Exhibit 10.1

VIRTUS INVESTMENT PARTNERS, INC.

AMENDED AND RESTATED EXECUTIVE SEVERANCE ALLOWANCE PLAN

Effective as of February 2, 2009
 
 
 
 
 
 
 

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ARTICLE 1 - PURPOSE; AMENDMENT AND RESTATEMENT

Virtus Investment Partners, Inc. adopts, effective as of February 2, 2009, this
Amended and Restated Executive Severance Allowance Plan , as amended, to provide
for benefits to certain executives of Virtus Investment Partners, Inc.
(“Virtus”) and other affiliates of Virtus, who meet the eligibility requirements
set forth in the Plan when their employment is involuntarily terminated by the
Employer.

ARTICLE 2 - DEFINITIONS

For purposes of this Plan, the following terms shall have the meanings set forth
below.
 
2.01
“Affiliate” means, as to any specified person, each other person directly or
indirectly controlling, controlled by or under direct or indirect common control
with that specified person. For the purposes of this definition, “control”, when
used with respect to any specified person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, or by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.
Notwithstanding the foregoing, any investment company registered under the
Investment Company Act of 1940, as amended, shall not be deemed an Affiliate of
any specified person.

2.02
“Affiliated Employer” means any Affiliate of Virtus which has been designated to
participate in the Plan by action of the Plan Administrator.

2.03
“Annual Incentive Award” means the compensation payable under any annual
incentive plan or such other incentive compensation arrangements as the Employer
may designate from time to time as approved by the Committee or the Chief
Executive Officer.

2.04
“Base Salary” means the Executive’s annual salary, determined as of the last day
of the month immediately preceding the Executive’s Separation Date. The
following items shall not be included in determining Base Salary: overtime pay;
distributions from a plan of deferred compensation; commissions; bonuses and
incentive compensation. In determining this annual salary, however, the
following items shall be included: any amount contributed by the Executive as
deferred compensation to a cash or deferred arrangement maintained by the
Employer pursuant to Code section 401(k); any salary reduction contributions
made on behalf of the Executive to a plan maintained by the Employer under Code
section 125 or Code section 132(f)(4), and any amounts deferred by the Executive
under a nonqualified plan of deferred compensation.

 

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2.05
“Cause” means any conduct by the Executive which is detrimental to the interests
of the Employer, including but not limited to: (a) the Executive’s conviction or
plea of nolo contendere to a felony or to a lesser crime involving fraud or
moral turpitude; (b) an act of misconduct (including, without limitation, a
violation of the Employer’s Code of Conduct or any code of ethics of any of its
affiliates) on Executive’s part with regard to the Employer; (c) unsatisfactory
performance; or (d) the Executive’s failure to attempt or refusal to perform
legal directives of the Board or executive officers of the Employer. "Cause" is
to be determined in the sole discretion of the Employer.

2.06
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and the regulations and guidance published thereunder.

2.07
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and guidance published thereunder.

2.08
“Committee” means the Compensation Committee of Board of Directors of Virtus
Investment Partners, Inc. (or, if no committee then exists, the Board of
Directors).

2.09
“Effective Date” means February 2, 2009, the date that the provisions of the
Plan, as amended and restated, as contained in this document shall become
effective.

2.10
“Employee” means any common law employee of the Employer who is actively at work
at the time of termination and is a regular (versus temporary) full-time
employee working at least 40 hours per week or part-time employee working at
least 19  1 / 4  hours per week.

2.11
“Employer” means Virtus and any other Affiliated Employer that has adopted this
Plan with the approval of the Plan Administrator.

2.12
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and guidance published thereunder.

2.13
“Executive” means (a) an Employee of Virtus who is an Executive Vice President
or above if such person is also subject to the reporting requirements under
Section 16(a) of the Securities Exchange Act of 1934, as amended, for Virtus;
and (b) any other Employee (Vice Presidents or other key personnel) of the
Employer that the Chief Executive Officer of Virtus has determined to be
integral to the formulation or execution of the business strategy of the
Employer, and who has been designated in writing by the Chief Executive Officer
to be covered under the Plan.

2.14
“Plan” means the Virtus Investment Partners, Inc. Executive Severance Allowance
Plan, as amended from time to time.

2.15
“Plan Administrator” means the Benefit Plans Committee of the Employer or the
person designated as such by the Benefit Plans Committee.

 

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2.16
“Plan Year” means the calendar year.

2.17
“Separation Date” means the last day of an Executive’s active service with the
Employer.

2.18
“Severance Agreement and Release” means an agreement signed by the Executive in
a form acceptable to the Employer containing a general release and restrictive
covenants, as well as any other clauses the Employer may require.

2.19
“Severance Amount” means the benefit payable under the provisions of Section
3.03.

 ARTICLE 3 - SEVERANCE ALLOWANCE BENEFIT

3.01
Qualification: An Executive whose employment is (a) involuntarily terminated by
the Employer for any reason, including but not limited to: reduction in force,
facility closing, reorganization, consolidation, elimination of position, or (b)
terminated voluntarily or involuntarily by resignation at the request of the
Employer in writing, shall be qualified for benefits under this Plan, unless the
termination is due to a disqualifying event identified in Section 3.02.

3.02
Disqualifying Events: An Executive who might otherwise be qualified for benefits
under this Plan shall be disqualified for such benefits by any one of the
following events and circumstances:

 
(a)
The Executive fails to continue in the employ of the Employer, satisfactorily
performing the Executive’s assigned duties, until the date actually set for the
Executive’s termination by the Employer.

 
(b)
The Executive works for a division, sub-division, unit, subsidiary or other
identifiable entity that is sold or the assets of which are transferred to an
owner other than the Employer, if the Executive is offered employment by the new
owner that is substantially comparable to the employment engaged in by the
Executive immediately prior to the sale or transfer (whether or not the
Executive accepts such offer). The Employer shall, in its discretion, determine
what constitutes “substantially comparable” employment.”

 
(c)
The Executive is terminated for Cause.

 
(d)
The Executive’s employment is terminated by reason of retirement (as defined in
the Virtus Investment Partners, Inc. 2008 Omnibus Incentive and Equity Plan ),
resignation (not at the request of the Employer), death, or during or at the
conclusion of a leave of absence taken or granted on account of any reason,
including permanent or temporary disability.

 
(e)
The Executive refuses to accept a transfer to an assigned job or location,
provided the new position is within two pay grades or one band, as applicable of
the current position held by the Executive.

 

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(f)
The Plan Administrator determines that under the facts and circumstances
relating to the Executive’s termination, or because of the Executive’s conduct
subsequent to termination, it would be inappropriate to commence or continue
severance payments.

 
(g)
The Executive receives or is entitled to receive from the Employer benefits
under any severance plan, any severance agreement, or any agreement providing
for the payment of severance benefits, including any change in control agreement
between the Employer and the Executive, other than this Plan, on account of the
Executive’s termination of employment by the Employer.

3.03
Severance Benefits: With respect to any Executive whose employment is terminated
for a reason identified in Section 3.01, the following Severance Amount shall be
payable, subject to the disqualification provisions of Section 3.02 and Section
3.09, and not any other benefit, except for outplacement services as provided in
Section 3.10 and certain employee welfare benefits as provided in Section 3.11:

 
The Severance Amount equals a plus b, where:

 
a         =           A cash amount equal to the Executive’s annual Base Salary
as of the Separation Date (for the Chief Executive Officer, 1.5 times Base
Salary).

b         =           A cash amount equal to the average of the Executive’s
actually earned and paid (even if one or both is $0) Annual Incentive Awards for
the prior two (2) completed fiscal years (for the Chief Executive Officer, 1.5
times this average). However, for the first two years of the Plan, b = target
Annual Incentive Award for the fiscal year in which the Executive’s Separation
Date occurs (for the Chief Executive Officer, 1.5 times target).

And

Pro-Rata Incentive = A cash amount equal to a pro-rata portion of the
Executive’s actually earned Annual Incentive Award for the fiscal year in which
the Executive’s Separation Date occurs. The pro-rata portion of such Annual
Incentive Award shall be determined by multiplying the amount actually earned
times a fraction, the numerator of which is the number of days during the
performance period applicable to such award prior to the Separation Date and the
denominator of which is the number of days in the performance period applicable
to such award.
 

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3.04
Time and Form of Payment: Except as otherwise provided herein or in Article 5,
the Executive will receive payment of the Severance Amount payable under this
Plan commencing as soon as practicable after the Separation Date in either (a)
an immediate lump sum payment, or (b) equal periodic installments based on the
Employer’s pay schedule, such payments to be made until the expiration of the
Executive’s severance period or March 15 of the year next succeeding the year in
which the involuntary termination occurred, whichever occurs first. In no event
will any payment be made earlier than after the execution of, and the expiration
of any revocation period related to, any Severance Agreement and Release .  If
the Severance Agreement and Release is not executed within the required
execution period, the Severance Amount and any other benefits under this Plan
shall be forfeited. In no event however, shall any lump sum payment or any
installment be paid later than March 15 in the year next succeeding the year in
which the involuntary termination occurred. Any Pro-Rata Incentive for the
fiscal year in which the Executive’s Separation Date occurs will be payable
after the Pro-Rata Incentive for that fiscal year is calculated and approved by
the Employer. In no event, however, shall any Pro-Rata Incentive payment be paid
later than March 15 in the year next succeeding the year in which the
involuntary termination occurred.

3.05
Death: If an Executive terminates employment and dies before having received the
entire amount of benefits to which the Executive is entitled under this Plan,
the balance of such benefits will be paid in a lump sum to (a) the Executive’s
surviving spouse or domestic partner, (b) if there is no surviving spouse or
domestic partner, the Executive’s children (including stepchildren and adopted
children) per stirpes, or (iii) if there is no surviving spouse or domestic
partner and/or children per stirpes, the Executive’s estate as soon as
practicable following the Executive’s death but in no event later than March 15
in the year next succeeding the year in which the Executive’s involuntary
termination occurred.

3.06
Reemployment by the Employer: In the event that an Executive becomes reemployed
by the Employer after having received any benefit pursuant to this Plan or any
predecessor or successor to this Plan, such Executive will be required to
reimburse the Employer for any benefits received before the Executive’s
reemployment.

3.07
Integration with Other Benefits: To the extent that a federal, state or local
law may require the Employer to make a payment to an Executive because of that
Executive’s involuntary termination, the Severance Amount payable under this
Plan shall be applied towards any such payment and not paid in addition to such
required payment. Nothing in this Plan shall be used to extend or modify
benefits under this Plan because of payments under any state unemployment
insurance laws.

3.08
Withholding: The Employer shall have the right to take such action as it deems
necessary or appropriate to satisfy any requirement under federal, state or
other law to withhold or to make deductions from any benefit payable under this
Plan.

 

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3.09
Pre-conditions for Receipt of Benefits: The payment of any benefit under this
Plan, including but not limited to Sections 3.03, 3.10 and 3.11, is conditioned
upon the Executive complying with all of the following:

 
(a)
refraining from directly or indirectly interfering in any manner with the
operations, management or administration of any Employer office, agent or
employee and refraining from making any disparaging remarks concerning the
Employer, its representatives, agents and employees;

 
(b)
refraining from encouraging, soliciting or suggesting to any and all employees,
agents, representatives and/or clients of the Employer that they terminate or
alter their current relationship with the Employer;

 
(c)
returning all Employer property provided or developed during the course of
employment including, but not limited to: computers, software, cell phones,
files, records, identification card, credit cards and Employer manuals;

 
(d)
complying with a continuing obligation to maintain the confidentiality of
proprietary information subsequent to termination of employment;

 
(e)
executing a Severance Agreement and Release within the required execution
period.

Upon the failure of the Executive to comply with any of the conditions set forth
above and in this Plan, all payments hereunder shall immediately cease and the
Executive shall immediately reimburse the Employer for all payments previously
made hereunder.

3.10
Outplacement Services: An Executive entitled to payment of a Severance Amount as
provided in Section 3.03 of this Plan shall be eligible to receive and the
Employer shall provide outplacement services, with a firm chosen by the
Employer, at a level commensurate with the Executive’s position, for a six-month
period beginning on the Separation Date, but in no event ending later than
December 31 of the second calendar year following the calendar year in which the
involuntary termination occurred.

3.11
Continuation of Benefits: The Executive (and, to the extent applicable, the
Executive’s dependents) shall be entitled to continue participation in all of
the employee plans providing medical and dental benefits that the Executive
participated in prior to the Separation Date in accordance with COBRA; provided,
however, that the Executive shall continue to pay the active participant rate
monthly for up to the first 12 months of the COBRA period following the
Executive’s Separation Date.

 

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ARTICLE 4 - ADMINISTRATION

4.01
The Plan Administrator: The Plan Administrator shall have the sole discretionary
authority to interpret the Plan and all questions thereunder, including, without
limitation, all questions relating to eligibility to participate in and receive
benefits under the Plan. All such actions of the Plan Administrator shall be
conclusive and binding on all persons.

4.02
Notification to Executives: The Plan Administrator shall notify an Executive
when and if such Executive becomes eligible for benefits under this Plan.

4.03
Claims by Executives: Claims for benefits under the Plan may be filed with the
Plan Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed (or
within 180 days if special circumstances require an extension of time for
review). In the event the claim is wholly or partially denied, the reasons for
the denial shall be specifically set forth in the notice in language reasonably
calculated to be understood by the claimant, pertinent provisions of the Plan
shall be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan’s claims review procedures and the
time limits applicable to such procedures, including a statement that the
claimant has a right to bring a civil action under ERISA section 502(a)
following an adverse benefit determination on review, if the claimant has
exhausted all remedies under the Plan. If notice of the denial of a claim is not
furnished to an Executive in accordance with this section within a reasonable
period of time, such Executive’s claim shall be deemed denied. The Executive
will then be permitted to proceed to the review stage described in Section 4.04.

4.04
Claims Review Procedure: Any Executive, former Executive, or authorized
representative or beneficiary of either, who has been denied a benefit either in
whole or in part by a decision of the Plan Administrator pursuant to Section
4.03 shall be entitled to request the Plan Administrator to give further
consideration to his claim by filing with the Plan Administrator a written
request for review. Such request, together with a written statement of the
reasons why the claimant believes his claim should be allowed, shall be filed
with the Plan Administrator no later than 60 days after receipt of the written
notification provided for in Section 4.03. The claimant may submit written
comments, documents, records and other information relating to the claim to the
Plan Administrator. The claim for review shall be given a full and fair review
that takes into account all comments, documents, records and other information
submitted that relates to the claim, without regard to whether such information
was submitted or considered in the initial benefit determination. The Plan
Administrator shall provide the claimant with written or electronic notice of
the decision on review within 60 days after the request for review is received
by the Plan Administrator (or within 120 days if special circumstances require
an extension of time for processing the claim and if notice of such extension
and circumstances is provided to the claimant within the initial 60-day period).
Such communication shall be written in a manner calculated to be understood by
the claimant and shall include specific reasons for the decision, specific
references to the pertinent Plan provisions on which the decision is based, a
statement that the claimant has a right to bring a civil action under ERISA
section 502(a) and that the claimant is entitled to receive, upon request and
free of charge, reasonable access to and copies of, all documents, records and
other information relevant to the claim for benefits. A document is relevant to
the claim for benefits if it was relied upon in making the determination, was
submitted, considered or generated in the course of making the determination or
demonstrates that benefit determinations are made in accordance with the Plan
and that Plan provisions have been applied consistently with respect to
similarly situated claimants.

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ARTICLE 5 - AMENDMENT AND TERMINATION

The Board of Directors of the Employer has delegated to the Benefit Plans
Committee the right at any time, whether in an individual case or more
generally, to amend this Plan from time to time without advance notice and to
terminate this Plan at any time. No consent of any Executive is required to
terminate, modify, amend or change the Plan generally or in an individual case.
Any such amendment or termination of this Plan generally shall be accomplished
by resolution of the Benefit Plans Committee adopted at a meeting duly called or
by unanimous written consent in accordance with the Employer’s Articles of
Incorporation, Bylaws, and applicable law. Any amendment or termination of this
Plan on an individual basis shall be accomplished by the written action of the
Plan Administrator.

ARTICLE 6 - SEVERANCE PAY PLAN LIMITATIONS UNDER ERISA

The Employer intends that this Plan constitute a “severance pay plan” under
ERISA and any ambiguities in this Plan shall be construed to effect that intent.
As a severance pay plan, notwithstanding any other provision of this Plan:
payments hereunder shall not be contingent directly or indirectly, upon the
retirement of any Executive or offset by any retirement benefit payable; the
total amount of severance payments made and the value of other benefits provided
under this Plan to any Executive shall not exceed twice the Executive’s annual
compensation during the year immediately preceding the termination of such
Executive’s service; and all payments to an Executive under this Plan shall be
paid within 24 months after the termination of the Executive’s service.

ARTICLE 7 - MISCELLANEOUS

7.01
Right to Terminate Employment: The fact that a former Executive has failed to
qualify for a benefit under this Plan shall not rescind or otherwise affect in
any manner whatsoever the Executive’s termination of employment from the
Employer, and such failure to qualify for a benefit shall not establish any
right of any kind whatsoever (a) to a continuation or to a reinstatement of
employment with the Employer or (b) to receive any payment from the Employer in
lieu of such benefit.

 

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7.02
Source of Benefits: All benefits paid to a terminated Executive under this Plan
shall be paid from the general assets of the Employer, and the status of the
claim of a person to any benefit shall be the same as the status of a claim
against the Employer by any general unsecured creditor. No person shall look to,
or have any claim against, any officer, director, employee or agent of the
Employer in his individual capacity for the payment of any benefits under this
Plan.

7.03
No Assignment; Binding Effect: No interest of any Executive eligible to receive
benefits under this Plan shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation or encumbrance
of any kind; nor may such interest or right to receive a benefit be taken,
either voluntarily or involuntarily, for the satisfaction of the debts of, or
other obligations or claims against, such person, including claims for alimony,
support, separate maintenance and claims in bankruptcy proceedings. The
provisions of this Plan shall be binding on each Executive (and on each person
who claims a benefit under such person) and on the Employer, their successors
and assigns.

7.04
Indebtedness: Indebtedness or obligations of the Executive to the Employer
existing at the time of termination or arising during the one year period
beginning on the Separation Date shall be set off against any benefit payable
under this Plan.

7.05
Construction: This Plan shall be construed in accordance with the law of the
State of Connecticut to the extent not preempted by federal laws. Headings and
subheadings have been added only for convenience of reference and have no
substantive effect whatsoever. All references to sections shall mean sections of
this Plan.

7.06
Usage: Whenever applicable, the singular shall include the plural, the masculine
shall include the feminine and vice versa when used in this Plan.

 
 

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