Exhibit 4.1
COMMONWEALTH BANKSHARES, INC.
1999 STOCK INCENTIVE PLAN
1. PURPOSE COMMONWEALTH BANKSHARES, INC., a Virginia corporation
(the "Company"), wishes to recruit, reward, and
retain employees and outside directors. To further
these objectives, the Company hereby sets forth the
Commonwealth Bankshares, Inc. 1999 Stock Incentive
Plan (the "Plan") to provide options ("Options" or
"Awards") to employees and outside directors with
respect to shares of the Company's common stock (the
"Common Stock"). The Plan is effective as of
February 19, 1999 (the "Effective Date"), subject to
shareholder approval of the Plan within one year of
the Effective Date.
2. PARTICIPANTS All employees of the Company and any Eligible
Subsidiaries (as defined in Section 16) are eligible
for Options under the Plan, as are the directors of
the Company who are not employees ("Eligible
Directors"). Eligible employees and directors become
"optionees" or "participants" when the Administrator
grants them an Option under the Plan. The term
"participant" also includes, where appropriate, a
person authorized to exercise an Award in place of
the original optionee.
Employee as such term is used in the Plan means any
person employed as a common law employee of the Company
or an Eligible Subsidiary.
3. ADMINISTRATOR The Administrator will be the Board of Directors of
the Company, unless the Board delegates its duties to
a committee of the Board composed solely of two or
more Non-Employee Directors, as "Non-Employee
Director" is defined by Rule 16b-3 promulgated by the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (the "Exchange
Act").
The Administrator is responsible for the general
operation and administration of the Plan and for
carrying out its provisions and has full discretion in
interpreting and administering the provisions of the
Plan. Subject to the express provisions of the Plan,
the Administrator may exercise such powers and
authority of the Board as the Administrator may find
necessary or appropriate to carry out its functions.
The Administrator may delegate its functions (other
than those described in Section 4) to officers or
other employees of the Company.
The Administrator's powers will include, but not be
limited to, the power to amend, waive, or extend any
provision or limitation of any Award. The
Administrator may act through meetings of a majority
of its members or by unanimous consent.
4. GRANTING OF Subject to the terms of the Plan, the
AWARDS Administrator will, in its sole
discretion, determine
the participants who receive Awards,
the terms and restrictions, if any, of such
Awards,
the schedule for exercisability or
nonforfeitability (including any requirements
that the participant or the Company satisfy
performance criteria),
the time and conditions for expiration of the
Award, and
the form of payment due upon exercise of the
Award, if any.
The Administrator's determinations under the Plan need
not be uniform and need not consider whether possible
participants are similarly situated.
Options granted to employees may be nonqualified stock
options ("NQSOs") or "incentive stock options"
("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended from time to
time (the "Code"), or the corresponding provision of
any subsequently enacted tax statute. Options granted
to Eligible Directors must be NQSOs.
SUBSTITUTIONS The Administrator may also grant Awards in
substitution for options held by individuals who
become employees of the Company or of an Eligible
Subsidiary as a result of the Company's acquiring or
merging with the individual's employer or acquiring
its assets. If necessary to conform the Awards to
the interests for which they are substitutes, the
Administrator may grant substitute Awards under terms
and conditions that vary from those the Plan
otherwise requires.
5. DIRECTOR Each Eligible Director will receive an Option
FORMULA ("Formula Option") as of the Effective Date with
OPTION respect to 250 shares of Common Stock. Each Eligible
Director serving on the Board at each annual meeting
of the Company's shareholders (beginning with the
meeting at least six months after the Effective Date)
will receive a Formula Option as of that meeting with
respect to 250 shares of Common Stock.
EXERCISE Options will not become exercisable until the average
SCHEDULE closing price of a share of Common Stock traded on
NASDAQ Bulletin Board (or any other over-the-counter
automated quotation system or national exchange on
which the Common Stock is traded) for thirty (30)
consecutive trading days has been at least $21.00.
After this requirement has been fulfilled, the Options
may be exercised regardless of the price at which the
Common Stock is trading at the time Optionee elects to
exercise the Options. If Options are granted after
this requirement has been fulfilled, such Options may
be exercised regardless of the price at which the
Common Stock is trading at the time the Optionee
elects to exercise Options. No Option shall be
exercisable before the first anniversary of the Date
of Grant (as defined below) or after the date ten (10)
years from the Date of Grant.
6. DATE OF GRANT The Date of Grant will be the date as of which the
Plan or the Administrator grants an Award to a
participant, as specified in the Plan or in the
Administrator's minutes.
7. EXERCISE PRICE The Exercise Price is the value of the consideration
that a participant must provide in exchange for one
share of Common Stock. The Administrator will
determine the Exercise Price under each Award and may
set the Exercise Price without regard to the Exercise
Price of any other Awards granted at the same or any
other time. The Company may use the consideration it
receives from the participant for general corporate
purposes.
The Exercise Price per share may not be less than 100%
of the Fair Market Value (on the Date of Grant) of a
share of Common Stock covered by the Option; provided,
however, that if the Administrator decides to grant an
ISO to someone covered by Sections 422(b)(6) and
424(d) of the Code (more-than-10% stock owner), the
Exercise Price of the Option must be at least 110% of
the Fair Market Value (on the Date of Grant). In no
event, however, may any Options be granted for an
Exercise Price per share less than the book value per
share of Common Stock as shown on the Company's last
published financial statement prior to the Date of
Grant.
FAIR MARKET Fair Market Value of a share of Common Stock for
VALUE purposes of the Plan will be determined as follows:
If the Common Stock is traded on a national
securities exchange, the average closing sale
price for the ten (10) trading days ending on
and including such date;
If the Common Stock is not traded on any such
exchange, the closing sale price as reported by
the National Association of Securities Dealers,
Inc. Automated Quotation System ("Nasdaq") for
the ten (10) trading days ending on and
including such date;
If no such closing sale price information is
available, the average of the closing bid and
asked prices as reported by Nasdaq Bulletin for
the ten (10) trading days ending on and
including such date; or
If there are no such closing bid and asked
prices, the average of the closing bid and asked
prices as reported by any other commercial
service for the ten (10) trading days ending on
and including such date.
For any date that is not a trading day, the price of a
share of Common Stock shall be calculated by using the
closing sale price or the average of the closing bid
and asked prices, as appropriate, for the immediately
preceding trading day.
8. EXERCISABILITY The Administrator will determine the times and
conditions for exercise of or purchase under each
Award but may not extend the period for exercise
beyond the tenth anniversary of its Date of Grant (or
five years for ISOs granted to 10% owners covered by
Code Sections 422(b)(6) and 424(d)).
Awards will become exercisable at such times and in
such manner as the Administrator determines and the
Award Agreement, if any, indicates.
Options will not become exercisable until the average
closing price of a share of Common Stock traded on
NASDAQ Bulletin Board (or any other over-the-counter
automated quotation system or national exchange on
which the Common Stock is traded) for thirty (30)
consecutive trading days has been at least $21.00.
After this requirement has been fulfilled, the Options
may be exercised regardless of the price at which the
Common Stock is trading at the time Optionee elects to
exercise the Options. If Options are granted after
this requirement has been fulfilled, such Options may
be exercised regardless of the price at which the
Common Stock is trading at the time the Optionee
elects to exercise Options. No Option shall be
exercisable before the first anniversary of the Date
of Grant (as defined below) or after the date ten (10)
years from the Date of Grant.
No portion of an Award that is unexercisable at a
participant's termination of employment will
thereafter become exercisable, unless the Award
Agreement provides otherwise, either initially or by
amendment.
CHANGE OF Upon a Change of Control (as defined below), all
CONTROL Options will become fully exercisable; provided,
however, such acceleration will not occur if it would
render unavailable "pooling of interest" accounting
for any reorganization, merger or consolidation of the
Company, unless the Board determines otherwise. A
Change of Control for this purpose means the
occurrence of any one or more of the following events,
unless otherwise determined by the Administrator at or
after grant of Awards, but prior to the occurrence of
such Change in Control:
a) a person, entity, or group (other than the
Company, any Company subsidiary, any Company
benefit plan, or any underwriter temporarily
holding securities for an offering of such
securities) acquires ownership of more than 25% of
the undiluted total voting power of the Company's
then-outstanding securities eligible to vote to
elect members of the Board ("Company Voting
Securities") without the consent of the Board of
Directors;
b) the individuals (A) who constitute the Board of
Directors of the Company on the Effective Date of
the Plan (the "Original Directors") or (B) who
thereafter are elected to the Board and whose
election, or nomination for election, to the Board
was approved by a vote of at least two-thirds
(2/3) of the Original Directors then still in
office (such directors becoming "Additional
Original Directors" immediately following their
election) or (C) who are elected to the Board and
whose election, or nomination for election, to the
Board was approved by a vote of at least
two-thirds (2/3) of the Original Directors and
Additional Original Directors then still in office
(such directors also becoming "Additional Original
Directors" immediately following their election)
cease for any reason to constitute a majority of
the members of the Board;
c) consummation of a merger or consolidation of the
Company into any other entity, unless the holders
of the Company Voting Securities outstanding
immediately before such consummation, together
with any trustee or other fiduciary holding
securities under a Company benefit plan, hold
securities that represent immediately after such
merger or consolidation at least 75% of the
combined voting power of the then outstanding
voting securities of either the Company or the
other surviving entity or its parent; or
d) the shareholders of the Company approve (i) a plan
of complete liquidation or dissolution of the
Company or (ii) an agreement for the Company's
sale or disposition of all or substantially all
the Company's assets, (i.e., 50% or more of the
total assets of the Company) and such liquidation,
dissolution, sale, or disposition is consummated.
The provisions of Section 15 of the Plan will also
apply if the Change of Control is a Substantial
Corporate Change (as defined in Section 15).
9. LIMITATION ON An Option granted to an employee will be an ISO only
ISOs to the extent that the aggregate Fair Market Value
(determined at the Date of Grant) of the stock with
respect to which ISOs are exercisable for the first
time by the optionee during any calendar year (under
the Plan and all other plans of the Company and its
subsidiary corporations, within the meaning of Code
Section 422(d)), does not exceed $100,000. This
limitation will be applied by taking Options into
account in the order in which such Options were
granted. If, by design or operation, the Option
exceeds this limit, the excess will be treated as an
ISOs
10. METHOD OF To exercise any exercisable portion of an Award, the
EXERCISE participant must:
Deliver a written notice of exercise to the
Secretary of the Company (or to whomever the
Administrator designates), in a form complying
with any rules the Administrator may issue,
signed by the participant, and specifying the
number of shares of Common Stock underlying the
portion of the Award the participant is
exercising;
Pay the full Exercise Price, if any, by
cashier's or certified check for the shares of
Common Stock with respect to which the Award is
being exercised, unless the Administrator
consents to another form of payment (which could
include Common Stock or other property); and
Deliver to the Administrator such
representations and documents as the
Administrator, in its sole discretion, may
consider necessary or advisable.
Payment in full of the Exercise Price need not
accompany the written notice of exercise provided the
notice directs that the stock certificates for the
shares issued upon the exercise be delivered to a
licensed broker acceptable to the Company as the agent
for the individual exercising the option and at the
time the stock certificates are delivered to the
broker, the broker will tender to the Company cash or
cash equivalents acceptable to the Company and equal
to the Exercise Price.
If the Administrator agrees to payment through the
tender to the Company of shares of Common Stock, the
individual must have held the stock being tendered for
at least six months at the time of surrender. Shares
of stock offered as payment will be valued, for
purposes of determining the extent to which the
participant has paid the Exercise Price, at their Fair
Market Value on the date of exercise.
11. AWARD No one may exercise an Award more than ten years after
EXPIRATION its Date of Grant (or five years, for an ISO granted
to a more-than-10% shareholder). Unless the Award
Agreement provides otherwise, either initially or by
amendment, no one may exercise an Award after the
first to occur of:
EMPLOYMENT The 90th day after the date of termination of
TERMINATION employment (other than for death or disability), where
termination of employment means the time when the
employer-employee or other service-providing
relationship between the employee and the Company ends
for any reason, including retirement. Unless the Award
Agreement provides otherwise, termination of
employment does not include instances in which the
Company immediately rehires a common law employee as
an independent contractor. The Administrator, in its
sole discretion, will determine all questions of
whether particular terminations or leaves of absence
are terminations of employment. Notwithstanding the
foregoing, if the Administrator determines that the
participant's termination of employment was for cause,
all unexercised Awards held by the participant shall
immediately terminate.
DISABILITY For disability, the earlier of (i) the first
anniversary of the participant's termination of
employment for disability and (ii) thirty (30) days
after the participant no longer has a disability,
where "disability" means the inability to engage in
any substantial gainful activity by reason of any
medically determinable physical or mental impairment
that can be expected to result in death or that has
lasted or can be expected to last for a continuous
period of not less than twelve months; or
DEATH The date twelve months after the participant's death.
If exercise is permitted after termination of
employment, the Award will nevertheless expire as of
the date that the former service provider violates any
covenant not to compete in effect between the Company
and the former employee. In addition, an optionee who
exercises an Option more than 90 days after
termination of employment with the Company and/or the
Eligible Subsidiaries will only receive ISO treatment
to the extent permitted by law, and becoming or
remaining an employee of another related company (that
is not an Eligible Subsidiary) or an independent
contractor to the Company will not prevent loss of ISO
status as a result of the formal termination of
employment.
Nothing in the Plan extends the term of an Award
beyond the tenth anniversary of its Date of Grant, nor
does anything in this Section 11 make an Award
exercisable that has not otherwise become exercisable.
12. AWARD Option Agreements will set forth the terms of each
AGREEMENT Option and will include such terms and conditions,
consistent with the Plan, as the Administrator may
determine are necessary or advisable. To the extent an
Option Agreement is inconsistent with the Plan, the
Plan will govern. The Option Agreements may contain
special rules.
13. STOCK SUBJECT Except as adjusted pursuant to Section 15, the
TO PLAN aggregate number of shares of Common Stock that may be
issued under Awards may not exceed fifteen percent
(15%) of the Company's outstanding Common Stock, less
the aggregate number of shares subject to issuance
pursuant to options granted or available for grant
under the Corporation's 1990 Stock Option Plan (for
employees) and the Non-Employee Director Stock
Compensation Plan, and shall in no event exceed
350,000 shares. The aggregate number of shares of
Common Stock that may be issued under Awards shall be
allocated 60% for grants to Eligible Directors
pursuant to Section 5 of this Plan, and 40% for grants
to Employees by the Administrator pursuant to Section
4 of this Plan.
The Common Stock will come from either authorized but
unissued shares or from previously issued shares that
the Company reacquires, including shares it purchases
on the open market. If any Award expires, is canceled,
or terminates for any other reason, the shares of
Common Stock available under that Award will again be
available for the granting of new Awards.
No adjustment will be made for a dividend or other
right for which the record date precedes the date of
exercise, except as determined by the Administrator
pursuant to Section 15 of the Plan.
The participant will have no rights of a shareholder
with respect to the shares of stock subject to an
Award except to the extent that the Company has issued
certificates for, or otherwise confirmed ownership of,
such shares upon the exercise of the Award.
The Company will not issue fractional shares pursuant
to the exercise of an Award, but the Administrator
may, in its discretion, direct the Company to make a
cash payment in lieu of fractional shares.
14. PERSON WHO During the participant's lifetime, only the
MAY EXERCISE participant or his duly appointed guardian or personal
representative may exercise the Awards. After his
death, his personal representative or any other person
authorized under a will or under the laws of descent
and distribution may exercise any then exercisable
portion of an Award. If someone other than the
original recipient seeks to exercise any portion of an
Award, the Administrator may request such proof as it
may consider necessary or appropriate of the person's
right to exercise the Award.
15. ADJUSTMENTS Subject to any required action by the Company (which
UPON CHANGES it shall promptly take) or its shareholders, and
IN CAPITAL STOCK subject to the provisions of applicable corporate law,
if, after the Date of Grant of an Award,
the outstanding shares of Common Stock increase
or decrease or change into or are exchanged for
a different number or kind of security by reason
of any recapitalization, reclassification, stock
split, reverse stock split, combination of
shares, exchange of shares, stock dividend, or
other distribution payable in capital stock, or
some other increase or decrease in such Common
Stock occurs without the Company receiving
consideration,
the Administrator may make a proportionate and
appropriate adjustment in the number of shares of
Common Stock underlying each Award, so that the
proportionate interest of the participant immediately
following such event will, to the extent practicable,
be the same as immediately before such event. In the
event the Company declares a stock dividend in lieu of
a cash dividend in lieu of a cash dividend, then the
Administrator shall make a proportionate and
appropriate adjustment in the number shares of Common
Stock underlying each Award, so that the proportionate
interest of the Participant immediately following such
event will, to the extent practicable, be the same as
immediately before such event. (This adjustment does
not apply to Common Stock that the optionee has
already purchased, except to the extent of similar
treatment for all shareholders.) Unless the
Administrator determines another method would be
appropriate, any such adjustment to an Award will not
change the total price with respect to shares of
Common Stock underlying the unexercised portion of the
Award but will include a corresponding proportionate
adjustment in the Award's Exercise Price.
The Administrator will make a commensurate change to
the maximum number of shares provided in Sections 5
and 13 of the Plan.
The grant of an Award under the Plan will not affect
in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or
changes of its capital or business structure, or to
merge or to consolidate, or to dissolve, liquidate,
sell, or transfer all or any part of its business or
assets.
SUBSTANTIAL Upon a Substantial Corporate Change, the Plan and any
CORPORATE unexercised Awards will terminate unless provision is
CHANGE made in writing in connection with such transaction
for
the assumption or continuation of outstanding
Awards, or
the substitution for such options or grants of
any options or grants covering the stock or
securities of a successor employer corporation,
or a parent or subsidiary of such successor,
with appropriate adjustments as to the number
and kind of shares of stock and prices, in which
event the Awards will continue in the manner and
under the terms so provided.
Unless the Board determines otherwise, if an Award
would otherwise terminate pursuant to the preceding
sentence, participants will have the right, at such
time before the consummation of the transaction
causing such termination as the Board reasonably
designates, to exercise any unexercised portions of
the Award, whether or not they had previously become
exercisable. However, unless the Board determines
otherwise, the acceleration will not occur if it would
render unavailable "pooling of interest" accounting
for any reorganization, merger, or consolidation of
the Company.
A Substantial Corporate Change means
a) the dissolution or liquidation of the Company,
b) merger, consolidation, or reorganization of the
Company with one or more corporations in which the
Company is not the surviving corporation,
c) the sale of substantially all of the assets of the
Company to another corporation, or
d) any transaction (including a merger or
reorganization in which the Company survives)
approved by the Board that results in any person
or entity (other than any affiliate of the Company
as defined in Rule 144(a)(1) under the Securities
Act) owning 100% of the combined voting power of
all classes of stock of the Company.
16. SUBSIDIARY Employees of Company Subsidiaries will be entitled to
EMPLOYEES participate in the Plan, except as otherwise
designated by the Board of Directors.
Eligible Subsidiary means each of the Company's
Subsidiaries, except as the Board otherwise specifies.
For ISO grants, Subsidiary means any corporation
(other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the
time an ISO is granted to a participant under the
Plan, each of the corporations (other than the last
corporation in the unbroken chain) 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. For ISO purposes,
Subsidiary also includes a single member limited
liability company included within the chain described
in the preceding sentence. For NQSOs, the
Administrator can use a different definition of
Subsidiary in its discretion.
17. LEGAL The Company will not issue any shares of Common Stock
COMPLIANCE under an Award until all applicable requirements
imposed by Federal and state securities and other
laws, rules, and regulations, and by any applicable
regulatory agencies or stock exchanges, have been
fully met. To that end, the Company may require the
participant to take any reasonable action to comply
with such requirements before issuing such shares. No
provision in the Plan or action taken under it
authorizes any action that is otherwise prohibited by
Federal or state laws.
The Plan is intended to conform to the extent
necessary with all provisions of the Securities Act of
1933 ("Securities Act") and the Exchange Act and all
regulations and rules the Securities and Exchange
Commission issues under those laws. Notwithstanding
anything in the Plan to the contrary, the
Administrator must administer the Plan, and Awards
must be granted and exercised, only in a way that
conforms to such laws, rules, and regulations. To the
extent permitted by applicable law, the Plan and any
Awards will be deemed amended to the extent necessary
to conform to such laws, rules, and regulations.
18. PURCHASE FOR Unless a registration statement under the Securities
INVESTMENT Act covers the shares of Common Stock a participant
AND OTHER receives upon exercise of his Award, the Administrator
RESTRICTIONS may require, at the time of such exercise or receipt
of a grant, that the participant agree in writing to
acquire such shares for investment and not for public
resale or distribution, unless and until the shares
subject to the Award are registered under the
Securities Act. Unless the shares are registered
tinder the Securities Act, the participant must
acknowledge:
that the shares purchased on exercise of the
Award are not so registered,
that the participant may not sell or otherwise
transfer the shares unless the shares have been
registered under the Securities Act in
connection with the sale or transfer thereof, or
counsel satisfactory to the Company has issued
an opinion satisfactory to the Company that the
sale or other transfer of such shares is exempt
from registration under the Securities Act, and
such sale or transfer complies with all other
applicable laws, rules, and regulations,
including all applicable Federal and state
securities laws, rules, and regulations.
Additionally, the Common Stock, when issued upon the
exercise of an Award, will be subject to any other
transfer restrictions, rights of first refusal, and
rights of repurchase set forth in or incorporated by
reference into other applicable documents, including
the Company's certificate of incorporation, by-laws,
or generally applicable shareholders' agreements.
The Administrator may, in its sole discretion, take
whatever additional actions it deems appropriate to
comply with such restrictions and applicable laws,
including placing legends on certificates and issuing
stop-transfer orders to transfer agents and
registrars.
19. TAX WITHHOLDING The participant must satisfy all applicable Federal,
state, and local income and employment tax
withholding requirements before the Company will
deliver stock certificates upon the exercise of an
Award. The Company may decide to satisfy the
withholding obligations through additional
withholding on salary or wages. If the Company does
not or cannot withhold from other compensation, the
participant must pay the Company, with a cashier's
check or certified check, the full amounts required
by withholding. Payment of withholding obligations
is due before the Company issues shares with respect
to the Award. If the Administrator so determines,
the participant may instead satisfy the withholding
obligations by directing the Company to retain shares
from the Award exercise, by tendering previously
owned shares.
20. TRANSFERS Unless the Administrator otherwise approves in advance
ASSIGNMENTS in writing, an Award may not be assigned, pledged, or
AND PLEDGES otherwise transferred in any way, whether by operation
of law or otherwise or through any legal or equitable
proceedings (including bankruptcy), by the participant
to any person, except by will or by operation of
applicable laws of descent and distribution.
21. AMENDMENT OR The Board may amend, suspend, or terminate the Plan at
TERMINATION any time, without the consent of the participants or
OF PLAN AND their beneficiaries; provided, however, that no
OPTIONS amendment will deprive any participant or beneficiary
of any previously declared Award. Except as required
by law or by Sections 8 or 15, the Administrator may
not, without the participant's or beneficiary's
consent, modify the terms and conditions of an Award
so as to adversely affect the participant. No
amendment, suspension, or termination of the Plan
will, without the participant's or beneficiary's
consent, terminate or adversely affect any right or
obligations under any outstanding Awards.
22. PRIVILEGES OF No participant and no beneficiary or other person
STOCK claiming under or through such participant will have
OWNERSHIP any right, title, or interest in or to any shares of
Common Stock allocated or reserved under the Plan or
subject to any Award except as to such shares of
Common Stock, if any, that have been issued to such
participant.
23. EFFECT ON Whether exercising or receiving an Award causes the
OTHER PLANS participant to accrue or receive additional benefits
under any pension or other plan is governed solely by
the terms of such other plan.
24. LIMITATIONS ON Notwithstanding any other provisions of the Plan, no
LIABILITY individual acting as a director, employee, or agent of
the Company shall be liable to any participant, former
participant, spouse, beneficiary, or any other person
for any claim, loss, liability, or expense incurred in
connection with the Plan, nor shall such individual be
personally liable because of any contract or other
instrument he executes in such other capacity. The
Company will indemnify and hold harmless each
director, employee, or agent of the Company to whom
any duty or power relating to the administration or
interpretation of the Plan has been or will be
delegated, against any cost or expense (including
attorneys' fees) or liability (including any sum paid
in settlement of a claim with the Board's approval)
arising out of any act or omission to act concerning
the Plan unless arising out of such person's own fraud
or bad faith.
25. NO EMPLOYMENT Nothing contained in the Plan constitutes an
CONTRACT employment contracts between the Company and the
participants. The Plan does not give any participant
any right to be retained in the Company's employ, nor
does it enlarge or diminish the Company's right to
terminate the participant's employment.
26. APPLICABLE LAW The laws of the Commonwealth of Virginia (other than
its choice of law provisions) and applicable federal
law govern the Plan and its interpretation.
27. DURATION OF PLAN Unless the Board extends the Plan's term, the
Administrator may not grant Awards after February
2009. The Plan will then terminate but will continue
to govern unexercised and unexpired Awards.
Adopted by the Board of Directors February 19, 1999, and by the Shareholders
on April 27, 1999.