Document:

exv10w10

Exhibit 10.10

Exelis Inc. Annual Incentive Plan For Executive Officers

1. Purpose

     The purpose of this Exelis Inc. Annual Incentive Plan for Executive Officers is to provide
incentive compensation in the form of a cash award to executive officers of Exelis Inc. (the
“Company”) for achieving specific pre-established performance objectives and to continue to
motivate participating executive officers to achieve their business goals, while tying a portion of
their compensation to measures affecting shareholder value; provided, however, that for purposes of
grants made under the Predecessor Plan, the term “Company” shall include the ITT Corporation (the
“Predecessor Corporation”) as the original grantor. The Incentive Plan seeks to enable the Company
to continue to be competitive in its ability to attract and retain executive officers of the
highest caliber.

     The Exelis Inc. Annual Incentive Plan (the “Incentive Plan”) first became effective as of
October 31, 2011 following the spin-off of Exelis Inc. from the Predecessor Corporation on October
31, 2011; provided, however, that for purposes of grants made under the Predecessor Plan, the term
“Incentive Plan” shall include shall include the Predecessor Plan as it existed at the time of the
grant. The Predecessor Corporation maintained a similar plan prior to the spin-off (the
“Predecessor Plan”), and the Incentive Plan was created to govern the awards under the Predecessor
Plan, as revised to reflect the spin-off from the Predecessor Corporation. The Incentive Plan
shall remain in effect as provided in Article IX hereof, and participants shall receive full credit
for their service and participation with the Predecessor Corporation as provided in Article IX
hereof.

     It is intended that compensation payable under the Incentive Plan will qualify as
“performance-based compensation,” within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”) and regulations promulgated thereunder, if such qualification is
desired.

2. Plan Administration

     The Compensation and Personnel Committee (the “Committee”) of the Board of Directors (the
“Board”) of the Company, as constituted by the Board from time to time, shall be comprised
completely of “outside directors” as defined under Section 162(m) of the Code.

     The Committee shall have full power and authority to administer, construe and interpret the
provisions of the Incentive Plan and to adopt and amend administrative rules and regulations,
agreements, guidelines and instruments for the administration of the Incentive Plan and for the
conduct of its business as the Committee considers appropriate.

     Except with respect to matters which under Section 162 (m) of the Code are required to be
determined in the sole and absolute discretion of the Committee, the Committee shall have

 

 

full power, to the extent permitted by law, to delegate its authority to any officer or
employee of the Company to administer and interpret the procedural aspects of the Incentive Plan,
subject to the terms of the Incentive Plan, including adopting and enforcing rules to decide
procedural and administrative issues.

     The Committee may rely on opinions, reports or statements of officers or employees of the
Company and of counsel to the Company (inside or retained counsel), public accountants and other
professional or expert persons.

     The Board reserves the right to amend or terminate the Incentive Plan in whole or in part at
any time; provided, however, that except as necessary to maintain an outstanding incentive award’s
qualification as performance-based compensation under Section 162(m) of the Code
(“Performance-Based Compensation”), no amendments shall adversely affect or impair the rights of
any participant that have previously accrued hereunder, without the written consent of the
participant. Unless otherwise prohibited by applicable law, any amendment required to cause an
incentive award to qualify as Performance-Based Compensation may be made by the Committee. No
amendment to the Incentive Plan may be made to alter the class of individuals who are eligible to
participate in the Incentive Plan, the performance criteria specified in Section 4 hereof or the
maximum incentive award payable to any participant without shareholder approval unless shareholder
approval of the amendment is not required in order for incentive awards paid to participants to
constitute Performance-Based Compensation.

     No member of the Committee shall be liable for any action taken or omitted to be taken or for
any determination made by him or her in good faith with respect to the Incentive Plan, and the
Company shall indemnify and hold harmless each member of the Committee against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a claim with the
approval of the Committee) arising out of any act or omission in connection with the administration
or interpretation of the Incentive Plan, unless arising out of such person’s own fraud or bad
faith.

3. Eligible Executives

     Executive officers of the Company and its subsidiaries, as defined by the Securities Exchange
Act of 1934, Rule 3b-7, as that definition may be amended from time to time, shall be eligible to
participate in the Incentive Plan. The Committee shall select from all eligible executive officers,
those to whom incentive awards shall be granted under the Incentive Plan.

4. Plan Year, Performance Periods, Performance Measures and Performance Targets

     Each fiscal year of the Incentive Plan (the “Plan Year”) shall begin on January 1 and end on
December 31. The performance period (the “Performance Period”) with respect to which incentive
awards may be payable under the Incentive Plan shall be the Plan Year unless the Committee
designates one or more different Performance Periods.

     The Committee shall establish the performance measures (the “Performance Measures”) to be used
which may include, one or more of the following criteria: (i) consolidated earnings before or after
taxes (including earnings before interest, taxes, depreciation and amortization);

2

 

(ii) net income; (iii) operating income; (iv) earnings per share; (v) book value per share;
(vi) return on shareholders’ equity; (vii) expense management; (viii) return on investment; (ix)
improvements in capital structure; (x) profitability of an identifiable business unit or product;
(xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv)
revenues or sales (including organic revenue); (xv) costs; (xvi) cash flow; (xvii) working capital
(xviii) return on assets; (xix) total shareholder return; (xx) return on invested or total capital
and (xxi) economic value added.

     In addition, to the extent consistent with Section 162(m) of the Code, Performance Measures
may be based upon other objectives such as negotiating transactions or sales, implementation of
Company policy, development of long-term business goals or strategic plans, negotiation of
significant corporate transactions, meeting specified market penetration goals, productivity
measures, geographic business expansion goals, cost targets, customer satisfaction or employee
satisfaction goals, goals relating to merger synergies, management of employment practices and
employee benefits, or supervision of litigation and information technology, and goals relating to
acquisitions or divestitures of subsidiaries and/or other affiliates or joint ventures; provided
however, that the measurement of any such Performance Measures must be objectively determinable.

     All Performance Measures shall be objectively determinable and, to the extent they are
expressed in standard accounting terms, shall be according to generally accepted accounting
principles as in existence on the date on which the applicable Performance Period is established
and without regard to any changes in such principles after such date (unless the modification of a
Performance Measure to take into account such a change is pre-established in writing at the time
the Performance Measures are established in writing by the Committee and/or the modification would
not affect the ability of the incentive award to qualify as Performance-Based Compensation).

     Notwithstanding the foregoing, incentive awards that are not intended to qualify as
Performance-Based Compensation may be based on the Performance Measures described above or such
other measures as the Committee may determine.

     The Committee shall establish the performance targets (the “Performance Targets”) to be
achieved which shall be based on one or more Performance Measures relating to the Company as a
whole or to the specific businesses of the Company, subsidiaries, operating groups, or operating
units, as determined by the Committee. Performance Targets may be established on such terms as the
Committee may determine, in its discretion, including in absolute terms, as a goal relative to
performance in prior periods, or as a goal compared to the performance of one or more comparable
companies or an index covering multiple companies. The Committee also shall establish with respect
to each incentive award an objective formula to be used in calculating the amount of incentive
award each participant shall be eligible to receive. There may be a sliding scale of payment
dependent upon the percentage levels of achievement of Performance Targets.

     The Performance Measures and Performance Targets, which may be different with respect to each
participant and each Performance Period, must be set forth in writing by the Committee within the
first ninety (90) days of the applicable Performance Period or, if sooner, prior to the time when
25 percent of the relevant Performance Period has elapsed.

3

 

5. Certification of Performance Targets and Calculation of Incentive Awards

     After the end of each Performance Period, and prior to the payment for such Performance
Period, the Committee must certify in writing the degree to which the Performance Targets for the
Performance Period were achieved, including the specific target objective or objectives and the
satisfaction of any other material terms of the incentive award. The Committee shall calculate the
amount of each participant’s incentive award for such Performance Period based upon the Performance
Measures and Performance Targets for such participant. In establishing Performance Targets and
Performance Measures and in calculating the degree of achievement thereof, the Committee may ignore
extraordinary items, property transactions, changes in accounting standards and losses or gains
arising from discontinued operations. The Committee shall have no authority or discretion to
increase the amount of any participant’s incentive award as so determined to the extent such
incentive award is intended to qualify as Performance-Based Compensation, but it may reduce the
amount or totally eliminate any such incentive award if it determines in its absolute and sole
discretion that such action is appropriate in order to reflect the participant’s performance or
unanticipated factors during the Performance Period. The Committee shall have the authority to
increase or decrease the amount of an incentive award to the extent the incentive award is not
intended to qualify as Performance-Based Compensation.

     The maximum payment that may be made with respect to incentive awards under the Plan to any
participant in any one calendar year shall be $8,000,000; provided, however, that this limitation
shall not apply with respect to any incentive award that is paid in a calendar year prior to the
year it would ordinarily be paid because of an Acceleration Event or other transaction or event
that provides for accelerated payment of an incentive award.

6. Payment of Awards

     Approved incentive awards shall be payable by the Company in cash to each participant, or to
the participant’s estate in the event of the participant’s death, as soon as practicable (and in
any event no later than 21/2 months) after the end of each Performance Period. No incentive award
that is intended to qualify as Performance-Based Compensation may be paid under the Incentive Plan
until the Committee has certified in writing that the relevant Performance Targets were achieved.
If a participant is not an employee on the last day of the Performance Period, the Committee shall
have sole discretion to determine what portion, if any, the participant shall be entitled to
receive with respect to any award for the Performance Period. The Committee shall have the
authority to adopt appropriate rules and regulations for the administration of the Incentive Plan
in such termination cases.

     The Company retains the right to deduct from any incentive awards paid under the Incentive
Plan any Federal, state, local or foreign taxes required by law to be withheld with respect to such
payment.

     Notwithstanding the above, no incentive awards shall be paid under the Incentive Plan unless
the Incentive Plan is approved by the requisite shareholders of the Company.

7. Other Terms and Conditions

4

 

     Any award made under this Incentive Plan shall be subject to the discretion of the Committee.
No person shall have any legal claim to be granted an award under the Incentive Plan and the
Committee shall have no obligation to treat participants uniformly. Except as may be otherwise
required by law, incentive awards under the Incentive Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary. Incentive awards granted under the
Incentive Plan shall be payable from the general assets of the Company, and no participant shall
have any claim with respect to any specific assets of the Company.

     Nothing contained in the Incentive Plan shall give any participant the right to continue in
the employment of the Company or affect the right of the Company to terminate the employment of a
participant.

8. Acceleration Event.

     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
the Company or a subsidiary of the Company or any employee benefit plan sponsored by the Company or
a subsidiary of the Company, is the beneficial owner directly or indirectly of twenty percent (20%)
or more of the outstanding Common Stock $1 par value, of the Company (the “Stock”); (ii) any person
(within the meaning of Section 13(d) of the Act), other than the Company or a subsidiary of the
Company, or any employee benefit plan sponsored by the Company or a subsidiary of the Company,
shall purchase shares pursuant to a tender offer or exchange offer to acquire any Stock (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 (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 the Company, other than a consolidation, business combination or
merger involving the Company 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
the Company (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 the
Company (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 the Company, (iv) there shall have been a change in a majority
of the members of the Board within a 12-month period unless the election or nomination for election
by the Company’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 were 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 the Company
or any subsidiary of the Company or any employee benefit plan

5

 

(or related trust) sponsored by the Company or a subsidiary of the Company) 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.

     Upon the occurrence of such Acceleration Event, the Performance Measures for each Performance
Period with respect to which incentive awards may be payable under the Incentive Plan shall be
deemed to be achieved at the greater of (i) the Performance Target established for such Performance
Measures or (ii) the Company’s actual achievement of such Performance Measures as of the
Acceleration Event. Payment of the incentive awards, for the full year, will be made to each
participant, in cash, within five (5) business days following such Acceleration Event.

9. Miscellaneous.

     The Incentive Plan shall be effective October 31, 2011 subject to the approval of the
requisite shareholders of the Company. Once approved, the Incentive Plan shall remain in effect
unless/until terminated by the Board; provided, however, that if an Acceleration Event has occurred
no amendment or termination shall impair the rights of any participant with respect to any prior
award.

     This Incentive Plan shall be construed and governed in accordance with the laws of the State
of New York.

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

6exv10w12

Exhibit 10.12

EXELIS INC.

EXCESS SAVINGS PLAN

Effective
as of October 31, 2011 including amendments effective as of

January 1, 2012

 

 

INTRODUCTION

The Exelis Inc. Excess Savings Plan (the “Plan”) first became effective as of October 31, 2011 (the
“Effective Date”) following the spin-off of Exelis Inc. from ITT Corporation (the “Predecessor
Corporation”) on October 31, 2011. The Predecessor Corporation maintained a similar plan, the ITT
Excess Savings Plan prior to the spin-off (the “Predecessor Plan”). Under the terms of the Benefits
and Compensation Matters Agreement, the Predecessor Corporation agreed that the spinoff of Exelis
Inc. from ITT Corporation would not trigger a separation from service for purposes of IRC Section
409A for Exelis Employees. The Plan was created as a spin-off of the Predecessor Plan and to
provide a means of restoring the contributions lost under the Exelis Salaried Investment and
Savings Plan due to the application of the limitations imposed on qualified plans by Section
401(a)(17) of the Internal Revenue Code. Effective as of January 1, 2012, the Plan is further
amended to reflect the enhanced employer contribution formula provided under the Exelis Salaried
Investment and Savings Plan (successor plan to the ITT Salaried Investment and Savings Plan) and to
cease Salary Deferrals by eligible employees effective as of January 1, 2012.

The Plan shall remain in effect as provided in Section 6.01 hereof, and Members shall be deemed to
receive full credit for their service and participation with the Predecessor Corporation as
provided in Section 3.03 hereof. Further, the Plan shall not deprive a Member 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.

The Predecessor Plan was effective as of January 1, 1987. The purpose of the Plan was to provide a
means of restoring the contributions lost under the ITT Investment and Savings Plan for Salaried
Employees due to the application of the limitations imposed on qualified plans by Section 415 of
the Internal Revenue Code.

As of January 1, 1989, the Predecessor Plan was amended to provide (i) a means for restoring, for
an employee participating in the ITT Investment and Savings Plan for Salaried Employees (the
“Savings Plan”), the matching and other employer contributions lost under said Plan due to

 

 

the application of the limitations imposed on qualified plans by Section 401(a)(17) and Section
402(g)(1) of the Internal Revenue Code (the “Code”) and (ii) a means of providing such employees
with an opportunity to defer a portion of their salary in accordance with the terms of said Plan as
hereinafter set forth.

As of January 1, 1995, the Predecessor Plan was further amended to provide a means of restoring,
for an employee participating in the ITT Investment and Savings Plan for Salaried Employees,
matching and other employer contributions lost due to the deferral of base compensation under
another nonqualified deferred compensation program. As of December 19, 1995, the Predecessor Plan
was renamed and continued as the ITT Industries Excess Savings Plan.

As of January 1, 1996, the Predecessor Plan was further amended to solely provide to individuals
who are designated as Eligible Employees under the Plan on and after January 1, 1996, a means to
restore the contributions lost under the Savings Plan due to the application of the limitations
imposed by Sections 415 and 401(a)(17) of the Code and providing such employees with an opportunity
to defer a portion of their base salary and to transfer any liabilities not attributable to such
benefits to the ITT Industries Deferred Compensation Plan. The Predecessor Plan was further
amended, effective as of (i) January 1, 1997, to provide additional optional forms of distributions
and to revise the participation requirements, (ii) July 1, 1997, to revise the eligibility
requirements to permit an Eligible Employee to participate in his first year of employment, and
(iii) September 1, 1997, to further expand the distribution options available under the Plan.

In July, 2004, the Predecessor Plan was amended and restated to make certain changes regarding the
effect of an Acceleration Event and to unify the definition of Acceleration Event with other
employee benefit plans of ITT Industries, and to make certain other technical amendments.
Effective as of July 1, 2006, the plan name was revised to the ITT Excess Savings Plan. Effective
as of January 1, 2008, the Predecessor Plan was amended to make certain administrative changes.

 

 

All benefits payable under this Plan, which is intended to constitute both an unfunded excess
benefit plan under Section 3(36) of Title I of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and a nonqualified, unfunded deferred compensation plan for a select
group of management employees under Title I of ERISA, shall be paid out of the general assets of
the Corporation. The Corporation may establish and fund a trust in order to aid it in providing
benefits due under the Plan.

 

 

EXELIS INC. EXCESS SAVINGS PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I — DEFINITIONS
	 	 	1	 
	 
	ARTICLE II — PARTICIPATION
	 	 	6	 
	2.01 Eligibility
	 	 	6	 
	2.02 Participation and Filing Requirements
	 	 	6	 
	2.03 Termination of Participation
	 	 	7	 
	 
	ARTICLE III — EXCESS SAVINGS PLAN CONTRIBUTIONS
	 	 	8	 
	3.01 Amount of Contributions
	 	 	8	 
	3.02 Investment of Accounts
	 	 	10	 
	3.03 Vesting of Accounts
	 	 	11	 
	3.04 Individual Accounts
	 	 	11	 
	3.05 Valuation of Accounts
	 	 	12	 
	 
	ARTICLE IV — PAYMENT OF CONTRIBUTIONS
	 	 	13	 
	4.01 Commencement of Payment
	 	 	13	 
	4.02 Method of Payment
	 	 	13	 
	4.03 Payment upon the Occurrence of a Change in Control
	 	 	13	 
	 
	ARTICLE V — GENERAL PROVISIONS
	 	 	14	 
	5.01 Funding
	 	 	14	 
	5.02 No Contract of Employment
	 	 	14	 
	5.03 Unsecured Interest
	 	 	14	 
	5.04 Facility of Payment
	 	 	15	 
	5.05 Withholding Taxes
	 	 	15	 
	5.06 Nonalienation
	 	 	15	 
	5.07 Transfers
	 	 	15	 
	5.08 Claims Procedure
	 	 	16	 
	5.09 Compliance
	 	 	18	 
	5.10 Acceleration of or Delay in Payments
	 	 	18	 
	5.11 Construction
	 	 	18	 
	 
	ARTICLE VI — AMENDMENT OR TERMINATION
	 	 	20	 
	6.01 Right to Terminate
	 	 	20	 
	6.02 Right to Amend
	 	 	20	 
	 
	ARTICLE VII — ADMINISTRATION
	 	 	21	 

 

 

ARTICLE I — DEFINITIONS

	1.01	 	“Acceleration Event” shall mean “Acceleration Event” as that term is defined under the
provisions of the Predecessor Plan as in effect on October 3, 2004.

	1.02	 	“Accounts” shall mean the Deferral Account, the Floor Contribution Account, Base
Contribution Account and the Matching Contribution Account.

	1.03	 	“Associated Company” shall mean any division, unit, subsidiary, or affiliate of the
Corporation which is an Associated Company as such term is defined in the Savings Plan.

	1.04	 	“Base Contribution Account” shall mean the bookkeeping account (or subaccount(s))
maintained for each Member to record all amounts credited on his behalf under Section 3.01(d)
and earnings on those amounts pursuant to Section 3.02

	1.05	 	“Beneficiary” shall mean the person or persons designated pursuant to the provisions of
the Savings Plan to receive benefits under said Savings Plan after a Member’s death.

	1.06	 	“Change in Control” shall mean a “Change in Control” as such term is defined in the
Exelis Inc. Excess Pension Plan IIA, as amended from time to time.

1.07 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

	1.08	 	“Committee” shall mean the Benefits Administration Committee under the Savings Plan.

	1.09	 	“Company” shall mean the Corporation with respect to its employees or any Participating
Corporation or Participating Division (as such terms are defined in the Savings Plan)
authorized to participate in the Plan by the Corporation, with respect to each of its
employees.

Page 1

 

	1.10	 	“Company Base Contribution Rate” shall mean the rate of Company Base Contributions (as
such term in defined under the provisions of the Savings Plan) for a particular Plan Year.

	1.11	 	“Corporation” shall mean Exelis Inc., an Indiana corporation, or any successor by merger,
purchase or otherwise.

	1.12	 	“Deferral Account” shall mean the bookkeeping account (or subaccount(s)) maintained for
each Member to record the amounts credited on his behalf under Section 3.01(a) and earnings on
those amounts pursuant to Section 3.02, and with respect to an individual who becomes a Member
of the Plan on the Effective Date and who immediately prior to the Effective Date was a member
in the Predecessor Plan, the amount deferred under Section 3.01(a) of the Predecessor Plan by
such Member adjusted as provided in Section 3.02.
	 
	1.13	 	“Effective Date” shall mean October 31, 2011.

	1.14	 	“Eligible Employee” shall mean an Employee of the Company who is eligible to participate
in the Plan as provided in Section 2.01.

1.15 “Employee” shall have the meaning set forth in the Savings Plan.

	1.16	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from
time to time.

	1.17	 	“Excess Base Contributions” shall mean the amount of contributions credited on a Member’s
behalf under Section 3.01(d).

	1.18	 	“Excess Floor Contributions” shall mean the amount of contributions credited on a
Member’s behalf under Section 3.01(c) of the Plan

Page 2 

 

	1.19	 	“Excess Matching Contributions” shall mean the amount of contributions credited on a
Member’s behalf under Section 3.01(b).

	1.20	 	“Exelis Employee” shall mean an Employee who is employed by or assigned to Exelis Inc.
following the spin-off of Exelis Inc. from the Predecessor Corporation, including former
Employees of the Predecessor Corporation who are determined by the Predecessor Corporation to
be associated with Exelis Inc.

	1.21	 	“Floor Contribution Account” shall mean the bookkeeping account (or subaccount(s))
maintained for each Member to record the amounts credited on his behalf under Section 3.01(c)
and earnings on those amounts pursuant to Section 3.02, and with respect to an individual who
becomes a Member of the Plan on the Effective Date and who immediately prior to the Effective
Date was a member in the Predecessor Plan, the amount credited on the Member’s behalf under
Section 3.01(c) of the Predecessor Plan adjusted as provided in Section 3.02.

	1.22	 	“Matching Company Contribution” shall have the meaning set forth in the Savings Plan.

	1.23	 	“Matching Contribution Account” shall mean the bookkeeping account (or subaccount(s))
maintained for each Member to record all amounts credited on his behalf under Section 3.01(b)
and earnings on those amounts pursuant to Section 3.02 and with respect to an
individual who becomes a Member of the Plan on the Effective Date and who immediately prior to
the Effective Date was a member in the Predecessor Plan, the amount credited on the Member’s
behalf under Section 3.01(b) of the Predecessor Plan adjusted as provided in Section 3.02.

	1.24	 	“Member” shall mean each Eligible Employee who participates in the Plan pursuant to
Article II and each individual who was a member in the Predecessor Plan immediately prior to
the Effective Date and had amounts transferred from the Predecessor Plan to this Plan
effective as of the Effective Date.

Page 3 

 

	1.25	 	“Plan” shall mean the Exelis Inc. Excess Savings Plan 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 Member with the
Predecessor Corporation.

1.26  “Plan Year” shall mean the calendar year.

	1.27	 	“Predecessor Plan” shall mean the ITT Excess Savings Plan as effective immediately prior
to the Effective Date.

	1.28	 	“Reporting Date” shall mean each business day on which the New York Stock Exchange is
open for business, or such other day as the Committee may determine.

	1.29	 	“Salary” shall mean (i) with respect to Plan Years beginning prior to January 1, 2012, an
Eligible Employee’s “Salary” as such term is defined in the Exelis Salaried Investment and
Savings Plan as in effect on the Effective Date disregarding any reduction required due to the
application of the Statutory Compensation Limitation and (ii) with respect to Plan Years
beginning on and after January 1, 2012, an Eligible Employee’s “Salary” as such term is
defined in the Savings Plan as in effect on and after the January 1, 2012 disregarding any
reduction required due to the application of the Statutory Compensation Limitation. Salary
shall be determined before any reduction pursuant to an Eligible Employee’s election to make
Salary Deferrals under this Plan, but after reduction for deferrals under any other
nonqualified deferred compensation program maintained by the Company.

	1.30	 	“Salary Deferrals” shall mean the amount of Salary a Member has elected to defer for a
Plan Year beginning prior to January 1, 2012 pursuant to a Salary Reduction Agreement in
accordance with the provisions of Section 3.01(a).

	1.31	 	“Salary Reduction Agreement” shall mean with respect to an individual who becomes a
Member effective as of the Effective Date and who immediately prior to the Effective

Page 4 

 

	 	 	Date was a Member in the Predecessor Plan, the completed Agreement entered into by said
Member pursuant to Section 2.02 of the Predecessor Plan under which be elected to deferred a
portion of his Salary under the provisions of Section 3.01(a) of the Predecessor Plan.

	1.32	 	“Savings” shall have the meaning set forth in the Savings Plan.

	1.33	 	“Savings Plan” shall mean the Exelis Salaried Investment and Savings Plan (formerly known
as the ITT Salaried Investment and Savings Plan) as amended from time to time.

	1.34	 	“Statutory Compensation Limitation” shall mean the limitations set forth in Section
401(a)(17) of the Code as in effect each calendar year for the Savings Plan.

	1.35	 	“Specified Employee” shall mean a “Specified Employee” as such term is defined in the
Exelis Excess Pension Plan IIA, as amended from time to time.

	1.36	 	“Termination of Employment” shall mean “Termination of Employment” as such term is
defined in the Exelis Inc. Excess Pension Plan IIA, as amended from time to time.

Page 5 

 

ARTICLE II — PARTICIPATION

2.01 Eligibility

	  	(a) 	(i)	 	 An Employee shall be an Eligible Employee as of the Effective Date
with respect to the period beginning on the Effective Date and ending on December 31,
2011 (the “2011 Plan Year”) if the Employee (A) is eligible to participate in the
Savings Plan during that period, (B) was an Eligible Employee under the terms of the
Predecessor Plan with respect to the calendar year beginning January 1, 2011 and (C)
his Salary in that calendar year exceeds the Statutory Compensation Limitation in
effect for that particular year.

	 	 	(ii)	 	Effective as of January 1, 2012, an Employee shall be an
Eligible Employee for the portion of a particular Plan Year during which (A) the
Employee is eligible to participate in the Savings Plan and (B) the Eligible
Employee’s Salary in that Plan Year exceeds the Statutory Compensation Limitation
in effect for that particular Plan Year.

	 	(b)	 	Upon reemployment by the Company, an Employee shall become an Eligible
Employee again only upon completing the eligibility requirement described in Section
2.01(a).

2.02 Participation and Filing Requirements

	 	(a)	 	Subject to the provisions of this Section, with respect to the 2011 Plan
Year, any Eligible Employee who has met the eligibility requirements of Section
2.01(a)(i) shall have Salary Deferrals credited to his Deferral Account for the 2011
Plan Year in accordance with the Salary Reduction Agreement executed by such Eligible
Employee under the provision of the Predecessor Plan with respect to the calendar year
beginning on January 1, 2012 which authorized Salary Deferrals under the Predecessor
Plan for that year in accordance with the provisions of Section 3.01(a) thereto.

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	 	(b)	 	Notwithstanding the foregoing, if a Member receives a hardship withdrawal
of elective deferrals from the Savings Plan or any other plan which is maintained by
the Company or an Associated Company and which meets the requirements of Section 401(k)
of the Code (or any successor thereof), the Member’s Salary Reduction Agreement in
effect at that time shall be cancelled. Any subsequent Salary payment which would have
been deferred pursuant to that Salary Reduction Agreement, but for the application of
this Section 2.02(b), shall be paid to the Member as if he had not entered into the
Salary Reduction Agreement.

	 	(c)	 	An Eligible Employee shall become a Member when contributions are credited
on his behalf pursuant to Article 3.

2.03 Termination of Participation

	 	(a)	 	A Member’s participation in the Plan shall terminate when the vested values
of the Member’s Accounts under the Plan are totally distributed to, or on behalf of,
the Member.

	 	(b)	 	Upon reemployment by the Company, a former Member shall become a Member
again only upon completing, subsequent to his reemployment, the eligibility and
participation requirements of Section 2.01 and 2.02, respectively.

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ARTICLE III — EXCESS SAVINGS PLAN CONTRIBUTIONS

3.01 Amount of Contributions

	 	 	For any Plan Year, the amount of contributions credited under the Plan on behalf of a Member
pursuant to this Article 3 shall be equal to the sum of the Salary Deferrals, Excess
Matching Contributions, Excess Floor Contributions and Excess Base Contributions determined
under (a), (b), (c) and (d) below:

	 	(a)	 	Salary Deferrals
	 
	 	 	 	The amount of Salary Deferrals for the period beginning on the Effective Date and
ending on December 31, 2011 (the “2011 Plan Year”) shall be equal to the designated
percentage of Salary elected by the Member in his Salary Reduction Agreement executed
under the provisions of the Predecessor Plan, provided that the allocation under the
Plan and the reduction in the Eligible Employee’s Salary corresponding to such
election shall be made only with respect to Salary that is otherwise earned and
payable to such Member during the 2011 Plan Year in excess of the Statutory
Compensation Limitation for that year.
	 
	 	 	 	Notwithstanding any Plan provision to the contrary, effective with respect to Plan
Years beginning on and after January 1, 2012, Salary Deferrals are no longer permitted
under the provision of the Plan and a Member shall not be eligible to defer any Salary
earned on and after January 1, 2012.

	 	(b)	 	Excess Matching Contributions
	 
	 	 	 	The amount of Excess Matching Contributions credited to a Member’s Matching
Contribution Account for the portion of the Plan Year beginning on the Effective Date
and ending on December 31, 2011 shall be equal to fifty (50%) percent of the Salary
Deferral to this Plan by the Member during that portion of the Plan Year and such
amount shall be credited to the Member’s Matching Contribution Account at the same
time as the Salary Deferral to which they relate.

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	 	 	 	With respect to Plan Years commencing on and after January 1, 2012, the amount of
Excess Matching Contributions credited for each particular Plan Year to the Matching
Contribution Account of Member who is eligible in that year for Company Matching
Contributions (as such term is defined in the Savings Plan) shall be equal to three
and one-half percent (3.5%) of the portion of such Eligible Employee’s Salary in that
particular Plan Year that exceeds the Statutory Compensation Limitation for that year.
	 
	 	 	 	For avoidance of doubt, an Excess Matching Contribution shall only be credited to a
Member’s Matching Contribution Account with respect to a Plan Year beginning on or
after January 1, 2012, if the Member is eligible to receive Company Base Contributions
in that Plan Year.

	 	(c)	 	Excess Floor Contributions
	 
	 	 	 	With respect to the portion of the year beginning on the Effective Date
and ending on December 31, 2011 in which Salary Deferrals are made on a Member’s
behalf pursuant to paragraph (a) above, Excess Floor Contributions shall be
credited on behalf of the Member equal to the result of (i) minus (ii) as
follows:

	 	(i)	 	an amount equal to one half of one percent of the Member’s
Salary for the calendar year ending December 31, 2011, minus
	 
	 	(ii)	 	the sum of (A) the amount of Floor Company Contribution (as
that term is defined under the Savings Plan) made by the Company on behalf of the
Member under the Savings Plan for such Plan Year and allocated to the Member’s
account under the Savings Plan in such Plan Year, and (B) the amount of Excess
Floor Contributions credited on the Member’s behalf under the Predecessor Plan
for the portion of the Plan Year beginning on January 1, 2011 and ending on
October 30, 2011.

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	 	 	 	Notwithstanding the foregoing, effective as of the October 31, 2011 Excess Floor
Contributions shall not be made to the Plan with respect to a Member’s Salary
paid on and after December 31, 2011.

	 	(d)	 	Excess Base Contributions
	 
	 	 	 	With respect to Plan Years commencing on and after January 1, 2012, the amount of
Excess Base Contributions credited to a Member’s Base Contribution Account for each
particular Plan Year shall be equal to Company Base Contribution Rate applicable to
the Eligible Employee for that particular Plan Year applied to the portion of such
Eligible Employee’s Salary in that particular Plan Year that exceeds the Statutory
Compensation Limitation for that Plan Year.
	 
	 	 	 	For avoidance of doubt, an Excess Base Contribution shall only be credited to a
Member’s Base Contribution Account with respect to a Plan Year beginning on or after
January 1, 2012, if the Member is eligible to receive Company Base Contributions in
that Plan Year.

	 	(e)	 	The contributions credited on a Member’s behalf pursuant to paragraphs (a),
(b), (c) and (d) above shall be credited to a Member’s Accounts at the same time as
they would have been credited to his accounts under the Savings Plan if not for the
application of the Statutory Compensation Limitations.

	3.02	 	Investment of Accounts

	 	 	A Member shall have no choice or election with respect to the investments of his Accounts.
As of each Reporting Date, there shall be credited or debited an amount of earnings or
losses on the balance of the Member’s Accounts as of such Reporting Date which would have
been credited had the Member’s Accounts been invested in the Stable Value Fund maintained
under the Savings Plan, or such other fund as determined by the “PFTIC”, as such term is
defined in the Savings Plan.

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3.03 Vesting of Accounts

	 	(a)	 	The Member shall be fully vested in his Salary Deferrals, Excess Floor
Contributions Account and Excess Base Contributions (and earnings thereon) made on his
behalf under Section 3.01(a), (c), and (d) respectively. The Member shall vest in the
Excess Matching Contributions made on his behalf under Section 3.01(b) (and earnings
thereon) at the same rate and under the same conditions at which such contributions
would have vested under the Savings Plan had they been contributed thereunder.

	 	 	In the event the Member incurs Termination of Employment prior to
vesting in all or any part of the Excess Matching Contributions credited on his
behalf, such contributions and earnings thereon shall be forfeited and shall not
be restored in the event the Member is subsequently reemployed by the Company or
an Associated Company.

	 	(b)	 	Notwithstanding any other provision of the Plan to the contrary, all prior
service and participation by a Member with the Predecessor Corporation shall be deemed
credited in full towards a Member’s service and participation with the Company.

3.04 Individual Accounts

	 	(a)	 	The Committee shall maintain, or cause to be maintained, on the book of the
Corporation records showing the individual balances of each Member’s Accounts (or
subaccounts). At least once a year, each Member shall be furnished with a statement
setting forth the value of his Accounts.

	 	(b)	 	Accounts established under this Plan shall be hypothetical in nature and
shall be maintained for bookkeeping purposes only so that hypothetical earnings or
losses on the amounts credited on a Member’s behalf under this Plan can be credited or
debited, as the case may be.

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3.05 Valuation of Accounts

	 	(a)	 	The Committee shall value or cause to be valued each Member’s Accounts at
least quarterly. On each Reporting Date, there shall be allocated to the Accounts of
each Member the appropriate amount determined in accordance with Section 3.02.

	 	(b)	 	Whenever an event requires a determination of the value of a Member’s
Accounts, the value shall be computed as of the Reporting Date immediately preceding
the date of the event, except as otherwise specified in this Plan.

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ARTICLE IV — PAYMENT OF CONTRIBUTIONS

4.01 Commencement of Payment

	 	(a)	 	Except as otherwise provided below, a Member shall be entitled to receive
payment of his Deferral Account, his Floor Contribution Account and his Base
Contribution Account and the vested portion of his Matching Contribution Account as
determined under Section 3.03 upon his Termination of Employment with the Company and
all Associated Companies for any reason, other than death. The distribution of such
Accounts shall be made in the seventh month following the date the Member’s Termination
of Employment occurs.

	 	(b)	 	In the event of the death of a Member prior to the full payment of his
Accounts, the unpaid portion of his Accounts shall be paid to his Beneficiary in the
month following the month in which the Member’s date of death occurs.

4.02 Method of Payment

	 	 	The payment of such Member’s Deferral Account, his Floor Contribution Account and his Base
Contribution Account and the vested portion of his Matching Contribution Account shall be
made in a single lump sum payment.

4.03 Payment upon the Occurrence of a Change in Control

	 	 	Upon the occurrence of a Change in Control, all Members shall automatically receive the
balance of their Deferral Account, Floor Contribution Account and Base Contribution Account
and the vested portion of their Matching Contribution Account in a single lump sum payment.
Such lump sum payment shall be made within 90 days of the date the Change in Control occurs.
If the Member dies after such Change in Control, but before receiving such payment, it
shall be made to his Beneficiary.

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ARTICLE V — GENERAL PROVISIONS

5.01 Funding

	 	 	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.

5.02 No Contract of Employment

	 	 	The Plan is not a contract of employment and the terms of employment of any Member shall not
be affected in any way by this Plan or related instruments, except as specifically provided
therein. The establishment of the Plan shall not be construed as conferring any legal
rights upon any person for a continuation of employment, nor shall it interfere with the
rights of the Company or an Associated Company to discharge any person and to treat him
without regard to the effect which such treatment might have upon him under this Plan. Each
Member and all persons who may have or claim any right by reason of his participation shall
be bound by the terms of this Plan and all agreements entered into pursuant thereto.

5.03 Unsecured Interest

	 	 	Neither the Corporation nor the Board of Directors nor the Committee in any way guarantees
the performance of the investment fund designated under Section 3.02. No special or
separate fund shall be established, and no segregation of assets shall be made, to assure
the payments thereunder. No Member 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 Member 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.

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5.04 Facility of Payment

	 	 	In the event that the Committee shall find that a Member or Beneficiary is unable to care
for his affairs because of illness or accident or has died, or if a Beneficiary is a minor,
the Committee may direct that any benefit payment due him, unless claim shall have been made
therefore by a duly appointed legal representative, be paid on his behalf to his spouse, a
child, a parent or other blood relative, or to a person with whom he resides, and any such
payment so made shall thereby be a complete discharge of the liabilities of the Corporation
and the Plan for that payment.

5.05 Withholding Taxes

	 	 	The Company or an Associated Company shall have the right to deduct from each payment to be
made under the Plan any required withholding taxes.

5.06 Nonalienation

	 	 	Subject to any applicable law, 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.

5.07 Transfers

	 	(a)	 	In the event the Corporation (i) sells, causes the sale of, or sold the
stock or assets of any employing company in the controlled group of the Corporation to
a third party or (ii) distributes or distributed to the holders of shares of the
Corporation’s common stock all of the outstanding shares of common stock of a
subsidiary or subsidiaries of the Corporation, and, as a result of such sale or
distribution, such company or its employees are no longer eligible to participate
hereunder, the liabilities with respect to the benefits accrued under this Plan for a
Member who, as a result of such sale or distribution, is no longer eligible to
participate in this Plan, shall, at the discretion and direction of the Corporation
(and approval by the new employer), be transferred to a similar plan of such new
employer and become a

Page 15 

 

	 	 	 	liability thereunder. Upon such transfer (and acceptance thereof) the liabilities for
such transferred benefits shall become the obligation of the new employer and the
liability under this Plan for such benefits shall cease.

	 	(b)	 	Notwithstanding any Plan provision to the contrary, at the discretion and
direction of the Corporation, liabilities with respect to benefits accrued by a Member
under a plan maintained by such Member’s former employer may be transferred to this
Plan and upon such transfer become the obligation of the Corporation.

5.08 Claims Procedure

	 	(a)	 	Submission of Claims

	 	 	Claims for benefits under the Plan shall be submitted in writing to the Committee or
to an individual designated by the Committee for this purpose.

	 	(b)	 	Denial of Claim

	 	 	If any claim for benefits is wholly or partially denied, the claimant shall be given
written notice within 90 days following the date on which the claim is filed, which
notice shall set forth

	 	(i)	 	the specific reason or reasons for the denial;
	 
	 	(ii)	 	specific reference to pertinent Plan provisions on which the denial
is based;
	 
	 	(iii)	 	a description of any additional material or information necessary
for the claimant to perfect the claim and an explanation of why such material or
information is necessary; and
	 
	 	(iv)	 	an explanation of the Plan’s claim review procedure, including.
information as to the steps to be taken if the claimant wishes to submit the
claim for review and the time limits for requesting a review.

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	 	 	If special circumstances require an extension of time for processing the claim,
written notice of an extension shall be furnished to the claimant prior to the end of
the initial period of 90 days following the date on which the claim is filed. Such an
extension may not exceed a period of 90 days beyond the end of said initial period.

	 	 	If the claim has not been granted and written notice of the denial of the claim is not
furnished within 90 days following the date on which the claim is filed, the claim
shall be deemed denied for the purpose of proceeding to the claim review procedure.

     (c)  Claim Review Procedure

	 	 	The claimant or his authorized representative shall have 60 days after receipt of
written notification of denial of a claim to request a review of the denial by making
written request to the Committee, and may review pertinent documents and submit issues
and comments in writing within such 60-day period.

	 	 	Not later than 60 days after receipt of the request for review, the Committee (or the
committee designated by the Company to hear such appeals, the “Appeals Committee)
shall render and furnish to the claimant a written decision, which shall include
specific reasons for the decision and shall make specific references to pertinent Plan
provisions on which it is based. If special circumstances require an extension of
time for processing, the decision shall be rendered as soon as possible, but not later
than 120 days after receipt of the request for review, provided that written notice
and explanation of the delay are given to the claimant prior to commencement of the
extension. Such decision by the Appeals Committee shall not be subject to further
review. If a decision on review is not furnished to a claimant within the specified
time period, the claim shall be deemed to have been denied on review.

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(d) Exhaustion of Remedy

	 	 	No claimant shall institute any action or proceeding in any state or federal court of
law or equity or before any administrative tribunal or arbitrator for a claim for
benefits under the Plan until the claimant has first exhausted the procedures set
forth in this section.

5.09 Compliance

The Plan is intended to comply with the requirements of Code Section 409A and the provisions
hereof shall be interpreted in a manner that satisfies the requirements of Code Section 409A
and the regulations thereunder, and the Plan shall be operated accordingly. If any
provision of the Plan would otherwise frustrate or conflict with this intent, the provision
will be interpreted and deemed amended so as to avoid this conflict.

5.10 Acceleration of or Delay in Payments

The Committee, in its sole and absolute discretion, may elect to accelerate the time or form
of payment of a benefit owed to the Member hereunder, provided such acceleration is
permitted under Treas. Regs. Section 1.409A-3(j)(4). The Committee may also, in its sole
and absolute discretion, delay the time for payment of a benefit owed to the Member
hereunder, to the extent permitted under Treas. Regs. Section 1.409A-2(b)(7).

5.11 Construction

	 	(a)	 	The Plan is intended to constitute an unfunded deferred compensation
arrangement maintained for a select group of management or highly compensated employees
within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA, and all
rights under this Plan shall be governed by ERISA. Subject to the preceding sentence,
the Plan shall be construed, regulated and administered in accordance with the laws of
the State of New York, to the extent such laws are not superseded by applicable federal
laws.

	 	(b)	 	The masculine pronoun shall mean the feminine wherever appropriate.

Page 18 

 

	 	(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.

	 	(d)	 	The headings and subheadings in the Plan have been inserted for convenience
of reference only and are to be ignored in any construction of the provisions thereof.

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ARTICLE VI — AMENDMENT OR TERMINATION

6.01 Right to Terminate

Notwithstanding any Plan provision to the contrary, the Corporation may, by action of the
Board of Directors, terminate this Plan and the related Deferral Agreements at any time. To
the extent consistent with the rules relating to Plan terminations and liquidation in
Treasury Regulations Section 1.409A-3(j)(4)(ix) or otherwise consistent with Code Section
409A, the Corporation may provide that each Member or Beneficiary shall receive a single sum
payment in cash equal to the balance of the Member’s Accounts. The single sum payment shall
be made within 90 days following the date the Plan is terminated and shall be in lieu of any
other benefit which may be payable to the Member or Beneficiary under this Plan. Unless so
distributed, in the event of a Plan termination, the Corporation shall continue to maintain
the Deferral Account, the Floor Contribution Account and the Matching Contribution Account
and the Base Contribution Account until distributed pursuant to the terms of the Plan.

6.02 Right to Amend

The Board of Directors or its delegate may amend or modify this Plan and the related
Deferral Agreements in any way either retroactively or prospectively. However, except that
without the consent of the Member or Beneficiary, if applicable, no amendment or
modification shall reduce or diminish such person’s right to receive any benefit accrued
hereunder prior to the date of such amendment or modification, and after the occurrence of
an Acceleration Event, no modification or amendment shall be made to Sections 3.03(b) and
4.03.

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ARTICLE VII — ADMINISTRATION

7.01 Administration

	 	(a)	 	The 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
hereunder, 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. The decisions of
the Committee on all matters shall be final, binding and conclusive on all persons to
the extent permitted by law.

	 	(b)	 	To the extent permitted by law, all agents and representatives of the
Committee 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.

Page 21

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