Document:

exv10w14

Exhibit 10.14

EXELIS INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

 

 

EXELIS INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

The Exelis Inc. Deferred Compensation Plan for Non-Employee Directors (the “Plan”) first became
effective as of October 31, 2011 following the spin-off of Exelis Inc. from ITT Corporation (the
“Predecessor Corporation”) on October 31, 2011. The Predecessor Corporation maintained a similar
plan prior to the spin-off (the “Predecessor Plan”). The Plan was created as a spin-off of the
Predecessor Plan to govern prior deferrals by Non-Employee Directors made under the Predecessor
Plan and to provide Non-Employee Directors with a means of deferring director fees in accordance
with the terms of the Plan.

The Plan shall remain in effect as provided in Section 6.01 hereof, and Participants shall be
deemed to receive full credit for their service and participation with the Predecessor Corporation
as provided in Section 4.06(c) hereof. Further, the Plan shall not deprive a Participant of the
right to payment of deferred compensation credited as of the date of termination or amendment, in
accordance with the terms of the Plan as of the date of such termination or amendment.

 

 

TABLE OF CONTENTS

	 	 	 
	 	 	Page
	ARTICLE 1. — DEFINITIONS
	 	1
	1.01 Adoption Date
	 	1
	1.02 Administrative Committee
	 	1
	1.03 Beneficiary
	 	1
	1.04 Board
	 	1
	1.05 Business Day
	 	1
	1.06 Code
	 	1
	1.07 Corporation
	 	1
	1.08 Deferral Account
	 	1
	1.09 Deferral Agreement
	 	1
	1.10 Deferral Election Deadline
	 	2
	1.11 Deferrals
	 	2
	1.12 Director Fees
	 	2
	1.13 Grandfathered Deferrals
	 	2
	1.14 In-Service Subaccount
	 	2
	1.15 Non-Employee Director
	 	2
	1.16 Participant
	 	2
	1.17 Plan
	 	3
	1.18 Predecessor Corporation
	 	3
	1.19 Predecessor Plan
	 	3
	1.20 Prior Deferrals
	 	3
	1.21 Prior Deferrals Agreement
	 	3
	1.22 Reporting Date
	 	3
	1.23 Retirement
	 	4
	1.24 Retirement Subaccount
	 	4
	1.25 Service Year
	 	4
	1.26 Specified Distribution Date
	 	4
	1.27 Unforeseeable Emergency
	 	4
	 
	 	 
	ARTICLE 2. — INTRODUCTION AND PARTICIPATION
	 	5
	2.01 Introduction
	 	5
	2.02 Participation
	 	5
	2.03 Termination of Participation
	 	5
	 
	 	 
	ARTICLE 3. — DEFERRALS
	 	6
	3.01 Deferral Elections
	 	6
	3.02 Amount of Deferral
	 	7
	3.03 Crediting to Deferral Account
	 	7
	3.04 Vesting
	 	7
	3.05 Unforeseeable Emergency
	 	7
	 
	 	 
	ARTICLE 4. — MAINTENANCE OF ACCOUNTS
	 	8
	4.01 Adjustment of Account
	 	8

 

 

	 	 	 
	 	 	Page
	4.02 Investment Elections
	 	8
	4.03 Changing Investment Elections of Amounts Held in Deferral Accounts
	 	9
	4.04 Compliance with Securities Laws and Trading Policies and Procedures
	 	9
	4.05 Individual Accounts
	 	10
	4.06 Valuation of Accounts
	 	10
	 
	 	 
	ARTICLE 5. — PAYMENT OF BENEFITS
	 	11
	5.01 Time of Payment
	 	11
	5.02 Method of Payment
	 	14
	5.03 Unforeseeable Emergency
	 	14
	5.04 Designation of Beneficiary
	 	14
	 
	 	 
	ARTICLE 6. AMENDMENT OR TERMINATION
	 	16
	6.01 Right to Amend or Terminate
	 	16
	 
	 	 
	ARTICLE 7. GENERAL PROVISIONS
	 	17
	7.01 Funding and Payment of Expense
	 	17
	7.02 Unsecured Interest
	 	17
	7.03 Facility of Payment
	 	17
	7.04 Withholding Taxes
	 	18
	7.05 Nonalienation
	 	18
	7.06 Construction and Governing Law
	 	18
	7.07 Discharge of Corporation’s Obligation
	 	18
	7.08 Successors
	 	19
	 
	 	 
	ARTICLE 8. ADMINISTRATION
	 	20
	8.01 Administration
	 	20

 

 

ARTICLE 1. DEFINITIONS

	1.01	 	“Adoption Date” shall have the meaning set forth in Section 2.01(a).
	 
	1.02	 	“Administrative Committee” shall mean the Board’s Compensation and Personnel Committee or the
person or persons appointed by the Board’s Compensation and Personnel Committee pursuant to
Article 8 hereof to administer the Plan.
	 
	1.03	 	“Beneficiary” shall mean the person or persons designated by a Participant pursuant to the
provisions of Section 5.04.
	 
	1.04	 	“Board” shall mean the Board of Directors of the Corporation.
	 
	1.05	 	“Business Day” shall mean any day on which the New York Stock Exchange, or a successor
thereto, is open.
	 
	1.06	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
	 
	1.07	 	“Corporation” shall mean Exelis Inc., an Indiana corporation, or any successor by merger,
purchase or otherwise; provided, however, that for purposes of deferrals made under the
Predecessor Plan, Corporation shall mean the Predecessor Corporation as the original deferral
recorder.
	 
	1.08	 	“Deferral Account” shall mean the bookkeeping account (or subaccounts) maintained for each
Participant to record the amount of Director Fees such Participant has elected to defer in
accordance with Article 3 and/or pursuant to a Prior Deferral Agreement, adjusted pursuant to
Article 4.
	 
	1.09	 	“Deferral Agreement” shall mean the completed agreement, including any amendments,
attachments and appendices thereto, in such form and with such title as is approved by the
Compensation and Personnel Committee of the Board or the Administrative Committee, between a
Non-Employee Director and the Corporation, under which the

Page 1

 

	 	 	Non-Employee Director agrees to defer a portion of his or her Director Fees earned for a
specified Service Year.
	 
	1.10	 	“Deferral Election Deadline” shall have the meaning set forth in Section 3.01(a).
	 
	1.11	 	“Deferrals” shall mean the amount of deferrals credited to a Participant’s Deferral Account
pursuant to Section 3.03.
	 
	1.12	 	“Director Fees” shall mean the fees paid in cash, including, without limitation, any annual
retainer, monthly fee, Board meeting fee or committee meeting fee that a Non-Employee Director
may be entitled to receive for services as a member of the Board or a committee thereof.
	 
	1.13	 	“Grandfathered Deferrals” shall mean deferred Director Fees (and any earnings thereon,
including amounts attributable to dividends on such deferred Director Fees) that were
initially deferred prior to 2005. For avoidance of doubt, an amount will be treated as
initially deferred prior to 2005 if the amount would have been paid before 2005 had it not
been deferred.
	 
	1.14	 	“In-Service Subaccount” shall mean the bookkeeping account described in Section 5.01(a)
maintained to record Deferrals (and related gains and losses on such Deferrals) that a
Participant has elected to have paid upon the first to occur of the Specified Distribution
Date, the Participant’s Retirement or the Participant’s death.
	 
	1.15	 	“Non-Employee Director” shall mean a member of the Board who is not concurrently an employee
of the Corporation.
	 
	1.16	 	“Participant” shall mean, except as otherwise provided in Section 2.02, each Non-Employee
Director who has executed a Deferral Agreement pursuant to the requirements of Articles 2 and
3.

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	1.17	 	“Plan” shall mean the Exelis Inc. Deferred Compensation Plan For Non-Employee Directors, as
set forth in this document, as it may be amended from time to time; provided, however, that
the term “Plan” shall include the Predecessor Plan with respect to all prior service and
participation by a Participant with the Predecessor Corporation and preserving all rights by
Participants regarding Grandfathered Deferrals.
	 
	1.18	 	“Predecessor Corporation” shall mean the Corporation as such term was defined under the
Predecessor Plan immediately prior to October 31, 2011.
	 
	1.19	 	“Predecessor Plan” shall mean the ITT Corporation Deferred Compensation Plan for Non-Employee
Directors as in effect prior to October 31, 2011.
	 
	1.20	 	“Prior Deferrals” shall mean Deferrals relating to annual cash retainers that were (a)
initially deferred after 2004 pursuant to a Prior Deferral Agreement, (b) not yet distributed
as of the Adoption Date and (c) deferred by Non-Employee Directors who consent to have their
Prior Deferrals become subject to the terms of the Plan. For avoidance of doubt, (a) an amount
will be treated as initially deferred after 2004 if the amount would have been paid after 2004
had it not been deferred and (b) the term Prior Deferrals shall not include any restricted
stock, restricted stock units or Grandfathered Deferrals.
	 
	1.21	 	“Prior Deferral Agreement” shall mean a deferral agreement and/or document that was effective
prior to the Adoption Date and that governs the Directors’ Prior Deferrals. For avoidance of
doubt, the term Prior Deferral Agreement shall not include any agreement or document governing
(a) restricted stock or restricted stock unit awards or a Non-Employee Director’s election to
receive restricted stock or restricted stock unit awards or (b) Grandfathered Deferrals.
	 
	1.22	 	“Reporting Date” shall mean the first Business Day of each calendar month following the
Adoption Date, or such other day as the Administrative Committee may determine.

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	1.23	 	“Retirement” shall mean, subject to Section 8.01(c), the termination of a Non-Employee
Director’s service as a member of the Board.
	 
	1.24	 	“Retirement Subaccount” shall mean the bookkeeping account described in Section 5.01(a)
maintained to record Deferrals (and related gains and losses on such Deferrals) that a
Participant has elected to have paid upon the first to occur of the Participant’s Retirement
or death.
	 
	1.25	 	“Service Year” shall mean the period beginning on the date of the Annual Meeting of
Shareholders in any year and ending on the day immediately preceding the date of the Annual
Meeting of Shareholders for the subsequent year, or such other period as shall be specified
from time to time by the Administrative Committee.
	 
	1.26	 	“Specified Distribution Date” shall mean a Business Day selected by a Participant pursuant to
Section 5.01(a).
	 
	1.27	 	“Unforeseeable Emergency” shall mean a severe financial hardship to a Participant resulting
from (a) an illness or accident of the Participant or the Participant’s spouse, beneficiary or
dependent (as defined in Code Section 152, without regard to Section 152(b)(1), (b)(2) and
(d)(1)(B)), (b) loss of the Participant’s property due to casualty (including the need to
rebuild a home following damage to the home not otherwise covered by insurance) or (c) other
similar extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the Participant; provided, however, that an Unforeseeable Emergency shall only
exist to the extent the severe financial hardship would constitute an Unforeseeable Emergency
under Code Section 409A, related regulations and other applicable guidance.

Page 4

 

ARTICLE 2. INTRODUCTION AND PARTICIPATION

	2.01	 	Introduction

	 	(a)	 	The Plan was adopted by the Board on October 11, 2011 (the “Adoption Date”).
	 
	 	(b)	 	The Plan shall govern (i) Deferrals (as adjusted pursuant to Article 4) made
pursuant to a Deferral Agreement executed after the Adoption Date and (ii) Prior
Deferrals (as adjusted pursuant to Article 4). All Prior Deferral Agreements will be
deemed amended to the extent the terms of the Prior Deferral Agreement are inconsistent
with the terms of the Plan so that, to the extent of any such inconsistency, the terms
of the Plan will govern.

	2.02	 	Participation

	 	(a)	 	All Non-Employee Directors shall be eligible to participate in the Plan. An
individual who is determined to be a Non-Employee Director with respect to a Service
Year and who desires to have Deferrals credited on his or her behalf pursuant to
Article 3 must execute a Deferral Agreement with the Administrative Committee
authorizing Deferrals under the Plan in accordance with the provisions of Sections
2.02(b) and 3.01.
	 
	 	(b)	 	The Deferral Agreement shall be in writing and properly completed upon a form
approved by the Administrative Committee, which shall be the sole judge of the proper
completion thereof. Such Deferral Agreement shall provide for the deferral of all or a
portion of the Non-Employee Director’s Director Fees and shall include such other
provisions as the Administrative Committee deems appropriate.

	2.03	 	Termination of Participation

	 	 	Participation shall cease when all benefits to which a Participant or Beneficiary is
entitled to hereunder are distributed.

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ARTICLE 3. DEFERRALS

	3.01	 	Deferral Elections

	 	(a)	 	Except as provided in Section 3.01(d), a Non-Employee Director may elect to
defer Director Fees that will be earned in the Service Year that begins in the
following calendar year by filing a Deferral Agreement with the Administrative
Committee on or before (i) the close of business on the last Business Day of the
calendar year preceding the calendar year in which such Service Year begins or (ii)
such earlier date as may be specified by the Administrative Committee (the “Deferral
Election Deadline”).
	 
	 	(b)	 	Except as provided in Sections 3.01(d) and 3.05 and subject to such
restrictions as the Administrative Committee may establish from time to time, a
Non-Employee Director’s election to defer Director Fees earned in any Service Year
shall become irrevocable on the Deferral Election Deadline. A Non-Employee Director may
revoke or change his or her election to defer Director Fees at any time prior to the
date the election becomes irrevocable, subject to such restrictions as the
Administrative Committee may establish from time to time. Any such revocation or change
shall be made in a form and manner determined by the Administrative Committee.
	 
	 	(c)	 	Except as provided in Section 3.01(d), a Participant’s Deferral Agreement shall
apply only with respect to Director Fees earned in the Service Year that begins in the
calendar year following the calendar year in which the Deferral Agreement is filed with
the Administrative Committee. A Non-Employee Director must file, in accordance with the
provisions of Section 3.01(a), a new Deferral Agreement to defer Director Fees earned
in any subsequent Service Year.
	 
	 	(d)	 	Notwithstanding anything in this Section 3.01 to the contrary, if a
Non-Employee Director first becomes eligible to participate in the Plan after the
Deferral Election Deadline, but before the first day of the Service Year that begins in
the calendar year in which the Non-Employee Director first becomes eligible to
participate in the

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	 	 	 	Plan, the Non-Employee Director may, within the period beginning on the date the
Non-Employee Director first becomes eligible to participate in the Plan and ending on
the earlier of (i) 30 days after such date or (ii) the first day of such Service Year,
elect to defer Director Fees that will be earned in such Service Year.

	3.02	 	Amount of Deferral
	 
	 	 	Unless the Administrative Committee provides otherwise, a Non-Employee Director may defer
all or none of his or her Director Fees, but not a portion of such Director Fees.
	 
	3.03	 	Crediting to Deferral Account
	 
	 	 	Except as provided below with respect to Prior Deferrals, Deferrals shall be credited to a
Participant’s Deferral Account on the day such Director Fees would have otherwise been paid
to the Participant in the absence of a Deferral Agreement. Deferrals credited to a
Participant’s Deferral Account which are deemed invested in a Corporation phantom stock fund
will be credited based on the closing price of the Corporation’s common stock on the New
York Stock Exchange (or a successor thereto) on that day or the next Business Day if such
day is not a Business Day. Prior Deferrals shall be credited to a Participant’s Deferral
Account as of the Adoption Date.
	 
	3.04	 	Vesting
	 
	 	 	A Participant shall at all times be 100% vested in his or her Deferral Account.
	 
	3.05	 	Unforeseeable Emergency
	 
	 	 	Notwithstanding the foregoing provisions of this Article 3, in the event a distribution is
made to the Participant due to an Unforeseeable Emergency, a Participant’s Deferral
Agreement in effect at that time shall be cancelled and subsequent Deferrals under that
Deferral Agreement shall cease.

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ARTICLE 4. MAINTENANCE OF ACCOUNTS

	4.01	 	Adjustment of Account

	 	(a)	 	The Administrative Committee shall designate at least one investment fund or
index of investment performance and may designate additional investment funds or
investment indices (including a Corporation phantom stock fund) to be used to measure
the investment performance of a Participant’s Deferral Account. The designation of any
such investment funds or indices shall not require the Corporation to invest or earmark
its general assets in any specific manner. The Administrative Committee may change the
designation of investment funds or indices from time to time, in its sole discretion,
and any such change shall not be deemed to be an amendment affecting Participants’
rights under Section 6.01.
	 
	 	(b)	 	As of each Reporting Date, each Deferral Account shall be credited or debited
with the amount of earnings or losses with which such Deferral Account would have been
credited or debited, assuming it had been invested in one or more investment funds, or
earned the rate of return of one or more indices of investment performance, designated
by the Administrative Committee and elected by the Participant pursuant to Section 4.02
for purposes of measuring the investment performance of his or her Deferral Account.
Any portion of a Participant’s Deferral Account deemed invested in a Corporation
phantom stock fund shall be credited with dividend equivalents, as and when dividends
are paid on the Corporation’s common stock. Any such dividend equivalents shall be
deemed invested in additional shares of Corporation phantom stock, and such shares of
phantom stock shall be deemed to be purchased on the day the dividends are paid by the
Corporation.

	4.02	 	Investment Elections
	 
	 	 	If the Administrative Committee designates more than one investment fund or indices under
Section 4.01, Participants may designate the investment fund or indices that will be used to
measure the investment performance of their Deferrals. Unless the Administrative
Committee provides otherwise, such elections shall be made when the Deferral

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	 	 	Agreement is
executed. Unless the Administrative Committee provides otherwise, a Participant’s investment
election made with respect to Prior Deferrals shall continue to govern such Prior Deferrals

	4.03	 	Changing Investment Elections of Amounts Held in Deferral Accounts
	 
	 	 	Unless the Administrative Committee provides otherwise, Participants may not change
investment elections for amounts already deferred. If the Administrative Committee allows
Participants to change their investment elections, such changes may only be made in
accordance with Section 4.04 and such other terms and conditions as may be established by
the Administrative Committee from time to time.
	 
	4.04	 	Compliance with Securities Laws and Trading Policies and Procedures
	 
	 	 	A Participant’s ability to direct investments into or out of a Corporation phantom stock
fund shall be subject to such terms, conditions and procedures as the Plan Administrator may
prescribe from time to time to assure compliance with Rule 16b-3 promulgated under Section
16(b) of the Securities Exchange Act of 1934, as amended (“Rule 16b-3”), and other
applicable requirements. Such procedures also may limit or restrict a Participant’s ability
to make (or modify previously made) deferral and distribution elections under the Plan. In
furtherance, and not in limitation, of the foregoing, to the extent a Participant acquires
any interest in an equity security under the Plan for purposes of Section 16(b), the
Participant shall not dispose of that interest within six (6) months, unless such
disposition is exempted by Section 16(b) or any rules or regulations promulgated thereunder
or with respect thereto. Any election by a Participant to invest any amount in a Corporation
phantom stock fund, and any elections to transfer amounts from or to the Corporation phantom
stock fund to or from any other investment fund or indices, shall be subject to all
applicable securities law requirements, including but not limited to the those reflected in
the prior sentence and Rule 16b-3, as well as all applicable stock trading policies and
procedures of the Corporation. To the extent any election violates any securities law
requirement, applicable trading policies and procedures of the Corporation, or any terms or
conditions established from time to time

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	 	 	by the Administrative Committee relating to such elections (whether or not reflected in the
Plan), the election shall be void.
	 
	4.05	 	Individual Accounts
	 
	 	 	The Administrative Committee shall maintain, or cause to be maintained on its books, records
showing the individual balance of each Participant’s Deferral Account. At least once a year
each Participant shall be furnished with a statement setting forth the value of his or her
Deferral Account.
	 
	4.06	 	Valuation of Accounts

	 
	 	(a)	 	The Administrative Committee shall value or cause to be valued each
Participant’s Deferral Account as the Administrative Committee determines is necessary
for the proper administration of the Plan.
	 
	 	(b)	 	Whenever an event requires a determination of the value of a Participant’s
Deferral Account, the value shall be computed as of the date of the event, or if the
date of the event is not a Business Day, the close of the next Business Day, except as
otherwise specified in this Plan.
	 
	 	(c)	 	Notwithstanding any other provision of the Plan to the contrary, all prior
service and participation by a Participant with the Predecessor Corporation shall be
deemed credited in full towards a Participant’s service and participation with the
Company.

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ARTICLE 5. PAYMENT OF BENEFITS

5.01 Time of Payment

	 	(a)	 	Subject to the limitations in Section 5.01(b), each time a Participant elects
to defer Director Fees, the Participant shall specify whether the deferred Director
Fees will be allocated to the Participant’s Retirement Subaccount or In-Service
Subaccount.

	 	(1)	 	Retirement Subaccount. Except as otherwise provided in the Plan,
amounts allocated to the Retirement Subaccount (after adjustment to reflect gains
and losses during the deferral period) will be paid upon the first to occur of
the Participant’s Retirement or death.
	 
	 	(2)	 	In-Service Subaccount. Except as otherwise provided in the Plan,
amounts allocated to the In-Service Subaccount (after adjustment to reflect gains
and losses during the deferral period) will be paid upon the first to occur of
(A) a Business Day designated by the Participant (the “Specified Distribution
Date”), (B) the Participant’s Retirement or (C) the Participant’s death. The
Specified Distribution Date for the In-Service Subaccount shall be the Business
Day designated by the Participant on his or her initial Deferral Agreement
establishing the In-Service Subaccount; unless otherwise modified in accordance
with the provisions of Section 5.01(c) or (e) below.

	 	 	Unless the Administrative Committee provides otherwise, Participants may not bifurcate any
one Service Year’s deferred Director Fees between the Retirement Subaccount and the
In-Service Subaccount.
	 
	 	 	Prior Deferrals will be allocated to the Participants’ Retirement Subaccount and/or
In-Service Subaccount as of the Adoption Date based on the payment election(s) then in
effect with respect to such Prior Deferrals. If a Participant’s payment election(s) in
effect with respect to Prior Deferrals as of the Adoption Date provides for payment at a
specified date, that specified date shall be the Participant’s “Specified Distribution Date”
for the Participant’s In-Service Subaccount.

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	 	(b)	 	Unless the Administrative Committee provides otherwise, (i) a Participant may
have only one In-Service Subaccount established on his or her behalf (and only one
Specified Distribution Date) at any one time and (ii) once a Participant has selected a
Specified Distribution Date, the Participant may not select an additional Specified
Distribution Date until the amounts in the Participant’s In-Service Subaccount have
been distributed.
	 
	 	(c)	 	In accordance with such procedures as the Administrative Committee may
prescribe, Participants may elect to delay the payment of amounts in the Participant’s
In-Service Subaccount by specifying a new Specified Distribution Date, subject to the
following limitations:

	 	(1)	 	such election must be made at least 12 months prior to the
Specified Distribution Date then in effect and such election will not become
effective until at least 12 months after the date on which the election is made;
and
	 
	 	(2)	 	the new Specified Distribution Date shall be a Business Day that is
not less than five (5) years from the Specified Distribution Date then in effect.

	 	 	Once a Participant’s election of a new Specified Distribution Date becomes effective, all
amounts in the Participant’s In-Service Subaccount (whether allocated before or after the
election of the new Specified Distribution Date) will be paid upon the first to occur of the
new Specified Distribution Date, the Participant’s Retirement or the Participant’s death. A
Participant may elect to delay a Specified Distribution Date pursuant to this Section
5.01(c) more than once, provided that all such elections comply with the provisions of this
Section 5.01(c).
	 
	 	 	It is the Corporation’s intent that the provisions of this Section 5.01(c) comply with the
subsequent election provisions in Code Section 409A(a)(4)(C), related regulations and other
applicable guidance, and this Section 5.01(c) shall be interpreted accordingly. The
Administrative Committee may impose additional restrictions or conditions on a Participant’s
ability to elect a new Specified Distribution Date pursuant to this Section

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	 	5.01(c). The Participant may revoke or change his or her election pursuant to this Section
5.01(c) at any time prior to the deadline for making such election, subject to such
restrictions as the Administrative Committee may establish from time to time. Any such
revocation or change shall be made in a form and manner determined by the Administrative
Committee. For avoidance of doubt, a Participant may not elect to delay payment of amounts
in the Participant’s Retirement Subaccount or transfer amounts between his or her Retirement
Subaccount and his or her In-Service Subaccount.
	 
	 	(d)	 	Notwithstanding anything in the Plan to the contrary, if it is not possible to
make payment on the date of the Participant’s Retirement or death, or the Specified
Payment Date, as the case may be, payment shall be made as soon as practicable
thereafter, but in all events subject to the following limitations:

	 	(1)	 	payments to be made upon the Participant’s Retirement or death
shall in no event be made later than (90) days after the date of Retirement or
death, as the case may be, and
	 
	 	(2)	 	payments to be made on a Specified Distribution Date shall in no
event be made later than the 15th day of the third calendar month following such
Specified Distribution Date.
	 
	If payment is made within one of the periods described in this Section 5.01(d), neither the
Participant nor any Beneficiary may elect, directly or indirectly, when within such period
payment shall be made.

	 	(e)	 	Notwithstanding anything in the Plan to the contrary, the Administrative
Committee may, in its discretion and subject to such terms and conditions as it may
from time to time prescribe, allow Participants to change the time of payment of all or
a portion of their Deferral Accounts in accordance with applicable transition relief
provided with respect to Code Section 409A.

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	5.02	 	Method of Payment
	 
	 	 	The distribution of the Participant’s Deferral Account shall be made to the Participant or,
if the Participant dies, to the Participant’s Beneficiary, in the form of a single lump sum
cash payment.
	 
	5.03	 	Unforeseeable Emergency
	 
	 	 	Notwithstanding anything in the Plan or in a Deferral Agreement to the contrary, the
Administrative Committee may, if it determines an Unforeseeable Emergency exists which
cannot be satisfied from other sources, approve a request by the Participant for a
withdrawal from his or her Deferral Account. Such request shall be made in a time and manner
determined by the Administrative Committee. The payment made from a Participant’s Deferral
Account pursuant to the provisions of this Section 5.03 shall be limited to the amount
reasonably necessary to satisfy the emergency need (which may include amounts necessary to
pay any Federal, state, local or foreign income taxes or penalties reasonably anticipated to
result from the distribution). Determinations of amounts necessary to satisfy the emergency
need must take into account any additional compensation that is available, other than
additional compensation that, due to the Unforeseeable Emergency, is available under another
nonqualified deferred compensation plan but that has not actually been paid. This Section
5.03 is intended to comply with Code Section 409A, related regulations and any other
applicable guidance and shall be interpreted accordingly so that distributions shall be
permitted under this Section 5.03 only to the extent they comply with Code Section 409A.
	 
	5.04	 	Designation of Beneficiary
	 
	 	 	Each Participant shall file with the Administrative Committee a written designation of one
or more persons as the Beneficiary who shall be entitled to receive the amount, if any,
payable under the Plan upon his or her death pursuant to Article 5. A Participant may, from
time to time, revoke or change his or her Beneficiary designation without the consent of any
prior Beneficiary by filing a new designation with the Administrative Committee. The last
such designation received by the Administrative Committee shall be controlling; provided,
however, that no designation, or change or revocation thereof, shall

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	 	 	be effective unless received by the Administrative Committee prior to the Participant’s
death, and in no event shall it be effective as of a date prior to such receipt. If no such
Beneficiary designation is in effect at the time of a Participant’s death, or if no
designated Beneficiary survives the Participant, the Participant’s surviving spouse, if any,
shall be the Participant’s Beneficiary, otherwise the Participant’s estate shall be the
Participant’s Beneficiary, and shall receive the payment of the amount, if any, payable
under the Plan upon the Participant’s death.

Page 15

 

ARTICLE 6. AMENDMENT OR TERMINATION

	6.01	 	Right to Amend or Terminate
	 
	 	 	Notwithstanding any Plan provision to the contrary, the Corporation may, by action of the
Board, amend or terminate the Plan at any time; provided, however, that no such amendment or
termination of the Plan that reduces a Participant’s Deferral Account shall be effective
without the prior written consent of the Participants whose Deferral Accounts are reduced by
the amendment or termination. To the extent consistent with the rules relating to plan
terminations and liquidations in Treasury Regulation Section 1.409A-3(j)(4)(ix) or otherwise
consistent with Code Section 409A, the Board may provide that, without the prior written
consent of Participants, all of the Participants’ Deferral Accounts shall be distributed in
a lump sum upon termination of the Plan. Unless so distributed, in the event of a Plan
termination, the Corporation shall continue to maintain the Deferral Accounts until
distributed pursuant to the terms of the Plan and Participants shall remain 100% vested in
all amounts credited to their Deferral Accounts.

Page 16

 

ARTICLE 7. GENERAL PROVISIONS

	7.01	 	Funding and Payment of Expenses
	 
	 	 	All amounts payable in accordance with this Plan shall constitute a general unsecured
obligation of the Corporation. Such amounts, as well as any administrative costs relating to
the Plan, shall be paid out of the general assets of the Corporation. The Administrative
Committee may decide that a Participant’s Deferral Account may be reduced to reflect
allocable administrative expenses.
	 
	7.02	 	Unsecured Interest
	 
	 	 	Neither the Corporation nor the Administrative Committee in any way guarantees the
performance of the investment funds or indices a Participant may designate under Article 4.
No special or separate fund shall be established, and no segregation of assets shall be
made, to assure the payments hereunder. No Participant hereunder shall have any right,
title, or interest whatsoever in any specific assets of the Corporation. Nothing contained
in this Plan and no action taken pursuant to its provisions shall create or be construed to
create a trust of any kind or a fiduciary relationship between the Corporation and a
Participant or any other person. To the extent that any person acquires a right to receive
payments under this Plan, such right shall be no greater than the right of any unsecured
creditor of the Corporation.
	 
	7.03	 	Facility of Payment
	 
	 	 	In the event that the Administrative Committee shall find that a Participant or Beneficiary
is incompetent to care for his or her affairs or if a Beneficiary is a minor, the
Administrative Committee may direct that any benefit payment due him or her, unless claim
shall have been made therefor by a duly appointed legal representative, be paid on his or
her behalf to his or her spouse, a child, a parent or other relative, and any such payment
so made shall thereby be a complete discharge of the liability of the Corporation and the
Plan for that payment.

Page 17

 

	7.04	 	Withholding Taxes
	 
	 	 	The Corporation shall have the right to deduct from each payment to be made under the Plan
any required withholding taxes.
	 
	7.05	 	Noalienation
	 
	 	 	Subject to any applicable law and except as provided in Section 5.04, no benefit under the
Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to do so shall be void, nor shall any such
benefit be in any manner liable for or subject to garnishment, attachment, execution or
levy, or liable for or subject to the debts, contracts, liabilities, engagements or torts of
a person entitled to such benefits.
	 
	7.06	 	Construction and Governing Law

	 	(a)	 	The Plan shall be construed, regulated and administered in accordance with the
laws of the State of New York, subject to the provisions of applicable federal laws.
	 
	 	(b)	 	The masculine pronoun shall mean the feminine wherever appropriate. To the
extent any section of the Code, Treasury Regulations or the Securities Exchange Act of
1934 or any rule promulgated under the Securities Exchange Act of 1934 that is
referenced in the Plan shall be amended or superseded, such reference shall be deemed
to be to the amended or superseding section or rule.
	 
	 	(c)	 	The illegality of any particular provision of this document shall not affect
the other provisions, and the document shall be construed in all respects as if such
invalid provision were omitted.

	7.07	 	Discharge of Corporation’s Obligation
	 
	 	 	The payment by the Corporation of the benefits due under the Plan and/or any Deferral
Agreement or Prior Deferral Agreement to the Participant or his or her Beneficiary shall
discharge the Corporation’s obligation with respect thereto, and the Participant or

Page 18

 

	 	 	Beneficiary shall have no further rights under this Plan or the Deferral Agreements or Prior
Deferral Agreements upon receipt by the appropriate person of all such benefits.

	7.08	 	Successors
	 
	 	 	The Plan shall be binding upon the successors and assigns of the Corporation, whether such
succession is by purchase, merger or otherwise.

Page 19

 

ARTICLE 8. ADMINISTRATION

	8.01 Administration
	 
	 	(a)	 	The Plan shall be administered by the Administrative Committee. The
Administrative Committee shall have the exclusive responsibility and complete
discretionary authority to control the operation, management and administration of the
Plan, with all powers necessary to enable it properly to carry out such
responsibilities, including, but not limited to, the power to interpret the Plan and
any related documents, to establish procedures for making any elections called for
under the Plan, to make factual determinations regarding any and all matters arising
under the Plan, including, but not limited to, the right to determine eligibility for
benefits, the right to construe the terms of the Plan, the right to remedy possible
ambiguities, inequities, inconsistencies or omissions, and the right to resolve all
interpretive, equitable or other questions arising under the Plan.
	 
	 	(b)	 	The Administrative Committee may delegate all or part of its administrative
duties to one or more persons, whether or not such person or persons are members of the
Administrative Committee or employees of the Corporation. The Administrative Committee
(and, to the extent consistent with the scope of delegated administrative authority,
the person or persons delegated authority hereunder) may engage agents and
representatives, including recordkeepers and legal counsel, in connection with the
administration of the Plan. To the extent permitted by law, the Administrative
Committee and the person or persons delegated administrative authority under the Plan
shall be indemnified by the Corporation and held harmless against any claims and the
expenses of defending against such claims, resulting from any action or conduct
relating to the administration of the Plan, except claims arising from gross
negligence, willful neglect or willful misconduct.
	 
	 	(c)	 	It is the intent of the Corporation that the Plan complies with Code Section
409A, related regulations and other applicable guidance promulgated with respect
thereto and the provisions of the Plan shall be interpreted to be consistent therewith.
Without limiting the foregoing, a Participant shall not be deemed to have

Page 20

 

	 	 	experienced
a Retirement until the Participant has had a “separation from service,” as that term
is used in Code Section 409A(a)(2)(A)(i) and defined in related regulations or other
applicable guidance.

Page 21exv10w15

Exhibit 10.15

Exelis Inc.

Enhanced Severance Pay Plan

1. Purpose

     The purpose of this Exelis Inc. Enhanced Severance Pay Plan (“Plan”) is to assist in
occupational transition by providing Severance Benefits, as defined herein, for employees covered
by this Plan whose employment is terminated under conditions set forth in this Plan.

     The Plan first became effective as of October 31, 2011 following the spin-off of Exelis Inc.
from ITT Corporation (the “Predecessor Corporation”) on October 31, 2011. The Predecessor
Corporation maintained a similar plan prior to the spin-off (the “Predecessor Plan”), and the Plan
was created to continue service accruals under the Predecessor Plan. The Plan shall remain in
effect as provided in Section 9 hereof, and covered employees shall receive full credit for their
service and participation with the Predecessor Corporation as provided in Section 5 hereof.

2. Covered Employees

     Covered employees under this Plan (“Employees”) are active full-time, regular salaried
employees of Exelis Inc. (“Exelis”) and of any subsidiary company (“Exelis Subsidiary”) (including
Employees who are short term disabled as of a Potential Acceleration event within the meaning of
the Company’s short term disability benefit plans) (other than Employees on periodic severance as
of a Potential Acceleration Event) who are or were, at any time within the two year period
immediately preceding the Employees’ termination of employment (other than executives covered by
the Exelis Inc. Special Senior Executive Severance Pay Plan), United States or Canadian citizens or
who are employed in the United States or Canada, whose primary employment location is at Exelis
Inc. Headquarters (currently in McLean, Virginia), and such other employees of the Company who
shall be designated as covered employees thereunder by the Chief Executive or the Senior Vice
President, Director-Human Resources of Exelis or a designee of such officers (“Authorized Officers
or Designees”). No person who is employed on a temporary, occasional or seasonal basis is eligible
under this Plan.

     After the occurrence of an Acceleration Event, the terms “Exelis”, “Exelis Subsidiary” and
“Company” as used herein shall also include, respectively and as the context requires, any
successor company to Exelis or any successor company to any Exelis Subsidiary and any affiliate of
any such successor company.

3. Definitions

     An “Acceleration Event” shall occur if (i) a report on Schedule 13D shall be filed with the
Securities and Exchange Commission pursuant to Section 13(d) of the Securities Exchange Act of 1934
(the “Act”) disclosing that any person (within the meaning of Section 13(d) of the Act), other than
Exelis or a subsidiary of Exelis or any employee benefit plan sponsored by

 

 

Exelis or a subsidiary of Exelis, is the beneficial owner directly or indirectly of twenty
percent (20%) or more of the outstanding Common Stock $1 par value, of Exelis (the “Stock”); (ii)
any person (within the meaning of Section 13(d) of the Act), other than Exelis or a subsidiary of
Exelis, or any employee benefit plan sponsored by Exelis or a subsidiary of Exelis, shall purchase
shares pursuant to a tender offer or exchange offer to acquire any Stock of Exelis (or securities
convertible into Stock) for cash, securities or any other consideration, provided that after
consummation of the offer, the person in question is the beneficial owner (as such term is defined
in Rule 13d-3 under the Act), directly or indirectly, of twenty percent (20%) or more of the
outstanding Stock of Exelis (calculated as provided in paragraph (d) of Rule 13d-3 under the Act in
the case of rights to acquire Stock); (iii) the consummation of (A) any consolidation, business
combination or merger involving Exelis, other than a consolidation, business combination or merger
involving Exelis in which holders of Stock immediately prior to the consolidation, business
combination or merger (x) hold fifty percent (50%) or more of the combined voting power of Exelis
(or the corporation resulting from the merger or consolidation or the parent of such corporation)
after the merger and (y) have the same proportionate ownership of common stock of Exelis (or the
corporation resulting from the merger or consolidation or the parent of such corporation), relative
to other holders of Stock immediately prior to the merger, business combination or consolidation,
immediately after the merger as immediately before, or (B) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or substantially all the
assets of Exelis, (iv) there shall have been a change in a majority of the members of the Board of
Directors of Exelis within a 12-month period unless the election or nomination for election by
Exelis’s stockholders of each new director during such 12-month period was approved by the vote of
two-thirds of the directors then still in office who (x) were directors at the beginning of such
12-month period or (y) whose nomination for election or election as directors was recommended or
approved by a majority of the directors who where directors at the beginning of such 12-month
period or (v) any person (within the meaning of Section 13(d) of the Act) (other than Exelis or any
subsidiary of Exelis or any employee benefit plan (or related trust) sponsored by Exelis or a
subsidiary of Exelis) becomes the beneficial owner (as such term is defined in Rule 13d-3 under the
Act) of twenty percent (20%) or more of the Stock.

     “Cause” shall mean action by the Employee involving willful malfeasance or gross negligence or
the Employee’s failure to act involving material nonfeasance that would tend to have a materially
adverse effect on the Company. No act or omission on the part of the Employee shall be considered
“willful” unless it is done or omitted in bad faith or without reasonable belief that the action or
omission was in the best interests of the Company.

     “Company” shall mean Exelis Inc. (“Exelis”) and of any subsidiary company (“Exelis
Subsidiary”), collectively or individually as the context requires “Company”; provided, however,
that for purposes of service under the Predecessor Plan, Company shall include the Predecessor
Corporation.

     “Enhanced Severance Period” shall mean the period, expressed in weeks, equal to the sum of (x)
two times the normal severance pay or termination pay period of weeks for the Employee (the “Normal
Severance Period”), determined as if the Employee were an employee of the same grade, and having
the same years of service, covered by and eligible for the severance pay or termination pay plans
or policies at Exelis Corporate Headquarters, McLean Virginia, as

2

 

in effect immediately preceding an Acceleration Event and (y) four (4) weeks (in lieu of
notice of termination), provided that the Enhanced Severance Period shall not exceed 108 weeks and
shall not be less than the Minimum Severance Period.

     “Enhanced Week’s Pay” shall mean the sum of (x) the current annual base salary rate paid or in
effect with respect to the Employee at any time of Employee’s termination of employment and (y) the
current annual bonus or service recognition award paid or awarded to the Employee in respect of
either (i) an Acceleration Event or (ii) the Employee’s termination of employment, including, among
the bonuses and service recognition awards taken into account for this purpose, any bonus or
service recognition award paid or awarded by reason of an Acceleration Event, without regard to
whether such bonus or service recognition award is paid during or after an Acceleration Event,
divided by 52 weeks.

     “Good Reason” shall mean (i) without the Employee’s express written consent and excluding for
this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company or its affiliates within 30 days after receipt of notice thereof given by
the Employee, (A) a reduction in the Employee’s annual base compensation (whether or not deferred),
(B) the assignment to the Employee of any duties inconsistent in any material respect with the
Employee’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities, or (C) any other action by the Company or its affiliates which results
in a material diminution in such position, authority, duties or responsibilities; (ii) without the
Employee’s express written consent, the Company’s requiring the Employee’s work location to be
other than within twenty-five (25) miles of the location where such Employee was principally
working immediately prior to the Acceleration Event; or (iii) any failure by the Company to obtain
the express written assumption of this Plan from any successor to the Company; provided that “Good
Reason” shall cease to exist for an event on the 90th day following the later of its occurrence or
the Employee’s knowledge thereof, unless the Employee has given the Company notice thereof prior to
such date.

     “Minimum Severance Period” shall mean (i) with respect to Employees with less than twenty (20)
years of service with the Company, twenty-six (26) weeks, (ii) with respect to Employees with
between twenty (20) and twenty-five (25) years of service with the Company, 52 weeks, (iii) with
respect to Employees with greater than twenty-five (25) years of service with the Company but less
than or equal to thirty (30) years of service with the Company, seventy-eight (78) weeks and (iv)
with respect to Employees with greater than thirty (30) years of service with the Company, one
hundred and four (104) weeks. For purposes hereof, “years of service” shall have the same meaning
as in the termination pay plans or policies at Exelis Corporate Headquarters, McLean, Virginia, as
in effect immediately preceding an Acceleration Event and shall be determined as of the date of the
Employee’s termination of employment with the Company.

     “Potential Acceleration Event” shall mean any execution of an agreement, the commencement of a
tender offer or any other transaction or event that if consummated would result in an Acceleration
Event.

4. Severance Benefits Upon Termination of Employment

3

 

     If an Employee’s employment with the Company is terminated due to a Qualifying Termination, he
or she shall receive the severance benefits set forth in Section 5 hereof (“Severance Benefits”).
For purposes hereof, (i) a “Qualifying Termination” shall mean a termination of an Employee’s
employment with the Company either (x) by the Company without Cause (A) within the two (2) year
period commencing on the date of the occurrence of an Acceleration Event or (B) prior to the
occurrence of an Acceleration Event and either (1) following the public announcement of the
transaction or event which ultimately results in such Acceleration Event or (2) at the request of a
party to, or participant in, the transaction or event which ultimately results in an Acceleration
Event; or (y) by an Employee for Good Reason within the two (2) year period commencing with the
date of the occurrence of an Acceleration Event and (ii) a determination by an Employee that he or
she has “Good Reason” hereunder shall be final and binding on the parties hereto unless the Company
can establish by a preponderance of the evidence that “Good Reason” does not exist.

5. Severance Benefits

     Severance Benefits for Employees:

     • Accrued Rights — The Employee’s base salary through the date of termination of employment,
any annual bonus earned but unpaid as of the date of termination for any previously completed
fiscal year, reimbursement for any unreimbursed business expenses properly incurred by the Employee
in accordance with Company policy prior to the date of the Employee’s termination of employment and
such employee benefits, if any, as to which the Employee may be entitled under the employee benefit
plans of the Company, including without limitation, the payment of any accrued or unused vacation
under the Company’s vacation policy.

     • Severance Pay — The number of weeks of the Employee’s Enhanced Severance Period times the
Employee’s Enhanced Week’s Pay, paid in the form described in Section 6 below.

     • Benefits

     — Continued health and life insurance benefits for a period equal to the Employee’s Enhanced
Severance Period following the Employee’s termination of employment at the same cost to the
Employee, and at the same coverage levels, as provided to the Employee (and the Employee’s eligible
dependents) immediately prior to his or her termination of employment.

     — Payment of a lump sum amount (“Pension Lump Sum Amount”) equal to the difference between (i)
the total lump sum value of the Employee’s pension benefit under the Exelis Inc. Salaried
Retirement Plan and, as applicable, Exelis Inc. Excess Pension Plan IIA, Exelis Inc. Excess Pension
Plan IIB or any successor plan; provided that the benefits under such successor plan is no less
favorable than the benefits under the plans set forth herein (or corresponding pension arrangements
(i) outside the United States or (ii) as may be designated by an Authorized Officer or Designee)
(“Pension Plans”) as of the Employee’s termination of employment and (ii) the total lump sum value
of the Employee’s pension benefit under the Pension Plans after crediting to the Employee an
additional two (2) years of age and two (2) years of eligibility and benefit service and applying
the highest annual base salary rate and

4

 

highest bonus or service recognition award determined above under “Enhanced Week’s Pay” with
respect to the additional period of service so credited for purposes of determining the Final
Average Compensation under the Pension Plans. The above total lump sum values shall be determined
in the manner provided in the Excess Pension Plans of the Company for determination of lump sum
benefits upon the occurrence of an Acceleration Event, as defined in said Plans. This provision
shall apply to any Employee having a pension benefit under any of the Pension Plans as of the
Employee’s termination of employment. An example of the calculation of benefits set forth in this
paragraph is set forth on Schedule A.

     — Crediting of an additional two (2) years of age and an additional two (2) years of
eligibility service for purposes of the Company’s retiree health and retiree life insurance
benefits. This provision shall apply to any Employees covered under such benefits any time during
the three (3) year period immediately preceding the Employee’s termination of employment.

     — Payment of a lump sum amount (“Savings Plan Lump Sum Amount”) equal to the number of weeks
of the Employee’s Enhanced Severance Period times the following amount: the highest annual base
salary rate determined above under “Enhanced Week’s Pay”, divided by 52 weeks, times the highest
percentage rate of Company Contributions (not to exceed 3 1/2%) with respect to the Employee under
the Exelis Inc. Investment and Savings Plan for Salaried Employees and/or the Exelis Inc. Excess
Savings Plan (or corresponding savings plan arrangements (i) outside the United States or (ii) as
may be designated by an Authorized Officer of Designee) (“Savings Plans”) (including matching
contributions and floor contributions) at any time during the three (3) year period immediately
preceding the Employee’s termination of employment or the three (3) year period immediately
preceding the Acceleration Event. This provision shall apply to any Employee who is a member of any
of the Savings Plans at any time during such three (3) year period.

     • Outplacement — Outplacement services for one (1) year.

     With respect to the provision of benefits described above during the above period equal to the
Employee’s Enhanced Severance Period, if, for any reason at any time the Company is unable to treat
the Employee as being eligible for ongoing participation in any Company employee benefit plans in
existence immediately prior to the termination of employment of the Employee, and if, as a result
thereof, the Employee does not receive a benefit or receives a reduced benefit the Company shall
provide such benefits by making available equivalent benefits from other sources in a manner
consistent with Section 15 below.

     Notwithstanding any other provision of the Plan to the contrary, all prior service and
participation by an Employee with the Predecessor Corporation shall be credited in full towards an
Employee’s service and participation with the Company.

6. Form of Payment of Severance Pay and Lump Sum Payments

     Severance Pay shall be paid in cash, in non-discounted equal periodic installment payments
corresponding to the frequency and duration of the severance payments that the Employee would have
been entitled to receive under the Normal Severance Period. The Pension

5

 

Lump Sum Amount and the Savings Plan Lump Sum Amount shall be paid in cash within thirty (30)
calendar days after the date the employment of the Employee terminates.

7. Termination of Employment — Other

     The Severance Benefits shall only be payable upon an Employee’s termination of employment due
to a Qualifying Termination; provided, that if, following the occurrence of an Acceleration Event,
an Employee is terminated due to the Employee’s death or disability (as defined in the long-term
disability plan in which the Employee is entitled to participate (whether or not the Employee
voluntarily participates in such plan)) and, at the time of such termination, the Employee had
grounds to resign with Good Reason, such termination of employment shall be deemed to be a
Qualifying Termination.

8. Administration of Plan

     This Plan shall be administered by Exelis, who 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 Exelis shall be final, conclusive and binding on all parties affected thereby.

     Notwithstanding the preceding paragraph, following an Acceleration Event, any controversy or
claim arising out of or relating to this Plan, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association under its Commercial Arbitration
Rules and the entire cost thereof shall be borne by the Company. The location of the arbitration
proceedings shall be reasonably acceptable to the Employee. Judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. The Company shall pay all
legal fees, costs of litigation, prejudgment interest, and other expenses which are incurred in
good faith by the Employee as a result of the Company’s refusal to provide any of the Severance
Benefits to which the Employee becomes entitled under this Plan, or as a result of the Company’s
(or any third party’s) contesting the validity, enforceability, or interpretation of this Plan, or
as a result of any conflict between the Employee and the Company pertaining to this Plan. The
Company shall pay such fees and expenses from the general assets of the Company.

9. Termination or Amendment

     Exelis may terminate or amend this Plan (“Plan Change”) at any time except, that following the
occurrence of (i) an Acceleration Event or (ii) a Potential Acceleration Event, no Plan Change that
would adversely affect any Employee may be made without the prior written consent of such Employee
affected thereby; provided, however, that (ii) above shall cease to apply if such Potential
Acceleration Event does not result in the occurrence of an Acceleration Event.

10. Offset

6

 

     Any Severance Benefits provided to an Employee under this Plan shall be offset in a manner
consistent with Section 15 by reducing (x) any Severance Pay hereunder by any severance pay, salary
continuation pay, termination pay or similar pay or allowance and (y) any other Severance Benefits
hereunder by corresponding employee benefits, or outplacement services, which the Employee receives
or is entitled to receive, (i) pursuant to any other Company policy, practice program or
arrangement, (ii) pursuant to any Company employment agreement or other agreement with the Company,
or (iii) by virtue of any law, custom or practice excluding, however, any unemployment compensation
in the United States, unless the Employee voluntarily expressly waives (which the Employee shall
have the exclusive right to do) in writing any such respective entitlement.

11. Excise Tax

     In the event that it shall be determined that any Payment would constitute an “excess
parachute payment” within the meaning of Section 280G of the Code, then the aggregate of all
Payments shall be reduced so that the Present Value of the aggregate of all Payments does not
exceed the Safe Harbor Amount; provided, however, that no such reduction shall be effected, if the
Net After-tax Benefit to Employee of receiving all of the Payments exceeds the Net After-tax
Benefit to Employee resulting from having such Payments so reduced. In the event a reduction is
required pursuant hereto, the order of reduction shall be first all cash payments on a pro rata
basis, then any equity compensation on a pro rata basis, and lastly medical and dental coverage.

     For purposes of this Section 11, the following terms have the following meanings:

     (i) “Net After-tax Benefit” shall mean the Present Value of a Payment net of all federal state
and local income, employment and excise taxes imposed on Employee with respect thereto, determined
by applying the highest marginal rate(s) applicable to an individual for Employee’s taxable year in
which the Change in Control occurs.

     (ii) “Payment” means any payment or distribution or provision of benefits by the Company to or
for the benefit of Employee, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any reductions required
by this Section 11.

     (iii) “Present Value” shall mean such value determined in accordance with Section 280G(d)(4)
of the Code.

     (iv) “Safe Harbor Amount” shall be an amount expressed in Present Value which maximizes the
aggregate Present Value of Payments without causing any Payment to be subject to excise tax under
Section 4999 of the Code or the deduction limitation of Section 280G of the Code.

     All determinations required to be made under this Section 11, including whether and when a
reduction is required and the amount of such reduction and the assumptions to be utilized in
arriving at such determination, shall be made by a nationally recognized accounting firm mutually
agreed to by the Employee and the Company (the “Accounting Firm”) which shall provide detailed
supporting calculations both to the Company and the Employee within ten (10) business days of the
receipt of notice from the Employee that there has been a Payment, or such

7

 

earlier time as is requested by the Company; provided that for purposes of determining the
amount of any reduction, the Employee shall be deemed to pay federal income tax at the highest
marginal rates applicable to individuals in the calendar year in which any such

     All fees and expenses of the Accounting Firm shall be borne solely by the Company. If the
Accounting Firm determines that no excise tax is payable by the Employee, it shall so indicate to
the Employee in writing. Any determination by the Accounting Firm shall be binding upon the Company
and the Employee.

12. Miscellaneous

     The Employee shall not be entitled to any notice of termination or pay in lieu thereof except
as included as part of Severance Pay as provided herein.

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

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

     If an Employee should die while any amount is still payable to the Employee hereunder had the
Employee continued to live, all such amounts shall be paid in accordance with this Plan to the
Employee’s designated heirs or, in the absence of such designation, to the Employee’s estate.

     The numbered 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.

     If, for any reason, any one or more of the provisions or part of a provision contained in this
Plan shall be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a provision of this
Plan not held so invalid, illegal or unenforceable, and each other provision or part of a provision
shall to the full extent consistent with law remain in full force and effect.

     The Plan shall be governed by and construed in accordance with the laws of the State of New
York without regard to the conflicts of laws provisions thereof.

     The Plan shall be binding on all successors and assigns of the Exelis and an Employee.

13. Notices

     Any notice and all other communication provided for in this Plan shall be in writing and shall
be deemed to have been duly given when delivered by hand or overnight courier or three days after
it has been mailed by United States registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth below, or to such other address as either

8

 

party may have furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

If to the Company:

Exelis Inc.

1650 Tysons Boulevard, Suite 1700

McLean, Virginia 22102

Attention: General Counsel

If to Employee:

To the most recent address of Employee set forth in the personnel records of Exelis.

14. Adoption Date

     This Plan was initially adopted by Exelis on October 31, 2011 (“Adoption Date”) and does not
apply to any termination of employment which occurred or which was communicated to the Employee
prior to the Adoption Date.

15. Section 409A

     This Plan is intended to comply with Section 409A of the Code and will be interpreted in a
manner intended to comply with Section 409A of the Code. Notwithstanding anything herein to the
contrary, (i) if at the time of the Employee’s termination of employment with the Company the
Employee 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
Employee) until the date that is six months following the Employee’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 Employee 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). 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 Employees 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 Employees with respect thereto.

9

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