exv10w36w1



 





Exhibit 10.36.1




AMERIGROUP CORPORATION

CHANGE IN CONTROL BENEFIT POLICY




     Section 1. Purpose of Policy.



          The name of this policy is the AMERIGROUP Corporation Change in Control Benefit Policy (the
“Policy”). The purposes of the Policy are as follows: (1) to reinforce and encourage the continued
attention and dedication of members of the Company’s management to their assigned duties without
the distraction arising from the possibility of a change in control of the Company; (2) to enable
and encourage the Company’s management to focus their attention on obtaining the best possible
transaction for the Company’s stockholders and to make an independent evaluation of all possible
transactions, without being diverted by their personal concerns regarding the possible impact of
various transactions on the security of their jobs and benefits; and (3) to provide severance
benefits to certain Participants (as defined below) who incur a termination of employment under the
circumstances described herein within a certain period following a Change in Control (as defined
below).




     Section 2. Definitions.



          For purposes of the Policy, the following terms shall be defined as set forth below:




          (a) “Affiliate” means any corporation or other entity 50% or more of the voting power
of the outstanding voting securities of which is owned by the Company or its Subsidiaries or by any
other Affiliate.




          (b) “Award” means all payments to a Participant under the Policy, including to the
extent applicable, the payment upon a Change in Control under Section 5(a), the Severance Payment
under Section 5(b) and the Gross-Up Payment under Section 5(d).




          (c) “Board” means the Board of Directors of the Company.




          (d) “Cause” means, unless a Participant is a party to a written employment agreement
with the Company, Subsidiary or Affiliate which contains a definition of “cause,” “termination for
cause,” or any other similar term or phrase, in which case “Cause” shall have the meaning set forth
in such agreement, conduct involving one or more of the following: (i) the substantial and
continuing failure of the Participant to render services to the Company or any Subsidiary or
Affiliate in accordance with the Participant’s obligations and position with the Company,
Subsidiary or Affiliate, after 30 day’s notice from the President of the Company or any Subsidiary
or Affiliate, such notice setting forth in reasonable detail the nature of such failure, and in the
event the Participant fails to cure such breach or failure within 30 days of notice from the
Company or any Subsidiary or Affiliate, if such breach or failure is capable of cure; (ii)
dishonesty, gross negligence, breach of fiduciary duty; (iii) the commission by the Participant of
an act of fraud or embezzlement, as found by a court of competent jurisdiction; (iv) the conviction
of the Participant of a felony; or a (v) material breach of the terms of an agreement with the
Company or any Subsidiary or Affiliate, provided that the Company or any Subsidiary or Affiliate
provides the


 









 







Participant with adequate notice of such breach and the Participant fails to cure such breach,
if the breach is reasonably curable, within thirty (30) days after receipt of such notice.




          (e) “Change in Control” means (1) in the case of any Award that is subject to Section
409A of the Code, any event that constitutes, within the meaning of Section 409A(a)(2)(A)(v) of the
Code, (i) a change in the ownership of the Company, (ii) a change in the effective control of the
Company, or (iii) a change in the ownership of a substantial portion of the Company’s assets, or
(2) in the case of any other Award, the first to occur of any one of the events set forth in the
following paragraphs:





          (i) any Person is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company (not including in the
securities Beneficially Owned by such Person any securities acquired directly from the
Company) representing 25% or more of the Company’s then outstanding securities, excluding
any Person who becomes such a Beneficial Owner in connection with a transaction described in
clause (A) of paragraph (iii);




          (ii) the following individuals cease for any reason to constitute a majority of the
number of directors then serving: individuals who, on the Effective Date of the Policy,
constitute the Board of Directors and any new director (other than a director whose initial
assumption of office is in connection with an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board of Directors or nomination for
election by the Company’s stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors on the
Effective Date of the Policy or whose appointment, election or nomination for election was
previously so approved or recommended;




          (iii) there is consummated a merger or consolidation of the Company with any other
corporation other than (A) a merger or consolidation which results in the directors of the
Company immediately prior to such merger or consolidation continuing to constitute at least
a majority of the board of directors of the Company, the surviving entity or any parent
thereof, or (B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired directly from the Company)
representing 25% or more of the combined voting power of the Company’s then outstanding
securities; or




          (iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or there is consummated an agreement for the sale or disposition
by the Company of all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets to an entity
at least a majority of the board of directors of which comprises individuals who were
directors of the Company immediately prior to such sale or disposition.



          (f) “Code” means the Internal Revenue Code of 1986, as amended from time to time.




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          (g) “Committee” means the Compensation Committee of the Board or, to the extent so
provided by the Board, any other person, committee or entity the Board may appoint to administer
the Policy.




          (h) “Company” means AMERIGROUP Corporation, a Delaware corporation, and, except in
determining under Section 2(e) hereof whether or not any Change in Control of the Company has
occurred, shall include any successor to its business and/or assets.




          (i) “Date of Termination” with respect to any purported termination of a Participant’s
employment (other than by reason of the Participant’s death or Disability), means the date
specified in the Notice of Termination (which shall be within thirty (30) days from the date such
Notice of Termination is given).




          (j) “Disability” means the condition of a Participant who is either (i) unable to
engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or can be expected to last for a
continuous period of not less than twelve (12) months; or (ii) by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health
plan covering employees of the Company.




          (k) “Eligible Recipient” means an employee, officer or director (including a
non-employee director) of the Company or of any Subsidiary or Affiliate.




          (l) “Enhancement Amount” means an additional LTI Award amount that a Participant may
have the opportunity to earn with respect to the first calendar year of a performance cycle under
the LTI Plan.




          (m) “Equity Plan” means the AMERIGROUP Corporation 2005 Equity Incentive Plan, or any
successor stock incentive plan, as amended from time to time.




          (n) “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together
with any interest or penalties imposed with respect to that tax.




          (o) “Good Reason” means, without the consent of the Participant, (i) any changes in
the duties and responsibilities of the Participant which are materially inconsistent with the
duties and responsibilities of the Participant within the Company immediately prior to the Change
in Control, (ii) any 10% or greater reduction of the Participant’s target annual compensation in
effect immediately prior to the change of control, (iii) any required relocation of the
Participant’s office beyond a 50 mile radius from the location of the Participant’s office
immediately prior to the Change in Control, or (iv) any failure by the Company to obtain the
assumption of the Policy by a successor of the Company.




          (p) “LTI Award” means a long-term incentive compensation award granted pursuant to the
LTI Plan.




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          (q) “LTI Plan” means the Company’s Long Term Incentive Program, or any successor
long-term cash incentive plan, as amended from time to time, which is a component of the Company’s
2007 Cash Incentive Plan, as amended.




          (r) “Multiple” means a number for each Participant, selected by the Committee, ranging
from one (1) to three (3). Unless otherwise specified in writing by the Committee, the following
multiples shall be used: (i) three (3) for the Chairman or Chief Executive Officer; (ii) two (2)
for the President, Chief Operating Officer, Chief Financial Officer, any Executive Vice President
and any member of the Company’s Executive Committee; and (iii) one (1) for the Company’s Health
Plan Chief Executive Officers and any other Participant not specifically listed herein or assigned
a different Multiple by the Committee.




          (s) “Notice of Termination” means a notice which shall indicate the specific
termination provision in this Policy relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Participant’s employment under
the provision so indicated.




          (t) “Participant” means any Eligible Recipient selected by the Committee pursuant to
the Committee’s authority in Section 4(a) hereof. Notwithstanding the foregoing, for (i) Awards
payable under Sections 5(a), 5(b) and 5(d), the Participants shall include the Company’s Chairman,
Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, any member of
the Company’s Executive Committee and the Company’s Health Plan Subsidiary Chief Executive
Officers, and any other Participants designated by the Committee, and (ii) for Awards payable under
Sections 5(a) and 5(d), the Participants shall include those Company employees who are eligible for
an annual cash bonus and/or a long term incentive cash award, as applicable, as of the date of a
Change in Control




          (u) “Payment” means any payment or distribution in the nature of compensation (within
the meaning of Section 280G(b)(2)(A) of the Code) to or for the benefit of a Participant, whether
paid or payable pursuant to this Agreement or otherwise pursuant to any plan, agreement or
understanding between the Participant and the Company, which within the meaning of Section
280G(b)(2)(A)(i) of the Code, is contingent on a change in the ownership or effective control of
the Company, or in the ownership of a substantial portion of the assets of the Company.




          (v) “Protected Period” shall mean the period beginning on the date of a Change in
Control and ending on the date which is two (2) years after the date of such Change in Control.




          (w) “Separation from Service” means a Participant’s “separation from service” with the
Company within the meaning of Section 409A(a)(2)(A)(i) of the Code.




          (x) “Subsidiary” means any corporation or other entity (other than the Company) in an
unbroken chain of entities beginning with the Company, if each of the entities (other than the last
entity) in the unbroken chain owns stock possessing 50% or more of the total combined voting power
of all classes of securities in one of the other entities in the chain.




          (y) “Target Amount” means an amount determined under the LTI Plan that might be earned
by a Participant in three annual installments during a performance cycle of the LTI Plan.




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     Section 3. Effective Date.



          The effective date of the Policy shall be February 12, 2007 (the “Effective Date”). The Policy
shall remain in effect until the earlier of (i) such time as the Company has discharged all of its
obligations hereunder, or (ii) the date of the termination of the Policy pursuant to Section 10(e)
hereof.




     Section 4. Administration.



          (a) Prior to the date of a Change in Control, the Policy shall be interpreted, administered
and operated by the Committee; on and after the date of a Change in Control, the Policy shall be
interpreted, administered and operated by a committee appointed by the Committee as such Committee
is constituted immediately prior to the Change in Control. In each case, subject to the terms of
the Policy, the Committee shall have complete authority, in its sole discretion subject to the
express provisions of the Policy, to determine who shall be a Participant, to interpret the Policy,
to prescribe, amend and rescind rules and regulations relating to it, and to make all other
determinations necessary or advisable for the administration of the Policy. Notwithstanding the
foregoing, the Committee may delegate any of its duties hereunder to such person or persons from
time to time as it may designate.




          (b) All expenses and liabilities which members of the Committee incur in connection with the
administration of the Policy shall be borne by the Company. The Committee may employ attorneys,
consultants, accountants, appraisers, brokers, or other persons, and the Committee, the Company and
the Company’s officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. No member of the Committee or the Board shall be personally liable
for any action, determination or interpretation made in good faith with respect to the Policy, and
all members of the Committee shall be fully protected by the Company in respect of any such action,
determination or interpretation.




     Section 5. Benefits Provided.



          (a) “Payments Upon a Change in Control” Subject to Section 5(d) hereof, the Company
shall pay to each Participant within ten (10) business days after a Change in Control, a lump sum
payment in an amount equal to the sum of (i) the Participant’s Target Amount for any LTI Award
(including any Enhancement Amount) that has been established for such Participant under the LTI
Plan, as amended, or any successor long-term incentive plan, for a performance year that has been
completed as of the date of the Change in Control and (ii) any unpaid but earned annual cash bonus
plus a pro-rated annual cash bonus for the fiscal year in which the Change in Control occurs. The
amount of any such pro-rated annual cash bonus shall be equal to the product of the Participant’s
target annual bonus for the applicable fiscal year, multiplied by a fraction, the numerator of
which is the number of months in the fiscal year completed prior to the date of the Change in
Control, and the denominator of which is twelve (12). Notwithstanding anything hereinabove to the
contrary, in the case of any Enhancement Amount for the 2006 performance year and any portion of
the Target Amount of an LTI Award that is attributable to the 2006 performance year, in no event
shall any payment be made hereunder prior to January, 2008.




          (b) “Termination After Change in Control” Subject to Section 5(d) hereof, if a
Participant’s employment with the Company is terminated during the Protected Period (i) by the


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Company other than for Cause, or by reason of the Participant’s Disability or death, or (ii) by the
Participant for Good Reason, the Company shall pay to each Participant within ten (10) business
days after the Participant’s Date of Termination a lump sum severance payment (the “Severance
Payment”) in an amount equal to the Participant’s Multiple times the sum of the Participant’s
annual base salary and the Participant’s target annual cash bonus, in each case, for the fiscal
year in which the Change in Control occurs. Notwithstanding anything hereinabove to the contrary,
in the case of any Severance Payment to be made after the Separation from Service of a Participant
that constitutes a distribution of deferred compensation to a “specified employee” within the
meaning of Section 409A(a)(2)(B)(i) of the Code, the Severance Payment shall be paid to the
Participant on the date that is six (6) months after the date of the Participant’s Separation from
Service.




          (c) “General Release” The Severance Payment shall be conditioned upon the execution
by the Participant of the Company’s standard form general release.




          (d) “Section 280G”




               (i) Notwithstanding anything in this Policy to the contrary, in the event that it shall be
determined that any Payment would constitute an “excess parachute payment” within the meaning of
Section 280G(b) of the Code, the Participant shall be paid an additional amount (a “Gross-Up
Payment”) such that the net amount retained by the Participant after deduction of any Excise Tax,
and any federal, state and local income and employment taxes and excise tax, including any interest
and penalties with respect thereto, imposed upon the Gross-Up Payment, shall be equal to the
Payment; provided, however, that if the total Payment(s) are less than or equal to 120% of the
Capped Benefit (as defined below), the Payment(s) shall be reduced by an amount necessary to
prevent any portion of the Payment(s) from being a “parachute payment” as defined in Section
280G(b)(2) of the Code. If the Payment(s) are to be reduced pursuant to this Section, the Company
shall provide Participant with a reasonable opportunity to request which of the benefits payable to
the Participant shall be reduced. For purposes of determining the amount of the Gross-Up Payment,
the Participant shall be deemed to pay federal income tax and employment taxes at the highest
marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal rate of taxation in
the state and locality of the Participant’s residence on the date the Payment is made, net of the
reduction in federal income taxes that the Participant may obtain from the deduction of such state
and local income taxes. The “Capped Benefit” shall equal the total Payment(s), reduced by the
amount necessary to prevent any portion of the Payment(s) from being a “parachute payment” as
defined in Section 280G(b)(2) of the Code.



               (ii) All determinations to be made under this Section 5(d) shall be made by the Company’s
independent public accountant immediately prior to the Change in Control (the “Accounting Firm”);
provided, that if the Accounting Firm is serving as accountant or auditor to the individual, entity
or group effecting the Change of Control, the Committee shall appoint another independent
accounting firm to make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). The Accounting Firm shall provide its
determinations and any supporting calculations and work papers both to the Company and the
Participant within fifteen (15) business days after receipt of written notification from the
Company or the Participant that there has been a Payment or by such earlier time as is requested by
the Company. Any such determination by the Accounting Firm shall include explanations of whether
and when a Gross-Up Payment is required, the amount of any such Gross-Up Payment and the



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assumptions utilized in arriving at the determination. The Accounting Firm’s determination shall
be binding upon the Company and the Participant. Within five (5) days after receipt of the
Accounting Firm’s determination, the Company shall pay to the Participant any Gross-Up Payment determined
by the Accounting Firm.



               (iii) In the event that upon any audit by the Internal Revenue Service, or by a state or local
taxing authority, of a Payment or Gross-Up Payment, a change is finally determined to be required
in the amount of taxes paid by the Participant, appropriate adjustments shall be made under this
Section 5(d) in the manner determined by the Accounting Firm, such that the net amount which is
payable to the Participant after taking into account the provisions of Section 4999 of the Code and
any interest and penalties shall reflect the intent of the parties as expressed in paragraph (A) of
this Section 5(d). The Participant shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as soon as practicable but no later than ten (10)
business days after the Participant is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be paid. The
Participant shall not pay such claim prior to the expiration of the 30-day period following the
date on which the Participant gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the Company notifies the
Participant in writing prior to the expiration of such period that it desires to contest such
claim, the Participant shall: (A) give the Company any information reasonably requested by the
Company relating to such claim; (B) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney reasonably selected by the
Company; (C) cooperate with the Company in good faith in order effectively to contest such claim;
and (D) permit the Company to participate in any proceedings relating to such claim; provided,
however, that the Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall indemnify and hold the
Participant harmless, on an after-tax basis, for any excise tax or income tax (including interest
and penalties with respect thereto) imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this Section 5(d), the Company
shall control all proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may contest the claim in any permissible manner, and
the Participant agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company
shall determine. The Company’s control of the contest shall be limited to issues the resolution of
which could result in a Gross-Up Payment’s being payable hereunder, and the Participant shall be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.



               (iv) All of the fees and expenses of the Accounting Firm in performing the determinations
referred to in paragraphs (ii) and (iii) of this Section 5(d) shall be borne solely by the Company.



          (e) Other Existing Arrangements This Policy will be subordinated to any written
severance benefit arrangement, change of control severance agreement or employment agreement that
provides for severance benefits in existence between the Participant and the Company,


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notwithstanding the terms of any such arrangement or agreement, and any benefits under any such
arrangement or agreement will be paid prior to any payments under this Policy, which shall be
delayed for payment until all benefits under any such arrangement or agreement have been
determined and paid, and payments under this Policy will be reduced by any amounts paid under any
such arrangement or agreement.




     Section 6. Termination Procedures.



               Any purported termination of a Participant’s employment following a Change in Control (other
than by reason of death) shall be communicated by written Notice of Termination from one party to
the other party in accordance with Section 9 hereof.



     Section 7. No Mitigation.



               The Company agrees that, in order for a Participant to be eligible to receive the Severance
Payment and other benefits described herein, the Participant is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the Participant by the Company
pursuant to Section 5 hereof. Further, the amount of any payment or benefit provided for in this
Policy hereof shall not be reduced by any compensation or income earned by the Participant as the
result of employment by another employer or self-employment, by retirement benefits, by offset
against any amount claimed to be owed by the Participant to the Company, or otherwise.



     Section 8. Successors.



          (a) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume this Policy and all obligations of the Company hereunder in the same
manner and to the same extent that the Company would be so obligated if no such succession had
taken place.




          (b) This Policy shall inure to the benefit of and shall be binding upon the Company, its
successors and assigns, but without the prior written consent of the Participants this Policy may
not be assigned other than in connection with the merger or sale of substantially all of the
business and/or assets of the Company or similar transaction in which the successor or assignee
assumes (whether by operation of law or express assumption) all obligations of the Company
hereunder.




          (c) This Policy shall inure to the benefit of and be enforceable by the Participant’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees,
legatees or other beneficiaries. If a Participant shall die while any amount would still be payable
to such Participant hereunder (other than amounts which, by their terms, terminate upon the death
of the Participant) if such Participant had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Policy to the executors,
personal representatives or administrators of such Participant’s estate.




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     Section 9. Notices.



          For the purpose of this Policy, notices and all other communications provided for in the
Policy shall be in writing and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid, addressed, if to a
Participant, to the address on file with the Company and, if to the Company, to the address set
forth below, or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon actual
receipt:



To the Company:



AMERIGROUP Company

4425 Company Lane

Virginia Beach, VA 23462

Attention: Executive Vice President, Associate Services




     Section 10. Miscellaneous



          (a) No waiver by the Company or any Participant, as the case may be, at any time of any breach
by the other party of, or of any lack of compliance with, any condition or provision of this Policy
to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. All other plans, policies and
arrangements of the Company in which the Participant participates during the term of this Policy
shall be interpreted so as to avoid the duplication of benefits paid hereunder. It is expressly
acknowledged that the terms of this policy shall not affect the terms of any equity incentive
agreement between the Company and the Participant.




          (b) Employment with any present or future Affiliate or Subsidiary shall be considered
employment with the Company for all purposes of this Policy.




          (c) Nothing contained in this Policy or any documents relating to the Policy shall (i) confer
upon any Participant any right to continue in the employ of the Company or a subsidiary, (ii)
constitute any contract or agreement of employment, or (iii) interfere in any way with the right of
the Company to terminate the Participant’s employment at any time, with or without Cause.




          (d) A Participant shall be entitled to the benefits of any indemnity applicable to the
Participant that is provided by the Company’s articles of incorporation, bylaws or otherwise
immediately prior to a Change in Control, and any subsequent changes to the articles of
incorporation, bylaws or otherwise reducing the indemnity granted to the Company’s officers and
employees shall not affect the rights granted hereunder.




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          (e) Prior to a Change in Control, the Committee shall have the right to amend or terminate the
Policy and to add or remove Participants from time to time, in its sole and absolute discretion.
From and after (i) the occurrence of a Change in Control; (ii) the public announcement of a
proposal for a transaction that, if consummated, would constitute a Change in Control; or (iii)
the Board’s learning of a specific proposal containing the essential terms of a transaction
that, if consummated, would constitute a Change in Control, the Committee shall not have the right
to terminate the Policy or amend it any manner which adversely affects the rights of any
Participant unless the Company has obtained the prior written consent of each affected Participant.
Notwithstanding the preceding sentence, however, in the case of a proposal under clause (ii) or
clause (iii) immediately above, if the proposal is finally withdrawn or terminated, the Policy may
be terminated or amended after the withdrawal or termination. Notwithstanding the foregoing, the
Policy shall automatically terminate on the date following the termination of the Protected Period,
provided that all obligations accrued by Participants prior to such termination of the Policy must
be satisfied in full in accordance with the terms hereof.




          (f) Except as otherwise provided herein or by law, no right or interest of any Participant
under the Policy shall be assignable or transferable, in whole or in part, either directly or by
operation of law or otherwise, including without limitation by execution, levy, garnishment,
attachment, pledge or in any manner; no attempted assignment or transfer thereof shall be
effective; and no right or interest of any Participant under the Policy shall be liable for, or
subject to, any obligation or liability of such Participant.




          (g) All amounts payable hereunder shall be subject to applicable federal, state and local tax
withholding.




          (h) This Policy shall be construed, interpreted and the rights of the parties determined in
accordance with the laws of the Commonwealth of Virginia (without regard to the conflicts of laws
principles thereof), to the extent not preempted by federal law, which shall otherwise control.




          (i) The invalidity or unenforceability of any provision of this Policy shall not affect the
validity or enforceability of any other provision of this Policy, which shall remain in full force
and effect. If this Policy shall for any reason be or become unenforceable by either party, this
Policy shall thereupon terminate and become unenforceable by the other party.




          (j) This Policy shall have no effect on any equity incentive award granted by the Company to a
Participant under the Equity Incentive Plan or any other equity incentive program or arrangement.
The terms of the equity incentive award shall govern those awards with respect to a change of
control.




          (k) If a Participant commences a legal action to enforce any of the obligations of the Company
under this Policy and it is ultimately determined that the Participant is entitled to any payments
or benefits under this Policy, the Company shall pay the Participant the amount necessary to
reimburse the Participant in full for all reasonable expenses (including reasonable attorneys’ fees
and legal expenses) incurred by the Participant with respect to such action. The Company shall pay
to a Participant interest on any unpaid portion of the Participant’s Award that is not paid when
due,


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calculated at the prime rate of The Chase Manhattan Bank as in effect from time to time from
the date that payment should have been made under this Policy, until the Award is fully paid.





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