Exhibit 4.3


JAMES
MONROE BANCORP, INC.


2003 EQUITY COMPENSATION PLAN


1.             Purpose
of Plan.


The purpose of this James Monroe Bancorp, Inc. 2003
Equity Compensation Plan is to promote the long-term interests of James Monroe
Bancorp, Inc. and its wholly-owned subsidiary, James Monroe Bank, by (i)
motivating key personnel and directors through the grant of equity
compensation, (ii) furthering the identity of interests of Participants with
those of the shareholders of the Corporation through the ownership of the Common
Stock of the Corporation and (iii) permitting the Corporation to attract and
retain key personnel and directors upon whose judgment and efforts the
successful conduct of the business of the Corporation largely depends. Toward
this objective, the Committee may grant stock options, stock appreciation
rights, restricted stock awards, phantom stock and/or performance shares to Key
Employees of the Corporation and its Subsidiaries, and to non-employee
directors of the Corporation and its Subsidiaries, on the terms and subject to
the conditions set forth in the Plan.


2.             Definitions.


2.1           “Administrative
Policies” shall mean the administrative policies and procedures, if any,
adopted and amended from time to time by the Committee regarding the
administration of the Plan.


2.2           “Award”
shall mean any form of stock option, stock appreciation right, restricted stock
award, phantom stock or performance share granted under the Plan, whether
singly, in combination, or in tandem, to a Participant by the Committee pursuant
to such terms, conditions, restrictions and limitations, if any, as the
Committee may establish by the Award Agreement or otherwise.


2.3           “Award
Agreement” shall mean a written agreement with respect to an Award between the
Corporation and a Participant establishing the terms, conditions, restrictions
and limitations applicable to an Award. To the extent an Award Agreement is
inconsistent with the terms of the Plan, the Plan shall govern the rights of
the Participant thereunder.


2.4           “Board”
shall mean the Board of Directors of the Corporation.


2.5           “Change In Control” shall mean a
change in control of the Corporation of a nature that would be required to be
reported (assuming such event has not been previously reported) in response to
Item 6(e) of Schedule 14A of Regulation l4A promulgated under the Securities
Exchange Act of 1934  (or a successor
provision thereto), provided that, without limitation, a Change In Control
shall be deemed to have occurred at such time after the Effective Date as (i)
any “person”, within the meaning of Section 14(d) of the Exchange Act, becomes
the beneficial owner, directly or indirectly, of securities of the Corporation
representing 50% or more of the
combined voting power of the Corporation’s then outstanding securities, or (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors cease for any reason to
constitute at least a majority thereof unless the election or the nomination
for election, by the Corporation’s shareholders, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.


2.6           “Change
In Control Price” shall mean the higher of (i) the mean of the high and low
trading prices for the Corporation’s Common Stock on the Stock Exchange on the
date of determination of the Change In Control or (ii) the highest price per
share actually paid for the Common Stock in connection with the Change In
Control of the Corporation.


2.7           “Code” shall mean the Internal
Revenue Code of 1986, as amended from time to time.


2.8           “Committee” shall mean the entire
Board of Directors of the Corporation, or such other committee designated by
the Board, authorized to administer the Plan under Section 3 hereof. The
Committee, in its discretion, may delegate to a senior executive officer of the
Corporation all or part of the 









 



Committee’s authority and duties with respect to
Awards to individuals who are not subject to the reporting and other provisions
of Section 16 of the Exchange Act. In the event of any such delegation,
references herein to the “Committee” shall, to the extent of such permitted
delegation, be deemed to be references to such senior executive officer as
well. The Committee may revoke or amend the terms of a delegation at any time,
but such action shall not invalidate any prior actions of any such senior
executive officer that were consistent with the terms of the Plan.


2.9           “Common
Stock” shall mean Common Stock, par value $1.00, of the Corporation.


2.10         “Corporation”
shall mean James Monroe Bancorp, Inc.


2.11         “Effective Date” shall mean June 30,
2003.


2.12         “Key
Employee” shall mean an employee of the Corporation or a Subsidiary who holds a
position of responsibility in a managerial, administrative or professional
capacity, or a consultant to the Corporation, in either case whose performance,
as determined by the Committee in the exercise of its sole and absolute
discretion, can have a significant effect on the growth, profitability and
success of the Corporation.


2.13         ‘Participant”
shall mean any individual to whom an Award has been granted by the Committee
under this Plan.


2.14         “Plan”
shall mean this James Monroe Bancorp, Inc. 2003 Equity Compensation Plan, as
amended from time to time.


2.15         “Share” shall mean one share of Common
Stock of the Corporation.


2.16         “Stock
Exchange” shall mean the Nasdaq SmallCap Market or National Market System or
the principal stock exchange upon which the Common Stock is traded or, if the
Common Stock is no longer traded on such a market or a stock exchange, then such other market price reporting system on which the
Common Stock is traded or quoted designated by the Committee after it
determines that such other system is both reliable and reasonably accessible.


2.17         “Subsidiary” shall mean a corporation
or other business entity in which the Corporation directly or indirectly owns
fifty percent (50%) or more of
the voting equity.


3.             Administration of the Plan.


(a)           Composition
of the Committee.  The Plan
shall be administered by the entire Board of Directors of the Corporation which
shall serve as the Committee (“Committee”).


(b)           Powers
of the Committee.  The
Committee shall have all the powers vested in it by the terms of the Plan, such
powers to include authority, in its sole and absolute discretion, to grant
Awards under the Plan, prescribe Award Agreements evidencing such Awards and
establish programs for granting Awards.


The
Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to (i) determine the eligible persons to whom, and
the time or times at which Awards shall be granted; (ii) determine the types of
Awards to be granted; (iii) determine the number of shares to be covered by or
used for reference purposes for each Award; (iv) impose such terms,
limitations, restrictions and conditions upon any such Awards as the Committee
shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards,
or accept the surrender of outstanding Awards and substitute new Awards
(provided, however, that, except as provided in Section 17 of the Plan, any
modification that would materially adversely affect any outstanding Awards shall
not be made without the consent of the holder); (vi) accelerate or otherwise
change the time in which an Award may be exercised or becomes payable and to
waive or accelerate the lapse, in whole or 



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in part, of any restriction or condition with respect
to such Award, including, but not limited to, any restriction or condition with
respect to the vesting or exercisability of an Award following termination of
any grantee’s employment or other relationship with the Company; and (vii)
establish objectives and conditions, if any, for earning Awards and determining
whether Awards will be paid after the end of a performance period.


The
Committee shall have full power and authority, in its sole and absolute
discretion, to administer and interpret the Plan and to adopt and interpret
such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the Committee
deems necessary or advisable.


(c)           Award
Agreement.  Each Award shall
be evidenced by an Award Agreement containing such provisions as may be
approved by the Committee.  Each such
Award Agreement shall constitute a binding contract between the Corporation and
the Participant, and every Participant, upon acceptance of such Award Agreement,
shall be bound by the terms and restrictions of the Plan and of such Award
Agreement.  The terms of each such Award
Agreement shall be in accordance with the Plan, but each Award Agreement may
include such additional provisions and restrictions determined by the
Committee, in its discretion, provided that such additional provisions and
restrictions are not inconsistent with the terms of the Plan.  In particular, the Committee shall set forth
in each Award Agreement (i) the number of Shares subject to, and the expiration
date of, the Award, (ii) the manner, time and rate (cumulative or otherwise) of
exercise or vesting of such Award and (iv) the restrictions, if any, to be
placed upon such Award, or upon Shares which may be issued upon exercise of
such Award.


The
Chairman of the Board of Directors, the Chief Executive Officer of the
Corporation and such other officers as shall be designated by the Committee are
hereby authorized to execute Agreements on behalf of the Corporation and to
cause them to be delivered to the recipients of Awards.


(d)           Non-Uniform
Determinations.  The Committee’s
determinations under the Plan (including, without limitation, determinations of
the persons to receive Awards, the form, amount and timing of such Awards, the
terms and provisions of such Awards and the Award Agreements evidencing such
Awards) need not be uniform and may be made by the Committee selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.


(e)           Limited
Liability.  To the maximum
extent permitted by law, no member of the Committee shall be liable for any
action taken or decision made in good faith relating to the Plan or any Award
thereunder.


(f)            Effect
of the Committee’s Decisions.  All decisions, determinations and
interpretations of the Committee shall be final and conclusive on all persons
affected thereby.


(g)           Indemnification.  In addition to such other rights of
indemnification as they may have, the members of the Committee shall be
indemnified by the Corporation in connection with any claim, action, suit or
proceeding relating to any action taken or failure to act under or in
connection with the Plan or any Award granted thereunder to the full extent
provided for under the Corporation’s Articles of Incorporation or Bylaws with
respect to the indemnification of Directors.


4.             Eligibility.


Any
Key Employee or director of the Corporation or Subsidiary is eligible to become
a Participant in the Plan.


5.             Shares
Available for the Plan.


(a)           Shares
Reserved.  Shares of Common
Stock available for issuance under the Plan may be authorized and unissued
shares or treasury shares. Subject to the adjustments provided for in Section
17



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hereof, the maximum number of shares of Common Stock
available for grant of Awards under the Plan during shall be Two Hundred
Thousand (200,000);


(b)           Shares
Granted.  For purposes of
calculating the number of Shares of Common Stock deemed to be granted
hereunder, each Award, whether denominated in stock options, stock appreciation
rights,  restricted stock, performance
shares or phantom stock, shall be deemed to be a grant of a number of shares of
Common Stock equal to the number of shares represented by the stock options,
shares of restricted stock, performance shares, shares of phantom stock or
stock appreciation rights set forth in the Award, provided, however:


(i)            in the case of any Award as to which
the exercise of one right nullifies the exercisability of another (including,
by way of illustration, the grant of a stock option with Tandem SARs (as
hereinafter defined)), the number of Shares deemed to have been granted shall
be the maximum number of Shares (and/or cash equivalents) that could have been
acquired upon the maximum exercise or settlement of the Award; and


(ii)           in the case of performance share
awards providing for payments in excess of 100% of the number of shares set
forth in the Award Agreement, the number of shares granted shall be deemed to
be the maximum number of shares (and/or the cash equivalent thereof) issuable
under the Award at the highest level of performance.


(c)           Release
of Shares.  Any shares for
which an Award is granted hereunder that are released from such Award for any
reason shall become available for other Awards to be granted under the Plan.
Notwithstanding the foregoing, for purposes of calculating the number of shares
available for re-grant in any year, the portion of any Award that has been
settled by the payment of cash or the issuance of shares of Common Stock, or a
combination thereof, shall not be available for re-grant under the Plan,
irrespective of the value of the settlement or the method of its payment. The
settlement of an Award shall not be deemed to be the grant of an Award
hereunder.


6.             Term.


The
Plan shall become effective as of June 30, 2003 subject to approval of the Plan
by the Corporation’s shareholders at the 2003 annual meeting. No Awards shall
be exercisable or payable before approval of the Plan has been obtained from
the Corporation’s shareholders. Any Award made under the Plan prior to the date
of approval by the shareholders shall be void if shareholder approval is not
obtained.


7.             Participation.


The
Committee shall select, from time to time, Participants from directors and
those Key Employees who, in the opinion of the Committee, can advance the Plan’s
purposes, and the Committee shall determine the type or types of Awards to be
made to the Participant. The terms, conditions and restrictions of each Award
shall be set forth in an Award Agreement.


8.             Stock Options.


(a)           Grants.  Awards may be granted in the form
of stock options. Stock options may be incentive stock options within the
meaning of section 422 of the Code or non-statutory stock options (i.e., stock
options which are not incentive stock options), or a combination of both, or
any particular type of tax advantage option authorized by the Code from time to
time.


(b)           Terms
and Conditions of Options.  An
option shall be exercisable in whole or in such installments and at such times
as may be determined by the Committee; provided, however, that no stock option
shall be exercisable more than ten (10) years after the date of grant
thereof.  The option exercise price shall
be established by the Committee, but such price shall not be less than the per
share fair market value of the Common Stock, as determined by the Committee, on
the date of the stock option’s grant subject to adjustment as provided in
Section 17.



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(c)           Restrictions
Relating to Incentive Stock Options. Stock options issued in the
form of incentive stock options shall, in addition to being subject to all
applicable terms, conditions, restrictions and/or limitations established by
the Committee, comply with section 422 of the Code. Incentive Stock Options
shall be granted (i) only to employees of the Corporation and its subsidiaries
within the meaning of section 424 of the Code and (ii) within ten (10) years
after the date of adoption of this Plan. The aggregate fair market value
(determined as of the date the option is granted) of Shares with respect to
which incentive stock options are exercisable for the first time by an
individual during any calendar year (under this Plan or any other plan of the
Corporation or any Subsidiary which provides for the granting of incentive
stock options) may not exceed $100,000 or such other number as may be
applicable under the Code from time to time. Any Incentive Stock Option that is
granted to any employee who is, at the time the option is granted, deemed for
purposes of section 422 of the Code, or any successor provision, to own Shares
of the Corporation possessing more than ten percent of the total combined
voting power of all classes of shares of the Corporation or of a parent or
subsidiary of the Corporation, shall have an option exercise price that is at
least one hundred ten percent (110%) of the fair market value of the Shares at
the date of grant and shall not be exercisable after the expiration of five
years from the date it is granted.


(d)           Additional
Terms and Conditions. The Committee may, by way of the Award
Agreement or otherwise, establish such other terms, conditions, restrictions
and/or limitations, if any, on any stock option Award, provided they are not
inconsistent with the Plan.


(e)           Payment.
Upon exercise, a Participant may pay the option exercise price of a
stock option in cash or Shares of Common Stock, stock appreciation rights or a
combination of the foregoing, or such other consideration as the Committee may
deem appropriate. The Committee shall establish appropriate methods for
accepting Common Stock and may impose such conditions as it deems appropriate
on the use of such Common Stock to exercise a stock option.


9.             Stock Appreciation Rights.


(a)           Grants.
Awards may be granted in the form of Stock Appreciation Rights (“SARs”).
SARs shall entitle the recipient to receive a payment equal to the appreciation
in market value of a stated number of Shares of Common Stock from the price
stated in the Award Agreement to the market value of the Common Stock on the
date of exercise or surrender. An SAR may be granted in tandem with all or a
portion of a related stock option under the Plan (“Tandem SARs”), or may be
granted separately (“Freestanding SARs”). A Tandem SAR may be granted either at
the time of the grant of the related stock option or at any time thereafter
during the term of the stock option. An SAR may be exercised no sooner than six
months after it is granted.  In the case
of SARs granted in tandem with stock options granted prior to the grant of such
SARs, the appreciation in value shall be appreciation from the option exercise
price of such related stock option to the market value of the Common Stock on
the date of exercise.


(b)           Terms
and Conditions of Tandem SARs. Subject to limitations contained in
the preceding paragraph, a Tandem SAR shall be exercisable to the extent, and
only to the extent, that the related stock option is exercisable. Upon exercise
of a Tandem SAR as to some or all of the Shares covered by an Award, the
related stock option shall be canceled automatically to the extent of the
number of SARs exercised, and such Shares shall not thereafter be eligible for
grant under Section 5 hereof.


(c)           Terms
and Conditions of Freestanding SARs. Freestanding SARs shall be
exercisable in whole or in such installments and at such times as may be
determined by the Committee. The base price of a Freestanding SAR shall also be
determined by the Committee; provided, however, that such price shall not be
less than the fair market value of the Common Stock, as determined by the
Committee, on the date of the award of the Freestanding SAR.


(d)           Deemed
Exercise. The Committee may provide that an SAR shall be deemed to
be exercised at the close of business on the scheduled expiration date of such
SAR, if at such time the SAR by its terms is otherwise exercisable and, if so
exercised, would result in a payment to the participant.



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(e)           Additional
Terms and Conditions. The Committee may, consistent with the Plan,
by way of the Award Agreement or otherwise, determine such other terms,
conditions, restrictions and/or limitations, if any, on any SAR Award,
including, but not limited to, determining the manner in which payment of the
appreciation in value shall be made.


10.          Restricted Stock Awards.


(a)           Grants. Awards may be granted in the form
of Restricted Stock Awards. Restricted Stock Awards shall be awarded in such
numbers and at such times as the Committee shall determine.


(b)           Award
Restrictions. Restricted Stock Awards shall be subject to such
terms, conditions, restrictions, or limitations as the Committee deems
appropriate including, by way of illustration but not by way of limitation,
restrictions on transferability, requirements of continued employment or
individual performance or the financial performance of the Corporation. The
Committee may modify, or accelerate the termination of, the restrictions
applicable to a Restricted Stock Award under such circumstances as it deems
appropriate.


(c)           Rights
as Shareholders.  During the
period in which any restricted shares of Common Stock are subject to the restrictions
imposed under the preceding paragraph, the Committee may, in its discretion,
grant to the Participant to whom such restricted shares have been awarded all
or any of the rights of a shareholder with respect to such shares, including,
by way of illustration but not by way of limitation, the right to vote such
shares and to receive dividends.


(d)           Evidence
of Award. Any Restricted Stock Award granted under the Plan may be
evidenced in such manner as the Committee deems appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates.


11.          Phantom Stock.


(a)           Grants.
Awards may be granted in the form of Phantom Stock Awards. Phantom
Stock Awards shall entitle the Participant to receive the market value or the
appreciation in value of an equivalent number of shares of Common Stock on a
settlement date determined by the Committee.


(b)           Additional Terms and Conditions. The
Committee may, consistent with the Plan, by way of Award Agreement or
otherwise, determine such other terms, conditions, restrictions or limitations,
if any, on any Award of Phantom Stock.


12.          Performance
Shares.


(a)           Grants. Awards may be granted in the form
of Performance Shares. “Performance Shares” shall mean interests the
entitlement to which is based upon the attainment of predetermined Performance
Targets as hereinafter defined during a Performance Period as hereinafter
defined. At the end of the Performance Period, Performance Shares shall be
converted into Common Stock (or Common Stock and cash, as determined by the
Award Agreement) and distributed to Participants based upon such entitlement.


(b)           Performance
Criteria. The Committee may grant an Award of Performance Shares to
Participants as of the first day of each Performance Period. As used herein,
the term “Performance Period” shall mean the period during which a Performance
Target is measured and the term “Performance Target” shall mean the
predetermined goals established by the Committee. A Performance Target will be
established at the beginning of each Performance Period. If at the end of the
Performance Period, the Performance Target is fully met, the Performance Shares
will be converted 100% into shares of Common Stock (or the cash equivalent
thereof, as determined by the Award Agreement) and issued to the Participant.
Award payments in excess of 100% shall be permitted based upon an attainment in
excess of 100% of the Performance Target. If the Performance Target has not
been fully met, Performance Shares will be converted and delivered only to the
extent, if any, provided at the time of the grant of such Award



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for conversion based upon partial attainment of the
Performance Target and the balance of the Performance Shares will be forfeited
to the Corporation and available for reissuance pursuant to Section 5 hereof.
Award payments made in cash rather than the issuance of Common Stock shall not,
by reason of such payment in cash, result in additional shares being available
for reissuance pursuant to Section 5 hereof.


(c)           Additional
Terms and Conditions. The Committee may, consistent with the terms
of this Plan, by way of the Award Agreement or otherwise, determine the manner
of payment of Awards of Performance Shares and other terms, conditions,
restrictions or limitations, if any, on any Award of Performance Shares.


13.          Payment of Awards.


Except as otherwise provided herein, Award Agreements
may provide that, at the discretion of the Committee, payment of Awards may be
made in cash, Common Stock, a combination of cash and Common Stock, or any
other form of property as the Committee shall determine. Further, the terms of
Award Agreements may provide for payment of Awards in the form of a lump sum or
installments, as determined by the Committee.


14.          Dividends
and Dividend Equivalents.


If an Award is granted in the form of a Restricted
Stock Award, Phantom Stock Award or a Freestanding SAR, the Committee may
choose, at the time of the grant of the Award, to include as part of such Award
an entitlement to receive dividends or dividend equivalents, subject to such
terms, conditions, restrictions or limitations, if any, as the Committee may
establish. Dividends and dividend equivalents shall be paid in such form and
manner and at such time as the Committee shall determine. All dividends or dividend
equivalents which are not paid currently may, at the Committee’s discretion,
accrue interest or be reinvested into additional Shares of Common Stock.


15.          Termination
of Employment.


The Committee may adopt Administrative Policies
determining the entitlement of Participants who cease to be employed by either
the Corporation or Subsidiary whether because of death, disability,
resignation, termination or retirement pursuant to an established retirement
plan or policy of the Corporation or of its applicable Subsidiary.  Such matters may also be dealt with under the
terms of Award Agreements.


Notwithstanding the provision of any stock option
granted hereunder which provides for its exercise over a stated vesting period
as indicated in the Award Agreement, such stock option shall become immediately
exercisable and fully vested upon the Participant’s death or Permanent and
Total Disability.


Any
stock option granted hereunder shall be exercisable by a Participant:


(i)            in the event of death, within two
(2) years from the date of death (but not later than the date on which the
option would otherwise expire) by the personal representatives of his estate or
person or persons to whom his rights under such option shall have passed by
will or by laws of descent and distribution;


(ii)           in the event of permanent and total
disability (as such term is defined in Section 22(e)(3) of the Code), within
one (1) year from the date of such permanent and total disability, but not
later than the date on which the option would otherwise expire.


16.          Assignment
and Transfer.


The rights and interests of a Participant under the
Plan may not be assigned, encumbered or transferred except (a) in the event of
the death of a Participant, by will or the laws of descent and distribution,
and (b) as may be explicitly set forth in an Award Agreement.



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17.          Adjustments Upon Changes in
Capitalization.


In
the event of any change in the outstanding Shares of Common Stock by reason of
any reorganization, recapitalization, stock split, stock dividend, combination
or exchange of shares, merger, consolidation or any change in the corporate
structure or shares of the Corporation, the maximum aggregate number and class
of shares as to which Awards may be granted under the Plan and the shares
issuable pursuant to then outstanding Awards (and the exercise price of any
outstanding stock options) shall be appropriately adjusted by the Committee,
whose determination shall be final.


18.          Withholding Taxes.


The
Corporation or the applicable Subsidiary shall be entitled to deduct from any
payment under the Plan, regardless of the form of such payment, the amount of
all applicable income and employment tax required by law to be withheld with
respect to such payment or may require the Participant to pay to it such tax prior
to and as a condition of the making of such payment. The Committee may allow a
Participant to pay the amount of taxes required by law to be withheld from an
Award by withholding from any payment of Common Stock due as a result of such
Award, or by permitting the Participant to deliver to the Corporation shares of
Common Stock having a fair market value, as determined by the Committee, equal
to the amount of such required withholding taxes.


19.          Regulatory Approvals and Listings.


Notwithstanding
anything contained in this Plan to the contrary, the Corporation shall have a
no obligation to issue or deliver certificates of Common Stock evidencing
Restricted Stock Awards or any other Award payable in Common Stock prior to (a)
the obtaining of any approval from any governmental agency which the
Corporation shall, in its sole discretion, determine to be necessary or
advisable, (b) the admission of such shares to listing on the Stock Exchange
and (c) the completion of any registration or other qualification of said
shares under any state or federal law or ruling of any governmental body that
the Corporation shall, in its sole discretion, determine to be necessary or
advisable.


20.          No Right to Continued Employment or
Grants.


Participation
in the Plan shall not give any Key Employee any right to remain in the employ
of the Corporation or any Subsidiary or any director the right to remain as a
director of the Corporation or any Subsidiary. The Corporation or, in the case
of employment with a Subsidiary, the Subsidiary, reserves the right to
terminate the employment of any Key Employee at any time. The adoption of this
Plan shall not be deemed to give any Key Employee or any other individual any
right to be selected as a Participant, to be granted any Awards hereunder or if
granted an Award in any year, to receive Awards in any subsequent year.


21.          Amendment.


The
Corporation reserves the right to amend, modify or terminate this Plan at any
time by action of its Board of Directors, or, by action of the Board of
Directors with the consent of a Participant, to amend, modify or terminate any
outstanding Award or Award Agreement, except that the Corporation may not,
without shareholder approval, adopt any amendment which would (a) materially
increase the benefits accruing to Participants under the Plan, (b) materially
increase the number of shares of Common Stock which may be issued under the
Plan (except as specified in Section 17), or (c) materially modify the
requirements as to eligibility for participation in the Plan. Moreover, no
action may be taken by the Corporation (without the consent of the Participant)
that will impair the validity of any Award then outstanding or that will
prevent any incentive stock options issued or to be issued under this Plan from
being “incentive stock options” as defined under section 422 of the Code or any
successor provision.



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22.          Change In Control.


(a)           Stock
Options. In the event of a Change In Control options not otherwise
exercisable at the time of a Change In Control shall become fully exercisable
immediately prior to such Change In Control and, in the discretion of the
Committee, (i) the options shall be assumed, or an equivalent option
substituted, by any successor corporation to the Corporation, or (ii) the
Corporation shall make provisions for the Participant to exercise the options
for a minimum of forty-five (45) days prior to the Change In Control as to all
Shares subject to the options.


(b)           Stock
Appreciation Rights. In the event of a Change In Control, Tandem
SARs not otherwise exercisable upon a Change In Control shall become
exercisable to the extent that the related Stock Option is exercisable.
Freestanding SARs not otherwise exercisable upon a Change In Control shall also
become fully exercisable upon such Change In Control.


(i)            The Corporation shall make payment
to Participants with respect to SARs in cash in an amount equal to the
appreciation in the value of the SAR from the base price specified in the Award
Agreement to the Change In Control Price;


(ii)           Such cash payments to Participants
shall be due and payable, and shall be paid by the Corporation, immediately
upon the occurrence of such Change In Control; and


(iii)          After the payment provided for in (ii)
above, Participants shall have no further rights under SARs outstanding at the
time of such Change In Control.


(c)           Restricted
Stock Awards. In the event of a Change In Control, all restrictions
previously established with respect to Restricted Stock Awards will
conclusively be deemed to have been satisfied. Participants shall be entitled
to have issued to them the Shares of Common Stock described in the applicable
Award Agreements, free and clear of any restriction or restrictive legend,
except that if, upon the advice of counsel to the Corporation, Shares of Common
Stock cannot lawfully be issued without restriction, then the Corporation shall
make payment to Participants in cash in an amount equal to the Change In
Control Price of the Common Stock that otherwise would have been issued:


(i)            Such cash payments to Participants shall
be due and payable, and shall be paid by the Corporation, immediately upon the
occurrence of such Change In Control; and


(ii)           After the payment provided for in (i)
above, Participants shall have no further rights under Restricted Stock Awards
outstanding at the time of such Change In Control of the Corporation.


(d)           Phantom
Stock. In the event of a Change In Control:


(i)            All restrictions and conditions, if
any, previously established with respect to Phantom Stock Awards will
conclusively be deemed to have been satisfied and fulfilled, and the
Corporation shall make payment to Participants in cash in an amount necessary
to satisfy the Participants’ rights under Phantom Stock Awards in accordance
with the amounts otherwise payable by the Corporation pursuant to the Award
Agreement;


(ii)           Such cash payments shall be made to
Participants by the Corporation immediately prior to the occurrence of such
Change In Control; and


(iii)          After the payment provided for in (ii)
above, the Participants shall have no further rights under Phantom Stock Awards
outstanding at the time of such change of control of the Corporation.


(e)           Performance
Shares. In the event of a Change In Control:


(i)            All previously established
Performance Targets will be conclusively deemed to have been met. Participants
shall be entitled to a pro-rata proportion of the shares of Common Stock which
would have been issued to them upon conversion of any outstanding Performance
Shares at the end of the 



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Performance Period (based upon the applicable Performance
Targets, which are conclusively deemed to have been met by reason of the Change
In Control), payable in the manner specified in subsection (ii) hereof. The
pro-rata proportion of the shares of Common Stock to be issued shall be equal
to a fraction, the numerator of which is the duration of the Performance Period
prior to such Change In Control and the denominator of which is the original
length of the Performance Period;


(ii)           In lieu of issuing shares of Common
Stock upon such conversion of Performance Shares, the Corporation shall make
payment to Participants in cash in an amount equal to the Change In Control
Price of the shares of Common Stock that would have been issued under paragraph
(i) above;


(iii)          Such cash payments to Participants
shall be due and payable, and shall be paid by the Corporation, immediately
upon the occurrence of such Change In Control; and


(iv)          After the payment provided for in (ii)
above, the Participants shall have no further rights under awards of
Performance Shares outstanding at the time of such Change In Control of the
Corporation.


(f)            Miscellaneous.
Upon a Change In Control, no action shall be taken which would
adversely affect the rights of any Participant or the operation of the Plan
with respect to any Award to which the Participant may have become entitled
hereunder on or prior to the date of the Change In Control or to which he may
become entitled as a result of such Change In Control.


23.          No Right, Title or Interest in
Corporation Assets.


No
Participant shall have any rights as a shareholder as a result of participation
in the Plan until the date of issuance of a stock certificate in his name
except, in the case of Restricted Stock Awards, to the extent such rights are
granted to the Participant under Section 10(c) hereof. To the extent any person
acquires a right to receive payments from the Corporation under this Plan, such
rights shall be no greater than the rights of an unsecured creditor of the
Corporation.


24.          Payment by Subsidiaries.


Settlement
of Awards to employees of Subsidiaries shall be made by and at the expense of
such Subsidiary.  Except as prohibited by
law, if any portion of an Award is to be settled in shares of Common Stock, the
Corporation shall sell and transfer to the Subsidiary, and the Subsidiary shall
purchase, the number of shares necessary to settle such portion of the Award.


25.          Governing Law.


The
Plan shall be governed by and. construed in accordance with the laws of the
Commonwealth of Virginia, except as preempted by applicable Federal law.


 



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