Document:

<PAGE>

                                                                   EXHIBIT 10.26

                    ALION SCIENCE AND TECHNOLOGY CORPORATION
                               PHANTOM STOCK PLAN

        The Alion Science and Technology Corporation Phantom Stock Plan (the
"Plan") is hereby established by Alion Science and Technology Corporation, a
Delaware corporation (the "Company"), effective as of February 11, 2003.

                                    ARTICLE 1
                                     PURPOSE

        The purpose of the Plan is to attract and retain key management
employees of the Company and to provide such persons with a proprietary interest
in the Company through the granting of phantom shares of common stock of the
Company ("Phantom Stock").

                                    ARTICLE 2
                                   DEFINITIONS

        For the purpose of the Plan, unless the context requires otherwise, the
following terms shall have the meanings indicated:

2.1     "Administrator" shall mean the compensation committee of the Board
unless the Board resolves to act itself as the Administrator.

2.2     "Affiliate" means any entity, whether now or hereafter existing, which
at the time of reference, controls, is controlled by, or is under common control
with, Alion (including, but not limited to, joint ventures, limited liability
companies, and partnerships).

2.3     "Award" means a grant of Phantom Stock under this Plan.

2.4     "Board" means the board of directors of the Company.

2.5     "Cause" or "Just Cause" shall have the same meaning as defined in the
relevant Participant's Employment Agreement.

2.6     "Change in Control" shall mean and shall be deemed to have occurred if
at any time for whatever reason:

        (i)     any Person (other than the Holder, or any of the Holder's direct
                assignees or transferees), or the Trust, together with their
                "affiliates" within the meaning of Rule 12b-2 of the Commission
                under the Exchange Act) shall acquire beneficial ownership
                (including beneficial ownership resulting from the formation of
                a "group" within the meaning of Rule13d-5 of the Securities
                Exchange Commission ("SEC") under the Exchange Act) of more than
                fifty percent (50%) of the combined voting power of the
                outstanding capital stock of the Company, ordinarily having the
                right to vote at any election of directors;

<PAGE>

        (ii)    there is a sale of all or substantially all of the Company's
                assets, directly or indirectly through one or more transactions
                whether or not concurrent; or

        (iii)   there is a liquidation or dissolution of the Company.

For these purposes, the term "Person" shall mean an individual, a corporation,
an association, a joint-stock company, a business trust or other similar
organization, a partnership, a limited liability company, a joint venture, a
trust, an unincorporated organization or a government or any agency,
instrumentality or political subdivision thereof.

2.7     "Code" means the Internal Revenue Code of 1986, as amended and any
successor Code, and related rules, regulations and interpretations.

2.8     "Common Stock" means the voting common stock, $0.01 par value per share,
of the Company, subject to adjustments pursuant to the Plan.

2.9     "Company" means Alion Science and Technology Corporation, a Delaware
corporation.

2.10    "Date of Grant" means the effective date on which an Award is made to a
Participant as set forth in the applicable Phantom Stock Agreement.

2.11    "Disability" shall have the same meaning as defined in the Alion Science
and Technology Corporation Employee Ownership, Savings and Investment Plan.

2.12    "Employee" shall mean any person who is employed by the Company, is on
the Company's payroll, and whose wages are subject to withholding under the
Federal Insurance Contributions Act, codified in Code Section 3121 or would be
subject to such withholding if paid in the US.

2.13    "Employer" shall mean the Company and any Affiliate that, with the
consent of the Company, elects to participate in the Plan and any successor
entity that adopts the Plan pursuant to Section 15.11. If any such entity
withdraws, is excluded from participation in the Plan or terminates its
participation in the Plan, such entity shall thereupon cease to be an Employer.

2.14    "Employment Agreement" shall mean the employment contract specifying the
terms of Participant's employment with Employer.

2.15    "Fair Market Value" on any given date means the value of one share of
Common Stock as determined by the Administrator in its sole discretion. Unless
otherwise determined by the Administrator, the value shall be as set forth in
the most recent appraisal of the Common Stock, which shall be done at least
annually.

2.16    "Participant" shall mean an Employee of the Company who has an
Employment Agreement to whom an Award is granted under this Plan.

<PAGE>

2.17    "Phantom Stock Agreement" means the agreement between the Company and
the Participant pursuant to which the Company authorizes an Award hereunder.
Each Phantom Stock Agreement entered into between the Company and a Participant
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Administrator. Provisions in any Phantom
Stock Agreement relating to matters such as noncompetition, nonsolicitation and
protection of intellectual property are hereby deemed to be consistent with the
Plan.

2.18    "Phantom Stock" means a unit granted to a Participant that entitles the
Participant to receive a payment in cash equal to the Fair Market Value of a
share of Common Stock on the date the Phantom Stock vests.

2.19    "Plan" means the Alion Science and Technology Corporation Phantom Stock
Plan, as amended from time to time.

2.20    "Proprietary Information" means any non-public information concerning
Alion or its affiliates, including, without limitation, non-public information
concerning its client or customer lists, solicitation and contact lists,
business plans and strategies, marketing and solicitation techniques, research
information, project data and information, or any other information which gives
or may give Alion and advantage against its competitors.

2.21    "Termination of Employment" means cessation of performance of services
for the Company. For purposes of maintaining a Participant's continuous status
as an Employee and accrual of rights under any Award granted pursuant to the
Plan, transfer of an Employee among Alion and any of its Affiliates shall not be
considered a Termination of Employment with the Company. For the avoidance of
doubt, and by way of example only, if a Participant works for a wholly-owned
subsidiary of the Company, then a sale of the subsidiary by the Company would be
regarded as a Termination of Employment of such Participant for purposes of this
Plan, notwithstanding the Participant's continued employment with that former
subsidiary.

                                    ARTICLE 3
                                 ADMINISTRATION

3.1     GENERAL. The Plan shall be administered by the Administrator. The
Administrator shall have the full and final authority, in its discretion, to
interpret conclusively the provisions of the Plan; to adopt such rules for
carrying out the Plan as it may deem advisable; to decide all questions of fact
arising in the application of the Plan; and to make all other determinations
necessary or advisable for the administration of the Plan.

3.2     PROCEDURE. The Administrator shall meet at such times and places and
upon such notice as it may determine. A majority of the members of the Board or
committee serving as Administrator hereunder shall constitute a quorum. Any acts
by the Administrator may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members entitled to vote. Additionally,
any acts reduced to writing or approved in writing by all of the

<PAGE>

members of the Board or committee serving as Administrator hereunder shall be
valid acts of the Administrator. Members of the Board or committee who are
either eligible for Awards or have been granted Awards may vote on any matters
affecting the administration of the Plan or the grant of Awards pursuant to the
Plan, except that no such member shall act upon the granting of an Award to
himself or herself, but any such member may be counted in determining the
existence of a quorum at any meeting of the Administrator during which action is
taken with respect to the granting of an Award to him or her.

3.3     DUTIES. The Administrator shall have full power and authority to
administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan and
for the conduct of its business as the Administrator deems necessary or
advisable, all within the Administrator's sole and absolute discretion. The
Administrator 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)     construe the Plan and any Award under the Plan;

        (ii)    select the Employees of the Company to whom Awards may be
                granted and the time or times at which Awards shall be granted;

        (iii)   determine the number of shares of Common Stock to be covered by
                or used for reference purposes for any Award;

        (iv)    determine and modify from time to time the terms and conditions,
                including restrictions, of any Award and to approve the form of
                Phantom Stock Agreements;

        (v)     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 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 of an Award
                following a Participant's Termination of Employment or death;

        (vi)    impose limitations on Awards, including limitations on transfer
                provisions;

        (vii)   modify, extend or renew outstanding Awards, or accept the
                surrender of outstanding Awards and substitute new Awards; or

        (viii)  to prescribe, amend and rescind rules and regulations relating
                to the Plan, including rules and regulations relating to
                sub-plans established for the purpose of qualifying for
                preferred tax treatment under foreign tax laws.

3.4     LIMITED LIABILITY. To the maximum extent permitted by law, no member of
the Board or committee serving as Administrator hereunder shall be liable for
any action taken or decision made in good faith relating to the Plan or any
Award.

3.5     EFFECT OF ADMINISTRATOR'S DECISION. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and

<PAGE>

binding on all parties concerned, including the Company, its stockholders, any
Participants in the Plan and any other Employee of the Company, and their
respective successors in interest.

                                    ARTICLE 4
                                  PARTICIPATION

Individual Participants in the Plan shall be selected by the Administrator in
its sole discretion from key executive Employees of the Company. Awards may be
granted by the Administrator at any time and from time to time to new
Participants, or to existing Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the
Administrator shall determine. Except as required by this Plan, Awards granted
at different times need not contain similar provisions.

                                    ARTICLE 5
                             GRANT OF PHANTOM STOCK

5.1     SHARES SUBJECT TO THE PLAN.

        (a)     Subject to adjustments as provided in Article 10, the shares of
Common Stock that may be used for reference purposes with respect to Awards
granted under the Plan shall not exceed 173,000 shares of Common Stock
outstanding on a fully diluted basis (assuming the exercise of any outstanding
options, warrants and rights including, without limitation, SARs, and assuming
the conversion into Common Stock of any outstanding securities convertible into
Common Stock) from time to time. If any Award, or portion of an Award, under the
Plan expires or terminates unexercised, becomes unexercisable or is forfeited or
otherwise terminated, surrendered or canceled without the delivery of
consideration, the shares of Common Stock that are used for reference purposes
for such Award shall thereafter be available for further Awards under the Plan.

        (b)     No actual shares of Common Stock are reserved hereunder.
References to shares of Common Stock are for accounting and valuation purposes
only, and not to grant any voting or other rights associated with ownership of
Common Stock.

5.2     GRANT OF AWARD. The grant of an Award shall be authorized by the
Administrator and shall be evidenced by a Phantom Stock Agreement in a form
approved by the Administrator, between the Company and the Participant. Each
such Phantom Stock Agreement shall set forth its Date of Grant, the number of
shares of Phantom Stock awarded, and the vesting provisions. Each such Phantom
Stock Agreement shall be subject to the express terms and conditions of this
Plan, and shall be subject to such other terms and conditions that, in the
reasonable judgment of the Administrator, are appropriate and not inconsistent
with this Plan. The Participant shall have none of the rights of a stockholder
with respect to any shares of Phantom Stock.

5.3     DISQUALIFIED PERSONS. Subject to the other applicable provisions of the
Plan, the Administrator may at any time and from time to time grant Phantom
Stock to eligible Participants, as it determines. Notwithstanding the foregoing
to the contrary, no grant of Phantom Stock may be made to any "Disqualified
Person" (within the meaning of

<PAGE>

sections 409(p)(4) and 4979A of the Code, as added by the Economic Growth and
Tax Relief Reconciliation Act of 2001) for any period during which the
Corporation maintains the Alion Science and Technology Corporation Employee
Ownership, Savings and Investment Plan (the "ESOP") or any other employee stock
ownership plan as described in and qualified under section 4975(e)(7) and 401(a)
of the Code, respectively. Any grant of Phantom Stock made in violation of this
edict shall be null and void ab initio. In addition, no grant of Phantom Stock
may be made to any eligible individual if and to the extent that such grant
would cause such individual to become a Disqualified Person.

5.4     AMOUNT OF PAYMENT UPON VESTING OF AWARDS. Each share of Phantom Stock
held by a Participant shall entitle the Participant to receive, subject to the
provisions of the Plan and the Phantom Stock Agreement, a payment having an
aggregate value equal to the product of: (i) the Fair Market Value multiplied by
(ii) the number of shares of Phantom Stock, or portion thereof, which are
vested.

                                    ARTICLE 6
                                RIGHT TO PAYMENT

6.1     VESTING. A participant shall have no right to receive payment for any
share of Phantom Stock until it is vested. Unless otherwise determined by the
Administrator in a Participant's Phantom Stock Agreement, Awards shall vest in
accordance with the following schedule:

<TABLE>
<CAPTION>
Anniversary from Grant Date                          Vested Amount
---------------------------                          -------------
<S>                                                  <C>
         3rd                                               1/2
         4th                                               1/4
         5th                                               1/4
</TABLE>

6.2     TERMINATION AND FORFEITURE OF AWARDS. Under certain circumstances
described below, vesting may be accelerated.

        (a)     Termination of Employment. Except as set forth in this Section
6.2, a Participant who has a Termination of Employment for any reason shall
forfeit his or her rights to all unvested Awards.

        (b)     Voluntary Termination of Employment. If a Participant
voluntarily terminates employment with the Company, then such Participant shall
forfeit all rights to all unvested Awards, unless such termination is for Good
Reason, as defined in the Participant's Employment Agreement (but for this
purpose only, without regard to whether the occurrence of one of the events is
during the Protected Period, as defined by the Employment Agreement). If a
Participant voluntarily terminates employment with the Company for Good Reason,
then such Participant shall immediately vest in a prorated portion of his or her
unvested Awards based on a ratio the numerator of which is the number of months
from the Date of Grant through the end of the month of such termination and the
denominator of which is sixty (60).

        (c)     Involuntary Termination of Employment Without Cause. If a
Participant is involuntarily terminated from employment with the Company for
any reason other than for

<PAGE>

Cause or Just Cause, then he or she shall immediately vest in a prorated
portion of his or her unvested Awards based on a ratio the numerator of which is
the number of months from the Date of Grant through the end of the month of such
termination and the denominator of which is sixty (60).

        (d)     Termination for Cause or Just Cause. If a Participant is
terminated for Cause or Just Cause, such Participant shall forfeit his or her
rights to all unvested Awards.

        (d)     Death of a Participant. If a Participant dies prior to
terminating employment with the Company, the Participant shall vest immediately
in one hundred percent (100%) of all Awards.

        (e)     Disability of a Participant. If a Participant ceases to be an
Employee due to Disability, then the Participant shall vest immediately in one
hundred percent (100%) of all Awards.

        (f)     Change in Control. Participants shall vest immediately in one
hundred percent (100%) of all Awards on the date on which there is a Change in
Control.

        (g)     Disqualified Persons. Prior to each vesting date for so long as
the Company shall maintain the ESOP or any other employee stock ownership plan
as described in and qualified under section 4975(e)(7) and 401(a) of the Code,
respectively, the Administrator shall determine whether a Participant is or will
become a Disqualified Person (as described in Section 5.3 above) as of such
date. If a Participant is a Disqualified Person, then the full amount of the
Award that has not yet vested shall be forfeited. If a Participant will become a
Participant as of such date, then all or part of the Award that has not yet
vested shall be forfeited to avoid causing such Participant to become a
Disqualified Person. In all cases, any required forfeiture is to occur in
reverse order of time at which the Company grants the Awards at issue. The
provisions of this section 6.2(g) are to be applicable from and after the
effective date of this Plan.

                                    ARTICLE 7
                        PAYMENT OF PHANTOM STOCK BENEFITS

7.1     FORM OF PAYMENT. Each Participant shall be entitled to a cash payment
upon vesting equal to the number of vested shares of Phantom Stock multiplied by
the Fair Market Value on the date of vesting.

7.2     TIMING OF PAYMENT. The Company shall make payment of the amount
receivable upon the vesting of an Award by the delivery of cash in a lump sum
within sixty (60) days of such vesting. Notwithstanding the foregoing, the
Administrator has the discretion to delay payment of an Award for a period not
to exceed five (5) years. If the determination is made to delay the payment, the
unpaid balance shall bear interest at the prime rate as announced in the Wall
Street Journal on the date of vesting. In making this determination, the
Administrator will examine the available cash and anticipated cash needs of the
Company.

<PAGE>

7.3     ELECTION TO DEFER BENEFITS. The Board may permit Participants who are
also participants in the Alion Science and Technology Corporation Executive
Deferred Compensation Plan (the "Deferred Compensation Plan") to elect, at least
180 days prior to the date of vesting, to defer receipt of all or a portion of
the Plan benefit through a contribution to the Deferred Compensation Plan.

7.4     DISCHARGE. Any payment made by the Company in good faith in accordance
with the provisions of this Plan and a Participant's Phantom Stock Agreement
shall fully discharge the Company from all further obligations with respect to
such payment and the Phantom Stock Agreement.

7.5     WITHHOLDING. The Company shall have the right to deduct from all amounts
paid pursuant to the Plan any Federal, State or local income tax, social
security contribution or other payroll taxes required by law, whether domestic
or foreign, to be withheld with respect to such payments. The Company shall also
have the right to deduct FICA contributions required at vesting.

                                    ARTICLE 8
                            AMENDMENT AND TERMINATION

8.1     AMENDMENT. The Board may amend the Plan at any time and from time to
time, provided that (i) no amendment shall deprive any person of any rights
granted under the Plan before the effective date of such amendment, without such
person's consent; and (ii) amendments may be subject to shareholder approval to
the extent needed to comply with applicable law.

8.2     TERMINATION. The Board reserves the right to terminate the Plan in whole
or in part at any time, without the consent of any person granted any rights
under the Plan. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

                                    ARTICLE 9
                                      TERM

The Plan shall be effective from the date that this Plan is approved by the
Board. Unless sooner terminated by action of the Board, the Plan will terminate
on February 11, 2013, but Awards granted before this termination date will
continue to be effective in accordance with their terms and conditions.

                                   ARTICLE 10
                                  TRANSACTIONS

<PAGE>

10.1    ADJUSTMENT OF NUMBER AND PRICE OF SHARES. Any other provision of the
Plan notwithstanding, if through, or as a result of, any merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, the outstanding shares of Common Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, the
Administrator shall make an appropriate or proportionate adjustment in the
Awards as it deems appropriate, in its sole discretion. The adjustment by the
Administrator shall be final, binding and conclusive.

10.2    ADJUSTMENTS DUE TO SPECIAL CIRCUMSTANCES. The Administrator is
authorized to make adjustments in the terms and conditions of, and the criteria
included in, Awards in recognition of unusual or nonrecurring events affecting
the Company, or the financial statements of the Company, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Administrator determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan.

                                   ARTICLE 11
                            MISCELLANEOUS PROVISIONS

11.1    NO GUARANTEE OF EMPLOYMENT. Neither the Plan nor any Award granted under
the Plan shall confer upon any Participant any right with respect to continuance
of employment by the Company. Participation in this Plan shall not be construed
to confer upon any Participant the legal right to be retained in the employ of
the Company or give any person any right to any payment whatsoever, except to
the extent of the benefits provided for hereunder. Each Participant shall remain
subject to discharge to the same extent as if this Plan had never been adopted.
Nothing in this Plan shall prevent, interfere with or limit in any way the right
of the Company to terminate a Participant's employment at any time, whether or
not such termination would result in: (i) the failure of any Award to vest; (ii)
the forfeiture of any unvested or vested portion of any Award under the Plan;
and/or (iii) any other adverse effect on the Participant's interests under the
Plan.

11.2    NO RIGHTS AS A SHAREHOLDER. A Participant shall not have any rights as a
shareholder with respect to any shares of Phantom Stock.

11.3    INDEMNIFICATION OF BOARD AND ADMINISTRATOR. No member of the Board or
the Administrator, nor any officer or Employee of the Company acting on behalf
of the Board or the Administrator, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Board or the Administrator and each and any officer
or Employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company in respect of any such
action, determination, or interpretation.

11.4    EFFECT OF THE PLAN. Neither the adoption of this Plan nor any action of
the Board or the Administrator shall be deemed to give any person any right to
be granted an Award or any other rights except as may be evidenced by a Phantom
Stock Agreement, or any amendment thereto,

<PAGE>

duly authorized by the Administrator and executed on behalf of the Company, and
then only to the extent and upon the terms and conditions expressly set forth
therein.

11.5    NON-ASSIGNABILITY. Phantom Stock granted to a Participant may not be
transferred or assigned other than by will or by the laws of descent and
distribution. If the Participant attempts to alienate, assign, pledge,
hypothecate, or otherwise dispose of his Phantom Stock or any right thereunder,
except as provided for in this Plan or the Phantom Stock Agreement, or in the
event of any levy, attachment, execution, or similar process upon the right or
interest conferred by this Plan or the Phantom Stock Agreement, the
Administrator may terminate the Participant's Phantom Stock by notice to him,
and it shall thereupon become null and void.

11.6    RESTRICTIVE LEGENDS. The Company may at any time place legends
referencing any restrictions described in the Phantom Stock Agreement and any
applicable federal or state securities law restrictions on all Awards.

11.7    COMPANY CHARTER AND BYLAWS. This Plan is subject to the charter and
by-laws of the Company, as they may be amended from time to time.

11.8    NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a Participant or any other person. To the
extent that any Participant or other person acquires a right to receive payments
from the Company pursuant to an Award, such right shall be no greater than the
right of any unsecured general creditor of the Company; however, in the event of
commencement of a voluntary or involuntary case of bankruptcy against or by the
Company, all vested and unvested Awards made hereunder shall be canceled and
void.

11.9    GOVERNING LAW. All questions arising with respect to this Plan and any
Phantom Stock Agreement executed hereunder shall be determined by reference to
the laws of the State of Delaware in effect at the time of their adoption and
execution, respectively, without implementing its laws regarding choice of law.

        IN WITNESS WHEREOF, the undersigned has caused this instrument to be
executed as of February 11, 2003, and certifies that the foregoing Plan was duly
adopted by the Board of the Company on February 11, 2003.

                                       Alion Science and Technology Corporation

                                       By:      /s/ BAHMAN ATEFI
                                                --------------------------------
                                                Chief Executive Officer

                                       Attest:  /s/ JON EMERY
                                                --------------------------------
                                                Secretaryexv10w6

 

Exhibit 10.6

GENERAL DYNAMICS CORPORATION

NON-EMPLOYEE DIRECTORS 1999 STOCK PLAN

(as amended and restated effective December 4, 2002)

	1.	 	Purpose. This plan is an amendment and restatement of the General
Dynamics Corporation Non-Employee Directors 1999 Stock Plan (the “Plan”).
The purpose of the Plan is to provide General Dynamics Corporation (the
“Company”) with an effective means of attracting, retaining, and
motivating directors of the Company.
	 
	2.	 	Eligibility. Any member of the Board of Directors of the Company (the
“Board”) who is not an employee of the Company (an “Eligible Director”) is
eligible to participate in the Plan.
	 
	3.	 	Administration. The Plan shall be administered by the Board. Except as
otherwise expressly provided in the Plan, the Board shall have full power
and authority to interpret and administer the Plan, to determine the
Eligible Directors to receive awards and the amounts, types and terms of
the awards, to adopt, amend, and rescind rules and regulations, and to
establish terms and conditions, not inconsistent with the provisions of
the Plan, for the administration and implementation of the Plan, provided,
however, that the Board may not, after the date of any award, make any
changes that would adversely affect the rights of a recipient under such
award without the consent of the recipient. The determination of the
Board on all matters shall be final and conclusive and binding on the
Company and all participants.
	 
	4.	 	Awards. Awards may be made by the Board in such amounts as it shall
determine in cash, in the Company’s common stock, par value $1.00 per
share (“Common Stock”), in options to purchase Common Stock (“Stock
Options”), or in shares of Common Stock subject to certain restrictions
(“Restricted Stock”), or any combination thereof. Further, an Eligible
Director’s annual retainer may also be paid under the Plan in either cash
or Common Stock or in a 50 percent and 50 percent combination thereof, as
the Eligible Director may elect. There shall be 250,000 shares of Common
Stock available for issuance in connection with awards under the Plan. If
any award under the Plan shall expire, terminate, or be canceled for any
reason without having been vested or exercised in full, the corresponding
number of shares which were reserved for issuance in connection therewith
shall again be available for the purposes of the Plan. Shares available
under the Plan may be authorized and unissued shares or may be treasury
shares.
	 
	5.	 	Common Stock. In the case of awards or payments of retainers in Common
Stock, the number of shares shall be determined by dividing the amount of
the award or retainer elected to be received in Common Stock by the
average of the highest and lowest quoted selling prices of the Company’s
Common Stock on the New York Stock Exchange on the date of the award or
retainer. The average is referred to throughout this Plan as the “fair
market value.”

Page: 1 of  7

 

	6.	 	Dividend Equivalents and Interest.

	 	a.	 	Dividends. If any award in Common Stock or Restricted Stock is
to be paid on a deferred basis, the recipient may be entitled, on
terms and conditions to be established by the Board, to receive a
payment of, or credit equivalent to, any dividend payable with respect
to the number of shares of Common Stock or Restricted Stock which, as
of the record date for the dividend, has been awarded or made payable
to the recipient but not delivered.
	 
	 	b.	 	Interest. If any award in cash is to be paid on a deferred
basis, the recipient may be entitled, on terms and conditions to be
established by the Board, to accrue interest on the unpaid amount.

	7.	 	Restricted Stock Awards.

	 	a.	 	General. Restricted Stock represents awards made in Common Stock
in which the shares granted may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated except upon passage
of time, or upon satisfaction of other conditions, or both, in every
case as provided by the Board. The recipient of an award of
Restricted Stock shall be entitled to vote the shares awarded and to
the payment of dividends on the shares from the date the award of
shares is made; and, in addition, all Special Distributions (as
defined in Section 9 hereof) thereon shall be credited to an account
similar to the Account described in Section 9. The recipient of an
award of Restricted Stock shall have a nonforfeitable interest in
amounts credited to such account in proportion to the lapse of
restrictions on the Restricted Stock to which such amounts relate.
For example, when restrictions lapse on 50 percent of the Restricted
Stock granted in an award, the holder of such Restricted Stock shall
have a nonforfeitable interest in 50 percent of the amount credited to
his account which is attributable to such Restricted Stock. The
holder of Restricted Stock shall receive a payment in cash of any
amount in his account as soon as practicable after the lapse of
restrictions relating thereto.
	 
	 	b.	 	Restricted Stock Performance Formula. Awards of Restricted Stock
may be granted pursuant to the formula described in this Section,
referred to herein as the “Restricted Stock Performance Formula.” The
Board shall make an initial grant of shares of Restricted Stock (the
“Initial Grant”). At the end of a specified performance period
(determined by the Board), the number of shares in the Initial Grant
shall be increased or decreased, based on the increase or decrease in
the fair market value of a share of Common Stock during the
performance period, by a number of shares equal to (a) the excess of
the fair market value of a share of Common Stock on the last day of
the performance period over the fair market value of a share of Common
Stock on the grant date multiplied by (b) the number of shares of
Restricted Stock subject to the Initial Grant and divided by (c) the
fair market value of a share of Common Stock on the last day of the
performance period. The number of shares of Common Stock so
determined is added to (in the case of a higher fair market value) or
subtracted from (in the case of a lower fair market value) the number
of shares of Restricted Stock to be earned at that time. Once the
number of shares of Restricted Stock has been adjusted, restrictions
will continue to be imposed for a period of time determined by the
Board.

	8.	 	Stock Option Awards.

	 	a.	 	Type of Options. Options shall be in the form of options which
do not qualify as incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended.

Page: 2 of  7

 

	 	b.	 	Purchase Price. The purchase price of the Common Stock under
each option shall be determined by the Board, but shall not be less
than 100 percent of the fair market value of the Common Stock on the
date of the award of the option.
	 
	 	c.	 	Terms and Conditions. The Board shall establish (i) the term of
each option, (ii) the terms and conditions upon which and the times
when each option shall be exercised, and (iii) the terms and
conditions under which options may be exercised after termination as
an Eligible Director for any reason for periods not to exceed three
years after such termination.
	 
	 	d.	 	Purchase by Cash or Stock. The purchase price of shares
purchased upon the exercise of any stock option shall be paid (i) in
full in cash, (ii) in whole or in part (in combination with cash) in
full shares of Common Stock owned by the optionee and valued at fair
market value on the date of exercise, or (iii) as otherwise as the
Board may approve, all pursuant to procedures approved by the Board.
	 
	 	e.	 	Transferability. Options shall not be transferable other than by
will or pursuant to the laws of descent and distribution. During the
lifetime of the person to whom an option has been awarded, it may be
exercisable only by such person or one acting in his stead or in a
representative capacity. Upon or after the death of the person to
whom an option is awarded, an option may be exercised by the
optionee’s legatee or legatees under his last will, or by the option
holder’s personal representative or distributee’s executive,
administrator, or personal representative or designee in accordance
with the terms of the option.

	9.	 	Adjustments for Special Distributions. The Board shall have the
authority to change all Stock Options granted under this Plan to adjust
equitably the purchase price thereof and the number and kind of shares or
other property subject thereto to reflect a special distribution to
shareholders or other extraordinary corporate action involving
distributions or payments to shareholders (collectively referred to as
“Special Distributions”). In the event of any Special Distribution, the
Board may cause to be created a Special Distribution account (the
“Account”) in the name of the individual to whom Stock Options have been
granted hereunder (sometimes herein referred to as a “Grantee”) to which
shall be credited an amount determined by the Board, or, in the case of
non-cash Special Distributions, make appropriate comparable adjustments
for, or payments to or for the benefit of, the Grantee.
	 
	 	 	Amounts credited to the Account in accordance with the preceding rules
shall be credited with interest, accrued monthly, at an annual rate equal
to the higher of Moody’s Corporate Bond Yield Average or the prime rate in
effect from time to time, and such interest shall be credited in accordance
with rules to be established by the Board. Notwithstanding the foregoing,
at no time shall the Board permit the amount credited to the Grantee’s
Account to exceed 90 percent of the purchase price of the Grantee’s
outstanding Stock Options to which such amount relates. To the extent that
any credit would cause the Account to exceed that limitation, such excess
shall be distributed to the Grantee in cash.
	 
	 	 	Amounts credited to the Grantee’s Account shall be paid to the Grantee or,
if the Grantee is deceased, his or her beneficiary at the time that the
Stock Options to which it relates are exercised or expire, whichever occurs
first.

Page: 3 of  7

 

	 	 	The Account shall for all purposes be deemed to be an unfunded promise to
pay money in the future in certain specified circumstances. As to amounts
credited to the Account, a Grantee shall have no rights greater than the
rights of a general unsecured creditor of the Company, and amounts credited
to the Grantee’s Account shall not be assignable or transferable other than
by will or the laws of descent and distribution, and such amounts shall not
be subject to the claims of the Grantee’s creditors.
	 
	10.	 	Adjustments and Reorganizations. The Board may make such adjustments to
awards granted under the Plan (including the terms, exercise price, and
otherwise) as it deems appropriate in the event of changes that impact the
Company, the Company’s share price, or share status.
	 
	 	 	In the event of any merger, reorganization, consolidation, Change of
Control (as defined in Section 11 below), recapitalization, separation,
liquidation, stock dividend, stock split, extraordinary dividend, spin-off,
split-up, rights offering, share combination, or other change in the
corporate structure of the Company affecting the Common Stock, the number
and kind of shares that may be delivered under the Plan shall be subject to
such equitable adjustment as the Board, in its sole discretion, may deem
appropriate. The determination of the Board on these matters shall be
final and conclusive and binding on the Company and all Eligible Directors.
Except as otherwise provided by the Board, all authorized shares, share
limitations, and awards under the Plan shall be proportionately adjusted to
account for any increase or decrease in the number of issued shares of
Common Stock resulting from any stock split, stock dividend, reverse stock
split, or any similar reorganization or event.
	 
	11.	 	Change of Control. Notwithstanding any provision of the Plan to the
contrary, immediately prior to the occurrence of a Change of Control (as
defined below), (a) each Option granted under the Plan and outstanding at
such time shall become fully vested and immediately exercisable, (b) all
restrictions on outstanding shares of Restricted Stock shall immediately
lapse and such shares shall become nonforfeitable and (c) each Eligible
Director shall become fully vested in, and entitled to a payment or
distribution in respect of, any cash or shares, whether vested or
unvested, that may be credited under the Plan to his or her account
(including, but not limited to, his or her Account as defined in Section 9
above). For purposes of applying the Restricted Stock Performance Formula
applicable to awards of Restricted Stock, each uncompleted performance
period shall be deemed fully completed on the third business day preceding
the date upon which the Change of Control occurs.
	 
	 	 	“Change of Control” means any of the following events:

	 	a.	 	An acquisition (other than directly from the Company) of any
voting securities of the Company by any Person (as used in Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and including any “group” as such term is used
in such sections) who immediately after such acquisition is the
Beneficial Owner (as used in Rule 13d-3 promulgated under the
Exchange Act) of 40 percent or more of the combined voting power of
the Company’s then outstanding voting securities; provided that, in
determining whether a Change of Control has occurred, voting
securities which are acquired by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by the Company or any
Subsidiary of the Company (as defined below), (ii) the Company or any
Subsidiary of the Company, (iii) any Person that, pursuant to Rule
13d-1 promulgated under the Exchange Act, is permitted to, and
actually does, report its beneficial ownership of voting securities
of the Company on Schedule 13G (or any successor Schedule) (a “13G
Filer”) provided that, if any 13G Filer

Page: 4 of  7

 

	 	 	 	subsequently becomes required to or does report its Beneficial
Ownership of voting securities of the Company on Schedule 13D (or any
successor Schedule) then such Person shall be deemed to have first
acquired, on the first date on which such Person becomes required to or
does so file, Beneficial Ownership of all voting securities of the
Company Beneficially Owned by it on such date, (iv) any Person in
connection with a Non-Control Transaction (as hereinafter defined), or
(v) any acquisition by an underwriter temporarily holding Company
securities pursuant to an offering of such securities, will not
constitute an acquisition which results in a Change of Control.
	 
	 	b.	 	Consummation of:

	 	(i)	 	a merger, consolidation, or reorganization involving the
Company or any direct or indirect Subsidiary of the Company,
unless:

	 	(A)	 	the stockholders of the Company
immediately before such merger, consolidation, or
reorganization will own, directly or indirectly,
immediately following such merger, consolidation, or
reorganization, at least 50 percent of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger, consolidation, or
reorganization (the “Surviving Company”) or any parent
thereof in substantially the same proportion as their
ownership of the voting securities of the Company
immediately before such merger, consolidation, or
reorganization; and
	 
	 	(B)	 	the individuals who were members of the
Board immediately prior to the execution of the agreement
providing for such merger, consolidation, or
reorganization constitute a majority of the members of
the Board of Directors of the Surviving Company or any
parent thereof; and
	 
	 	(C)	 	no Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan (or
any trust forming a part thereof) maintained by the
Company, any Schedule 13G Filer, the Surviving Company,
any Subsidiary or parent of the Surviving Company, or any
Person who, immediately prior to such merger,
consolidation, or reorganization, was the Beneficial
Owner of 40 percent or more of the then outstanding
voting securities of the Company) is the Beneficial Owner
of 40 percent or more of the combined voting power of the
Surviving Company’s then outstanding voting securities.

	 	 	 	A transaction described in clauses (A) through (C)
above is referred to herein as a “Non
Control Transaction;”
	 
	 	(ii)	 	the complete liquidation or dissolution of the Company;
or
	 
	 	(iii)	 	a sale or other disposition of all or substantially all
of the assets of the Company to an entity (other than to an entity
(A) of which at least 50 percent of the combined voting power of
the outstanding voting securities are owned, directly or
indirectly, by stockholders of the Company in substantially the
same proportion as their ownership of the voting securities of the
Company, (B) a majority of whose board of directors is comprised
of individuals who were members of the Board immediately prior to
the

Page: 5 of  7

 

	 	 	 	execution of the agreement providing for such sale or other
disposition and (C) of which no Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan (or any trust
forming a part thereof) maintained by the Company or any of its
Subsidiaries, any Schedule 13G Filer, the Surviving Corporation,
any Subsidiary or parent of the Surviving Corporation, or any
Person who, immediately prior to such merger, consolidation or
reorganization, was the Beneficial Owner of 40 percent or more of
the then outstanding voting securities of the Company) has
Beneficial Ownership of 40 percent or more of the combined voting
power of the entity’s outstanding voting securities).

	 	c.	 	Individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”), cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the effective date of the Plan whose
election, or nomination for election by Company stockholders, was
approved by a vote of two-thirds of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (including, but not
limited to, a consent solicitation).
	 
	 	d.	 	Notwithstanding the foregoing, a Change of Control will not be
deemed to occur solely because any Person (a “Subject Person”)
acquires Beneficial Ownership of more than the permitted amount of the
outstanding voting securities of the Company as a result of the
acquisition of voting securities by the Company which, by reducing the
number of voting securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person, provided
that if a Change of Control would occur (but for the operation of this
sentence) as a result of the acquisition of voting securities by the
Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional voting
securities which increases the percentage of the then outstanding
voting securities Beneficially Owned by the Subject Person, then a
Change of Control will be deemed to have occurred.

	 	 	“Subsidiary” means any corporation with respect to which another specified
corporation has the
power under ordinary circumstances to vote or direct the voting of
sufficient securities to elect a
majority of the directors.
	 
	12.	 	Tax Withholding. In the event that federal, state or local tax laws
provide withholding requirements that apply to Eligible Directors, the
Company shall withhold amounts paid under the Plan as required by any such
law.
	 
	13.	 	Expenses. The expenses of administering the Plan shall be borne by the
Company.
	 
	14.	 	Amendments. The Board shall have complete power and authority to amend
the Plan, provided that the Board shall not amend the Plan in any manner
that requires shareholder approval under applicable law or the listing
requirements of the New York Stock Exchange without such approval. No
amendment to the Plan may, without the consent of the individual to whom
the award shall theretofore have been awarded, adversely affect the rights
of an individual under the award.

Page: 6 of  7

 

	15.	 	Effective Date of the Plan. The Plan became effective on December 1,
1999, the date of its adoption by the Board. This amended and restated
Plan became effective on December 4, 2002, the date of its adoption by the
Board, and applies to all Awards outstanding hereunder as of such date.
	 
	16.	 	Termination. The Board may terminate the Plan or any part thereof at any
time, provided that no termination may, without the consent of the
individual to whom any award shall theretofore have been made, adversely
affect the rights of an individual under the award.
	 
	17.	 	Other Actions. Nothing contained in the Plan shall be deemed to preclude
other compensation plans which may be in effect from time to time or be
construed to limit the authority of the Company to exercise its corporate
rights and powers, including, but not by way of limitation, the right of
the Company (a) to award options for proper corporate purposes otherwise
than under the Plan to an employee or other person, firm, corporation, or
association, or (b) to award options to, or assume the option of, any
person in connection with the acquisition, by purchase, lease, merger,
consolidation, or otherwise, of the business and assets (in whole or in
part) of any person, firm, corporation, or association.

Page: 7 of  7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]