Exhibit 10.1

VECTRUS, INC.
SENIOR EXECUTIVE SEVERANCE PAY PLAN
(Amended and Restated as of October 6, 2015)

1. Purpose
    
The purpose of this Vectrus, Inc. Senior Executive Severance Pay Plan (the
“Plan”), as amended and restated, is to assist in occupational transition by
providing severance pay for employees covered by the Plan whose employment is
terminated under conditions set forth in the Plan.
 
The Plan first became effective as of September 27, 2014 following the spin-off
of Vectrus, Inc. (“Vectrus”) from Exelis Inc. (“Exelis”) on September 27, 2014.
Exelis was spun off from ITT Corporation (“ITT” and, together with Exelis, the
“Predecessor Corporations”) on October 31, 2011. The Predecessor Corporations
maintained similar plans prior to the respective spin-offs (the “Predecessor
Plans”), and the Plan was created to continue service accruals under the
Predecessor Plans. The Plan shall remain in effect as provided in Section 12
hereof, and Executives shall receive full credit for their service with the
Predecessor Corporations as provided in Section 4 hereof.

2. Covered Employees
 
Covered employees under the Plan (“Executives”) are full-time, active regular
salaried employees of Vectrus, and of any subsidiary company (each a “Vectrus
Subsidiary”) (collectively or individually as the context requires, the
“Company”) who are either (a) in Band A and either United States citizens or
employed in the United States immediately preceding the date the Company selects
as the Executive’s last day of active employment (“Scheduled Termination Date”)
or (b) selected by the Vectrus Compensation and Personnel Committee (the
“Committee”), but excluding any such employees who are party to individual
agreements that provide severance pay in situations where severance would be
payable under the Plan. As of the date of the amendment and restatement of the
Plan, Band A includes Senior Vice Presidents, but it may be further defined by
the Committee at any time.

3. Severance Pay Upon Termination of Employment

If the Company terminates an Executive’s employment, the Executive shall be
provided severance pay in accordance with, and subject to, the terms of the Plan
except where the Executive:
 
     • is terminated for Cause (as defined below),

     • accepts employment or refuses comparable employment with a purchaser as
provided in Section 8, “Divestiture,”

     • is terminated with a Scheduled Termination Date on or after the
Executive’s Normal Retirement Date (as defined below), or

     • terminates his or her employment with the Company for any reason, or no
reason, prior to the Scheduled Termination Date.
 
For the avoidance of doubt, no severance pay will be provided under the Plan
where the Executive terminates employment by:

 

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Exhibit 10.1

     • voluntarily resigning,  

     • voluntarily retiring, or

     • failing to return from an approved leave of absence (including a medical
leave of absence).

No severance pay will be provided under the Plan upon any termination of
employment as a result of the Executive’s death or Disability (as defined
below).

“Cause” shall mean the Executive’s (i) willful and continued failure to
substantially perform the Executive’s duties with the Company or to
substantially follow and comply with the specific and lawful directives of the
Company or the Vectrus Board of Directors (the “Board”), as reasonably
determined by the Board (other than any such failure resulting from the
Executive’s incapacity due to physical or mental illness) after a written demand
for substantial performance that specifically identifies the manner in which the
Board believes that the Executive has not substantially performed his duties is
delivered to the Executive by the Board; (ii) willful commission of an act of
fraud or dishonesty resulting in material economic or financial injury to the
Company; (iii) willful engagement in illegal conduct or gross misconduct, in
either case which is materially and demonstrably injurious to the Company; (iv)
material breach of the terms of any confidentiality, trade secret,
non-solicitation, non-competition or similar Company agreement or policy; or (v)
conviction of, or plea of nolo contendere to, a felony or crime involving moral
turpitude.

“Disability” shall mean the complete and permanent inability of the Executive to
perform all of his or her duties under the terms of his or her employment, as
determined by the Company upon the basis of such evidence, including independent
medical reports and data, as the Company deems appropriate or necessary.

“Normal Retirement Date” shall mean the first of the month which coincides with
or follows the Executive’s 65th birthday.

4. Schedule of Severance Pay

Except with respect to the Executives listed in Exhibit A, which is attached
hereto and incorporated as part of the Plan, severance pay will be provided in
accordance with the following schedule, which sets forth the aggregate amount of
severance pay that will be paid to an Executive. Such aggregate amount of
severance pay shall be equal to the Executive’s Base Pay (as defined below)
multiplied by the “Months of Base Pay” shown in the schedule below based upon
the Executive’s Years of Service as of the Scheduled Termination Date. The
severance pay of the Executives listed in Exhibit A will be determined in
accordance with Exhibit A.
Years of Service
 
Months of Base Pay
Less than 4
 
12
4
 
13
5
 
14
6
 
15
7
 
16
8
 
17
9 or more
 
18

 

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Exhibit 10.1

“Base Pay” shall mean the Executive’s annual base salary rate paid or in effect
as of the Scheduled Termination Date, divided by twelve (12). .

“Years of Service” shall mean the total number of completed years of full-time
employment since the Executive’s Vectrus system service date to the Scheduled
Termination Date, rounded to the nearest whole year; provided that, for the
purposes of “Years of Service,” service shall include years of service with the
Predecessor Corporations; provided, however, that any breaks in service during
which the Executive was not employed by Vectrus or one of the Predecessor
Corporations shall not be counted. The Vectrus system service date is the date
from which employment in the Vectrus system is recognized beginning with the
first date of employment with the Company, unless the Executive was previously
employed with ITT or Exelis, in which case the Vectrus system service date shall
mean the first date of employment with (i) ITT (if applicable) or, if not
previously employed by ITT, (ii) Exelis.

Notwithstanding anything contained herein to the contrary, in no event shall
(i) the number of months of Base Pay upon which an Executive’s severance pay is
calculated exceed the number of full calendar months remaining between the
Scheduled Termination Date and the Executive’s Normal Retirement Date or (ii)
severance pay exceed the equivalent of twice the Executive’s total annual
compensation during the year immediately preceding the Scheduled Termination
Date. For avoidance of doubt, the foregoing limitations shall apply to all
Executives, including those listed on Exhibit A.
 
For the avoidance of doubt, all prior full-time employment by an Executive with
the Predecessor Corporations shall be credited in full when determining an
Executive’s Years of Service.
    
5. Form of Payment of Severance Pay

Severance pay shall be paid in the form of equal periodic payments according to
Vectrus’ regular payroll schedule. Severance pay will commence within 60 days
following the Scheduled Termination Date; provided, that, to the extent such
60-day period begins in one calendar year and ends in another, any payment
scheduled to occur during the first 60 days following the Scheduled Termination
Date shall not be paid until the first regularly scheduled pay date in the
latter calendar year, and such first payment shall include all amounts that were
otherwise scheduled to be paid prior thereto.

In the event of an Executive’s death during the period the Executive is
receiving severance pay, the amount of severance pay remaining shall be paid in
a discounted lump sum to the Executive’s spouse or to such other beneficiary or
beneficiaries designated by the Executive in writing, or, if the Executive is
not married and failing such designation, to the estate of the Executive. Any
discounted lump sum paid under the Plan shall be equal to the present value of
the remaining periodic payments of severance pay as determined by Vectrus using
an interest rate equal to the prime rate at Citibank or other entity designated
by Vectrus in effect on the date of the Executive’s death.

If an Executive is receiving severance pay, the Executive must continue to be
available to render to the Company reasonable assistance, consistent with the
Executive’s prior position with the Company, at times and locations that are
mutually acceptable. In requesting such services, the Company will take into
account any other commitments which the Executive may have. After the Scheduled
Termination Date and normal wind up of the Executive’s former duties, the
Executive will not be required to perform any regular services for the Company.
In the event the Executive secures other employment during the period the
Executive is receiving severance pay, the Executive must promptly notify the
Company.

Severance pay will permanently cease if an Executive is rehired by the Company.

 

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Exhibit 10.1

6. Benefits During Severance Pay

As long as an Executive is receiving severance pay, except as provided in this
Section or in Section 7, the Executive will be eligible for continued
participation in those Company employee benefit plans that are COBRA eligible,
and coverage will run concurrently through the COBRA period. The Company and the
Executive will continue to share the monthly premium expense per the Plan Year’s
contribution strategy approved on an annual basis. For the avoidance of doubt,
an Executive will not be eligible to participate in any other Company benefit
plans, policies, programs, and arrangements, including without limitation, any
Company tax qualified retirement plans, non-qualified retirement plans, deferred
compensation plans, and incentive plans (stock and cash).

If, for any reason at any time, the Company (i) is unable to treat the Executive
as being eligible for ongoing participation in any Company benefit plans or
policies in existence immediately prior to the termination of employment of the
Executive, and if, as a result thereof, the Executive does not receive a benefit
or receives a reduced benefit , or (ii) determines that ongoing participation in
any such Company benefit plans or policies would result in a violation of the
nondiscrimination rules of Section 105(h)(2) of the Internal Revenue Code of
1986, as amended (the “Code”) or any other Code section, statute or regulation
of similar effect (including but not limited to the 2010 Patient Protection and
Affordable Care Act, as amended by the 2010 Health Care and Education
Reconciliation Act), the Company shall provide such benefits by making available
equivalent benefits from other sources in a manner consistent with Section 15
below.

7. Excluded Compensation and Benefit Plans, Policies, Programs and Arrangements
 

The period during which an Executive is receiving severance pay does not count
as service for the purpose of any compensation or benefit plan, policy, program
or arrangement, including any equity or cash incentive award plan or program
unless otherwise expressly provided in plan and/or award documents previously
approved by the Board or the Committee.

8. Divestiture

If a Vectrus Subsidiary or business unit or service line of Vectrus or a portion
thereof at which an Executive is employed is sold or divested and if (i) the
Executive accepts employment or continued employment with the purchaser or an
affiliate of the purchaser (or, in the case of a divestiture without a
purchaser, such as a spin off, accepts employment or continued employment with
the divested entity), or (ii) refuses employment or continued employment with
the purchaser or an affiliate of the purchaser (or divested entity, as
applicable) on terms and conditions substantially comparable to those in effect
immediately preceding the sale or divestiture, the Executive shall not be
provided severance pay under the Plan. The provisions of this Section 8 apply to
divestitures accomplished through sales (or other divestiture) of assets or
through sales (or other divestiture) of corporate or other entities.

9. Disqualifying Conduct

If during the period an Executive is receiving severance pay, the Executive
(i) engages in any activity which is inimical to the best interests of the
Company; (ii) disparages the Company; (iii) fails to comply with any Company
Covenant Against Disclosure and Assignment of Rights to Intellectual Property;
(iv) without the Company’s prior consent, induces any employees of the Company
to leave their Company employment; (v) without the Company’s prior consent,
engages in, becomes affiliated with, or

 

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Exhibit 10.1

becomes employed by any business competitive with the Company; or (vi) fails to
comply with applicable provisions of the Vectrus Code of Conduct or applicable
Vectrus Corporate Policies, then the Company will have no further obligation to
provide severance pay.

10. Release

The Company shall not be required to make or continue any severance payments
under the Plan unless (i) the Executive executes and delivers to Vectrus within
50 days following the Scheduled Termination Date, a release, satisfactory to
Vectrus, in which the Executive discharges and releases the Company and the
Company’s affiliates, successors, directors, officers, employees and employee
benefit plans from all claims (with certain exceptions, including exceptions for
claims for benefits to which Executive is entitled under any Company employee
benefit plan) arising out of Executive’s employment or termination of
employment, and (ii) such release is not revoked by the Executive within the
seven-day statutory revocation period following the date the release is executed
by the Executive.

11. Administration of Plan

The Plan shall be administered by Vectrus, which shall have the exclusive right
to interpret the Plan, adopt any rules and regulations for carrying out the Plan
as may be appropriate and decide any and all matters arising under the Plan,
including but not limited to the right to determine appeals. Subject to
applicable Federal and state law, all interpretations and decisions by Vectrus
shall be final, conclusive and binding on all parties affected thereby.

Any employee or other person who believes he or she is entitled to any payment
under the Plan may submit a claim in writing to the Plan’s administrator (in
accordance with Section 17) within ninety (90) days after the earlier of (i) the
date the claimant learned the amount of their severance benefits under the Plan
or (ii) the date the claimant learned that he or she will not be entitled to any
benefits under the Plan. If the claim is denied (in full or in part), the
claimant will be provided a written notice explaining the specific reasons for
the denial and referring to the provisions of the Plan on which the denial is
based. The notice will also describe any material or information necessary for
the claimant to perfect the claim, and an explanation of why such material or
information is necessary, and an explanation of the Plan’s procedures (and time
limits) for appealing the denial, including a statement of the claimant’s right
to bring a civil action under Section 502(a) of ERISA following an adverse
benefit determination on appeal. The denial notice will be provided within
ninety (90) days after the claim is received. If special circumstances require
an extension of time (up to ninety (90) days), written notice of the extension
will be given within the initial ninety (90) day period. This notice of
extension will indicate the special circumstances requiring the extension of
time and the date by which the administrator expects to render its decision on
the claim.

If the claimant’s claim is denied, the claimant (or his or her authorized
representative) may apply in writing to the administrator for a review of the
decision denying the claim. Review must be requested within sixty (60) days
following the date the claimant received the written notice of their claim
denial or else the claimant loses the right to review. The claimant (or
representative) then has the right to review and obtain copies of all documents
and other information relevant to the claim, upon request and at no charge, and
to submit issues and comments (as well as documents, records and other
information related to the claim) in writing. The administrator will provide
written notice of its decision on review within sixty (60) days after it
receives a review request. If additional time (up to sixty (60) days) is needed
to review the request, the claimant (or representative) will be given written
notice of the reason for the delay.

 

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Exhibit 10.1

This notice of extension will indicate the special circumstances requiring the
extension of time and the date by which the administrator expects to render its
decision.

If the claim is denied (in full or in part), the claimant will be provided a
written notice explaining the specific reasons for the denial and referring to
the provisions of the Plan on which the denial is based. The notice will also
include a statement that the claimant will be provided, upon request and free of
charge, reasonable access to, and copies of, all documents and other information
relevant to the claim and a statement regarding the claimant’s right to bring an
action under Section 502(a) of ERISA.

12. Termination or Amendment

The Board or the Committee may terminate or amend the Plan (“Plan Change”) at
any time except that no such Plan Change may reduce or adversely affect
severance pay for any Executive whose employment terminates on or before the
effective date of such Plan Change, provided that the Executive was either
receiving or entitled to receive severance pay under the Plan on the date of
such Plan Change.

13. Offset

Any severance pay provided to an Executive under the Plan shall be offset, to
the extent consistent with Section 15, by reducing such severance pay by any
severance pay, salary continuation, termination pay or similar pay or allowance
which Executive receives or is entitled to receive (i) under any other Company
plan, policy practice, program, arrangement; (ii) pursuant to any employment
agreement or other agreement with the Company; or (iii) by virtue of any law,
custom or practice.
 
14. Miscellaneous

Except as provided in the Plan, the Executive shall not be entitled to any
notice of termination or pay in lieu thereof.

In cases where severance pay is provided under the Plan, pay in lieu of any
unused current year paid time off accrual will be paid to the Executive in a
lump sum within 30 days after the date of the Executive’s Scheduled Termination
Date.

Severance pay and benefits under the Plan are paid for entirely by the Company
from its general assets and represent an unfunded and unsecured obligation of
the Company. An Executive’s right to severance pay or benefits under the Plan
may not be sold, assigned, transferred, pledged, encumbered or otherwise
alienated, hypothecated or disposed of, other than in accordance with the second
paragraph of section 5.

The Plan is not a contract of employment, does not guarantee the Executive
employment for any specified period and does not limit the right of the Company
to terminate the employment of the Executive at any time.

The section headings contained in the Plan are included solely for convenience
of reference and shall not in any way affect the meaning of any provision of the
Plan.

 

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Exhibit 10.1

15. Section 409A

The Plan is intended to comply with Section 409A of the Code (or an applicable
exemption therefrom) and will be interpreted in a manner consistent with such
intent. Notwithstanding anything herein to the contrary, (i) if at the time of
the Executive’s termination of employment with the Company the Executive is a
“specified employee” as defined in Section 409A of the Code (and any related
regulations or other pronouncements thereunder) and the deferral of the
commencement of any payments or benefits otherwise payable hereunder as a result
of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits
hereunder (without any reduction in such payments or benefits ultimately paid or
provided to the Executive) until a date that is six months following the
Executive’s termination of employment with the Company (or the earliest date as
is permitted under Section 409A of the Code), at which point all payments
deferred pursuant to this Section 15 shall be paid to the Executive in a lump
sum and (ii) if any other payments of money or other benefits due hereunder
could cause the application of an accelerated or additional tax under
Section 409A of the Code, such payments or other benefits shall be deferred if
deferral will make such payment or other benefits compliant under Section 409A
of the Code, or otherwise such payment or other benefits shall be restructured,
to the extent possible, in a manner, determined by the Company, that does not
cause such an accelerated or additional tax. To the extent any reimbursements or
in-kind benefits due under the Plan constitute “deferred compensation” under
Section 409A of the Code, any such reimbursements or in-kind benefits shall be
paid in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv), the
terms of which shall be deemed incorporated herein by reference. All payments to
be made upon a termination of employment that constitute deferred compensation
under the Plan may only be made upon a “separation from service” (as that term
is used in Section 409A). Each payment made under the Plan shall be designated
as a “separate payment” within the meaning of Section 409A of the Code. The
Company shall consult with Executives in good faith regarding the implementation
of the provisions of this section; provided that neither the Company nor any of
its employees or representatives shall have any liability to Executives with
respect thereto.

16. Adoption Date and Amendments

The Plan was initially adopted by Vectrus on September 27, 2014 (“Adoption
Date”) and does not apply to any termination of employment which occurred or
which was communicated to an Executive prior to the Adoption Date. The Plan was
amended and restated on October 6, 2015.

 

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Exhibit 10.1

17. Additional Information
Plan Name:
Vectrus, Inc. Senior Executive Severance Pay Plan
 
 
 
 
 
 
Plan Sponsor:
Vectrus, Inc.
 
 
 
 
655 Space Center Drive
 
 
 
Colorado Springs, CO 80915
 
 
 
 
 
 
 
Employer Identification Number:
38-3924636
 
 
 
 
 
 
 
 
Plan Year:
Vectrus' Fiscal Year
 
 
 
 
 
 
 
 
Plan Administrator:
Vectrus, Inc.
 
 
 
 
Attention: Administrator of the Vectrus, Inc. Senior Executive Severance Pay
Plan
 
655 Space Center Drive
 
 
 
Colorado Springs, CO 80915
 
 
 
(719) 591-3600
 
 
 
 
 
 
 
 
Agent for Service of Legal Process:
Vectrus, Inc.
 
 
 
 
Attention: Senior Vice President, Chief Legal Office & Corporate Secretary
 
655 Space Center Drive
 
 
Colorado Springs, CO 80915
 
 
(719) 591-3600
 
 
 
 
 
 
 
 
 
Service of process may also be made upon the Plan administrator.
 
 
 
 
 
Type of Plan
Employee Welfare Benefit Plan - Severance Pay Plan
 
 
 
 
 
Plan Costs
The cost of the Plan is paid by Vectrus, Inc.
 

18. Statement of ERISA Rights

As participants in the Plan, Executives have the following rights and
protections under the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”):

•
Executives may examine, without charge, at the Plan administrator’s office and
at other specified locations, such as worksites, all documents governing the
plan, including insurance contracts and a copy of the latest annual report (Form
5500 Series) filed by the plan with the U.S. Department of Labor and available
at the Public Disclosure Room of the Employee Benefits Security Administration;
and

•
Executives may obtain, upon written request to the Plan administrator, copies of
documents governing the operation of the Plan, including insurance contracts and
copies of the latest annual report (Form 5500 Series) and updated summary plan
description. The Plan administrator may make a reasonable charge for the copies.

 

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Exhibit 10.1

In addition to creating rights for participants, ERISA imposes duties upon the
people who are responsible for the operation of the Plan. The people who operate
the Plan (called “fiduciaries”) have a duty to do so prudently and in the
interests of Plan participants. No one, including Vectrus or any other person,
may fire a Plan participant or otherwise discriminate against a Plan participant
in any way to prevent the participant from obtaining a benefit under the Plan or
exercising rights under ERISA. If a claim for a severance benefit is denied, in
whole or in part, the person seeking benefits must receive a written explanation
of the reason for the denial. Plan participants have the right to have the
denial of the claim reviewed. (The claim review procedure is explained in
Section 8 above.)

Under ERISA, there are steps Plan participants can take to enforce the above
rights. For instance, if a Plan participant requests materials and does not
receive them within thirty (30) days, the Participant may file suit in a federal
court. In such a case, the court may require the Administrator to provide the
materials and to pay the Plan participant up to $110 a day until the participant
receives the materials, unless the materials were not sent because of reasons
beyond the control of the Administrator. If a Plan participant has a claim which
is denied or ignored, in whole or in part, the participant may file suit in a
federal court. If it should happen that the participant is discriminated against
for asserting his or her rights, the participant may seek assistance from the
U.S. Department of Labor, or the participant may file suit in a federal court.

In any case, the court will decide who will pay court costs and legal fees. If
the Plan participant is successful, the court may order the person the Plan
participant sued to pay these costs and fees. If the Plan participant loses,
unless the Plan requires the Vectrus to pay the costs, he court may order the
Plan participant to pay these costs and fees, for example, if it finds that the
Participant’s claim is frivolous.

If the Plan participant has any questions regarding the Plan, the participant
should contact the Plan administrator (see Section 17 for the contract in
formation). If the Plan participant has any questions about this statement or
about his or her rights under ERISA, the Plan participant may contact the
nearest area office of the Employee Benefits Security Administration (formerly
the Pension and Welfare Benefits Administration), U.S. Department of Labor,
listed in his or her telephone directory, or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue, N.W. Washington, D.C. 20210. The
Plan participant may also obtain certain publications about his or her rights
and responsibilities under ERISA by calling the publications hotline of the
Employee Benefits Security Administration.

 

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Exhibit 10.1

Exhibit A
Senior Executive Severance Pay Plan Calculation
 
 
 
 
 
Name
Title
Service Period in Years
Months of Severance*
 
 
 
 
 
Matthew M. Klein
SVP & Chief Financial Officer
19

24

Kelvin R. Coppock
SVP, Contracts
11

20

Francis A. Peloso
SVP & Chief Human Resources Officer
15

24

(*) Months of severance are based on the severance pay levels specified in the
initial plan.