Exhibit 10.
DYNCORP KEY EXECUTIVES SHARE-OPTION
COMPENSATION PLAN ("KEYSOP")
ARTICLE I
PURPOSE
1.1 Purpose. The purpose of the Plan is to provide benefits to eligible
Employees of the Employer in a form that will encourage the recipients to
continue in the service of the Employer, and allow the recipients to diversify
their investment portfolios.
1.2 Intent. The Plan is intended to be a nonqualified option plan governed by
Section 83 of the Code and not an employee benefit plan as defined under ERISA.
ARTICLE II
DEFINITIONS
As used herein, the following capitalized words and phrases shall have the
respective meanings set forth below:
2.1 "Administrative Committee" means a committee consisting of two or more
members designated from time to time by the Compensation Committee to administer
the Plan.
2.2 "Beneficiary" means the person or persons designated by a Participant,
pursuant to Section 3.6, to exercise a Share-Option after the Participant's
death.
2.3 "Board of Directors" or "Board" means the Board of Directors of DynCorp.
2.4 "Change of Control" means any of the following: (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), other than a trustee or other fiduciary
holding securities under an employee benefit plan of DynCorp or its
subsidiaries, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of DynCorp
representing more than 35% of the combined voting power of DynCorp's
then-outstanding securities; or (B) during any period of two consecutive years
(not including any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board and any new director
(other than a director designated by a person who has entered into an agreement
with DynCorp to effect a transaction described in clause (C) of this definition)
whose election by the Board or nomination for election by DynCorp's Shareholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of DynCorp
approve a merger or consolidation of DynCorp with any other corporation, other
than a merger or consolidation which would result in the voting securities of
DynCorp outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of DynCorp approve a plan of
complete liquidation of DynCorp or an agreement for the sale or disposition by
DynCorp of all or substantially all DynCorp's assets.
Notwithstanding the foregoing, in the event the Employer by which a Participant
is employed is no longer a subsidiary or controlled affiliate of DynCorp, a
Change of Control shall not be deemed to have occurred if the Employer or new
owner of such Employer undertakes in writing with DynCorp to assume all the
obligations of DynCorp under this Plan.
2.5 "Code" means the Internal Revenue Code of 1986, as amended, and any
regulations or rulings issued thereunder.
2.6 "Compensation Committee" means the Compensation Committee of the Board of
Directors.
2.7 "Disability" means a disability as defined under the Employer's executive
long-term disability plan.
2.8 "Effective Date" means December 14, 1998.
2.9 "Employee" means any common law employee of the Employer.
2.10 "Employer" means DynCorp, any of its subsidiaries and controlled
affiliates, and any successor thereto.
2.11 "ERISA" means the Employee Retirement Income Security Act of 1974, any
amendments thereto, and any regulations or rulings issued thereunder.
2.12 "Exercise Date" means the date upon which the Administrative Committee
approves the Share-Option exercise form, which is completed and submitted by a
Participant to the Administrative Committee with respect to the Share-Option
being exercised.
2.13 "Exercise Period" means the period during which a Participant may exercise
a Share-Option, as determined under Section 4.1.
2.14 "Exercise Price" means the price to be paid by a Participant to exercise a
Share-Option, as determined under Section 3.3.
2.15 "Fair Market Value" means the closing price of a Share reflected in the
consolidated trading tables of The Wall Street Journal, or other recognized
market source, as determined by the Administrative Committee, on the applicable
date of reference hereunder or, if there is no sale of the Shares on such date,
then the closing price on the last previous day on which a sale is reported.
2.16 "Grant Date" means, with respect to any Share-Option, the date on which the
Share-Option is granted by the Administrative Committee to a Participant
pursuant to Section 3.2, which shall be the last day of the quarter on which
Shares are sold on the relevant market.
2.17 "Intrinsic Value" means the Fair Market Value of the aggregate underlying
Shares minus the aggregate Exercise Price, as of the Grant Date.
2.18 "Participant" means any individual who meets the eligibility requirements
of Section 3.1, who has received an award of Share-Options in accordance with
Section 3.2, and whose Share-Options have not all been completely exercised or
lapsed. For purposes of Section 4.3:
(a) After a Participant's death, his Beneficiary is to be treated as a
Participant under this Plan with respect to any Share-Options that are
outstanding at the time of the Participant's death;
(b) In the event of a Participant's legal incapacity, the Participant's
legal representative is to be treated as a Participant under this Plan
with respect to any Share-Options that are outstanding at the time the
Participant incurred the legal incapacity; and
(c) If a Participant has assigned Share-Options under Section 3.8, then
the assignee of such Share-Options is to be treated as a Participant
under this Plan with respect to the assigned Share-Options.
2.19 "Plan" means the DynCorp Key Executives Share-Option Compensation Plan
("KEYSOP") (including Exhibit A) as adopted by DynCorp and set forth herein and
from time to time amended.
2.20 "Retirement" means termination of employment, other than for Cause and not
due to Disability, at or after age 60.
2.21 "Share" or "Shares" means a share or shares of a registered investment
company regulated by the Investment Company Act of 1940, as amended (i.e.,
Mutual Fund shares), which share or shares are designated by the Administrative
Committee as subject to purchase through the exercise of Share-Option(s).
2.22 "Share-Option" means the right of a Participant, granted by the Employer in
accordance with Section 3.2, to purchase a Share from the Employer at the
Share-Option's Exercise Price.
2.23 "Share-Option Agreement" means an agreement executed on behalf of the
Employer and by a Participant to whom Share-Options have been awarded,
acknowledging the issuance of the Share-Options and setting forth terms of the
Share-Options.
2.24 "Termination for Cause" means termination of a Participant's employment
following a decision by a two-thirds majority vote of the Board that the
Participant's employment should be terminated by reason of any one or more of
the following acts:
(a) gross negligence relating to the Participant's employment;
(b) refusal to follow the reasonable instructions of the Board;
(c) actions involving a material breach of the Participant's employment
agreement, if any; (d) willful violation of environmental laws and
regulations relating to the Participant's employment; (e) criminal
conduct relating to the Participant's employment; (f) violation of the
Procurement Integrity Provisions of the Office of the Federal
Procurement Policy Act Amendments of 1988; or (g) material violation of
the DynCorp Standards of Conduct, as amended or supplemented from time
to time.
2.25 "Termination of Employment" means an Employee's separation from the service
of the Employer by reason of resignation, discharge, death, disability or other
termination. The Administrative Committee may, in its discretion, determine
whether any leave or other absence from service constitutes a Termination of
Employment for purposes of the Plan.
2.26 "Trust" means the trust that shall be established pursuant to Article VII
to hold the Shares that are subject to purchase through the exercise of
Share-Options.
2.27 "Trust Agreement" means an agreement setting forth the terms of the Trust,
which may be established pursuant to Article VII.
2.28 "Trust Fund" means the Shares that are held in the Trust.
2.29 "Trustee" means the persons or institution acting as trustee of the Trust.
ARTICLE III
GRANT OF SHARE-OPTION
3.1 Eligibility. Share-Options may be granted to any Employee falling
within Bands 1 through 4 of the DynCorp Executive/Senior Management
Compensation Program.
3.2 Grant of Share-Option. Share-Options may be granted, in its sole
discretion, by the Administrative Committee to any eligible Employee at
any time on or after the Effective Date and prior to the termination of
the Plan, as determined by the Administrative Committee. (No Employee,
even if an eligible Employee, shall have any entitlement to a grant of
Share-Options; grants are within the discretion of the Administrative
Committee.) A Share-Option is granted as follows:
(a) Participation. The Administrative Committee will notify an eligible
Employee that he or she is eligible to participate in the Plan. If the
Employee desires to participate, the Employee and Employer will execute
a written Share-Option Agreement, substantially in the form set forth
in Exhibit A, in which they mutually agree that a fixed dollar amount
or a fixed percentage of the Employee's future bonus payments or future
salary payments will be exchanged for options to buy Shares
("Share-Options") that have a Fair Market Value, at the Grant Date,
equal to one and one-third (1-1/3) times the amount of the salary or
bonus payments so exchanged, and in which they mutually agree as to the
type(s) of Shares upon which the Share-Options will be granted, at an
Exercise Price set by the Administrative Committee.
(b) Changes in Participation. An Employee's election relating to future
bonus payments shall be irrevocable for the bonus year for which the
election is made. An Employee's election relating to future salary
payments may be changed, upon execution by the Employee and the
Employer of a revised Share-Option Agreement setting for such changed
election, and will become effective with the first practicable
following pay period. If an election change relating to salary payments
is reduced so as to cease exchanging any current salary payments for
Share-Options, the Employee may not make any further election as to
salary payments until the fiscal quarter following such change.
(c) Addendum. The Employer will, as soon as practicable, prepare and
periodically update an Addendum to the Share-Option Agreement, which
shall reflect the amount or percentage of compensation to be exchanged
for Share-Options rather than cash, and specify the number of Shares
subject to the Share-Option Agreement, the Exercise Price of the
Share-Options as of the Grant Date, and such other terms and in such
form as the Administrative Committee may from time to time determine in
accordance with the Plan. The Administrative Committee may establish a
policy, which sets forth a maximum and/or minimum number of
Share-Options allowed to be granted to a Participant during any
calendar year; provided that any maximum number shall not include
substitutions pursuant to Section 3.5.
(d) Effect of Dividends and Distributions with Respect to Shares.
(1) Cash Dividends and Distributions. The Employer agrees to
reinvest all cash dividends and distributions received in cash
with respect to Shares in additional property of the same kind
(or as nearly the same kind as feasible, if property of the
same kind is not available). Any Shares acquired through
reinvestment will immediately be subject to Share-Options in
favor of the Participant which are granted pursuant to the
Share-Option Agreement that pertains to the Shares on which
the dividends or distributions were made.
(2) Noncash Distributions or Similar Transaction. In the event
of a Shares dividend, Shares split, reverse Shares split,
rights offering, recapitalization or similar transaction that
materially affects the Fair Market Value of the Shares, the
Administrative Committee shall adjust the Exercise Price so
that it retains the same ratio to the Fair Market Value of the
Shares as existed immediately before such transaction.
3.3 Exercise Price.
(a) Upon a request to exercise any Share-Option(s), the Exercise Price
required to be paid by the Participant shall be the greater of (i) the
Exercise Price initially set in the Share-Option Agreement as of the
Grant Date, or (ii) twenty-five percent (25%) of the Fair Market Value
of the Share(s) on the Exercise Date. The initial Exercise Price in
effect as of the effective date of this Plan is twenty-five percent
(25%) of the Fair Market Value of the Shares on the Grant Date.
(b) Notwithstanding any provision herein to the contrary, the
Administrative Committee may, in its discretion, charge reasonable
administrative costs of the Plan to individual Participants by
adjusting the Exercise Price of Share-Options, reducing the number of
Shares subject to Share-Options, or by other means in its discretion.
3.4 Purchase of Property Subject to Share-Option. Upon the grant of
Share-Options to a Participant, the Employer shall acquire an amount of Shares
having a Fair Market Value equal to the Intrinsic Value of the aggregate
Share-Options. The Employer shall contribute such amount of Shares to the Trust
established in accordance with Article VII. At the time the Shares are
contributed to the Trust, and at the time the Share-Options are exercised, the
Shares acquired by the Employer pursuant to the preceding sentence shall not be
subject to any security interest, whether or not perfected, or to any
Share-Options or contract under which any other person may acquire any interest
in them. Additional Shares required to be delivered at the time of exercise of
the Share-Options may be acquired in the open market by the Trustees, utilizing
proceeds from the Exercise Price payment.
3.5 Substitution of Share-Option Shares. The Administrative Committee may, in
its discretion and at the request of a Participant, cancel outstanding
Share-Options and issue substitute Share-Options on different types of Shares,
provided that the Shares of the substitute Share-Options are of equal aggregate
Fair Market Value as that of the Shares of the original Share-Options as of the
date of substitution. Notwithstanding anything to the contrary in this Plan, a
substitution of Share-Options pursuant to this paragraph shall be made no more
than one time during any fiscal quarter, or at additional times upon special
circumstances as determined by the Administrative Committee. Upon a change in
Shares pursuant to this paragraph, the Employer shall cause the Trust to dispose
of the old Shares and acquire and contribute to the Trust new Shares having the
same Fair Market Value (taken as of the Grant Date of the new Share-Options) as
the old Shares. This transaction shall be treated as a new grant of
Share-Options. The Intrinsic Value of the old Share-Options will in all cases
equal the Intrinsic Value of the new Share-Options on the date of substitution.
3.6 Designation of Beneficiary. In the Share-Option Agreement, the Participant
shall designate one or more Beneficiaries and successor Beneficiaries, and the
Participant may change a Beneficiary designation at any time, by filing the
prescribed form with the Administrative Committee. The consent of the
Participant's current Beneficiary shall not be required for a change of
Beneficiary. No Beneficiary shall have any rights under the Plan or a
Share-Option Agreement during the lifetime of the Participant, except as may
otherwise be provided in herein.
A Participant who dies without having designated a Beneficiary in
accordance with this Section 3.6 shall be deemed to have named the Participant's
estate as Beneficiary.
3.7 General Non-Transferability. No Share-Option granted under this Plan may be
transferred, assigned, or alienated (whether by operation of law or otherwise),
except as provided herein, and no Share-Option shall be subject to execution,
attachment or similar process. A Share-Option may be exercised only by a
Participant.
3.8 Permitted Transfers. Notwithstanding the provisions of Section 3.7, a
Participant may at any time prior to death, assign a Share-Option to the
Participant's spouse, lineal and/or collateral descendants, a trust for the
benefit of the Participant's spouse and/or lineal descendants, or a partnership
of which the Participant's spouse and/or lineal descendants are the only
partners, subject to approval by the Administrative Committee. Any such
assignment shall be permitted only if an assignment is expressly permitted in
the Share-Option Agreement, or approved in writing by the Administrative
Committee, and the Participant receives no consideration for the assignment. Any
such assignment shall be evidenced by an appropriate written document executed
by the Participant, and delivered to the Administrative Committee on or before
the effective date of the assignment. In the event of such assignment, the
spouse, lineal or collateral descendant, partnership or trustee of the trust
shall be entitled to all of the rights of the Participant under Section 4.3 with
respect to the assigned Share-Option, and such Share-Option shall continue to be
subject to all of the terms, conditions and restrictions applicable to the
Share-Option, as set forth in the Plan and the Share-Option Agreement.
ARTICLE IV
EXERCISE OF SHARE-OPTION
4.1 Exercise Period. A Participant may exercise a Share-Option pursuant to
Section 4.3 at any time during the period beginning on the earlier of (i) the
date which is six (6) months after the initial Grant Date (disregarding a
subsequent Grant Date caused by substitution of Shares pursuant to Section 3.5)
or (ii) the date of a Change of Control and ending on the earliest of:
(a) ninety (90) days after the Participant's Termination for Cause or
other Termination of Employment for reasons other than described in
Section 4.1(b) below; or
(b) fifteen (15) years after the Grant Date for active Employees,
Participants who have incurred a Termination of Employment by reason of
retirement, disability, death or an involuntary termination which is
not a Termination for Cause, or such later time as is approved by the
Administrative Committee.
If a Participant fails to exercise a Share-Option within the Exercise
Period, then the Share-Option expires and the Participant or his Beneficiary
loses any rights he or she had with respect to the Share-Option. Notwithstanding
the foregoing, (i) except in the case of a Share-Option outstanding as of a
Change of Control, the Exercise Period shall not commence earlier than six
months following the Grant Date and, (ii) in the event of the Participant's
death, the Exercise Period shall not expire earlier than one year following the
date of the Participant's death.
4.2 Notice. The Administrative Committee shall cause notice to be provided to
the Participant that Share-Options are set to expire. Such notice shall be given
approximately six months prior to the expiration of the Exercise Period, if
known and otherwise, as soon as practicable. The required notice will be a
written notice and will list the Shares subject to the Share-Option and the date
on which the Share-Option Exercise Period would expire. Failure to give or
receive notice with respect to a Share-Option will not in any way extend the
Exercise Period of the Share-Option or increase a Participant's rights with
respect to the Share-Option.
4.3 Share-Option Exercise. A Participant may exercise a Share-Option by giving
written notice to the Administrative Committee and tendering full payment of the
Exercise Price by cash, check or other means acceptable to the Administrative
Committee on or about the Exercise Date.
The minimum amount of Share-Options that can be exercised by a
Participant at any one time is the number of Share-Options for which the Fair
Market Value of the underlying Shares minus the applicable aggregate Exercise
Price totals $5,000, or 100% of the Fair Market Value of the underlying Shares,
whichever is less. For these purposes, the term "underlying Shares" means the
Shares which will be acquired by the Participant upon the exercise of the
Share-Options. A Participant shall not have any of the rights and privileges of
a shareholder with respect to any Shares purchasable or issuable upon the
exercise of Share-Options prior to the date of exercise of such Share-Options in
accordance with this Section 4.3.
In the event that the listing, registration or qualification of the
Share-Option on any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body, is necessary as a
condition of, or in connection with, the exercise of the Share-Option, then the
Share-Option shall not be exercised in whole or in part until such listing,
registration, qualification, consent or approval has been effected or obtained.
4.4 Delivery of Shares. Within ten business days following the date that a
Participant satisfies the conditions for exercising Share-Options in accordance
with Section 4.3, the Employer shall deliver or cause to be delivered to the
Participant title to, or beneficial ownership of, the Shares subject to such
Share-Options, which Shares the Participant can direct to be liquidated or
otherwise disposed of.
4.5 Tax Withholding. Whenever Shares are to be delivered upon exercise of
Share-Options under the Plan, the Employer shall require as a condition of such
delivery payment by the Participant of an amount sufficient to satisfy all
federal, state and local tax withholding requirements related thereto. Such
payment shall take the form of whichever of the following is acceptable to the
Administrative Committee: (a) cash; (b) the withholding of such amount from any
Shares to be delivered to the Participant, (c) the withholding of such amount
from compensation otherwise due to the Participant, or (d) any combination of
the foregoing, at the election of the Participant. Such election shall be made
before the date on which the amount of tax to be withheld is determined by the
Employer, and such election shall be irrevocable. With the consent of the
Employer, the Participant may elect a greater amount of withholding, not to
exceed the estimated amount of the Participant's total tax liability with
respect to the exercise of Share-Options under the Plan. Such election shall be
made at the same time and in the same manner as provided above.
4.6 Failure to Exercise. No Share-Option shall be exercised, in whole or in
part, after the end of the Share-Option's Exercise Period as stated in Section
4.1. The Employer shall have no obligation to deliver or cause to be delivered
to the Participant the Shares subject to such Share-Option after the end of the
Share-Option's Exercise Period. Failure to exercise a Share-Option in a timely
fashion shall constitute a forfeiture of the Share-Option.
ARTICLE V
AMENDMENT OR TERMINATION
5.1 Plan Amendment. The Administrative Committee may, from time to time in its
discretion, amend any provision of the Plan, in whole or in part, with respect
to any Participant or group of Participants. Such amendment shall be effective
as of the date specified therein and shall be binding upon the Administrative
Committee, all Participants and Beneficiaries, and all other persons claiming an
interest under the Plan. Subject to Section 5.2 below, such amendment shall not
affect any Share-Options that are outstanding as of the amendment date without
the Participant's consent. Notwithstanding anything herein to the contrary, any
amendments which modify the category of individuals eligible to participate in
the Plan or which modify Article V or VI of the Plan must be approved by the
Compensation Committee.
5.2 Plan Termination. The Plan shall terminate as the Compensation Committee may
determine, in its discretion. Such termination shall be effective as of the date
determined by the Compensation Committee and shall be binding upon the
Administrative Committee, all Participants and Beneficiaries, and all other
persons claiming an interest under the Plan. Share-Options that are outstanding
as of the Plan's termination shall continue to be subject to exercise after the
effective date of such termination, and may be exercised in accordance with
Article IV and any applicable Share-Option Agreement; except that termination of
the Plan may provide for termination of all then outstanding Share-Options,
provided that the Employer gives the affected Participants 90 days' notice
before such termination. In the event a termination of outstanding Share-Options
occurs pursuant to the preceding sentence, and such outstanding Share-Options
are not exercised during the 90-day notice period, the Employer may pay all
holders of such Share-Options, in cash or such other form as determined by the
Employer in its sole discretion, the Share-Options' Intrinsic Value as of the
date the Share-Options terminated. As of the date of termination of the Plan, no
new Share-Options shall be granted, except for Share-Options required to be
granted under Section 3.2(b).
5.3 Amendment of Share-Options. A Share-Option may be amended by the
Administrative Committee at any time after the Grant Date if the Administrative
Committee determines that an amendment is necessary as a result of:
(a) any addition to or change in the Code or ERISA, a federal or state
securities law or any other law or regulation, which occurs after the Grant Date
and by its terms applies to the Share-Option;
(b) any Plan amendment pursuant to Section 5.1, or Plan termination
pursuant to Section 5.2, provided that the amendment does not materially affect
the terms, conditions and restrictions applicable to the Share-Option, except
for termination of the Share-Option with 90 days' notice as set forth in Section
5.2 above; or (c) any circumstances not specified in paragraphs (a) or (b), with
the consent of the Participant.
5.4 Change of Control. Notwithstanding any other provision of the Plan or a
Share-Option Agreement, in the event of a Change of Control, the Exercise Period
under Section 4.1 shall begin immediately upon such Change of Control.
ARTICLE VI
ADMINISTRATION
6.1 The Administrative Committee. The Plan shall be administered by the
Administrative Committee.
6.2 Powers of the Administrative Committee. In carrying out its duties with
respect to the general administration of the Plan, the Administrative Committee
shall have, in addition to any other powers conferred by the Plan or by law, the
following powers:
(a) to grant Share-Options, and to determine the form, amount and timing of
such Share-Options;
(b) to determine the terms and provisions of the Share-Option Agreements,
and to modify such Share-Option Agreements as provided in Section 5.3;
(c) to maintain all records necessary for the administration of the Plan;
(d) to prescribe, amend, and rescind rules for the administration of the
Plan to the extent not inconsistent with the terms thereof;
(e) to appoint such individuals and subcommittees as it deems desirable for
the conduct of its affairs and the administration of the Plan;
(f) to employ counsel, accountants and other consultants to aid in
exercising its powers and carrying out its duties under the Plan;
(g) to revise periodically, on a prospective basis only, the nature of
the Shares to the subject of Share-Options and/or the amount or percentage of
the initial Exercise Price to be included in Share-Option Agreements.
(h) to contract for services, i.e. trustee, record keeper, etc.;
(i) to establish the cost for participants in the plan;
(j) to authorize the payment of expenses related to the plan set-up,
administrative and/or record keeping etc.;
(k) to perform any other acts necessary and proper for the conduct of its
affairs and the administration of the Plan, except those reserved by the
Compensation Committee;
6.3 Determinations by the Administrative Committee. The Administrative Committee
shall interpret and construe the Plan and the Share-Option Agreements, and its
interpretations and determinations shall be conclusive and binding on all
Participants, Beneficiaries and any other persons claiming an interest under the
Plan or any Share-Option Agreement. The Administrative Committee's
interpretations and determinations under the Plan and the Share-Option
Agreements need not be uniform and may be made by it selectively among
Participants, Beneficiaries and any other persons whether or not they are
similarly situated.
6.4 Indemnification of the Administrative Committee and the Compensation
Committee. The Employer shall indemnify and hold harmless each member of the
Administrative Committee and Compensation Committee against any and all expenses
and liabilities arising out of such member's action or failure to act in such
capacity, excepting only expenses and liabilities arising out of such member's
own willful misconduct or failure to act in good faith.
Expenses and liabilities against which a member of the Administrative
Committee or the Compensation Committee is indemnified hereunder shall include,
without limitation, the amount of any settlement or judgment, costs, counsel
fees and related charges reasonably incurred in connection with a claim asserted
or a proceeding brought against him or the settlement thereof.
This right of indemnification shall be in addition to any other rights
to which any member of the Administrative Committee or the Compensation
Committee may be entitled.
The Employer may, at its own expense, settle any claim asserted or
proceeding brought against any member of the Administrative Committee or the
Compensation Committee when such settlement appears to be in the best interest
of the Employer.
6.5 Expenses of the Administrative Committee. The members of the Administrative
Committee shall serve without compensation for services as such. All reasonable
expenses of the Administrative Committee shall be paid by the Employer.
ARTICLE VII
TRUST PROVISIONS
7.1 Establishment of the Trust. The Employer shall establish a trust to hold all
Shares contributed by the Employer pursuant to Section 3.4. Except as otherwise
provided in Section 7.2 of the Plan and the terms of the Trust Agreement, the
Trust will be irrevocable and no portion of the Trust Fund will be used for any
purpose other than the exchange of substitute Shares in accordance with Section
3.5, the delivery of Shares pursuant to the exercise of Share-Options under the
Plan, the delivery of Shares subject to forfeited Share-Options to the Employer,
and the payment of expenses of the Plan and Trust.
7.2 Trust Status. Any Trust established pursuant to Section 7.1 shall be
designed as a grantor trust, within the meaning of section 671 of the Code, of
which the Employer is the grantor, and this Plan is to be construed in
accordance with that intention. Notwithstanding any other provision of this
Plan, the Trust Fund will remain the property of the Employer and will be
subject to the claims of its creditors in the event of its bankruptcy or
insolvency. No Participant will have any priority claim on the Trust Fund or any
security interest or other right superior to the rights of a general creditor of
the Employer.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
8.1 Headings. The headings of Articles, Sections and Paragraphs are solely for
convenience of reference. If there is any conflict between such headings and the
text of this Plan, the text shall control.
8.2 Gender. Unless the context clearly requires a different meaning, all
pronouns shall refer indifferently to persons of any gender.
8.3 Singular and Plural. Unless the context clearly requires a different
meaning, singular terms shall also include the plural and vice versa.
8.4 Governing Law. Except to the extent preempted by federal law, the
construction and operation of the Plan shall be governed by the laws of the
Commonwealth of Virginia without regard to the choice of law principles of such
state.
8.5 Severability. If any provision of this Plan is held illegal or invalid by
any court or governmental authority for any reason, the remaining provisions
shall remain in full force and effect and shall be construed and enforced in
accordance with the purposes of the Plan as if the illegal or invalid provision
did not exist.
8.6 No Obligation to Exercise. The granting of a Share-Option shall impose no
obligation upon a Participant to exercise such Share-Option.
8.7 No Rights of Shareholder. Neither the Participant, a Beneficiary nor any
assignee shall be, or shall have any of the rights and privileges of, a
Shareholder with respect to any Shares subject to purchase or issuance or upon
the exercise of Share-Options, prior to the date of exercise of such
Share-Options in accordance with Section 4.3 of the Plan.
8.8 No Right to Continued Employment. Nothing contained in the Plan shall be
deemed to give any person the right to be retained in the employ of the
Employer, or to interfere with the right of the Employer to discharge any person
at any time without regard to the effect that such discharge shall have upon
such person's rights or potential rights, if any, under the Plan.
8.9 Notices. Unless otherwise specified in a Share-Option Agreement, any notice
to be provided under the Plan to the Administrative Committee shall be mailed
(by certified mail, postage prepaid) or delivered to the Administrative
Committee in care of the Employer at its executive offices, and any notice to
the Participant shall be mailed (by certified mail, postage prepaid) or
delivered to the Participant at the current address shown on the payroll records
of the Employer, or at such address as a Participant shall provide to the
Administrative Committee in accordance with this Section 8.9. No notice shall be
binding on the Administrative Committee until received by the Administrative
Committee, and no notice shall be binding on the Participant until received by
the Participant.
8.10 Conflict Between Plan and Share-Option Agreement. Should there be a
conflict or other contradiction between the language of the Plan and that
contained in any Share-Option Agreement, the terms and conditions of the Plan
will control.