a component of the Executive's
compensation to Company stock value, which Performance Shares entitle the
Executive to receive an annual bonus measured by the increased value of the
Company's common stock, par value $.01 per share (the "Common Stock").
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties hereby agree as follows:
1. GRANT OF PERFORMANCE SHARES. The Company hereby grants to
the Executive a total of 50,000 Performance Shares, which shall have the
features set forth below. The date of the grant of the Performance Shares is
August 9, 2000.
a. Vesting. The 50,000 Performance Shares shall vest
immediately.
b. Performance Bonus Calculation. Until expiration or
termination, each vested Performance Share shall
entitle the Executive to receive a bonus (the
"Performance Bonus"). The Performance Bonus shall
be calculated on each of August 9, 2001 and 2002
with respect to the aggregate number of Performance
Shares that have vested as of August 1 of such
year. The Performance Bonus shall be equal to the
increase, if any, from the Base Price to the
Anniversary Valuation Price, as illustrated below
for each applicable valuation period.
NUMBER OF ANNIVERSARY
--------- -----------
PERFORMANCE SHARES BASE DATE BASE PRICE VALUATION PRICE
------------------ --------- ---------- ---------------
50,000 August 9, 2000 Fair Market Value Fair Market Value
on August 9, 2000 on August 9, 2001
50,000 August 9, 2001 Fair Market Value Fair Market Value
on August 9, 2001 on August 9, 2002
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c. Payment of Performance Bonus. The Performance Bonus,
if any, shall be paid in cash in the form of a credit
to the Executive's account under the Company's 1995
Deferred Compensation Plan. Such payment shall be
made as soon as practicable after calculation of the
Performance Bonus. Fifty percent (50%) of such credit
shall vest immediately, with the other Fifty percent
(50%) vesting on August 9 of the subsequent year.
d. Expiration. The Performance Shares shall expire on
August 10, 2002 unless this Agreement is terminated
according to its terms at an earlier time.
e. Fair Market Value. For purposes of this Agreement,
the Fair Market Value shall be equal to the average
closing sales price of the Common Stock on the
national securities exchange on which the Common
stock is then principally traded, calculated for
the 20 trading days immediately preceding August 9
of the applicable valuation year.
2. LIMITATION ON TRANSFER. The Performance Shares are not
transferable by the Executive.
3. PERFORMANCE SHARE ADJUSTMENTS.
a. Changes in Stock. If the outstanding shares of
Common Stock of the Company are increased,
decreased, changed into or exchanged for a
different number or kind of shares of the Company
through reorganization, recapitalization,
reclassification, stock dividend, stock split or
reverse stock split, upon authorization of the
Board, a proportionate adjustment shall be made in
the number or kind of Common Stock subject to the
Performance Shares, so that the proportionate
interest of the Executive immediately following
such event shall, to the extent practicable, be the
same as immediately prior to such event. Any such
adjustment to Performance Shares shall include a
corresponding proportionate adjustment in the Base
Price per share of Common Stock.
b. Reorganization in Which the Company is the
Surviving Corporation. Subject to subparagraph (c)
below, if the Company shall be the surviving
corporation in any reorganization, merger or
consolidation of the Company with one or more other
corporations, the Performance Shares shall pertain
to and apply to the securities to which a holder of
the number of shares of Common Stock subject to the
Performance Shares would have been entitled
immediately following such reorganization, merger
or consolidation, with a corresponding
proportionate adjustment in the Base Price per
share of Common Stock so that the aggregate Base
Price thereafter shall be the same as the aggregate
Base Price of the Common Stock remaining subject to
the Performance Shares immediately prior to such
reorganization, merger or consolidation.
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c. Reorganization in Which the Company is Not the
Surviving Corporation or Sale of Assets or Stock.
Upon the dissolution or liquidation of the Company,
or upon a merger, consolidation or reorganization
of the Company with one or more other corporations
in which the Company is not the surviving
corporation, or upon a sale of substantially all
the assets of the Company to another corporation,
or upon any transaction (including, without
limitation, a merger or reorganization in which the
Company is the surviving corporation) approved by
the Board which results in any person or entity
owning Eighty percent (80%) or more of the combined
voting power of all classes of the stock of the
Company, unless provision is made in writing in
connection with such transaction for the assumption
of this Agreement with such adjustments as the
Board deems appropriate with respect to the
features, terms and conditions of the Performance
Shares, the Performance Shares hereunder shall
immediately entitle the Executive to a Performance
Bonus in an amount equal to the difference between
the applicable Base Price and the Fair Market Value
of the per share Common Stock on the trading date
immediately preceding the closing date of such
Transaction, and any unpaid portion of a previously
vested Performance Bonus shall be immediately paid.
d. Adjustments. In all cases, the nature and extent
of adjustments under this Section 3 shall be
determined by the Committee in its sole discretion,
and any such determination as to what adjustments
shall be made, and the extent thereof, shall be
final and binding.
4. WITHHOLDING OF TAXES. The parties hereto recognize that the
Company may be obligated to withhold federal, state and local income taxes and
Social Security taxes to the extent that the Executive realizes ordinary
income in connection with receipt of the Performance Bonus pursuant to this
Agreement. The Executive agrees that the Company may withhold amounts needed
to cover such taxes from payments otherwise due and owing to the Executive.
5. DISCLAIMER OF RIGHTS. No provision in this Agreement shall
be construed to confer upon the Executive the right to be employed by the
Company, or to interfere in any way with the right and authority of the
Company either to increase or decrease the compensation of the Executive at
any time, or to terminate any employment or other relationship between the
Executive and the Company.
6. INTERPRETATION OF PERFORMANCE SHARE AGREEMENT. All
decisions and interpretations made by the Committee or the Board of Directors
of the Company with regard to any questions arising under this Agreement shall
be binding and conclusive on the Company and the Executive.
7. TERMINATION. Except as otherwise provided herein, this
Agreement shall terminate and all rights and obligations of the parties
hereunder shall be void and of no effect immediately upon the date the
Executive ceases to hold the same, equivalent or higher grade
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office as that office set forth in the first paragraph of this Agreement or
August 9, 2003, whichever occurs first. For purposes of this Agreement, an
approved leave of absence shall not be deemed an event resulting in the
Executive ceasing to hold such office under this Agreement. An approved leave
of absence shall mean an absence approved by the Committee for military leave,
sick leave, or other bona fide leave, as long as the Executive's right to
re-employment is guaranteed by contract, statute or the policy of the Company.
8. MISCELLANEOUS
a. Title and Headings. Titles and headings of sections of the
Agreement are for convenience of reference only and shall
not affect the construction of any provision of this
Agreement.
b. Governing Law. This Agreement shall be governed by,
interpreted under and construed and enforced in accordance
with the internal laws, and not the laws pertaining to
conflicts or choice of laws, of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this agreement
as of August 9, 2000.
ORBITAL SCIENCES CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
