US AIRWAYS GROUP, INC.
NONEMPLOYEE DIRECTOR DEFERRED STOCK UNIT PLAN
(as amended and restated effective May 16, 2000)
1. PURPOSE
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1.1 The US Airways Group, Inc. Nonemployee Director Deferred Stock
Unit Plan is intended to increase the alignment of the interests of
eligible members of the Board with the interests of stockholders of the
Corporation by increasing their incentive to contribute to the success of
the Corporation's business through the grant of Deferred Stock Units.
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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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 Deferred Stock Units
are granted pursuant to Section 5.1.
(f) "Deferred Stock Units" shall mean the units issued pursuant to
Section 5 hereof.
(g) "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.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(i) "Fair Market Value" shall mean the average of the high and low
sales
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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 which a sale was reported.
(j) "Plan" shall mean the US Airways Group, Inc. Nonemployee Director
Deferred Stock Unit 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 Deferred Stock
Unit. 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. Deferred
Stock Units 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. Capital Adjustments
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4.1 In the event of a reorganization, recapitalization, stock split,
stock dividend, combination of shares, merger, consolidation or a similar
corporate transaction, the class of shares available under the Plan, and
the number or class of shares of Stock represented by Deferred Stock Units
granted hereunder shall be proportionately adjusted to reflect any such
transaction.
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5. Grant of Deferred Stock Units
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5.1 Annual Grant. The Corporation shall establish a bookkeeping
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account for each Eligible Director. On the first business day following
the 1996 annual meeting of stockholders of the Corporation, the bookkeeping
account of each Eligible Director shall automatically be credited with 500
Deferred Stock Units. 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, the
bookkeeping account of each Eligible Director shall automatically be
credited with 500 Deferred Stock Units.
5.2 Terms and Conditions of Deferred Stock Units.
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(a) VESTING. The Deferred Stock Units shall become
nonforfeitable 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 Deferred Stock Units that are forfeitable shall be
forfeited as of the date of such termination of service.
(b) DIVIDEND EQUIVALENTS. As of each dividend payment date
declared with respect to the Stock, the Corporation shall credit to each
bookkeeping account a number of additional Deferred Stock Units equal to
(i) the product of (x) the dividend per share of Stock payable on such
dividend payment date and (y) the number of Deferred Stock Units credited
to such account as of the applicable dividend record date divided by (ii)
the Fair Market Value of a share of Stock on such dividend payment date.
(c) PAYMENT WITH RESPECT TO DEFERRED STOCK UNITS. On the
February 1st immediately following the termination of service of an
Eligible Director the Eligible Director shall receive a lump sum cash
payment equal to the product of (i) the average of the Fair Market Value of
a share of Stock for the five business days immediately preceding such
February 1st and (ii) the number of nonforfeitable Deferred Stock Units
then credited to such Eligible Director's account. Notwithstanding the
foregoing, an Eligible Director may elect to receive the distribution with
respect to his or her account in a number of annual installments commencing
on the February 1st immediately following the termination of service of
such Eligible Director, the number of such annual installments to be
elected by the Eligible Director, but in no event to exceed four. In the
event an Eligible Director makes such an election, the amount of each such
installment shall be determined based upon the average of the Fair Market
Value of a share of Stock for the five business days immediately preceding
the date such installment payment is made. Any election by an Eligible
Director to receive
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distribution with respect to his or her account in annual installments and
with respect to the number of such installments may be made or changed at
any time without limitation provided, however, that any such election (and
any modification or revocation of any such election) shall not be given
effect unless made at least forty-five days prior to the Eligible
Director's termination of service. Each Eligible Director whose
termination of service as a director occurs (i) after such Eligible
Director has been a member of the Board for at least five (5) years or (ii)
due to his for her death or disability shall also receive, at the time of
the lump sum payment pursuant to the first sentence of this Section 5.2(c)
or at the time of each annual installment pursuant to the second sentence
of this Section 5.2(c), an additional amount (the "Tax Liability Payment")
such that the net amount of the Tax Liability Payment retained by the
Eligible Director, after deduction of any federal, state and local income
tax upon the Tax Liability Payment, shall be equal to the total federal,
state and local income tax owed by the Eligible Director in respect of such
lump sum payment or installment, as the case may be. For purposes of
determining the amount of each Tax Liability Payment, the Eligible Director
shall be deemed to pay federal income tax at the highest marginal rate of
federal income taxation in the calendar year in which such Tax Liability
Payment is to be made and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Eligible
Director's residence on the date on which the Tax Liability Payment is
made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes."
(d) RIGHTS WITH RESPECT TO DEFERRED STOCK UNITS. The
holder of Deferred Stock Units shall have none of the rights of a
stockholder of the Corporation. The Corporation's obligation hereunder
with respect to Deferred stock Units shall be an unsecured promise to pay
the amount described in Section 5(c) above at the times described therein.
6. Effective Date; Term of Plan
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6.1 The Plan shall be effective as of May 22, 1996.
6.2 The Plan shall remain in effect until all Deferred Stock Units
have been paid under the terms of the Plan, provided that no Deferred Stock
Units 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
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the provisions of Section 5 shall not be amended more than every six
months, other than to comport with
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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
Deferred Stock Units.
8. Miscellaneous
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8.1 Deferred Stock Units granted hereunder shall not be assignable or
transferable by the director except by will or by the laws of descent and
distribution.
8.2 Nothing in the Plan shall be construed as conferring any right
upon any director to continue as a member of the Board.
8.3 The Plan and all rights hereunder shall be construed in
accordance with and governed by the laws of the State of Delaware.
8.4 TAX WITHHOLDING. The Corporation shall have the right to
require, prior to any payment 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.
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(..continued)
