Exhibit 10.18
Vectrus, Inc.
Senior Executive Severance Pay Plan
1. Purpose
     The purpose of this Vectrus, Inc. Senior Executive Severance Pay Plan
(“Plan”) is to assist in occupational transition by providing severance pay for
employees covered by this Plan whose employment is terminated under conditions
set forth in this 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 this Plan (“Executives”) are full-time, active
regular salaried employees of Vectrus and of any subsidiary company (“Vectrus
Subsidiary”) (collectively or individually as the context requires “Company”)
who are United States citizens, or who are employed in the United States, in
Band A currently (Senior Vice Presidents and as may be further defined by the
Vectrus Compensation and Personnel Committee) at any time within the two year
period immediately preceding the date the Company selects as the Executive’s
last day of active employment (“Scheduled Termination Date”), 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.
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 the terms of this Plan except where
the Executive:
 
     • is terminated for cause,

     • 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 herein, or

     • voluntarily terminates employment with the Company prior to the Scheduled
Termination Date.
 
     No severance pay will be provided under this Plan where the Executive
terminates employment by:

     • 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 this Plan upon any termination of
employment as a result of the Executive’s death or disability.

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

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4. Schedule of Severance Pay
     Severance pay will be provided in accordance with the following Schedule of
Severance Pay which sets forth the months of Base Pay provided to an Executive
based upon the Executive’s Years of Service as of the Scheduled Termination
Date.
 
 
 
Years of Service
 
Months of Base Pay
Less than 4
 
12
 
 
13
5
 
14
6
 
15
7
 
16
8
 
17
9
 
18
10
 
19
11
 
20
12
 
21
13
 
22
14
 
23
15 or more
 
24

     
“Base Pay” shall mean the annual base salary rate payable or in effect with
respect to the Executive at the Scheduled Termination Date divided by twelve
(12) months. Such annual base salary rate shall in no event be less than the
highest annual base salary rate paid or in effect with respect to the Executive
at any time during the twenty-four month (24) period immediately preceding the
Scheduled Termination Date.

     “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 Vectrus, 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 the above Schedule of Severance Pay, (i) in no event shall
months of Base Pay provided to an Executive exceed the number of months
remaining between the Scheduled Termination Date and the Executive’s Normal
Retirement Date or (ii) shall severance pay exceed the equivalent of twice the
Executive’s total annual compensation during the year immediately preceding the
Scheduled Termination Date.
 
     Notwithstanding any other provision of the Plan to the contrary, 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”). 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.

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     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 this 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 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
level of 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 cease if an Executive is rehired by the Company.

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 continue to be eligible for
participation in Company employee benefit plans in accordance with the
provisions of such plans as in effect on the Scheduled Termination Date. An
Executive will not be eligible to participate in any Company tax qualified
retirement plans, non-qualified excess or supplemental benefit plans, short-term
or long-term disability plans, the Company business travel accident plan or any
new employee benefit plan or any improvement to any existing employee benefit
plan adopted by the Company after the Scheduled Termination Date.

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 perquisite or receives a reduced benefit or perquisite, 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 or perquisites by making available equivalent benefits or perquisites
from other sources in a manner consistent with Section 15 below.

7. Excluded Executive Compensation Plans, Programs, Arrangements, and
Perquisites  

     During the period an Executive is receiving Severance Pay, the Executive
will not be eligible to accrue any paid time off or participate in any
(i) annual incentive or bonus program, (ii) special termination programs,
(iii) tax or financial advisory services, (iv) new awards under any stock option
or stock related plans for executives (provided that the Executive will be
eligible to exercise any outstanding stock options in accordance with the terms
of any applicable stock option plan), (v) new or revised executive compensation
programs that may be introduced after the Scheduled Termination Date and
(vi) any other executive compensation program, plan, arrangement, practice,
policy or perquisites unless specifically authorized by Vectrus in writing. The
period during which an Executive is receiving Severance Pay does not count as
service for the purpose of any Vectrus long term incentive award program unless
otherwise provided in plan documents previously approved by the Board of
Directors or Compensation and Personnel Committee.

8. Divestiture

     If a Vectrus Subsidiary or division 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, in the case
of

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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 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 this 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 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 becomes employed by any business
competitive with the Company (which for purposes of this Plan shall not include
Exelis Inc. for a period of three years from the date of the spin-off; 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 this Plan unless (i) the Executive executes and delivers to
Vectrus within 45 days following the Scheduled Termination Date, a release,
satisfactory to Vectrus, in which the Executive discharges and releases the
Company and the Company’s directors, officers, employees and employee benefit
plans from all claims (other than 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.

11. Administration of Plan

     This Plan shall be administered by Vectrus, which shall have the exclusive
right to interpret this Plan, adopt any rules and regulations for carrying out
this Plan as may be appropriate and decide any and all matters arising under
this 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

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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. 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

     Vectrus may terminate or amend this 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 within two years of the effective date of
such Plan Change provided that the Executive was a covered employee under this
Plan on the date of such Plan Change.

13. Offset

     Any severance pay provided to an Executive under this Plan shall be offset
in a manner 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; (iii) by virtue of any law,
custom or practice. Any severance pay provided to Executive under this Plan
shall also be offset by reducing such severance pay by any severance pay, salary
continuation pay, termination pay or similar pay or allowance received by the
Executive as a result of any prior termination of employment with the Company.

     Coordination of severance pay with any pay or benefits provided by any
applicable Vectrus short-term or long-term disability plan shall be in
accordance with the provisions of those plans.
 
14. Miscellaneous

Except as provided in this 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 this 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.

     Benefits under this Plan are paid for entirely by the Company from its
general assets.

     This 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 this Plan are included solely for
convenience of reference and shall not in any way affect the meaning of any
provision of this Plan

15. Section 409A

     This 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

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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 this 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 this Plan may only be made upon a
“separation from service” (as that term is used in Section 409A). Each payment
made under this 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

     This Plan was adopted by Vectrus on [date] (“Adoption Date”) and does not
apply to any termination of employment which occurred or which was communicated
to the Executive prior to the Adoption Date.

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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 Number:
50[ ]
 
 
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: Chief Legal Officer
 
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

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•
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.

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.