Newport News Shipbuilding Inc. Stock Ownership Plan

Exhibit 10.13


NEWPORT NEWS SHIPBUILDING INC. STOCK OWNERSHIP PLAN


1. Purpose


The purpose of the Plan is to promote the long-term success of the Company for the benefit of shareholders by encouraging its officers and key employees to have meaningful investments in the Company so that, as stockholders themselves, those individuals will be more likely to represent the views and interest of other stockholders and by providing incentives to such officers and key employees for continued service. The Company believes that the possibility of participation under the Plan will provide this group of officers and employees an incentive to perform more effectively and will assist the Company in attracting and retaining people of outstanding training, experience and ability.


2. Definitions


"Authorized Plan Shares" has the meaning set forth in Section 6(a).


"Award" means an award or grant made to a Participant under Section 8.


"Award Agreement" means the agreement provided in connection with an Award under Section 12.


"Award Date" means the date that an Award is made, as specified in an Award Agreement.


"Board of Directors" means the Board of Directors of the Company.


"Code" means the Internal Revenue Code of 1986, as amended, or any successor legislation.


"Company" means Newport News Shipbuilding Inc.


"Committee" means the Compensation and Benefits Committee of the Board of Directors, or any successor committee thereto.


"Common Stock" means the Company's common stock, $.01 par value per share.


"Covered Employees" shall have the meaning specified in Section 162(m)(3) of the Code.


"Dividend Equivalent" means an amount equal to the amount of the cash dividends that are declared and become payable after the Award Date for the Award to which it relates and on or before the Settlement Date for such Award.


"Exchange Act" means the Securities Exchange Act of 1934, as amended.


"Fair Market Value" on any date means the average of the highest and the lowest sales prices of a share of Common Stock on the Composite Tape for such date, as reported by the National Quotation Bureau Incorporated, provided that if (i) no sales of Common Stock are included on the Composite Tape for such date, or (ii) in the opinion of the Committee, the sales of Common Stock on such date are insufficient to constitute a representative market, then the Fair Market Value of a share of Common Stock on such date shall be deemed to be the average of the highest and lowest prices of a share of Common Stock as reported on said Composite Tape for the next preceding day on which (x) sales of Common Stock are included and (y) the circumstances described in this clause (ii) do not exist.


"ISO" means any Stock Option designated in an Award Agreement as an "Incentive Stock Option" within the meaning of Section 422 of the Code.


"Non-Qualified Stock Option" means any Stock Option that is not an ISO.


"Option Price" means the purchase price of one share of Common Stock under a Stock Option.


"Participant" means an employee or officer of Newport News who has been selected by the Committee to receive an Award under the Plan.


"Performance Unit" means an Award denominated in cash, the amount of which may be based on performance of the Participant or of Newport News or of any subsidiary or division thereof.


"Plan" means this Newport News Shipbuilding Inc. Stock Ownership Plan,
as amended from time to time.


"Reload Stock Option" means a Stock Option (i) that is awarded, either automatically in accordance with the terms of an Award Agreement in which one or more other Awards are made or by separate Award, upon the exercise of a stock option granted under this Plan or otherwise where the option price is paid by the option holder by delivery of shares of Common Stock on the Settlement Date for such exercise and (ii) that entitles such holder to purchase the number of shares so delivered for an Option Price equal to the Fair Market Value of a share of Common Stock on such Settlement Date.


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"Restricted Stock" means shares of Common Stock subject to restrictions and conditions pursuant to Section 8(c).


"Rule 16b-3" means Regulation ' 240.16b-3 of the rules and regulations of the Securities and Exchange Commission promulgated under the Exchange Act.


"Settlement Date" means, (i) with respect to any Stock Option that has been exercised in whole or in part, the date or dates upon which shares of Common Stock are to be delivered to the Participant and the Option Price therefor paid, (ii) with respect to any SARs that have been exercised, the date or dates upon which a cash payment is to be made to the Participant, or in the case of SARs that are to be settled in shares of Common Stock, the date or dates upon which such shares are to be delivered to the Participant, (iii) with respect to Performance Units, the date or dates upon which cash or shares of Common Stock are to be delivered to the Participant, (iv) with respect to Dividend Equivalents, the date upon which payment thereof is to be made, and (v) with respect to Stock Equivalent Units, the date upon which payment thereof is to be made, in each case, determined in accordance with the terms of the Award Agreement under which any such Award was made.


"Stock Appreciation Right" or "SAR" means an Award that entitles the Participant to receive on the Settlement Date an amount equal to the excess of


(i) the Fair Market Value of a share of Common Stock on the date of exercise of the SAR over


(ii) the Fair Market Value of one share of Common Stock on the Award Date or any other higher amount specified in the Award Agreement.


"Stock Equivalent Unit" means an Award that entitles the Participant to receive on the Settlement Date an amount equal to the Fair Market Value of one share of Common Stock on such date.


"Stock Option" or "Option" means any right to purchase shares of Common Stock (including a Reload Stock Option) awarded pursuant to Section 8(a).


"Newport News" means the Company, any stock corporation of which a majority of the capital stock generally entitled to vote for directors is owned directly or indirectly by the Company, and any other company designated as such by the Committee, but only during the period of such ownership or designation.


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3. Term


The Plan shall be effective as of October 8, 1996, and shall remain in effect though December 31, 2001. After termination of the Plan, no further Awards may be granted other than Reload Stock Options granted in accordance with Award Agreement existing as of December 31, 2001, but outstanding Awards shall remain effective in accordance with their terms and the terms of the Plan.


4. Plan Administration


(a) The Committee shall be responsible for administering the Plan.


(i) Composition of the Committee. The Committee shall be comprised of two or more members of the Board of Directors, all of whom shall be "non-employee directors" as defined in Rule 16b-3 and "outside directors" as that term is used in Section 162 of the Code and the regulations promulgated thereunder.


(ii) Powers. The Committee shall have full and exclusive discretionary power to interpret the Plan and to determine eligibility for benefits and to adopt such rules, regulations and guidelines for administering the Plan as the Committee may deem necessary or proper. Such power shall include, but not be limited to, selecting Award recipients, establishing all Award terms and conditions and, subject to Section 13, adopting modifications and amendments to the Plan or any Award Agreement, including without limitation, any that are necessary to comply with the laws of the countries in which the Company or its affiliates operate.


(iii) Delegation. The Committee may delegate to one or more of its members or to one or more agents or advisors such non-discretionary administrative duties as it may deem advisable, and the Committee or any person to whom it has delegated duties as aforesaid may employ or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan.


(b) The Committee may employ attorneys, consultants, accountants and other persons, and the Committee, the Company and its officers and directors shall be entitled to rely upon the advice, opinions, or valuations of any such persons. All actions take and all interpretations and determinations made by the Committee in good faith shall be final and binding upon the Participants, the Company and all other interested persons. No member of the Committee shall be personally liable for any action, determination, or interpretation made in good faith with respect to the Plan or Awards,


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and all members of the Committee shall be fully protected by the Company, to the fullest extent permitted by applicable law, in respect of any such action, determination or interpretation.


5. Eligibility


Awards will be limited to persons who are officers or key employees of Newport News. In determining the persons to whom Awards shall be made, the Committee shall, in its discretion, take into account the nature of the person's duties, past and potential contributions to the success of Newport News and such other factors as the Committee shall deem relevant in connection with accomplishing the purposes of the Plan. A person who has received an Award or Awards may receive an additional Award or Awards. For purposes of this Section 5, the terms "employee" and "officer" shall also include any former employee or former officer of Newport News eligible to receive a replacement award as contemp ...