SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
LAMONTAGNE PETER B

(Last) (First) (Middle)
9715 KEY WEST AVENUE, THIRD FLOOR

(Street)
ROCKVILLE MD 20850

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
Paradigm Holdings, Inc [ PDHO ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
X Director 10% Owner
X Officer (give title below) Other (specify below)
President, CEO and COO
3. Date of Earliest Transaction (Month/Day/Year)
10/21/2008
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 10/21/2008 A 650,000(1) A $0 1,250,000 D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Stock Option (right to buy) $2.5 10/21/2008 D 500,000 (2) 05/15/2016 Common Stock 500,000 (2) 0 D
Stock Option (right to buy) $0.3 10/21/2008 A 500,000 (2) 05/15/2016 Common Stock 500,000 (2) 500,000 D
Explanation of Responses:
1. Represents shares of restricted common stock that will vest on January 2, 2013.
2. The two reported transactions involved an amendment of the exercise price of an outstanding option from $2.50 per share to $0.30 per share, resulting in the deemed cancellation of the "old" option and the grant of a replacement option. The "old" option was originally granted on May 15, 2006 and was to vest in equal installments on May 15, 2007, May 15, 2008 and May 15, 2009. The replacement option is vested with respect to two-thirds of the shares subject to the option and will vest with respect to the final one-third on May 15, 2009.
/s/ Peter B. LaMontagne 10/23/2008
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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