exv10w13



 





Exhibit 10.13




ORBITAL SCIENCES CORPORATION




NONQUALIFIED




MANAGEMENT DEFERRED




COMPENSATION PLAN




AMENDED AND RESTATED

AS OF JANUARY 1, 2005





 









 








ORBITAL SCIENCES CORPORATION

NONQUALIFIED MANAGEMENT DEFERRED COMPENSATION PLAN




AMENDED AND RESTATED AS OF JANUARY 1, 2005




     WHEREAS, Orbital Sciences Corporation (“Orbital”) has decided to establish a deferred
compensation plan for a select group of its key management and highly compensated employees; and



     WHEREAS, the purpose of this Plan is to provide a select group of management or highly
compensated employees with a tax-deferred capital accumulation program through their voluntary
deferrals of Base Salary and Bonus and the allocation of Company Discretionary Contributions;



     WHEREAS, this Plan of deferred compensation is intended to be a “top-hat plan” (i.e., an
unfunded deferred compensation plan maintained for a select group of management or highly
compensated employees) pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of the Employee
Retirement Income Security Act of 1974 (“ERISA”); and



     WHEREAS, this Plan is amended and restated to comply with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), any regulations promulgated thereunder and any other
applicable guidance.



     NOW, THEREFORE, the Orbital Sciences Corporation Nonqualified Management Deferred Compensation
Plan is hereby amended and restated as of January 1, 2005 in accordance with the following terms
and conditions:



ARTICLE 1 - Definitions




     Unless the context or subject matter otherwise requires, the following definitions shall
govern the Plan:



     Section 1.01 Base Salary — the base salary established by the Company to be earned by
a Participant during a calendar year.



     Section 1.02 Beneficiary — a person (other than the Participant) who is entitled to
receive benefits under the Plan because of his designation for such benefits by the Participant
under the provisions of this Plan.



     Section 1.03 Board — the Board of Directors of Orbital Sciences Corporation.



     Section 1.04 Bonus — Management Incentive Plan compensation (or any successor plan).



 









 





     Section 1.05 Committee — the Human Resources and Compensation Committee appointed by
the Board to administer the Plan.



     Section 1.06 Company — Orbital Sciences Corporation and its successors.



     Section 1.07 Company Discretionary Contributions — the contributions made by the
Company pursuant to the provisions of Section 3.02 of the Plan.



     Section 1.08 Deferrals — the portion of a Participant’s Base Salary and/or Bonus that
is deferred pursuant to the provisions of Article 3 of the Plan.



     Section 1.09 Deferral Account — the separate unfunded account established and
maintained on the books of the Company for each Participant pursuant to the provisions of Article 6
of the Plan, which is credited with Company Discretionary Contributions and Deferrals made on the
Participant’s behalf. The Deferral Account shall include account balances accumulated under the
Prior Plan that have been transferred to this Plan. To the extent necessary to reflect different
vesting schedules and/or distribution dates, a Participant’s Deferral Account can include multiple
sub-accounts.



     Section 1.10 Deferral Election Form — the form designated by the Company for use by
Participants to (a) contribute Deferrals to the Plan, (b) designate the deemed investment of the
Deferral Account, and (c) select the timing and form of the distribution of Deferrals, Company
Discretionary Contributions and/or amounts transferred to the Plan from the Prior Plan. The
Committee may change the form at any time.



     Section 1.11 Effective Date — September 1, 2003.



     Section 1.12 Forfeiture — that portion of a Participant’s Deferral Account that is
attributable to Company Discretionary Contributions and that is not Vested as of the date the
Participant terminates employment with the Company.



     Section 1.13 Grandfathered Amounts — any amounts deferred under the Plan for taxable
years beginning prior to January 1, 2005 for which the Participant had a vested right as of
December 31, 2004.



     Section 1.14 Involuntary Separation From Service — events which result in a
separation from service with the Company and which are generally not initiated by a Participant,
including but not limited to a layoff, disability or discharge by the Company for any reason.



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     Section 1.15 Participant — an employee of the Company who is (a) determined by the
Company to be a member of a select group of the Company’s management or highly compensated
employees; and (b) designated by the Committee as a Participant under the Plan.



     Section 1.16 Performance-Based Compensation — compensation that meets the
requirements of performance-based compensation specified in Code Section 409A(a)(4)(B)(iii) and its
regulations and other guidance promulgated thereunder. Performance-Based Compensation shall be
designated as such by the Committee and must relate to services performed by the Participant during
a designated incentive period of at least twelve (12) months.



     Section 1.17 Plan — this Nonqualified Management Deferred Compensation Plan and any
modification, amendment, extension or renewal thereof.



     Section 1.18 Plan Year — the calendar year ending each December 31.



     Section 1.19 Prior Plan — the Orbital Sciences Corporation 1995 Deferred Compensation
Plan as in existence immediately prior to the transfer of assets and liabilities from such plan to
this Plan, effective as of September 1, 2003.



     Section 1.20 Specified Employee — a key employee (as defined in Code Section 416(i))
of the Company. An employee will be considered a “key employee” if such employee meets the
requirements of this Section 1.20 at any time during the 12-month period ending on December 31 of
any year (the “Identification Date”). If a person is a key employee, the person is treated as a
Specified Employee for the 12-month period beginning on the April 1st following the
Identification Date, but only with respect to the payment of any benefits that are not
Grandfathered Amounts.



     Section 1.21 Unforeseeable Emergency — a severe financial hardship of the Participant
resulting from: an illness or accident of the Participant, the Participant’s spouse, or the
Participant’s dependent (as defined in Code Section 152(a)); loss of the Participant’s property due
to casualty (including the need to rebuild a home following damage to a home not otherwise covered
by insurance, for example, as a result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.
“Unforeseeable Emergency” may include the need to pay for medical expenses, including
non-refundable deductibles, as well as for the costs of prescription drug medication for the
Participant and/or his spouse and dependents (as defined in Code Section 152(a)), or pay for the
funeral expenses of a spouse or a dependent (as defined in Code Section 152(a)). Whether a
Participant is faced with an Unforeseeable Emergency shall be determined by the Committee on the
relevant facts and circumstances of each case, but, in any case, a distribution on account of
Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved
through: reimbursement or compensation from insurance or otherwise, by liquidation of



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the Participant’s assets, to the extent the liquidation of such assets would not cause severe
financial hardship; or by cessation of deferrals under the Plan.



     Section 1.22 Valuation Date — the date on which a Participant’s Deferral Account is
credited with Deferrals and earnings. For purposes of this Plan, and in accordance with the terms
set forth by the Plan’s third-party administrator, a Participant’s Deferral Account will be subject
to daily valuation.



     Section 1.23 Vested — a Participant’s nonforfeitable interest in a portion of his
Deferral Account. A Participant’s Vested interest shall be determined in accordance with the
provisions of Article 5 of the Plan.



     Section 1.24 Voluntary Separation From Service — events, other than those classified
as an Involuntary Separation From Service, which are initiated by the Participant and which result
in a separation from service with the Company. For purposes of this Plan, a Participant’s death
will constitute a Voluntary Separation From Service.



ARTICLE 2 — Eligibility and Participation




     Section 2.01 Eligible Persons. Eligibility to participate in the Plan is limited to
(a) those management or highly compensated employees of the Company with a Base Salary of $125,000
or greater on January 1 of any Plan Year, and (b) any additional management or highly compensated
employees of the Company who are designated as Participants by the Committee.



     Section 2.02 Notice of Participation. The Committee shall notify in writing each
Participant of his designation to participate in the Plan.



     Section 2.03 Date of Entry. Those persons who are designated to participate in the
Plan on or after the Effective Date shall become a Participant thirty (30) days after they are
notified in writing of their designation to participate in the Plan.



     Section 2.04 Application for Participation. As a condition to participation during
any Plan Year, an eligible employee shall enroll in the Plan by making an election in accordance
with Section 3.01 herein on the Company-approved Deferral Election Form. If, with respect to any
Plan Year, a Participant fails to submit the form in a timely manner, he will be ineligible to make
Deferrals in that Plan Year.



     Section 2.05 Limitation on Participants. The Committee, in its sole discretion, may
determine who qualifies as a Participant and may change the criteria (including salary
requirements) at any time. The effective date of such change shall be determined by the Committee.



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     Section 2.06 Removal from Participation. The Committee may terminate a Participant’s
participation for any reason. A Participant who is prospectively terminated from participating in
this Plan is ineligible to make Deferrals or receive an allocation of Company Discretionary
Contributions effective as of the date of termination in the Plan as determined by the Committee.



ARTICLE 3 — Participant Deferrals and Company Contributions




     Section 3.01 Participant Deferrals. As set forth more fully below, a Participant may
defer a portion of his Base Salary, which would otherwise be earned and payable during any Plan
Year, by executing a Deferral Election Form pursuant to subsection (a) of this Section. A
Participant may defer a portion of his Bonus, which would otherwise be earned and payable during
any Plan Year, by executing a Deferral Election Form pursuant to subsection (b) of this Section.
Subject to the rules set forth by the Committee and the limitations set forth below, the maximum
Deferral is one hundred percent (100%) of the Participant’s Base Salary and Bonus. No deferral
election shall reduce a Participant’s compensation below the amount necessary to satisfy the
following obligations: applicable employment taxes (e.g., FICA/Medicare) on amounts paid or
deferred; withholding requirements of a Company-sponsored benefit plan; or income tax withholding
for compensation that is not deferred. Except as otherwise provided under this Plan, once an
election to defer amounts under this Plan for any calendar year has become effective (e.g., as of
January 1st), that election shall be irrevocable.



     (a) Salary Deferral Contribution.



          (i) Submission of Deferral Election Form. Each Participant who wishes to participate
in the Plan and defer a portion of his Base Salary must submit a Deferral Election Form to the
Committee no later than December 15 of the year immediately prior to the Plan Year with respect to
which the election is to be effective. The Deferral Election Form, once properly completed and
submitted to the Committee, shall be effective as of the first pay period of the following Plan
Year. In the case of a person who becomes a Participant after the first day of a Plan Year, the
Deferral Election Form must be filed with the Committee no later than thirty (30) days after he
becomes eligible to participate in the Plan or as otherwise determined by the Committee. However,
such election shall be prospective and shall apply only to Base Salary earned after the election is
made. If, with respect to any Plan Year, a Participant fails to submit the form in a timely
manner, he will be ineligible to make Deferrals in that Plan Year. The Deferral Election Form is
effective for one 12-month period only. A Participant must file a new Deferral Election Form each
year as determined by the Committee.




          (ii) Deferral Period. The Deferral Election Form will establish the deferral period
for the Base Salary. The deferral period shall begin on the first day of the Plan Year with
respect to which the Deferral Election Form is filed (or, in the case of Participants becoming




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eligible after the Effective Date, on the first day of a pay period following the filing of a
Deferral Election Form). The deferral period shall end on the earlier of: (A) a Participant’s
separation from service; or (B) the scheduled in-service withdrawal date specified on the Deferral
Election Form (such scheduled in-service withdrawal dates shall be a minimum of two years from the
date the deferral period commenced). The Participant may designate different deferral periods for
the Base Salary contributed each Plan Year by filing a separate Deferral Election Form in
accordance with Section 3.01(a)(i).




     (b) Bonus Deferral Contribution.



          (i) Submission of Deferral Election Form. Each Participant who wishes to participate
in the Plan and defer a portion of his Bonus must submit a Deferral Election Form to the Committee
no later than December 15 of the year immediately prior to the Plan Year with respect to which the
election is to be effective. Notwithstanding the foregoing, and at the option of the Committee,
for deferrals of any Bonus that qualifies as Performance-Based Compensation, a Participant may file
a Deferral Election Form with the Committee at any time up to the date that is at least six (6)
months before the end of the performance period.




          The Deferral Election Form with respect to Bonuses is effective for one 12-month period only.
A Participant must file a new Deferral Election Form in order to defer the Bonus that is earned
during the subsequent 12-month period commencing each January 1.




          (ii) Deferral Period. If a Participant has elected to defer his Base Salary, the
deferral period corresponding to the Base Salary deferred in a Plan Year will govern the deferral
period for the Bonus earned with respect to that Plan Year. If a Participant has not elected to
defer his Base Salary, the Deferral Election Form with respect to the Bonus will establish the
deferral period for the Bonus. Such deferral period shall begin on the January 1 following the
Plan Year with respect to which the Bonus was earned and shall end on the earlier of: (A) a
Participant’s separation from service; or (B) the scheduled in-service withdrawal date specified on
the Deferral Election Form (such scheduled in-service withdrawal dates shall be a minimum of two
years from the date the deferral period commenced). If a Participant has not elected to defer his
Base Salary, the Participant may designate different deferral periods by filing a separate Deferral
Election Form for each Bonus.




     Section 3.02 Company Discretionary Contributions. The Company, in its sole and
absolute discretion, may at any time credit a Company Discretionary Contribution to a Participant’s
Deferral Account. The Company shall determine the amount of the Company Discretionary
Contribution, which Participants are eligible to share in the allocation of the Company
Discretionary Contribution and the vesting of the Company Discretionary Contribution. Participants
who, with respect to any Plan Year, are not making Deferrals may, in the sole discretion of the
Committee, be eligible for the allocation of a Company Discretionary Contribution for such Plan
Year. In the event a Participant has not established a Deferral



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Account, the Company shall determine how the Company Discretionary Contribution will be deemed
invested until such time as the Participant directs otherwise.



     Section 3.03 Amounts Transferred from Prior Plan. Effective September 1, 2003, all
assets and liabilities attributable to the Prior Plan were transferred to and became payable under
this Plan. The deferral period for amounts attributable to the Prior Plan held in a Participant’s
Deferral Account began on September 1, 2003 and ends on the earlier of: (A) a Participant’s
termination from employment; or (B) the scheduled in-service withdrawal date specified on the
Deferral Election Form (which date is not prior to September 1, 2005). If a Participant failed to
submit such a Deferral Election Form, the amount held in such Participant’s Deferral Account
attributable to the Prior Plan shall be paid in a lump sum following his termination from
employment (whether on account of an Involuntary Separation From Service or a Voluntary Separation
From Service).



ARTICLE 4 — Investment of Deferral Account




     Section 4.01 Participant Election. The Participant may elect in writing to have a
specified percentage of his Deferral Account deemed invested in one or more investment fund(s) made
available by the Company from time to time provided that the specified percentage is in whole
numbers, the minimum designation is one percent (1%) and the sum of the percentages allocated does
not exceed one hundred percent (100%). The Participant agrees on behalf of himself and his
Beneficiary to assume all risks in connection with any decrease in the value of funds credited to
the Participant’s Deferral Account that are deemed so invested or which continue to be deemed to be
invested in accordance with the provisions of the Plan. The Committee may add, delete or otherwise
alter the deemed investments allowed under this Plan at any time.



     Section 4.02 Change of Deemed Investment Election. In accordance with any procedures
established by the Committee, each Participant may elect to change the deemed investment of all or
a portion of his Deferral Account among the investments then allowed by the Plan on a daily basis
by providing the Committee with such completed forms as the Committee may require.



     Section 4.03 Investment Options. In addition to those investment funds made available
by the Company from time to time, any funds credited to the Deferral Account may be kept in cash or
invested and reinvested in mutual funds, stocks, bonds, securities, insurance contracts, or any
other assets as may be selected by the Committee. Notwithstanding the foregoing, the Committee may
(but is not required to) invest the funds reflected in the Deferral Account of a Participant in
accordance with the Participant’s deemed investment directions.



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ARTICLE 5 — Vesting and Forfeiture of Benefits




     Section 5.01 Participant Deferral. Each Participant will be Vested in the amounts in
his Deferral Account attributable to Deferrals and his account balance accumulated under the Prior
Plan (and associated earnings thereof) at all times.



     Section 5.02 Company Contributions. Each Participant will be Vested in the amounts in
his Deferral Account attributable to Company Discretionary Contributions upon the earlier of: (i)
the date the Participant satisfies the vesting schedule established below; (ii) the date the
Participant reaches age sixty (60) provided the Participant is still employed by the Company; or
(iii) the date the Participant becomes disabled (as determined by the Committee in its sole
discretion). Notwithstanding the above, if a Participant dies while in the employ of the Company,
all amounts credited to the Participant’s Deferral Account will be Vested.



     Each Participant shall vest in the Company Discretionary Contributions credited to his
Deferral Account in accordance with the following schedule: a Participant who completes one year of
service with the Company will be 33% Vested in all Company Discretionary Contributions allocated to
his Deferral Account; a Participant who completes two years of service with the Company will be 66%
Vested in all Company Discretionary Contributions allocated to his Deferral Account; and a
Participant who completes three years of service with the Company will be 100% Vested in all
Company Discretionary Contributions allocated to his Deferral Account.



     For purposes of calculating years of service under the aforementioned vesting schedule, a
Participant will be credited with one year of service for each Plan Year in which he works 1,000
hours of service. The term “hours of service” shall have the same meaning ascribed thereto in the
Deferred Salary & Profit Sharing Plan For Employees of Orbital Sciences Corporation.



     Notwithstanding the above, the Committee may modify the aforementioned vesting schedule for
Company Discretionary Contributions not yet made to the Plan at any time.



     Section 5.03 Forfeitures. All Forfeitures in a Participant’s Deferral Account as of
the date the Participant terminates employment with the Company shall be cancelled, and the
Participant shall forfeit any right to the payment to him of such Forfeitures.



ARTICLE 6 — Deferral Account




     Section 6.01 Deferral Accounts. The Committee shall establish and maintain a Deferral
Account for each Participant under the Plan. Each Participant’s Deferral Account shall be further
divided into separate sub-accounts (“investment fund sub-accounts”), each of which corresponds to a
deemed investment fund elected by the Participant pursuant to Section 4.01. The Participant’s
Deferral Account shall be credited as follows:



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          (a) As of each Valuation Date, the Committee shall credit the investment fund sub-accounts of
the Participant’s Deferral Account with (i) an amount equal to the Deferrals made by the
Participant during each pay period in accordance with the Participant’s elections under Section
4.01 and (ii) an amount equal to the Company Discretionary Contributions allocated to the
Participant during any such pay period. The portion of the Participant’s Deferrals or Company
Discretionary Contributions that the Participant has elected to be deemed to be invested in a
certain type of investment fund shall be credited to the investment fund sub-account corresponding
to that investment fund.




          (b) As of each Valuation Date, each deemed investment fund sub-account of the Participant’s
Deferral Account shall be credited with earnings or losses.




     Section 6.02 Quarterly Reports. The Committee shall make available Deferral Account
information to Participants at least quarterly.



     Section 6.03 Title to Assets. The Company shall not be required to segregate any
assets of any kind to meet the obligation of the Plan. Any claim of title to and beneficial
ownership of any assets which the Company has designated to pay the deferred compensation benefits
hereunder shall at all times be that of a general unsecured creditor of the Company, and a
Participant shall have no property rights in those assets.



ARTICLE 7- Benefit Distributions




     Section 7.01 In General. Unless they are forfeited in accordance with Article 5, the
terms and conditions of benefit payments to a Participant who is eligible to receive benefits under
the Plan are set forth in this Article. Except as provided in Section 7.11, distributions pursuant
to Sections 7.02, 7.03 and 7.09 will commence as soon as administratively feasible after the last
day of the month following the month that contains the Participant’s separation from service date.
Distributions pursuant to Sections 7.05, 7.06 and 7.07 shall be made as soon as administratively
feasible after he becomes eligible for such distribution.



     Section 7.02 Voluntary Separation From Service. Upon a Participant’s Voluntary
Separation From Service, the Participant is entitled to a distribution of benefits from the Vested
portion of his Deferral Account. With respect to Grandfathered Amounts, the Participant may
request a change to the form of distribution previously elected by submitting a written request to
the Committee. The Committee then may approve or deny the request at its sole discretion.



     With respect to all Plan benefits other than Grandfathered Amounts, except as provided in
Section 7.04, the form of distribution is the form irrevocably elected on the Deferral Election
Form. The forms of distribution permitted are set forth below:



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          (a) Normal Form of Distribution. The normal form of distribution is a lump sum
payment.




          (b) Optional Forms of Distribution. Participants who properly complete and submit a
Deferral Election Form in accordance with Article 3 may elect to receive their distribution of
benefits in monthly installment payments not to exceed six years and/or 72 installment payments.
Such monthly installment payments must be paid out in 12-month increments, e.g., a Participant may
only request 12, 24, 36, 48, 60 or 72 installment payments.




          (c) Distribution of Small Benefits. Notwithstanding the foregoing, if the
Participant’s Deferral Account is ten thousand dollars ($10,000) or less, a distribution for any
reason shall be made in the form of a lump-sum payment.




     Section 7.03 Involuntary Separation From Service. Upon a Participant’s Involuntary
Separation From Service, the Participant is entitled to a distribution of benefits from the Vested
portion of his Deferral Account. With respect to Grandfathered Amounts, the Participant may
request a change to the form of distribution previously elected by submitting a written request to
the Committee. The Committee may then approve or deny the request at its sole discretion.



     With respect to all Plan benefits other than Grandfathered Amounts, except as provided in
Section 7.04, the form of distribution is the form irrevocably elected on the Deferral Election
Form. The forms of distribution permitted are set forth in Sections 7.02(a), (b) and (c) above.



     Section 7.04 Changes in Elected Form of Plan Benefits Other Than Grandfathered
Amounts. Notwithstanding the foregoing, and subject to Code Section 409A, accompanying
regulations and any related guidance, the Committee, in its sole discretion, is authorized to
provide a Participant with the right to change a form of a benefit comprised of non-Grandfathered
Amounts previously elected by a Participant on his Deferral Election Form provided that such
election change (i) does not take effect until at least 12 months after the date on which the new
Deferral Election Form is filed with the Committee, (ii) the payment with respect to such change in
election is deferred for a period of not less than 5 years after the date such payment would
otherwise have been made or would commence to be paid (except to the extent payable as a result of
death or disability), and (iii) the election change is made at least 12 months prior to the date
the payment(s) would otherwise have commenced. In the case of an ineffective change, benefits will
be paid in accordance with the most recent valid Deferral Election Form.



     Section 7.05 Scheduled In-Service Withdrawals. Subject to Section 7.05(a) and Section
7.11, a Participant who properly completes and submits a Deferral Election Form and elects to
receive a distribution prior to his separation from service will receive benefits in one (1) lump
sum payment or in monthly installment payments not to exceed six years and/or 72



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installment payments. Such monthly installment payments must be paid out in 12-month
increments, e.g., a Participant may only request 12, 24, 36, 48, 60 or 72 installment payments.



          (a) Criteria to Elect Scheduled In-Service Withdrawal. In order to select a scheduled
in-service withdrawal date, a Participant must complete a Deferral Election Form and elect a
distribution date that is at least two (2) years from the date the deferral period commenced.
Notwithstanding any provision of this Plan to the contrary, a Participant shall not be entitled to
receive the unvested portion of his Deferral Account. In this case, the deferral period with
respect to the unvested portion shall be automatically extended until the Participant becomes
Vested in such amount. If the Participant elected to receive a lump sum payment prior to becoming
Vested, the portion of his Deferral Account that was unvested at his scheduled in-service
withdrawal date shall, subject to Section 7.11, be paid in a lump sum as soon as practical after he
becomes Vested in such amount. If the Participant elected to receive monthly installment payments
prior to becoming Vested, the portion of his Deferral Account that was unvested at his scheduled
in-service withdrawal date shall be paid out after he becomes Vested in monthly installments equal
to the number of payments remaining in the scheduled in-service withdrawal.




          (b) Election to Extend Scheduled In-Service Withdrawal. Notwithstanding the
foregoing, the Committee, in its sole discretion, is authorized to provide a Participant with a
one-time right to extend the in-service withdrawal date originally elected by such Participant to a
later date if the election change (i) does not take effect until at least twelve (12) months after
the date on which the new election is filed with the Committee, (ii) the payment with respect to
such change in election is deferred for a period of not less than five (5) years after the date
such payment would otherwise have been made or would commence to be paid (except to the extent
payable as a result of death or disability), and (iii) the election change is made at least twelve
(12) months prior to the date the payment(s) would otherwise have commenced.




     Section 7.06 Nonscheduled In-Service Withdrawals of Grandfathered Amounts. A
Participant may request to receive all Grandfathered Amounts in the form of a lump sum payment at
any time. Subject to the approval of the Committee, a Participant who elects this type of benefit
distribution will receive ninety percent (90%) of the Vested portion of his Grandfathered Amounts
and will forfeit the remaining ten-percent (10%). As a result of such non-scheduled in-service
withdrawal, the Participant will be ineligible to participate in the Plan for purposes of making
Deferrals for the Plan Year next following the Plan Year in which he received the lump sum payment.



     Section 7.07 Hardship Distributions — Withdrawal of Deferrals.



     In the event that a Participant suffers an Unforeseeable Emergency (defined below), the
Participant shall be permitted to withdraw from the Vested portion of his Deferral Account an
amount equal to the amount reasonably necessary to satisfy the emergency need



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(which may include amounts necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution). The Participant must first
submit a written withdrawal request to the Committee explaining the nature of the Unforeseeable
Emergency and the amount required to meet the need. The Participant will be required to certify
that the need cannot be reasonably met from other sources. If a Participant qualifies for a
hardship distribution under this Section 7.07 or has received a hardship distribution pursuant to
Treasury Regulation Section 1.401(k)-1(d)(3), he may cancel his deferral election with regard to
compensation to be earned in the remainder of the Plan Year. Any later deferral election will be
subject to the provisions under Code Section 409A governing initial deferral elections.




     Section 7.08 Forfeiture of Company Discretionary Contributions. Notwithstanding any
provisions of this Plan to the contrary, if (a) a Participant’s separation from service (whether on
account of an Involuntary Separation From Service or a Voluntary Separation From Service) is due to
theft, proven dishonesty, gross misconduct, embezzlement, fraud, conviction of a felony (whether or
not related to the employment relationship), disclosure of trade secrets or business information of
the Company or use of the facilities, premises or other assets of the Company to conduct unlawful
or unauthorized activities or transactions, or (b) a Participant, subsequent to separation from
service, violates the terms of any restrictive covenant applicable to the Participant, then all
unpaid amounts credited to the Participant’s Deferral Account attributable to Company Discretionary
Contributions shall be forfeited. All determinations as to the applicability of this Section 7.08
shall be determined by the Committee in its sole discretion and shall be conclusive.



     Section 7.09 Death Benefits.



          (a) Death Before Separation from Service. In the event that a Participant incurs a
Voluntary Separation From Service because of death, his Beneficiary shall be entitled to receive a
death benefit that shall equal the value of the Participant’s Deferral Account, as of the Valuation
Date immediately preceding the distribution date. The portion of the death benefit attributable to
the Participant’s Deferral Account shall be paid in accordance with the distribution form selected
by the Participant (but subject to 7.02(c)).




          (b) Death After Separation from Service. In the event that a Participant who is
receiving a monthly distribution of benefits after incurring a Voluntary or Involuntary Separation
From Service dies, his Beneficiary shall be entitled to receive the remaining installment payments
from the Participant’s Deferral Account as they become due. Payment of benefits under this Section
shall be made in the form of payment selected by the Participant. Notwithstanding the foregoing,
with respect to payment of any remaining Grandfathered Amounts, the Committee, in its sole
discretion, may elect to pay any remaining benefit payable to the Beneficiary in the form of a lump
sum payment as soon as reasonably practicable after the date of death.




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     Section 7.10 Tax Liability. In the event the Plan is required to distribute benefits
to any Participant in compliance with a change in the law, the Participant shall bear all tax
consequences associated with the premature payment of his Deferral Account. Notwithstanding the
above, the Participant will be responsible for all taxes in conjunction with the deferral or
distribution of his benefits.



     Section 7.11 Payments to Specified Employees. Any payment to a Specified Employee on
account of a Voluntary Separation From Service or Involuntary Separation From Service, shall not
commence earlier than the first date of the seventh month following the date of separation from
service. Payments to which a Specified Employee would otherwise be entitled during the first six
months following the date of separation from service will be accumulated and paid out in a lump sum
commencing the first date of the seventh month following the date of Separation from Service.



ARTICLE 8 — Administration




     Section 8.01 Responsibilities and Powers of Committee. The Committee shall be the
agent for service of legal process regarding any litigation arising out of the operation and
administration of the Plan. The Plan shall be administered by the Committee. The Committee shall
have the authority to delegate some or all of its powers with respect to the Plan to designated
representatives, including, but not limited to, the Company’s Pension and Retirement Committee.
Subject to Section 10.11, the Committee shall also have the discretionary power to establish and
revise rules and procedures relating to the administration of the Plan, interpret the provisions of
the Plan and answer all questions and settle all disputes which may arise in connection with the
Plan.



     Section 8.02 Interpretation of Plan. The Committee shall, subject to the requirements
of the law, be the sole judge of the standard of proof required in any case and the application and
interpretation of this Plan, and decisions of the Committee shall be final and binding on all
parties. The Committee shall have the exclusive right and discretionary authority to construe the
terms of the Plan, to resolve any ambiguities, and to determine any questions which may arise with
the Plan’s application or administration, including but not limited to, determination of
eligibility for benefits. Whenever in the Plan the Committee is given discretionary powers, the
Committee shall exercise such powers in a uniform and nondiscriminatory manner. The Committee
shall process a claim for benefits as speedily as is feasible, consistent with the need for
adequate information and proof necessary to establish the Participant’s benefit rights and to
commence payment of benefits.



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ARTICLE 9 — Application for Benefits and Claims Procedure




     Section 9.01 Notice of Denial of Benefit. In the event that a request for
distribution of benefits is denied in whole or in part, a Participant whose request for benefits
has been denied shall be notified of such denial in writing by the Committee. The denial notice
shall specify the reason or reasons for the denial, make specific references to pertinent Plan
provisions, describe any additional material or information necessary for the Participant to
perfect the claim, and shall advise the Participant of the procedure for the appeal of such denial.



     Section 9.02 Appeals Procedure. All appeals shall be made in accordance with the
following procedure:



          (a) The Participant or his duly authorized representative shall file with the Committee a
request to appeal the denial within sixty (60) days of notification by the Committee of the claim
denial. The request shall be made in writing, and shall set forth all of the facts upon which the
appeal is based. Appeals not timely filed shall be barred.




          (b) The Committee shall consider the merits of the Participant’s written presentations, the
merits of any facts or evidence in support of the denial of benefits, and such other facts and
circumstances as it shall deem relevant.




          (c) Within forty-five (45) days after a request for review has been received, the Committee
shall render a decision upon the appealed claim that shall be in writing and shall include specific
reasons for the decision and specific references to the pertinent Plan provisions on which the
decision was based. The decision rendered by the Committee shall be binding on all parties.




ARTICLE 10 — General Provisions




     Section 10.01 No Alienation or Assignment of Benefits. Payments of benefits under
this Plan to any Participant shall not be subject to any claim of any creditor of such Participant,
and, in particular, to the fullest extent permitted by law, all such payments shall be free from
attachment, garnishments, trustee’s process, or any other legal or equitable process available to
any creditor of such Participant. No Participant shall have the right to alienate, anticipate,
commute, pledge, encumber, assign, sell, or transfer any potential payment of benefits hereunder.



     Section 10.02 No Contract of Employment. Nothing contained herein shall be construed
as conferring upon a Participant the right to continue in the employ of the Company.



     Section 10.03 Other Retirement Plans. Any compensation deferred under this Plan shall
not be deemed salary or other compensation to a Participant for the purpose of computing



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benefits to which he may be entitled under any ERISA-covered benefit plan of the Company,
provided it is permissible to do so under such plan.



     Section 10.04 Heirs, Assigns and Successors. This agreement is binding upon and
inures to the benefit of the Company, its successors and assigns and the Participant and his heirs,
executors, administrators and legal representatives.



     Section 10.05 Amendment or Termination. The Committee has the right to amend the Plan
with retroactive effect if necessary, at any time; provided that, in no event shall the Committee
have the authority to adopt any amendment having a significant cost to the Company. Except as
provided below, the Board retains the right to modify the powers of the Committee to amend the
Plan, to amend the Plan (with retroactive effect if necessary) or to terminate the Plan, at any
time.



     The Plan may be frozen at any time by the Board so that no new amounts can be deferred under
the Plan. In the event that the Plan is frozen, benefits shall be held in the Plan and paid out in
accordance with the terms of the Plan.



     The Plan may be terminated at any time by the Board, provided that, to the extent required by
Code Section 409A and its regulations and other guidance thereunder: (i) all other account balance
plans and arrangements maintained by the Company are terminated with respect to all Participants,
(ii) no payments, other than those otherwise payable under the terms of the Plan absent a
termination of the Plan, are made within 12 months of the termination of the Plan, (iii) all
payments are made within 24 months of the termination of the Plan, and (iv) the Company does not
adopt another deferred compensation plan with an account balance feature at any time for a period
of five years following the date of termination of the Plan.



     Section 10.06 Severability of Provisions. If any provision of this Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and this Plan shall be construed and enforced as if such provisions had not been included.



     Section 10.07 Controlling Law. This Plan shall be construed in accordance with and
governed by the laws of the Commonwealth of Virginia.



     Section 10.08 Grammatical Construction. Pronouns or other words indicating the
masculine gender shall be deemed to include the feminine gender, and singular words shall include
the plural in all cases where such meaning would be appropriate.



     Section 10.09 Unauthorized Representations. The Company shall not be bound by the
representations of any person, other than the Committee, regarding eligibility for benefits under
the Plan or any other matter relating to the Plan.



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     Section 10.10 Designation of Death Benefit Beneficiary. In accordance with procedures
established by the Committee, in its sole discretion, each Participant may designate any person or
persons (primarily or contingently) as his Beneficiary to whom his Plan benefits shall be paid if
he dies prior to receipt of all such benefits. Such Beneficiary designation shall be effective
only if in writing on forms provided by the Committee and if such form is delivered to the
Committee during the lifetime of the Participant.



     Section 10.11 Compliance with Code Section 409A. This Plan is intended to comply with
the requirements of Code Section 409A and regulations and other guidance thereunder. The Committee
shall interpret the Plan provisions in a manner consistent with the requirements of Code Section
409A and regulations and other guidance thereunder. To the extent one or more provisions of this
Plan do not comply with Code Section 409A, such provision shall be automatically and immediately
voided, and shall be amended as soon as administratively feasible and shall be administered to so
comply.




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