US AIRWAYS GROUP, INC.
NONEMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE MAY 16, 2000)
1. PURPOSE
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1.1 The US Airways Group, Inc. Nonemployee Director
Stock Incentive Plan is intended to increase the alignment
of the interest of eligible members of the Board with the
interests of stockholders of the Corporation by providing
further opportunity for ownership of Stock, and to increase
their incentive to contribute to the success of the
Corporation's business through the grant of Options.
1.2 The Plan is intended to comply with Rule 16b-3
under the Exchange Act, as such rule may be amended from
time to time, and shall be construed to so comply.
2. DEFINITIONS
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2.1 When used in this Plan, unless the context
otherwise requires:
(a) "Board" shall mean the Board of Directors of the
Corporation.
(b) "Change of Control" shall mean:
(i) The acquisition by any individual,
entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of
beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20%
or more of either (A) the then outstanding shares
of common stock of the Corporation (the
"Outstanding Group Common Stock") or (B) the
combined voting power of the then outstanding
voting securities of the Corporation entitled to
vote generally in the election of directors (the
"Outstanding Group Voting Securities"); provided,
however, that the following acquisitions shall not
constitute a Change of Control: (w) any
acquisition directly from the Corporation, (x) any
acquisition by the Corporation or any of its
Subsidiaries, (y) any acquisition by any employee
benefit plan (or related trust) sponsored or
maintained by the Corporation or any of its
Subsidiaries, or (z) any acquisition by any
corporation with respect to which, following such
acquisition, more than 85% of, respectively, the
then outstanding shares of common stock of such
corporation and the combined voting power of the
then outstanding voting securities of such
corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially
all of the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Group Common Stock and Outstanding
Group Voting Securities immediately prior to such
acquisition, in substantially the same proportions
as their ownership, immediately prior to such
acquisition, of the Outstanding Group Common Stock
and Outstanding Group Voting Securities, as the
case may be; or
(ii) 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
date hereof whose election, or nomination for
election by the Corporation's shareholders, was
approved by a vote of at least a majority 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
(as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of
proxies or consents; or
(iii) Consummation of a reorganization,
merger or consolidation, in each case, with
respect to which all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Group
Common Stock and Outstanding Group Voting
Securities immediately prior to such
reorganization, merger or consolidation do not
following such reorganization, merger or
consolidation, beneficially own, directly or
indirectly, more than 85% of, respectively, the
then outstanding shares of common stock and the
combined voting power of the then outstanding
voting securities entitled to vote generally in
the election of directors, as the case may be, of
the corporation resulting from such
reorganization, merger or consolidation in
substantially the same proportions as their
ownership, immediately prior to such
reorganization, merger or consolidation of the
Outstanding Group Common Stock and Outstanding
Group Voting Securities, as the case may be; or
(iv) Approval by the shareholders of the
Corporation of (x) a complete liquidation or
dissolution of the Corporation or (y) the sale or
other disposition of all or substantially all of
the assets of the Corporation, other than to a
corporation, with respect to which following such
sale or other disposition, more than 85% of,
respectively, the then outstanding
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shares of common stock of such corporation and the
combined voting power of the then outstanding
voting securities of such corporation entitled to
vote generally in the election of directors is
then beneficially owned, directly or indirectly,
by all or substantially all of the individuals and
entities who were the beneficial owners,
respectively, of the Outstanding Group Common
Stock and Outstanding Group Voting Securities
immediately prior to such sale or other
disposition in substantially the same proportion
as their ownership, immediately prior to such sale
or other disposition, of the Outstanding Group
Common Stock and Outstanding Group Voting
Securities, as the case may be; or
(v) The acquisition by an individual, entity
or group of beneficial ownership of 20% or more of
the then outstanding securities of the
Corporation, including both voting and non-voting
securities, provided, however, that such
acquisition shall only constitute a change of
control in the event that such individual, entity
or group also obtains the power to elect by class
vote, cumulative voting or otherwise to appoint
20% or more of the total number of directors to
the Board.
(c) "Committee" shall mean the Human Resources
Committee of the Board or such other committee as
may be designated by the Board.
(d) "Corporation" shall mean US Airways Group, Inc.
(e) "Date of Grant" shall mean the date on which
Options are granted pursuant to Section 5.1.
(f) "Eligible Director" shall mean each member of the
Board who (i) is not at the time of reference an
employee of the Corporation or any Subsidiary,
(ii) is not serving on the Board pursuant to
rights exercised by a preferred stockholder of the
Corporation, and (iii) in the case of an
individual first becoming a member of the Board
after January 1, 1996, was not previously an
employee of the Corporation or any Subsidiary.
(g) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(h) "Fair Market Value" shall mean the average of the
high and low sales prices of the Stock as reported
on the New York Stock Exchange Composite Tape on
the date as of which such value is being
determined or, if there shall be no sale on that
date, then on the last previous day on
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which a sale was reported.
(i) "Options" shall mean the stock options issued
pursuant to Section 5 hereof.
(j) "Plan" shall mean the US Airways Group, Inc.
Nonemployee Director Stock Incentive Plan, as such
Plan may be amended from time to time.
(k) "Stock" shall mean the common stock of the
Corporation.
(l) "Subsidiary" shall mean any corporation more than
50% of whose stock having general voting power is
owned by the Corporation or by a Subsidiary of the
Corporation.
3. ADMINISTRATION
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3.1 The Plan shall be administered by the Committee.
3.2 The Committee may make such rules and establish
such procedures for the administration of the Plan as it
deems appropriate to carry out the purpose of the Plan,
provided that the Committee shall have no discretion with
respect to the grantee, amount, price or timing of any
Option grant. The interpretation and application of the
Plan or of any rule or procedure, and any other matter
relating to or necessary to the administration of the Plan,
shall be determined by the Committee, and any such
determination shall be final and binding on all persons.
Options shall be evidenced by agreements in such form as
shall be determined from time to time by the Committee,
provided that the terms and conditions of each such
agreement are not inconsistent with this Plan.
4. SHARES OF STOCK
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4.1 Shares Reserved. Subject to adjustment as
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provided in Section 4.2 hereof, a maximum of 70,000 shares
of Stock shall be reserved for issuance in accordance with
the terms of the Plan. Shares of Stock that may be issued
upon the exercise of Options under the Plan may either be
authorized and unissued shares or issued shares that have
been reacquired by the Corporation. If an Option under the
Plan is surrendered, expires, lapses or ceases to be exer-
cisable in whole or in part for any other reason, then the
shares that were subject to any such Option shall again be
available for grant under the Plan.
4.2 Capital Adjustments. In the event of a
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reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation or a
similar corporate transaction, the maximum number or class
of shares available under the Plan,
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the number or class of shares of Stock to be delivered
hereunder upon the exercise of Options granted hereunder,
and the price at which Options may be exercised, as
appropriate, shall be proportionately adjusted to reflect
any such transaction.
5. GRANT OF OPTIONS
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5.1 ANNUAL GRANT. On the first business day following
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the 1996 annual meeting of stockholders of the Corporation,
each Eligible Director shall automatically be issued an
Option pursuant to the Plan to purchase 1,500 shares of
Stock. Thereafter, on the first business day following the
annual meeting of stockholders of the Corporation held in
each year subsequent to 1996 and prior to the termination of
the Plan, each Eligible Director shall automatically be
issued an Option pursuant to the Plan to purchase 1,500
shares of Stock. Options shall be granted at an option
price equal to the Fair Market Value of the Stock on the
Date of Grant.
5.2 Terms and Conditions of Options.
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(a) Each Option shall first become
exercisable on the earliest to occur of (i) the first
anniversary of the Date of Grant, (ii) the Eligible
Director's death, disability or termination of service as a
director upon completion of the last term of office to which
such director was elected, or (iii) the occurrence of a
Change of Control. If an Eligible Director otherwise
terminates service as a director, any Options that have not
become exercisable shall be forfeited as of the date of such
termination of service. Subject to the foregoing and to
Section 5.2(c) below, each Option shall expire on the date
that is ten years following the Date of Grant.
(b) Options shall be exercised by written
notice to the Secretary of the Corporation in such form as
is from time to time prescribed by the Committee and by the
payment in full, in cash, of the aggregate option price of
the shares of Stock for which the Option is being exercised.
To the extent that an Option is not exercised by an
optionee when it becomes initially exercisable, it shall not
expire but shall be carried forward and shall be exercisable
until the expiration date. Partial exercise shall be
permitted from time to time, provided that exercises shall
be in multiples of one hundred shares of Stock.
(c) If for any reason during the term of an
unexercised and unexpired Option, the Eligible Director
shall cease to be a member of the Board, such Option may be
exercised, to the extent exercisable at the time of such
termination of service, by the Eligible Director (or, in the
event of his death, by his estate) until the second
anniversary of the date that the Eligible Director ceases to
be a member of the Board.
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6. EFFECTIVE DATE; STOCKHOLDER APPROVAL; TERM OF PLAN
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6.1 The Plan is subject to approval by the stockholders
of the Corporation at the 1996 annual meeting and shall be
effective on the date of such approval.
6.2 The Plan shall remain in effect until all Options
granted under the Plan have been satisfied by the issuance
of shares, or terminated under the terms of the Plan,
provided that no Options may be granted after the tenth
anniversary of the effective date of the Plan.
7. AMENDMENT; TERMINATION
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7.1 The Board may at any time and from time to time
alter, amend, suspend, or terminate the Plan in whole or in
part; provided, however, that the provisions of Section 5
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shall not be amended more than every six months, other than
to comport with changes in the Internal Revenue Code of
1986, as amended, the Employee Retirement Income Security
Act, as amended, or the rules thereunder. The termination
or any modification or amendment of the Plan shall not,
without the consent of a director, affect his or her rights
under a grant of an Option.
8. MISCELLANEOUS
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8.1 Options granted hereunder shall not be assignable
or transferable by the director except by will or by the
laws of descent and distribution. During the life of the
director, an Option shall be exercisable only by the
director.
8.2 Each Option shall be subject to the requirement
that, if at any time the Committee shall determine that the
listing, registration or qualification of the shares subject
to such Option upon any securities exchange or under any
state or federal law, or the consent or approval of any
government regulatory body, is necessary or desirable as a
condition of, or in connection with, the issuance or
purchase of shares thereunder, such shares shall not be
delivered unless such listing, registration, qualification,
consent, approval or other action shall have been effected
or obtained free of any conditions not acceptable to the
Committee. The Corporation may require that certificates
evidencing shares of Stock delivered pursuant to any award
made hereunder bear a legend indicating that the sale,
transfer or other disposition thereof by the holder is
prohibited except in compliance with the Securities Act of
1933, as amended, and the rules and regulations thereunder.
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8.3 Nothing in the Plan shall be construed as
conferring any right upon any director to continue as a
member of the Board.
8.4 The Plan and all rights hereunder shall be
construed in accordance with and governed by the laws of the
State of Delaware.
8.5 The Corporation shall have the right to require,
prior to the issuance or delivery of any shares of Stock
hereunder, payment by the holder of such award of any
federal, state, local or other taxes which may be required
to be withheld or paid in connection with such award. The
holder may satisfy any such obligation by any of the
following means: (A) a cash payment to the Corporation, (B)
delivery to the Corporation of shares of Stock having an
aggregate Fair Market Value, determined as of the date the
obligation to withhold or pay taxes arises in connection
with an award (the "Tax Date"), equal to the amount
necessary to satisfy any such obligation, (C) authorizing
the Corporation to withhold whole shares of Stock which
would otherwise be delivered having an aggregate Fair Market
Value, determined as of the Tax Date equal to the amount
necessary to satisfy any such obligation, (D) a cash payment
by a broker-dealer acceptable to the Corporation to whom the
optionee has submitted an irrevocable notice of exercise, or
(E) any combination of the foregoing. The Eligible Director
may elect to have shares of Stock delivered or withheld
having an aggregate Fair Market Value in excess of the
minimum amount required to be withheld, but not in excess of
the amount determined by applying the holder's maximum
marginal tax rate. Any fraction of a share of Stock which
would be required to satisfy such an obligation shall be
disregarded and the remaining amount shall be paid in cash
by the holder.
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