(Mark One) | ||
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended September 30, 2011 | ||
or | ||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
State of Indiana
(State or Other Jurisdiction of Incorporation or Organization) |
45-2083813
(I.R.S. Employer Identification Number) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x | Smaller reporting company o |
1 | ||||
1 | ||||
1 | ||||
2 | ||||
3 | ||||
4 | ||||
5 | ||||
5 | ||||
7 | ||||
8 | ||||
9 | ||||
9 | ||||
10 | ||||
10 | ||||
11 | ||||
12 | ||||
13 | ||||
14 | ||||
15 | ||||
16 | ||||
19 | ||||
20 | ||||
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 22 | |||
22 | ||||
25 | ||||
29 | ||||
32 | ||||
32 | ||||
32 | ||||
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 34 | |||
ITEM 4. CONTROLS AND PROCEDURES | 34 |
(IN MILLIONS)
Three Months
Nine Months
FOR THE PERIODS ENDED SEPTEMBER 30,
2011
2010
2011
2010
$
744
$
812
$
2,111
$
2,541
785
550
2,248
1,715
1,529
1,362
4,359
4,256
510
565
1,465
1,782
688
483
1,996
1,510
150
125
429
389
24
27
72
85
1
1
5
20
156
161
392
470
1
1
1
(8
)
(13
)
(7
)
154
169
404
477
53
61
142
169
101
108
262
308
144
150
$
101
$
252
$
262
$
458
Table of Contents
(IN MILLIONS)
Three Months
Nine Months
FOR THE PERIODS ENDED SEPTEMBER 30,
2011
2010
2011
2010
$
101
$
252
$
262
$
458
10
4
12
(1
)
1
1
3
2
1
1
(3
)
(1
)
(2
)
(9
)
$
11
$
2
$
6
$
$
112
$
254
$
268
$
458
Table of Contents
(IN MILLIONS)
September 30,
December 31,
2011
2010
$
64
$
18
1,057
954
330
238
121
121
36
52
1,608
1,383
459
458
2,154
2,156
224
258
80
40
2,917
2,912
$
4,525
$
4,295
$
430
$
326
444
427
193
215
285
200
1,352
1,168
188
184
649
222
204
135
129
1,194
517
2,546
1,685
2,041
2,678
(62
)
(68
)
1,979
2,610
$
4,525
$
4,295
Table of Contents
(IN MILLIONS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2011
2010
$
262
$
458
(150
)
262
308
100
102
12
11
5
20
(17
)
(12
)
(103
)
(27
)
(91
)
9
(43
)
(2
)
104
(32
)
17
(22
)
96
134
1
2
343
491
(55
)
(72
)
14
251
(5
)
(4
)
1
(45
)
175
649
(6
)
(899
)
(662
)
6
(12
)
(250
)
(674
)
(2
)
4
46
(4
)
18
34
$
64
$
30
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Three Months
Nine Months
For the Periods Ended September 30,
2011
2010
2011
2010
$
$
4
$
6
$
12
1
1
5
20
$
1
$
5
$
11
$
32
Table of Contents
September 30,
2011
December 31,
2010
$
555
$
598
505
357
1
3
1,061
958
(4
)
(4
)
$
1,057
$
954
September 30,
2011
December 31,
2010
$
299
$
216
(11
)
(25
)
288
191
42
47
$
330
$
238
Table of Contents
C4ISR Electronics and
Information and
Systems
Technical Services
TOTAL
$
1,776
$
380
$
2,156
(2
)
(2
)
$
1,776
$
378
$
2,154
September 30, 2011
December 31, 2010
Gross
Gross
Carrying
Accumulated
Net
Carrying
Accumulated
Net
Amount
Amortization
Intangibles
Amount
Amortization
Intangibles
$
515
$
(300
)
$
215
$
513
$
(265
)
$
248
22
(14
)
8
22
(13
)
9
4
(3
)
1
4
(3
)
1
$
541
$
(317
)
$
224
$
539
$
(281
)
$
258
$
13
38
24
21
18
110
$
224
Table of Contents
September 30, 2011
December 30, 2010
$
650
$
-
(
1
)
-
$
649
$
-
September 30, 2011
December 31, 2010
Carrying
Carrying
Interest rate
Value
Fair Value
Value
Fair Value
4.25
$
250
$
254
$
$
5.55
400
406
$
650
$
660
$
$
Table of Contents
Three Months Ended September 30,
2011
2010
Other
Other
Pension
Benefits
Total
Pension
Benefits
Total
$
2
$
$
2
$
2
$
$
2
5
1
6
6
1
7
(7
)
(7
)
(7
)
(7
)
1
1
$
1
$
1
$
2
$
1
$
1
$
2
Table of Contents
Nine Months Ended September 30,
2011
2010
Other
Other
Pension
Benefits
Total
Pension
Benefits
Total
$
5
$
$
5
$
5
$
1
$
6
16
4
20
16
4
20
(22
)
(22
)
(21
)
(21
)
4
4
2
(1
)
1
1
(1
)
1
(1
)
$
4
$
3
$
7
$
3
$
3
$
6
September 30,
December 31,
2011
2010
$
2
$
(9
)
9
(64
)
(68
)
$
(62
)
$
(68
)
Table of Contents
Three Months
Nine
Months
For the periods ended September 30,
2011
2010
2011
2010
$
4
$
5
$
12
$
11
(1
)
(1
)
(2
)
$
3
$
4
$
12
$
9
$
1
$
1
$
4
$
3
1.73%
24.75%
6.5
2.93%
$
14.31
Table of Contents
Table of Contents
September 30, 2011
$
20
$
50
22
Table of Contents
Table of Contents
Three Months Ended September 30,
2011
2010
Product
Service
Total
Product
Service
Total
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
$
746
$
$
746
$
815
$
$
815
786
786
552
552
(2
)
(1
)
(3
)
(3
)
(2
)
(5
)
$
744
$
785
$
1,529
$
812
$
550
$
1,362
Nine Months Ended September 30,
2011
2010
Product
Service
Total
Product
Service
Total
Revenue
Revenue
Revenue
Revenue
Revenue
Revenue
$
2,114
$
$
2,114
$
2,547
$
$
2,547
2,250
2,250
1,718
1,718
(3
)
(2
)
(5
)
(6
)
(3
)
(9
)
$
2,111
$
2,248
$
4,359
$
2,541
$
1,715
$
4,256
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010
2011
2010
$
107
$
125
$
278
$
364
49
36
114
106
$
156
$
161
$
392
$
470
14.3%
15.3%
13.2%
14.3%
6.2%
6.5%
5.1%
6.2%
10.2%
11.8%
9.0%
11.0%
Table of Contents
September 30,
December 31,
Assets
2011
2010
$
3,202
$
3,187
1,178
983
145
125
$
4,525
$
4,295
Table of Contents
Table of Contents
Table of Contents
§
Funded orders of approximately $1.7 billion were received
during the quarter, representing 12% total growth compared to
the corresponding prior year period.
§
Total backlog (funded and unfunded) expanded to
$12.3 billion at September 30, 2011 as backlog
benefited from strong demand in our Information and Technical
Services segment, including backlog increases on our Kuwait Base
Operations and Security Support Services
(K-BOSSS)
and Afghan National Security Forces (ANSF) service contracts.
§
In connection with the Spin-off, we issued senior notes in an
aggregate principal amount of $650 from which net proceeds were
paid to ITT as part of the ITT Dividend.
Table of Contents
§
Adjusted income from continuing operations defined
as income from continuing operations, adjusted to exclude items
that include, but are not limited to significant charges or
credits that impact current results, but not related to our
ongoing operations, unusual and infrequent
non-operating
items and non-operating tax settlements or adjustments.
Table of Contents
Three Months Ended
Nine Months Ended
September 30,
September 30,
2011
2010
2011
2010
$
101
$
108
$
262
$
308
6
15
$
107
$
108
$
277
$
308
Nine Months Ended
Three Months Ended September 30,
September 30,
2011
2010
Change
2011
2010
Change
$
1,529
$
1,362
12.3
%
$
4,359
$
4,256
2.4%
1,198
1,048
14.3
%
3,461
3,292
5.1%
175
153
14.4
%
506
494
2.4%
156
161
(3.1
)%
392
470
(16.6)%
10.2
11.8%
9.0%
11.0%
1
1
1
(8)
(13)
(7)
53
61
(13.1
)%
142
169
(16.0)%
34.5%
36.1%
35.1%
35.4
%
101
108
(6.5
)%
262
308
(14.9)%
144
150
$
101
$
252
(59.9
)%
$
262
$
458
(42.8)%
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010
Change
2011
2010
Change
$
746
$
815
(8.5
)%
$
2,114
$
2,547
(17.0)%
786
552
42.4
%
2,250
1,718
31.0%
(3)
(5)
(5)
(9)
$
1,529
$
1,362
12.3
%
$
4,359
$
4,256
2.4%
Table of Contents
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010
Change
2011
2010
Change
$
510
$
565
(9.7
)%
$
1,465
$
1,782
(17.8)%
68.5
%
69.6
%
69.4
%
70.1
%
688
483
42.4
%
1,996
1,510
32.2%
87.6
%
87.8
%
88.8
%
88.0
%
150
125
20.0
%
429
389
10.3%
9.8
%
9.2
%
9.8
%
9.1
%
24
27
(11.1
)%
72
85
(15.3)%
1.6
%
2.0
%
1.7
%
2.0
%
1
1
5
20
$
1,373
$
1,201
14.3
%
$
3,967
$
3,786
4.8%
Table of Contents
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010
Change
2011
2010
Change
$
107
$
125
(14.4
)%
$
278
$
364
(23.6)%
14.3%
15.3%
13.2%
14.3
%
49
36
36.1
%
114
106
7.5%
6.2%
6.5%
5.1%
6.2
%
$
156
$
161
(3.1
)%
$
392
$
470
(16.6)%
10.2%
11.8%
9.0%
11.0
%
Table of Contents
Table of Contents
September 30,
December 30,
2011
2010
$
4.0
$
4.1
8.3
7.4
$
12.3
$
11.5
Table of Contents
Table of Contents
Nine Months Ended September 30,
2011
2010
$
343
$
491
(45
)
175
(250
)
(674
)
(2
)
$
46
$
(8
)
Table of Contents
PAYMENTS DUE BY PERIOD
LESS THAN
TOTAL
1 YEAR
1-3 YEARS
3-5 YEARS
THEREAFTER
$
650
$
$
$
250
$
400
$
276
$
17
$
66
$
66
$
127
(1)
In connection with the Spin-off, we issued senior notes in an
aggregate principal amount of $650.
(2)
Amounts represent estimate of future interest payments on
long-term debt outstanding as of the period end date.
Table of Contents
§
Economic, political and social conditions in the countries in
which we conduct our businesses;
§
Changes in U.S. or International government defense budgets;
§
Decline in consumer spending;
§
Sales and revenue mix and pricing levels;
§
Availability of adequate labor, commodities, supplies and raw
materials;
§
Interest and foreign currency exchange rate fluctuations and
changes in local government regulations;
§
Competition, industry capacity and production rates;
§
Ability of third parties, including our commercial partners,
counterparties, financial institutions and insurers, to comply
with their commitments to us;
§
Our ability to borrow or refinance our existing indebtedness and
availability of liquidity sufficient to meet our needs;
§
Changes in the value of goodwill or intangible assets;
§
Our ability to achieve stated synergies or cost savings from
acquisitions or divestitures;
§
The number of personal injury claims filed against the company
or the degree of liability;
§
Our ability to affect restructuring and cost reduction programs
and realize savings from such actions;
§
Government regulations and compliance therewith, including
compliance with and costs associated with new Dodd-Frank
legislation;
§
Changes in technology;
§
Intellectual property matters;
§
Governmental investigations;
§
Potential future postretirement benefit plan contributions and
other employment and pension matters;
§
Contingencies related to actual or alleged environmental
contamination, claims and concerns;
§
Changes in generally accepted accounting principles;
§
Other factors set forth in this
Form 10-Q
and any other filings with the Securities and exchange
commissions.
Table of Contents
Table of Contents
ITEM 1A.
RISK
FACTORS
ITEM 2.
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
ITEM 3.
DEFAULTS
UPON SENIOR SECURITIES
ITEM 4.
(REMOVED
AND RESERVED)
ITEM 5.
OTHER
INFORMATION
ITEM 6.
EXHIBITS
Table of Contents
EXELIS INC.
November 17, 2011
Chief Accounting Officer
(Principal Accounting Officer)
Table of Contents
EXHIBIT
NUMBER
DESCRIPTION
LOCATION
Amended and Restated Articles of Incorporation of Exelis
Inc.
Incorporated by reference to Exhibit 3.1 of Exelis Inc.s
Form 8-K Current Report filed on October 14, 2011 (CIK No.
1524471, File No. 1-35228).
By-laws of Exelis Inc.
Incorporated by reference to Exhibit 3.2 of Exelis Inc.s
Form 8-K Current Report filed on October 14, 2011 (CIK No.
1524471, File No. 1-35228).
Indenture, dated as of September 20, 2011, between Exelis
Inc., ITT Corporation, as initial guarantor, and Union Bank,
N.A., as trustee
Incorporated by reference to Exhibit 4.1 of ITT
Corporations Form 8-K Current Report filed on September
21, 2011 (CIK No. 216228, File No. 1-5672).
Form of Exelis Inc. 4.250% Senior Notes due 2016
Incorporated by reference to Exhibit 4.3 of ITT
Corporations Form 8-K Current Report filed on September
21, 2011 (CIK No. 216228, File No. 1-5672).
Form of Exelis Inc. 5.550% Senior Notes due 2021
Incorporated by reference to Exhibit 4.4 of ITT
Corporations Form 8-K Current Report filed on September
21, 2011 (CIK No. 216228, File No. 1-5672).
Registration Rights Agreement, dated as of September 20,
2011, between Exelis Inc., ITT Corporation and Barclays Capital
Inc., Citigroup Global Markets Inc. and J.P. Morgan
Securities LLC, as representatives of the Initial Purchasers
Incorporated by reference to Exhibit 4.7 of ITT
Corporations Form 8-K Current Report filed on September
21, 2011 (CIK No. 216228, File No. 1-5672).
Distribution Agreement, dated as of October 25, 2011, among
ITT Corporation, Exelis Inc. and Xylem Inc.
Incorporated by reference to Exhibit 10.1 of ITT
Corporations Form 10-Q Quarterly Report filed on October
28, 2011 (CIK No. 216228, File No. 1-5672).
Benefits and Compensation Matters Agreement, dated as of
October 25, 2011, among ITT Corporation, Exelis Inc. and
Xylem Inc.
Incorporated by reference to Exhibit 10.2 of ITT
Corporations Form 10-Q Quarterly Report filed on October
28, 2011 (CIK No. 216228, File No. 1-5672).
Tax Matters Agreement, dated as of October 25, 2011, among
ITT Corporation, Exelis Inc. and Xylem Inc.
Incorporated by reference to Exhibit 10.3 of ITT
Corporations Form 10-Q Quarterly Report filed on October
28, 2011 (CIK No. 216228, File No. 1-5672).
Master Transition Services Agreement, dated as of
October 25, 2011, among ITT Corporation, Exelis Inc. and
Xylem Inc.
Incorporated by reference to Exhibit 10.4 of ITT
Corporations Form 10-Q Quarterly Report filed on October
28, 2011 (CIK No. 216228, File No. 1-5672).
ITT Transitional Trademark License Agreement Exelis,
dated as of October 25, 2011, between ITT Manufacturing
Enterprises LLC and Exelis Inc.
Incorporated by reference to Exhibit 10.5 of ITT
Corporations Form 10-Q Quarterly Report filed on October
28, 2011 (CIK No. 216228, File No. 1-5672).
Table of Contents
Four-Year Competitive Advance and Revolving Credit Facility
Agreement, dated as of October 25, 2011, among Exelis Inc.,
the Lenders Named Therein, J.P. Morgan Chase Bank, N.A., as
Administrative Agent and Citibank, N.A., as Syndication Agent.
Filed herewith.
Exelis Inc. 2011 Omnibus Incentive Plan
Incorporated by reference to Exhibit 4.3 of Exelis Inc.s
Registration Statement on Form S-8 filed on October 28, 2011
(CIK No. 1524471, File No. 333-177605).
Exelis Inc. 1997 Long-Term Incentive Plan
Filed herewith.
Exelis Inc. 1997 Annual Incentive Plan
Filed herewith.
Exelis Inc. Annual Incentive Plan for Executive Officers
Filed herewith.
Exelis Salaried Investment and Savings Plan
Incorporated by reference to Exhibit 4.4 of Exelis Inc.s
Registration Statement on Form S-8 filed on October 28, 2011
(CIK No. 1524471, File No. 333-177605).
Exelis Inc. Excess Savings Plan
Filed herewith.
Exelis Inc. Deferred Compensation Plan
Incorporated by reference to Exhibit 4.5 of Exelis Inc.s
Registration Statement on Form S-8 filed on October 28, 2011
(CIK No. 1524471, File No. 333-177605).
Exelis Inc. Deferred Compensation Plan for Non-Employee Directors
Filed herewith.
Exelis Inc. Enhanced Severance Pay Plan
Filed herewith.
Exelis Inc. Special Senior Executive Severance Pay Plan
Filed herewith.
Exelis Inc. Senior Executive Severance Pay Plan
Filed herewith.
ITT Excess Pension Plan IA (formerly known as ITT Industries
Excess Pension Plan IA.). Originally effective as of
July 1, 1975. Amended and restated as of December 31,
2008.
Incorporated by reference to Exhibit 10.14 of ITT
Corporations Form 10-K for the year ended December 31,
2008 (CIK No. 216228, File No. 1-5672).
ITT Excess Pension Plan IB (formerly known as ITT Industries
Excess Pension Plan IB). Originally effective as of
January 1, 1996. Amended and restated as of
December 31, 2008.
Incorporated by reference to Exhibit 10.15 of ITT
Corporations Form 10-K for the year ended December 31,
2008 (CIK No. 216228, File No. 1-5672).
ITT Excess Pension Plan IIA (formerly known as ITT Excess
Pension Plan II, and ITT Industries Excess Pension Plan II, as
amended and restated as of July 13, 2004). Originally
effective as of January 1, 1988. Amended and restated as of
December 31, 2008.
Incorporated by reference to Exhibit 10.16 of ITT
Corporations Form 10-K for the year ended December 31,
2008 (CIK No. 216228, File No. 1-5672).
Table of Contents
ITT Excess Pension Plan IIB. Effective as of January 1,
1988. Amended and restated as of December 31, 2008.
Incorporated by reference to Exhibit 10.55 of ITT
Corporations Form 10-K for the year ended December 31,
2008 (CIK No. 216228, File No. 1-5672).
Special Retention and Employment Compensation Memorandum between
Christopher C. Bernhardt and ITT Corporation, dated
February 13, 2009
Incorporated by reference to Exhibit 10.7 of Exelis Inc.s
Registration Statement on Form 10 filed on September 26, 2011
(CIK No. 1524471, File No. 1-35228).
Special Retention and Employment Compensation Memorandum between
Christopher C. Bernhardt and ITT Corporation, dated
August 11, 2010
Incorporated by reference to Exhibit 10.8 of Exelis Inc.s
Registration Statement on Form 10 filed on September 26, 2011
(CIK No. 1524471, File No. 1-35228).
Form of Exelis Inc. 2011 Omnibus Incentive Plan 2011
Non-Qualified Stock Option Award Agreement
Founders Grant
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Non-Qualified
Stock Option Award Agreement General Grant
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Restricted Stock
Unit Agreement 2010 TSR Replacement (Stock Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Restricted Stock
Unit Agreement 2011 TSR Replacement (Stock Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Restricted Stock
Unit Agreement Founders Grant (Stock Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Restricted Stock
Unit Agreement General Grant (Stock Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan Restricted Stock
Unit Agreement General Grant (Cash Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan 2011 Restricted
Stock Unit Award Agreement Non-Employee Director
(Stock Settled)
Filed herewith.
Form of Exelis Inc. 2011 Omnibus Incentive Plan General
Restricted Stock Unit Award Agreement Non Employee
Director (Stock Settled)
Filed herewith.
Form of Indemnification Agreement
Filed herewith.
Certification pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith.
Table of Contents
Certification pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith.
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
This Exhibit is intended to be furnished in accordance with
Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to
be filed for purposes of Section 18 of the Securities Exchange
Act of 1934 or incorporated by reference into any filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except as shall be expressly set forth by specific
reference.
Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
This Exhibit is intended to be furnished in accordance with
Regulation S-K Item 601(b) (32) (ii) and shall not be deemed to
be filed for purposes of Section 18 of the Securities Exchange
Act of 1934 or incorporated by reference into any filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except as shall be expressly set forth by specific
reference.
The following materials from Exelis Inc.s Quarterly Report
on
Form 10-Q
for the quarter ended September 30, 2011, formatted in XBRL
(Extensible Business Reporting Language): (i) Condensed
Combined Income Statements, (ii) Condensed Combined
Statements of Comprehensive Income, (iii) Condensed
Combined Balance Sheets, (iv) Condensed Combined Statements
of Cash Flows and (v) Notes to Condensed Combined Financial
Statements
Submitted electronically with this report.
ARTICLE I |
||||
DEFINITIONS |
||||
SECTION 1.01. Defined Terms
|
3 | |||
SECTION 1.02. Terms Generally
|
27 | |||
SECTION 1.03. Accounting Terms; GAAP
|
28 | |||
ARTICLE II |
||||
THE CREDITS |
||||
SECTION 2.01. Commitments
|
28 | |||
SECTION 2.02. Loans
|
29 | |||
SECTION 2.03. Competitive Bid Procedure
|
31 | |||
SECTION 2.04. Revolving Borrowing Procedure
|
33 | |||
SECTION 2.05. Letters of Credit
|
33 | |||
SECTION 2.06. Conversion and Continuation of Revolving Loans
|
38 | |||
SECTION 2.07. Fees
|
39 | |||
SECTION 2.08. Repayment of Loans; Evidence of Debt
|
40 | |||
SECTION 2.09. Interest on Loans
|
41 | |||
SECTION 2.10. Default Interest
|
42 | |||
SECTION 2.11. Alternate Rate of Interest
|
42 | |||
SECTION 2.12. Termination, Reduction, Extension and Increase of Commitments
|
42 | |||
SECTION 2.13. Prepayment
|
45 | |||
SECTION 2.14. Reserve Requirements; Change in Circumstances
|
45 | |||
SECTION 2.15. Change in Legality
|
46 | |||
SECTION 2.16. Indemnity
|
47 | |||
SECTION 2.17. Pro Rata Treatment
|
48 | |||
SECTION 2.18. Sharing of Setoffs
|
48 | |||
SECTION 2.19. Payments
|
49 | |||
SECTION 2.20. Taxes
|
50 | |||
SECTION 2.21. Duty to Mitigate; Assignment of Commitments Under Certain Circumstances
|
53 | |||
SECTION 2.22. Defaulting Lenders
|
54 | |||
ARTICLE III |
||||
REPRESENTATIONS AND WARRANTIES |
||||
SECTION 3.01. Organization; Powers
|
56 | |||
SECTION 3.02. Authorization
|
56 | |||
SECTION 3.03. Enforceability
|
57 | |||
SECTION 3.04. Governmental Approvals
|
57 | |||
SECTION 3.05. Financial Statements and Projections
|
57 |
2
SECTION 3.06. Litigation; Compliance with Laws
|
57 | |||
SECTION 3.07. Federal Reserve Regulations
|
58 | |||
SECTION 3.08. Investment Company Act
|
58 | |||
SECTION 3.09. Use of Proceeds
|
58 | |||
SECTION 3.10. Full Disclosure; No Material Misstatements
|
58 | |||
SECTION 3.11. Taxes
|
59 | |||
SECTION 3.12. Employee Pension Benefit Plans
|
59 | |||
SECTION 3.13. OFAC
|
59 | |||
ARTICLE IV |
||||
CONDITIONS OF LENDING |
||||
SECTION 4.01. All Extensions of Credit
|
60 | |||
SECTION 4.02. Effective Date
|
60 | |||
SECTION 4.03. First Borrowing by Each Borrowing Subsidiary
|
63 | |||
ARTICLE V |
||||
AFFIRMATIVE COVENANTS |
||||
SECTION 5.01. Existence
|
63 | |||
SECTION 5.02. Business and Properties
|
64 | |||
SECTION 5.03. Financial Statements, Reports, etc
|
64 | |||
SECTION 5.04. Insurance
|
65 | |||
SECTION 5.05. Obligations and Taxes
|
65 | |||
SECTION 5.06. Litigation and Other Notices
|
65 | |||
SECTION 5.07. Maintaining Records; Access to Properties and Inspections
|
66 | |||
SECTION 5.08. Use of Proceeds
|
66 | |||
SECTION 5.09. Distribution Agreement and Related Agreements
|
66 | |||
ARTICLE VI |
||||
NEGATIVE COVENANTS |
||||
SECTION 6.01. Priority Indebtedness
|
66 | |||
SECTION 6.02. Liens
|
67 | |||
SECTION 6.03. Sale and Lease-Back Transactions
|
68 | |||
SECTION 6.04. Fundamental Changes
|
69 | |||
SECTION 6.05. Restrictive Agreements
|
69 | |||
SECTION 6.06. Leverage Ratio
|
70 | |||
ARTICLE VII |
||||
EVENTS OF DEFAULT |
3
ARTICLE VIII |
||||
GUARANTEE |
||||
ARTICLE IX |
||||
THE ADMINISTRATIVE AGENT |
||||
ARTICLE X |
||||
MISCELLANEOUS |
||||
SECTION 10.01. Notices
|
77 | |||
SECTION 10.02. Survival of Agreement
|
78 | |||
SECTION 10.03. Binding Effect
|
78 | |||
SECTION 10.04. Successors and Assigns
|
78 | |||
SECTION 10.05. Expenses; Indemnity
|
82 | |||
SECTION 10.06. APPLICABLE LAW
|
83 | |||
SECTION 10.07. Waivers; Amendment
|
83 | |||
SECTION 10.08. Entire Agreement
|
84 | |||
SECTION 10.09. Severability
|
84 | |||
SECTION 10.10. Counterparts
|
84 | |||
SECTION 10.11. Headings
|
84 | |||
SECTION 10.12. Right of Setoff
|
84 | |||
SECTION 10.13. JURISDICTION; CONSENT TO SERVICE OF PROCESS
|
84 | |||
SECTION 10.14. WAIVER OF JURY TRIAL
|
85 | |||
SECTION 10.15. Borrowing Subsidiaries
|
86 | |||
SECTION 10.16. Conversion of Currencies
|
86 | |||
SECTION 10.17. USA PATRIOT Act
|
87 | |||
SECTION 10.18. No Fiduciary Relationship
|
87 | |||
SECTION 10.19. Non-Public Information
|
87 |
4
EXHIBITS
|
||
|
||
Exhibit A-1
|
Form of Competitive Bid Request | |
Exhibit A-2
|
Form of Notice of Competitive Bid Request | |
Exhibit A-3
|
Form of Competitive Bid | |
Exhibit A-4
|
Form of Competitive Bid Accept/Reject Letter | |
Exhibit A-5
|
Form of Revolving Borrowing Request | |
Exhibit B
|
Form of Assignment and Assumption | |
Exhibit C-1
|
Form of Opinion of Dewey & LeBoeuf, Counsel for Exelis Inc. | |
Exhibit C-2
|
Form of Opinion of Ann D. Davidson, General Counsel of Exelis Inc. | |
Exhibit D-1
|
Form of Borrowing Subsidiary Agreement | |
Exhibit D-2
|
Form of Borrowing Subsidiary Termination | |
Exhibit E
|
Form of Issuing Bank Agreement | |
Exhibit F
|
Form of Note | |
Exhibit G
|
Form of US Tax Certificate | |
|
||
SCHEDULES
|
||
|
||
Schedule 2.01
|
Commitments | |
Schedule 6.01
|
Existing Indebtedness | |
Schedule 6.02
|
Existing Liens | |
Schedule 6.05
|
Existing Restrictive Agreements |
2
4
Eurocurrency | Alternate Base Rate | Facility Fee | L/C Participation | |||||||||||||
Spread | Spread | Percentage | Fee Percentage | |||||||||||||
Category 1
|
||||||||||||||||
A3 or higher by Moodys;
|
0.900 | % | 0.000 | % | 0.1000 | % | 0.900 | % | ||||||||
A- or higher by S&P;
|
||||||||||||||||
A- or higher by Fitch
|
||||||||||||||||
Category 2
|
||||||||||||||||
Baa1 or higher by Moodys;
|
1.000 | % | 0.000 | % | 0.1250 | % | 1.000 | % | ||||||||
BBB+ or higher by S&P;
|
||||||||||||||||
BBB+ or higher by Fitch
|
||||||||||||||||
Category 3
|
||||||||||||||||
Baa2 by Moodys;
|
1.100 | % | 0.100 | % | 0.150 | % | 1.100 | % | ||||||||
BBB by S&P;
|
||||||||||||||||
BBB by Fitch
|
||||||||||||||||
Category 4
|
||||||||||||||||
Baa3 by Moodys;
|
1.300 | % | 0.300 | % | 0.200 | % | 1.300 | % | ||||||||
BBB- by S&P;
|
||||||||||||||||
BBB- by Fitch
|
||||||||||||||||
Category 5
|
||||||||||||||||
Lower than Baa3 by Moodys;
|
1.475 | % | 0.475 | % | 0.275 | % | 1.475 | % | ||||||||
Lower than BBB- by S&P;
|
||||||||||||||||
Lower than BBB- by Fitch
|
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
EXELIS INC., as Borrower,
|
||||
by | /s/ Janet McGregor | |||
Name: | Janet McGregor | |||
Title: | Treasurer | |||
JPMORGAN CHASE BANK, N.A.,
individually and as Administrative Agent, |
||||
by | /s/ Robert D. Bryant | |||
Name: | Robert D. Bryant | |||
Title: | Vice President | |||
CITIBANK, N.A.,
|
||||
by | /s/ Andrew Sidford | |||
Name: | Andrew Sidford | |||
Title: | Vice President | |||
SIGNATURE PAGE TO EXELIS INC.
CREDIT AGREEMENT DATED AS OF OCTOBER 25, 2011
Lender:
,
|
||||
by | ||||
Name: | ||||
Title: | ||||
For any Lender requiring
a second signature line:
|
||||
by | ||||
Name: | ||||
Title: | ||||
Lender
Commitment
$
65,000,000
$
65,000,000
$
65,000,000
$
65,000,000
$
50,000,000
$
50,000,000
$
50,000,000
$
50,000,000
$
30,000,000
$
30,000,000
$
30,000,000
$
30,000,000
$
20,000,000
$
600,000,000
(A) Date of Competitive Borrowing
|
||||
(which is a Business Day)
|
||||
|
||||
|
||||
(B) Currency of Competitive Borrowing
1
|
||||
|
||||
|
||||
(C) Principal amount
|
||||
of Competitive Borrowing
2
|
||||
|
||||
|
||||
(D) Interest rate basis
3
|
||||
|
||||
|
||||
(E) Interest Period and the
|
||||
last day thereof
4
|
||||
|
1 | Dollar or a Non-US Currency. | |
2 | An integral multiple of 1,000,000 units of the applicable currency with a Dollar Equivalent of at least $10,000,000 but not greater than the Total Commitment then available. | |
3 | A Eurocurrency Borrowing or a Fixed Rate Borrowing. | |
4 | Shall be subject to the definition of the term Interest Period and end not later than the Maturity Date. |
Very truly yours,
[NAME OF BORROWER], |
||||
by | ||||
Name: | ||||
Title: | [Financial Officer] | |||
2
(A) Date of Competitive Borrowing
|
||||
|
||||
|
||||
(B) Currency of Competitive Borrowing
|
||||
|
||||
|
||||
(C) Principal amount of
Competitive Borrowing
|
||||
|
||||
|
||||
(D) Interest rate basis
|
||||
|
||||
|
||||
(E) Interest Period and the
last day thereof.
|
||||
|
1 | The Competitive Bid must be received by the Administrative Agent (i) in the case of Eurocurrency Competitive Loans, not later than 9:30 a.m., New York City time, three Business Days before a proposed Competitive Borrowing, and (ii) in the case of Fixed Rate Loans, not later than 9:30 a.m., New York City time, on the day of a proposed Competitive Borrowing. |
Very truly yours,
JPMORGAN CHASE BANK, N.A., as Administrative Agent, |
||||
by | ||||
Name: | ||||
Title: | ||||
(A) Principal Amount
1
|
||||
|
||||
|
||||
(B) Competitive Bid Rate
2
|
||||
|
||||
|
||||
(C) Interest Period and last
|
||||
day thereof
|
||||
|
1 | An integral multiple of 1,000,000 units of the applicable currency and may be equal to the entire principal amount of the Competitive Borrowing requested. Multiple bids will be accepted by the Administrative Agent. | |
2 | i.e ., LIBO Rate + or - %, in the case of Eurocurrency Competitive Loans, or %, in the case of Fixed Rate Loans. |
Very truly yours,
[NAME OF LENDER], |
||||
by | ||||
Name: | ||||
Title: | ||||
2
Principal Amount | Currency | Fixed Rate/Margin | Lender | |||
|
[%]/[+/-. %] |
Principal Amount | Currency | Fixed Rate/Margin | Lender | |||
|
[%]/[+/-. %] |
Very truly yours,
[NAME OF BORROWER], |
||||
by | ||||
Name: | ||||
Title: | ||||
(A) Date of Revolving Borrowing
|
||||
(which is a Business Day)
|
||||
|
||||
|
||||
(B) Principal amount of
|
||||
Revolving Borrowing
1
|
||||
|
||||
|
||||
(C) Interest rate basis
2
|
||||
|
||||
|
||||
(D) Interest Period and the
|
||||
last day thereof
3
|
||||
|
1 | An integral multiple of $5,000,000 and not less than $10,000,000 (or an aggregate principal amount equal to the Total Commitment then available) but not greater than the Total Commitment then available. | |
2 | Eurocurrency Revolving Loan or ABR Loan. | |
3 | Shall be subject to the definition of the term Interest Period. |
Very truly yours,
[NAME OF BORROWER], |
||||
by | ||||
Name: | ||||
Title: | [Financial Officer] | |||
1. | Assignor (the Assignor ): |
2. | Assignee (the Assignee ): |
3. | Borrowers: |
4. | Administrative Agent: |
5. | Assigned Interest: |
Aggregate Amount | Percentage | |||||||||||
of | Amount of | Assigned | ||||||||||
Commitment/Loans | Commitment/Loans | of Commitment/ | ||||||||||
of all Lenders | Assigned | Loans 1 | ||||||||||
Commitment Assigned
|
$ | $ | % | |||||||||
Revolving Loans
|
$ | $ | % | |||||||||
Competitive Loans
|
$ | $ | % |
1 | Set forth, to at least nine decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. |
2
[NAME OF ASSIGNOR], as
Assignor, |
||||
by | ||||
Name: | ||||
Title: | ||||
[NAME OF ASSIGNEE], as
Assignee, |
||||
by | ||||
Name: | ||||
Title: | ||||
Consented to:
JPMORGAN CHASE BANK, N.A. as Administrative Agent, |
||||
by | ||||
Name: | ||||
Title: | ||||
Consented to:
[ ], as Issuing Bank, |
||||
by | ||||
Name: | ||||
Title: | ||||
[Consented to:
Exelis Inc., as the Company, |
||||
by | ||||
Name: | ||||
Title:] 2 | ||||
2 | No consent of the Company shall be required for an assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has occurred and is continuing, any other assignee. |
3
2
1 | For opinion purposes, Loan Documents will be defined as those Loan Documents to be executed and delivered as of the Effective Date. |
2
EXELIS INC.,
|
||||
by | ||||
Name: | ||||
Title: | ||||
[NAME OF SUBSIDIARY],
|
||||
by | ||||
Name: | ||||
Title: | ||||
Accepted as of the date first appearing above:
JPMORGAN CHASE BANK N.A., as Administrative Agent, |
||||
by | ||||
Name: | ||||
Title: |
EXELIS INC.,
|
||||
by | ||||
Name: | ||||
Title: |
2
EXELIS INC.,
|
||||
by | ||||
Name: | ||||
Title: | ||||
[ISSUING BANK],
|
||||
by | ||||
Name: | ||||
Title: | ||||
Accepted:
JPMORGAN CHASE BANK N.A., as Administrative Agent, |
||||
by | ||||
Name: | ||||
Title: |
Issuing Bank Agreement
Issuing Bank:
Issuing Banks Address and
Telecopy Number
for Notices:
Time of Day by
Which Notices Must
be Received
A notice requesting the issuance of
a Letter of Credit must be received
by the Issuing Bank by 10:00 a.m.
(New York time) not less than five
Business Days prior to the proposed
date of issuance.
Special Terms:
The aggregate L/C Exposure in
respect of Letters of Credit issued
pursuant to this Agreement shall not
exceed $[ ].
Issuing Bank Fronting Fee:
[ ]% per annum on the average
daily undrawn amount of the Letters
of Credit, payable on the same dates
that L/C Participation Fees are
payable under the Credit Agreement.
Issuing Banks Account
for
Payment of Issuing Bank Fees:
[NAME OF BORROWER],
|
||||
by | ||||
Name: | ||||
Title: |
Amount of Principal | Unpaid | Notations | ||||||||||||||
Date | Amount of Loan | Repaid | Principal Balance | Made By | ||||||||||||
|
2
[NAME OF LENDER]
|
||||
By: | ||||
Name: | ||||
Title: | ||||
[NAME OF LENDER]
|
||||
By: | ||||
Name: | ||||
Title: |
[NAME OF PARTICIPANT]
|
||||
By: | ||||
Name: | ||||
Title: | ||||
[NAME OF PARTICIPANT]
|
||||
By: | ||||
Name: | ||||
Title: | ||||
2
3
4
5
6
7
8
2
3
4
5
2
3
4
5
6
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 |
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 Members 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 . |
1.08 | 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. |
1.16 | 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 Members behalf under Section 3.01(d). |
1.18 | Excess Floor Contributions shall mean the amount of contributions credited on a Members 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 Members 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 Members 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 Members 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. |
1.27 | 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 Employees 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 Employees 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 Employees 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
(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 Employees 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). |
(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. |
Page 6
(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 Members 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. |
(a) | A Members participation in the Plan shall terminate when the vested values of the Members 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. |
Page 7
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 Employees 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 Members 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 Members Matching Contribution Account at the same time as the Salary Deferral to which they relate. |
Page 8
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 Employees 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 Members 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 Members 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 Members 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 Members account under the Savings Plan in such Plan Year, and (B) the amount of Excess Floor Contributions credited on the Members behalf under the Predecessor Plan for the portion of the Plan Year beginning on January 1, 2011 and ending on October 30, 2011. |
Page 9
Notwithstanding the foregoing, effective as of the October 31, 2011 Excess Floor Contributions shall not be made to the Plan with respect to a Members 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 Members 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 Employees 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 Members 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 Members behalf pursuant to paragraphs (a), (b), (c) and (d) above shall be credited to a Members 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 Members Accounts as of such Reporting Date which would have been credited had the Members 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. |
Page 10
(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 Members service and participation with the Company. |
(a) | The Committee shall maintain, or cause to be maintained, on the book of the Corporation records showing the individual balances of each Members 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 Members behalf under this Plan can be credited or debited, as the case may be. |
Page 11
(a) | The Committee shall value or cause to be valued each Members 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 Members 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. |
Page 12
(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 Members 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 Members date of death occurs. |
The payment of such Members 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. |
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. |
Page 13
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 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. |
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. |
Page 14
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. |
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. |
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. |
(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 Corporations 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 Members former employer may be transferred to this Plan and upon such transfer become the obligation of the Corporation. |
(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 Plans 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. |
Page 16
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. |
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. |
Page 17
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. |
(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. |
Page 19
Page 20
(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
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 Corporations Obligation
|
18 | |
7.08 Successors
|
19 | |
|
||
ARTICLE 8. ADMINISTRATION
|
20 | |
8.01 Administration
|
20 |
1.01 | Adoption Date shall have the meaning set forth in Section 2.01(a). | |
1.02 | Administrative Committee shall mean the Boards Compensation and Personnel Committee or the person or persons appointed by the Boards 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
Page 2
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 Directors 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. |
Page 3
1.23 | Retirement shall mean, subject to Section 8.01(c), the termination of a Non-Employee Directors 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 Participants 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 Participants 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 Participants 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
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 Directors 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. |
Page 5
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 Directors 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 Participants 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 |
Page 6
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 Participants 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 Participants Deferral Account which are deemed invested in a Corporation phantom stock fund will be credited based on the closing price of the Corporations 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 Participants 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 Participants Deferral Agreement in effect at that time shall be cancelled and subsequent Deferrals under that Deferral Agreement shall cease. |
Page 7
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 Participants 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 Participants Deferral Account deemed invested in a Corporation phantom stock fund shall be credited with dividend equivalents, as and when dividends are paid on the Corporations 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 |
Page 8
Agreement is executed. Unless the Administrative Committee provides otherwise, a Participants 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 Participants 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 Participants 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 |
Page 9
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 Participants 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 Participants 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 Participants 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 Participants service and participation with the Company. |
Page 10
(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 Participants 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 Participants 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 Participants Retirement or (C) the Participants 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 Years 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 Participants 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 Participants Specified Distribution Date for the Participants In-Service Subaccount. |
Page 11
(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 Participants 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 Participants 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 Participants election of a new Specified Distribution Date becomes effective, all amounts in the Participants 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 Participants Retirement or the Participants 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 Corporations 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 Participants ability to elect a new Specified Distribution Date pursuant to this Section |
Page 12
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 Participants 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 Participants 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 Participants 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. |
Page 13
5.02 | Method of Payment | |
The distribution of the Participants Deferral Account shall be made to the Participant or, if the Participant dies, to the Participants 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 Participants 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 |
Page 14
be effective unless received by the Administrative Committee prior to the Participants 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 Participants death, or if no designated Beneficiary survives the Participant, the Participants surviving spouse, if any, shall be the Participants Beneficiary, otherwise the Participants estate shall be the Participants Beneficiary, and shall receive the payment of the amount, if any, payable under the Plan upon the Participants death. |
Page 15
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 Participants 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
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 Participants 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 Corporations 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 Corporations 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
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 21
2
3
4
5
6
7
8
9
2
3
4
5
6
7
8
9
10
11
Years of Service | Months of Base Pay | |
Less than 4
|
12 | |
4
|
13 | |
5
|
14 | |
6
|
15 | |
7
|
16 | |
8
|
17 | |
9
|
18 | |
10
|
19 | |
11
|
20 | |
12
|
21 | |
13
|
22 | |
14
|
23 | |
15 or more
|
24 |
2
3
4
5
6
1. | Grant of Options . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on November 7, 2011, (the Grant Date) to the Optionee of the option to purchase from the Company all or any part of an aggregate of #,### Shares (the Option), at the purchase price of $[ ] per Share (the Option Price or Exercise Price). The Option shall be a Nonqualified Stock Option. | |
2. | Terms and Conditions . It is understood and agreed that the Option is subject to the following terms and conditions: |
(a) | Expiration Date . The Option shall expire on November 7, 2021, or, if the Optionees employment terminates before that date, on the date specified in subsection (f) below. | ||
(b) | Exercise of Option . The Option may not be exercised until it has become vested. | ||
(c) | Vesting . Subject to subsections 2(a) and 2(f), the Option shall vest in three installments as follows: |
(i) | 1/3 of the Option shall vest on November 7, 2012, | ||
(ii) | 1/3 of the Option shall vest on November 7, 2013, and | ||
(iii) | 1/3 of the Option shall vest on November 7, 2014, | ||
Subject to subsections 2(a) and 2(f), to the extent not earlier vested pursuant to paragraphs (i), (ii), and (iii) of this subsection (c), the Option shall vest in full upon an Acceleration Event (as defined in the Plan). |
(d) | Payment of Exercise Price . Permissible methods for payment of the Exercise Price upon exercise of the Option are described in Section 6.6 of the Plan, or, if the Plan is amended, successor provisions. In addition to the methods of exercise permitted by Section 6.6 of the Plan, the Optionee may exercise all or part of the Option by way of (i) broker-assisted cashless exercise in a manner consistent with the Federal Reserve Boards Regulation T, unless the Committee determines that such exercise method is prohibited by law, or (ii) net-settlement, whereby the Optionee directs the Company to withhold Shares that otherwise would be issued upon exercise of the Option having an aggregate Fair Market Value on the date of the exercise equal to the Exercise Price, or the portion thereof being exercised by way of net-settlement (rounding up to the nearest whole Share). | ||
(e) | Tax Withholding . The Company shall have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, all applicable federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to the exercise of the Option. The Optionee may elect to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares that otherwise would be issued upon exercise of the Option, with the number of Shares withheld having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction (rounding up to the nearest whole Share). Any such election shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. | ||
(f) | Effect of Termination of Employment . | ||
If the Optionees employment terminates before November 7, 2021, the Option shall expire on the date set forth below, as applicable: |
(i) | Termination due to Death . If the Optionees employment is terminated as a result of the Optionees death, the Option shall expire on the earlier of November 7, 2021 , or the date three years after the termination of the Optionees employment due to death. If all or any portion of the Option is not vested at the time of the Optionees termination of employment due to death, the Option shall immediately become 100% vested. | ||
(ii) | Termination due to Disability . If the Optionees employment is terminated as a result of the Optionees Disability (as defined below), the Option shall expire on the earlier of November 7, 2021, or the date five years after the termination of the Optionees employment due to Disability. If all or any portion of the Option is not vested at the time of the termination of the Optionees employment due to Disability, the Option shall immediately become 100% vested. | ||
(iii) | Termination due to Retirement . If the Optionees employment is terminated as a result of the Optionees Retirement (as defined below), the Option shall expire on the earlier of November 7, 2021, or the date five years after the termination of the Optionees employment due to |
Retirement. If all or any portion of the Option is not vested at the time of the Optionees termination of employment due to Retirement, a prorated portion of the unvested portion of the Option shall immediately vest as of the date of the termination of employment (see Prorated Vesting Upon Retirement below). Any remaining unvested portion of the Option shall expire as of the date of the termination of the Optionees employment. For purposes of this subsection 2(f)(iii), the Optionee shall be considered employed during any period in which the Optionee is receiving severance payments (disregarding any delays required to comply with tax or other requirements), and the date of the termination of the Optionees employment shall be the last day of any such severance period. | |||
(iv) | Cause . If the Optionees employment is terminated by the Company (or an Affiliate, as the case may be) for cause (as determined by the Committee), the vested and unvested portions of the Option shall expire on the date of the termination of the Optionees employment. | ||
(v) | Voluntary Termination or Other Termination by the Company . If the Optionees employment is terminated by the Optionee or terminated by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), and not because of the Optionees Retirement, Disability or death, the vested portion of the Option shall expire on the earlier of November 7, 2021, or the date three months after the termination of the Optionees employment. Any portion of the Option that is not vested (or the entire Option, if no part was vested) as of the date the Optionees employment terminates shall expire immediately on the date of termination of employment, and such unvested portion of the Option (the entire Option, if no portion was vested on the date of termination) shall not thereafter be exercisable. For purposes of this subsection 2(f)(v), the Optionee shall be considered employed during any period in which the Optionee is receiving severance payments, and the date of the termination of the Optionees employment shall be the last day of any such severance period. |
Notwithstanding the foregoing, if an Optionees employment is terminated on or after an Acceleration Event (A) by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), and not because of the Optionees Retirement, Disability, or death, or (B) by the Optionee because the Optionee in good faith believed that as a result of such Acceleration Event he or she was unable effectively to discharge his or her present duties or the duties of the position the Optionee occupied just prior to the occurrence of such Acceleration Event, the Option shall in no event expire before the earlier of the date that is 7 months after the Acceleration Event or November 7, 2021, . | |||
Retirement . For purposes of this Agreement, the term Retirement shall mean the termination of the Optionees employment if, at the time of such termination, the Optionee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such a traditional formula defined benefit pension plan) or if no such |
plan is maintained, the first day of the month which coincides with or follows the Optionees 65th birthday. | |||
Disability . For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Optionee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. | |||
Prorated Vesting Upon Retirement . The prorated portion of an Option that vests upon termination of the Optionees employment due to the Optionees Retirement shall be determined by multiplying the total number of unvested Shares subject to the Option at the time of the termination of the Optionees employment by a fraction, the numerator of which is the number of full months the Optionee has been continually employed since the Grant Date and the denominator of which is 36. For this purpose, full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. | |||
(g) | Compliance with Laws and Regulations . The Option shall not be exercised at any time when its exercise or the delivery of Shares hereunder would be in violation of any law, rule, or regulation that the Company may find to be valid and applicable. | ||
(h) | Optionee Bound by Plan and Rules . The Optionee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof as amended from time to time. The Optionee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee during the life of the Option. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(i) | Governing Law . This Agreement is issued, and the Option evidenced hereby is granted, in McLean, Virginia, and shall be governed and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
1. | Grant of Options . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on [Month, Day, Year], (the Grant Date) to the Optionee of the option to purchase from the Company all or any part of an aggregate of #,### Shares (the Option), at the purchase price of $[XX.XX] per Share (the Option Price or Exercise Price). The Option shall be a Nonqualified Stock Option. | |
2. | Terms and Conditions . It is understood and agreed that the Option is subject to the following terms and conditions: |
(a) | Expiration Date . The Option shall expire on [Month, Day, Year], or, if the Optionees employment terminates before that date, on the date specified in subsection (f) below. | ||
(b) | Exercise of Option . The Option may not be exercised until it has become vested. | ||
(c) | Vesting . Subject to subsections 2(a) and 2(f), the Option shall vest in three installments as follows: |
(i) | 1/3 of the Option shall vest on [Month, Day, Year], | ||
(ii) | 1/3 of the Option shall vest on [Month, Day, Year], and | ||
(iii) | 1/3 of the Option shall vest on [Month, Day, Year], |
(d) | Payment of Exercise Price . Permissible methods for payment of the Exercise Price upon exercise of the Option are described in Section 6.6 of the Plan, or, if the Plan is amended, successor provisions. In addition to the methods of exercise permitted by Section 6.6 of the Plan, the Optionee may exercise all or part of the Option by way of (i) broker-assisted cashless exercise in a manner consistent with the Federal Reserve Boards Regulation T, unless the Committee determines that such exercise method is prohibited by law, or (ii) net-settlement, whereby the Optionee directs the Company to withhold Shares that otherwise would be issued upon exercise of the Option having an aggregate Fair Market Value on the date of the exercise equal to the Exercise Price, or the portion thereof being exercised by way of net-settlement (rounding up to the nearest whole Share). | ||
(e) | Tax Withholding . The Company shall have the power and the right to deduct or withhold, or require the Optionee to remit to the Company, all applicable federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to the exercise of the Option. The Optionee may elect to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares that otherwise would be issued upon exercise of the Option, with the number of Shares withheld having a Fair Market Value on the date the tax is to be determined equal to the minimum statutory total tax that could be imposed on the transaction (rounding up to the nearest whole Share). Any such election shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. | ||
(f) | Effect of Termination of Employment . | ||
If the Optionees employment terminates before [Month, Day, Year], the Option shall expire on the date set forth below, as applicable: |
(i) | Termination due to Death . If the Optionees employment is terminated as a result of the Optionees death, the Option shall expire on the earlier of [Month, Day, Year] , or the date three years after the termination of the Optionees employment due to death. If all or any portion of the Option is not vested at the time of the Optionees termination of employment due to death, the Option shall immediately become 100% vested. | ||
(ii) | Termination due to Disability . If the Optionees employment is terminated as a result of the Optionees Disability (as defined below), the Option shall expire on the earlier of [Month, Day, Year], or the date five years after the termination of the Optionees employment due to Disability. If all or any portion of the Option is not vested at the time of the termination of the Optionees employment due to Disability, the Option shall immediately become 100% vested. | ||
(iii) | Termination due to Retirement . If the Optionees employment is terminated as a result of the Optionees Retirement (as defined below), the Option shall expire on the earlier of [Month, Day, Year], or the date five years after the termination of the Optionees employment due to Retirement. If all or any portion of the Option is not vested at the time of the Optionees termination of employment due to Retirement, a prorated |
portion of the unvested portion of the Option shall immediately vest as of the date of the termination of employment (see Prorated Vesting Upon Retirement below). Any remaining unvested portion of the Option shall expire as of the date of the termination of the Optionees employment. For purposes of this subsection 2(f)(iii), the Optionee shall be considered employed during any period in which the Optionee is receiving severance payments (disregarding any delays required to comply with tax or other requirements), and the date of the termination of the Optionees employment shall be the last day of any such severance period. | |||
(iv) | Cause . If the Optionees employment is terminated by the Company (or an Affiliate, as the case may be) for cause (as determined by the Committee), the vested and unvested portions of the Option shall expire on the date of the termination of the Optionees employment. | ||
(v) | Voluntary Termination or Other Termination by the Company . If the Optionees employment is terminated by the Optionee or terminated by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), and not because of the Optionees Retirement, Disability or death, the vested portion of the Option shall expire on the earlier of [Month, Day, Year], or the date three months after the termination of the Optionees employment. Any portion of the Option that is not vested (or the entire Option, if no part was vested) as of the date the Optionees employment terminates shall expire immediately on the date of termination of employment, and such unvested portion of the Option (the entire Option, if no portion was vested on the date of termination) shall not thereafter be exercisable. For purposes of this subsection 2(f)(v), the Optionee shall be considered employed during any period in which the Optionee is receiving severance payments, and the date of the termination of the Optionees employment shall be the last day of any such severance period. |
(g) | Compliance with Laws and Regulations . The Option shall not be exercised at any time when its exercise or the delivery of Shares hereunder would be in violation of any law, rule, or regulation that the Company may find to be valid and applicable. | ||
(h) | Optionee Bound by Plan and Rules . The Optionee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof as amended from time to time. The Optionee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee during the life of the Option. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(i) | Governing Law . This Agreement is issued, and the Option evidenced hereby is granted, in McLean, Virginia, and shall be governed and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
1. | Grant of Restricted Stock Units . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on November 7, 2011 , (the Grant Date) to the Grantee of #,### Restricted Stock Units. The Restricted Stock Units are notional units of measurement denominated in Shares of common stock ( i.e ., one Restricted Stock Unit is equivalent in value to one share of common stock). | |
The Restricted Stock Units represent an unfunded, unsecured right to receive Shares (and dividend equivalent payments pursuant Section 2(b) hereof) in the future if the conditions set forth in the Plan and this Agreement are satisfied. | ||
2. | Terms and Conditions . It is understood and agreed that the Restricted Stock Units are subject to the following terms and conditions: |
(a) | Restrictions . Except as otherwise provided in the Plan and this Agreement, neither this Award nor any Restricted Stock Units subject to this Award may be sold, assigned, pledged, exchanged, transferred, hypothecated or encumbered, other than to the Company as a result of forfeiture of the Restricted Stock Units. | ||
(b) | Voting and Dividend Equivalent Rights. The Grantee shall not have any privileges of a stockholder of the Company with respect to the Restricted Stock Units or any Shares that may be delivered hereunder, including without limitation any right to vote such Shares or to receive dividends, unless and until such Shares are delivered upon vesting of the Restricted Stock Units. Dividend equivalents shall be earned with respect to each Restricted Stock Unit that vests. The amount of dividend equivalents earned with respect to each such Restricted Stock Unit that vests shall be equal to the total dividends declared on a Share where the record date of the dividend is between the Grant Date of this Award and the date a Share is issued upon vesting of the Restricted Stock Unit. Any dividend equivalents earned shall be paid in cash to the Grantee when the Shares subject to the vested Restricted Stock Units are issued. No dividend |
equivalents shall be earned or paid with respect to any Restricted Stock Units that do not vest. Dividend equivalents shall not accrue interest. |
(c) | Vesting of Restricted Stock Units and Payment . Subject to earlier vesting pursuant to subsections 2(d) and 2(e) below, the Restricted Stock Units shall vest (meaning the Period of Restriction shall lapse and the Restricted Stock Units shall become free of the forfeiture provisions in this Agreement) on December 31, 2012, provided the Grantee has been continuously employed by the Company or an Affiliate on a full-time basis from the Grant Date through the date the Restricted Stock Units vest. Except as provided in subsections 2(i)(i) and 2(i)(ii) below, upon vesting of the Restricted Stock Units (including vesting pursuant to subsections 2(d) or 2(e) below), the Company will deliver to the Grantee (i) one Share for each vested Restricted Stock Unit, with any fractional Shares resulting from proration pursuant to subsection 2(e)(ii) to be rounded to the nearest whole Share (with 0.5 to be rounded up) and (ii) an amount in cash attributable to any dividend equivalents earned in accordance with subsection 2(b) above, less any Shares withheld in accordance with subsection 2(f) below. For the avoidance of doubt, continuous employment of a Grantee by the Company or an Affiliate for purposes of vesting in the Restricted Stock Units granted hereunder shall include continuous employment with the Company for so long as the Grantee continues working at such entity. | ||
(d) | Effect of Acceleration Event . The Restricted Stock Units shall vest in full upon an Acceleration Event. | ||
(e) | Effect of Termination of Employment . If the Grantees employment with the Company and its Affiliates is terminated for any reason and such termination constitutes a separation from service within the meaning of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (Section 409A), any Restricted Stock Units that are not vested at the time of such separation from service shall be immediately forfeited except as follows: |
(i) | Separation from Service due to Death or Disability . If the Grantees separation from service is due to death or Disability (as defined below), the Restricted Stock Units shall immediately become 100% vested as of such separation from service. For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Grantee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. | ||
(ii) | Separation from Service due to Retirement or Separation from Service by the Company for Other than Cause . If the Grantees separation from service is due to Retirement (as defined below) or an involuntary separation from service by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), a prorated portion of the Restricted Stock Units shall immediately vest as of such separation from service. For these purposes, |
A. | the prorated portion of the Restricted Stock Units shall be determined by multiplying the total number of Restricted Stock Units subject to this Award by a fraction, the numerator of which is the number of full months during which the Grantee has been continually employed since the Grant Date, together with any period during which the Grantee is entitled to receive severance in the form of salary continuation (not to exceed 14 in the aggregate), and the denominator of which is 14 (for avoidance of doubt, the period during which the Grantee may receive severance in the form of salary continuation or otherwise shall not affect the determination of the date of the Grantees separation from service or the date of delivery of any Shares or dividend equivalent payments); and | ||
B. | full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. |
For purposes of this Agreement, the term Retirement shall mean the Grantees separation from service if, at the time of such separation from service, the Grantee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such traditional formula defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Grantees 65th birthday. |
(f) | Tax Withholding . In accordance with Article 15 of the Plan, the Company may make such provisions and take such actions as it may deem necessary for the withholding of all applicable taxes attributable to the Restricted Stock Units and any related dividend equivalents. Unless the Committee determines otherwise, the minimum statutory tax withholding required to be withheld upon delivery of the Shares and payment of dividend equivalents shall be satisfied by withholding a number of Shares having an aggregate Fair Market Value equal to the minimum statutory tax required to be withheld. If such withholding would result in a fractional Share being withheld, the number of Shares so withheld shall be rounded up to the nearest whole Share. Notwithstanding the foregoing, the Grantee may elect to satisfy such tax withholding requirements by timely remittance of such amount by cash or check or such other method that is acceptable to the Company, rather than by withholding of Shares, provided such election is made in accordance with such conditions and restrictions as the Company may establish. If FICA taxes are required to be withheld while the Award is outstanding, such withholding shall be made in a manner determined by the Company. | ||
(g) | Grantee Bound by Plan and Rules . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof. The Grantee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee prior to the date the Restricted Stock Units vest. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(h) | Governing Law . This Agreement is issued, and the Restricted Stock Units evidenced hereby are granted, in McLean, Virginia, and shall be governed and |
construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
(i) | Section 409A Compliance . To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A, and the Plan and this Agreement shall be interpreted accordingly. |
(i) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, and if the Grantee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code, at the time of the Grantees separation from service, then, to the extent required under Section 409A, any Shares that would otherwise be distributed (along with the cash value of all dividend equivalents that would be payable) upon the Grantees separation from service, shall instead be delivered (and, in the case of the dividend equivalents, paid) on the earlier of (x) the first business day of the seventh month following the date of the Grantees separation from service or (y) the Grantees death. | ||
(ii) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, upon an Acceleration Event that does not constitute a change in the ownership or a change in the effective control of the Company or a change in the ownership of a substantial portion of a corporations assets (as those terms are used in Section 409A), the Restricted Stock Units shall vest at the time of the Acceleration Event, but distribution of any Restricted Stock Units (or related dividend equivalents) that constitute deferred compensation for purposes of Section 409A shall not be accelerated ( i.e ., distribution shall occur when it would have occurred absent the Acceleration Event). |
Agreed to: |
EXELIS INC.
|
|
_________________________________ | ||
Grantee | ||
(Online acceptance constitutes agreement) | ||
Dated:________________________ | Dated: November 7, 2011 | |
Enclosures |
1. | Grant of Restricted Stock Units . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on November 7, 2011 (the Grant Date) to the Grantee of #,### Restricted Stock Units. The Restricted Stock Units are notional units of measurement denominated in Shares of common stock ( i.e ., one Restricted Stock Unit is equivalent in value to one share of common stock). | |
The Restricted Stock Units represent an unfunded, unsecured right to receive Shares (and dividend equivalent payments pursuant Section 2(b) hereof) in the future if the conditions set forth in the Plan and this Agreement are satisfied. |
2. | Terms and Conditions . It is understood and agreed that the Restricted Stock Units are subject to the following terms and conditions: |
(a) | Restrictions . Except as otherwise provided in the Plan and this Agreement, neither this Award nor any Restricted Stock Units subject to this Award may be sold, assigned, pledged, exchanged, transferred, hypothecated or encumbered, other than to the Company as a result of forfeiture of the Restricted Stock Units. | ||
(b) | Voting and Dividend Equivalent Rights. The Grantee shall not have any privileges of a stockholder of the Company with respect to the Restricted Stock Units or any Shares that may be delivered hereunder, including without limitation any right to vote such Shares or to receive dividends, unless and until such Shares are delivered upon vesting of the Restricted Stock Units. Dividend equivalents shall be earned with respect to each Restricted Stock Unit that vests. The amount of dividend equivalents earned with respect to each such Restricted Stock Unit that vests shall be equal to the total dividends declared on a Share where the record date of the dividend is between the Grant Date of this Award and the date a Share is issued upon vesting of the Restricted Stock Unit. Any dividend equivalents earned shall be paid in cash to the Grantee when the Shares subject to the vested Restricted Stock Units are issued. No dividend |
equivalents shall be earned or paid with respect to any Restricted Stock Units that do not vest. Dividend equivalents shall not accrue interest. |
(c) | Vesting of Restricted Stock Units and Payment . Subject to earlier vesting pursuant to subsections 2(d) and 2(e) below, the Restricted Stock Units shall vest (meaning the Period of Restriction shall lapse and the Restricted Stock Units shall become free of the forfeiture provisions in this Agreement) on December 31, 2013, provided the Grantee has been continuously employed by the Company or an Affiliate on a full-time basis from the Grant Date through the date the Restricted Stock Units vest. Except as provided in subsections 2(i)(i) and 2(i)(ii) below, upon vesting of the Restricted Stock Units (including vesting pursuant to subsections 2(d) or 2(e) below), the Company will deliver to the Grantee (i) one Share for each vested Restricted Stock Unit, with any fractional Shares resulting from proration pursuant to subsection 2(e)(ii) to be rounded to the nearest whole Share (with 0.5 to be rounded up) and (ii) an amount in cash attributable to any dividend equivalents earned in accordance with subsection 2(b) above, less any Shares withheld in accordance with subsection 2(f) below. For the avoidance of doubt, continuous employment of a Grantee by the Company or an Affiliate for purposes of vesting in the Restricted Stock Units granted hereunder shall include continuous employment with the Company for so long as the Grantee continues working at such entity. | ||
(d) | Effect of Acceleration Event . The Restricted Stock Units shall vest in full upon an Acceleration Event. | ||
(e) | Effect of Termination of Employment . If the Grantees employment with the Company and its Affiliates is terminated for any reason and such termination constitutes a separation from service within the meaning of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (Section 409A), any Restricted Stock Units that are not vested at the time of such separation from service shall be immediately forfeited except as follows: |
(i) | Separation from Service due to Death or Disability . If the Grantees separation from service is due to death or Disability (as defined below), the Restricted Stock Units shall immediately become 100% vested as of such separation from service. For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Grantee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. | ||
(ii) | Separation from Service due to Retirement or Separation from Service by the Company for Other than Cause . If the Grantees separation from service is due to Retirement (as defined below) or an involuntary separation from service by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), a prorated portion of the Restricted Stock Units shall immediately vest as of such separation from service. For these purposes, |
2
A. | the prorated portion of the Restricted Stock Units shall be determined by multiplying the total number of Restricted Stock Units subject to this Award by a fraction, the numerator of which is the number of full months during which the Grantee has been continually employed since the Grant Date, together with any period during which the Grantee is entitled to receive severance in the form of salary continuation (not to exceed 26 in the aggregate), and the denominator of which is 26 (for avoidance of doubt, the period during which the Grantee may receive severance in the form of salary continuation or otherwise shall not affect the determination of the date of the Grantees separation from service or the date of delivery of any Shares or dividend equivalent payments); and | ||
B. | full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. |
For purposes of this Agreement, the term Retirement shall mean the Grantees separation from service if, at the time of such separation from service, the Grantee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such traditional formula defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Grantees 65th birthday. |
(f) | Tax Withholding . In accordance with Article 15 of the Plan, the Company may make such provisions and take such actions as it may deem necessary for the withholding of all applicable taxes attributable to the Restricted Stock Units and any related dividend equivalents. Unless the Committee determines otherwise, the minimum statutory tax withholding required to be withheld upon delivery of the Shares and payment of dividend equivalents shall be satisfied by withholding a number of Shares having an aggregate Fair Market Value equal to the minimum statutory tax required to be withheld. If such withholding would result in a fractional Share being withheld, the number of Shares so withheld shall be rounded up to the nearest whole Share. Notwithstanding the foregoing, the Grantee may elect to satisfy such tax withholding requirements by timely remittance of such amount by cash or check or such other method that is acceptable to the Company, rather than by withholding of Shares, provided such election is made in accordance with such conditions and restrictions as the Company may establish. If FICA taxes are required to be withheld while the Award is outstanding, such withholding shall be made in a manner determined by the Company. | ||
(g) | Grantee Bound by Plan and Rules . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof. The Grantee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee prior to the date the Restricted Stock Units vest. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(h) | Governing Law . This Agreement is issued, and the Restricted Stock Units evidenced hereby are granted, in McLean, Virginia, and shall be governed and |
3
construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |||
(i) | Section 409A Compliance . To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A, and the Plan and this Agreement shall be interpreted accordingly. |
(i) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, and if the Grantee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code, at the time of the Grantees separation from service, then, to the extent required under Section 409A, any Shares that would otherwise be distributed (along with the cash value of all dividend equivalents that would be payable) upon the Grantees separation from service, shall instead be delivered (and, in the case of the dividend equivalents, paid) on the earlier of (x) the first business day of the seventh month following the date of the Grantees separation from service or (y) the Grantees death. | ||
(ii) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, upon an Acceleration Event that does not constitute a change in the ownership or a change in the effective control of the Company or a change in the ownership of a substantial portion of a corporations assets (as those terms are used in Section 409A), the Restricted Stock Units shall vest at the time of the Acceleration Event, but distribution of any Restricted Stock Units (or related dividend equivalents) that constitute deferred compensation for purposes of Section 409A shall not be accelerated ( i.e ., distribution shall occur when it would have occurred absent the Acceleration Event). |
Agreed to:
|
EXELIS INC. | |
|
||
_____________________________
Grantee |
||
|
||
(Online acceptance constitutes agreement)
|
||
|
||
Dated: _________________
|
Dated: November 7, 2011 | |
|
||
Enclosures
|
4
1. | Grant of Restricted Stock Units . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on November 7 , 2011 (the Grant Date) to the Grantee of #,### Restricted Stock Units. The Restricted Stock Units are notional units of measurement denominated in Shares of common stock ( i.e ., one Restricted Stock Unit is equivalent in value to one share of common stock). |
The Restricted Stock Units represent an unfunded, unsecured right to receive Shares (and dividend equivalent payments pursuant Section 2(b) hereof) in the future if the conditions set forth in the Plan and this Agreement are satisfied. |
2. | Terms and Conditions . It is understood and agreed that the Restricted Stock Units are subject to the following terms and conditions: |
(a) | Restrictions . Except as otherwise provided in the Plan and this Agreement, neither this Award nor any Restricted Stock Units subject to this Award may be sold, assigned, pledged, exchanged, transferred, hypothecated or encumbered, other than to the Company as a result of forfeiture of the Restricted Stock Units. |
(b) | Voting and Dividend Equivalent Rights. The Grantee shall not have any privileges of a stockholder of the Company with respect to the Restricted Stock Units or any Shares that may be delivered hereunder, including without limitation any right to vote such Shares or to receive dividends, unless and until such Shares are delivered upon vesting of the Restricted Stock Units. Dividend equivalents shall be earned with respect to each Restricted Stock Unit that vests. The amount of dividend equivalents earned with respect to each such Restricted Stock Unit that vests shall be equal to the total dividends declared on a Share where the record date of the dividend is between the Grant Date of this Award and the date a Share is issued upon vesting of the Restricted Stock Unit. Any dividend equivalents earned shall be paid in cash to the Grantee when the |
Shares subject to the vested Restricted Stock Units are issued. No dividend equivalents shall be earned or paid with respect to any Restricted Stock Units that do not vest. Dividend equivalents shall not accrue interest. |
(c) | Vesting of Restricted Stock Units and Payment . Subject to earlier vesting pursuant to subsections 2(d) and 2(e) below, the Restricted Stock Units shall vest (meaning the Period of Restriction shall lapse and the Restricted Stock Units shall become free of the forfeiture provisions in this Agreement) on November 7, 2014 , provided the Grantee has been continuously employed by the Company or an Affiliate on a full-time basis from the Grant Date through the date the Restricted Stock Units vest. Except as provided in subsections 2(i)(i) and 2(i)(ii) below, upon vesting of the Restricted Stock Units (including vesting pursuant to subsections 2(d) or 2(e) below), the Company will deliver to the Grantee (i) one Share for each vested Restricted Stock Unit, with any fractional Shares resulting from proration pursuant to subsection 2(e)(ii) to be rounded to the nearest whole Share (with 0.5 to be rounded up) and (ii) an amount in cash attributable to any dividend equivalents earned in accordance with subsection 2(b) above, less any Shares withheld in accordance with subsection 2(f) below. For the avoidance of doubt, continuous employment of a Grantee by the Company or an Affiliate for purposes of vesting in the Restricted Stock Units granted hereunder shall include continuous employment with the Company for so long as the Grantee continues working at such entity. |
(d) | Effect of Acceleration Event . The Restricted Stock Units shall vest in full upon an Acceleration Event. |
(e) | Effect of Termination of Employment . If the Grantees employment with the Company and its Affiliates is terminated for any reason and such termination constitutes a separation from service within the meaning of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (Section 409A), any Restricted Stock Units that are not vested at the time of such separation from service shall be immediately forfeited except as follows: |
(i) | Separation from Service due to Death or Disability . If the Grantees separation from service is due to death or Disability (as defined below), the Restricted Stock Units shall immediately become 100% vested as of such separation from service. For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Grantee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. |
(ii) | Separation from Service due to Retirement or Separation from Service by the Company for Other than Cause . If the Grantees separation from service is due to Retirement (as defined below) or an involuntary separation from service by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), a prorated portion of the Restricted Stock Units shall immediately vest as of such separation from service. For these purposes, |
2
A. | the prorated portion of the Restricted Stock Units shall be determined by multiplying the total number of Restricted Stock Units subject to this Award by a fraction, the numerator of which is the number of full months during which the Grantee has been continually employed since the Grant Date, together with any period during which the Grantee is entitled to receive severance in the form of salary continuation (not to exceed 36 in the aggregate), and the denominator of which is 36 (for avoidance of doubt, the period during which the Grantee may receive severance in the form of salary continuation or otherwise shall not affect the determination of the date of the Grantees separation from service or the date of delivery of any Shares or dividend equivalent payments); and |
B. | full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. |
For purposes of this Agreement, the term Retirement shall mean the Grantees separation from service if, at the time of such separation from service, the Grantee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such traditional formula defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Grantees 65th birthday. |
(f) | Tax Withholding . In accordance with Article 15 of the Plan, the Company may make such provisions and take such actions as it may deem necessary for the withholding of all applicable taxes attributable to the Restricted Stock Units and any related dividend equivalents. Unless the Committee determines otherwise, the minimum statutory tax withholding required to be withheld upon delivery of the Shares and payment of dividend equivalents shall be satisfied by withholding a number of Shares having an aggregate Fair Market Value equal to the minimum statutory tax required to be withheld. If such withholding would result in a fractional Share being withheld, the number of Shares so withheld shall be rounded up to the nearest whole Share. Notwithstanding the foregoing, the Grantee may elect to satisfy such tax withholding requirements by timely remittance of such amount by cash or check or such other method that is acceptable to the Company, rather than by withholding of Shares, provided such election is made in accordance with such conditions and restrictions as the Company may establish. If FICA taxes are required to be withheld while the Award is outstanding, such withholding shall be made in a manner determined by the Company. |
(g) | Grantee Bound by Plan and Rules . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof. The Grantee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee prior to the date the Restricted Stock Units vest. Terms used herein and not otherwise defined shall be as defined in the Plan. |
(h) | Governing Law . This Agreement is issued, and the Restricted Stock Units evidenced hereby are granted, in McLean, Virginia, and shall be governed and construed in accordance with the laws of the State of New York, excluding any |
3
conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
(i) | Section 409A Compliance . To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A, and the Plan and this Agreement shall be interpreted accordingly. |
(i) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, and if the Grantee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code, at the time of the Grantees separation from service, then, to the extent required under Section 409A, any Shares that would otherwise be distributed (along with the cash value of all dividend equivalents that would be payable) upon the Grantees separation from service, shall instead be delivered (and, in the case of the dividend equivalents, paid) on the earlier of (x) the first business day of the seventh month following the date of the Grantees separation from service or (y) the Grantees death. |
(ii) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, upon an Acceleration Event that does not constitute a change in the ownership or a change in the effective control of the Company or a change in the ownership of a substantial portion of a corporations assets (as those terms are used in Section 409A), the Restricted Stock Units shall vest at the time of the Acceleration Event, but distribution of any Restricted Stock Units (or related dividend equivalents) that constitute deferred compensation for purposes of Section 409A shall not be accelerated ( i.e ., distribution shall occur when it would have occurred absent the Acceleration Event). |
4
Agreed to:
|
EXELIS INC. |
Dated: _________________
|
Dated: November 7 , 2011 |
5
1. | Grant of Restricted Stock Units . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on [Month, Day, Year] (the Grant Date) to the Grantee of #,### Restricted Stock Units. The Restricted Stock Units are notional units of measurement denominated in Shares of common stock ( i.e ., one Restricted Stock Unit is equivalent in value to one share of common stock). | |
The Restricted Stock Units represent an unfunded, unsecured right to receive Shares (and dividend equivalent payments pursuant Section 2(b) hereof) in the future if the conditions set forth in the Plan and this Agreement are satisfied. | ||
2. | Terms and Conditions . It is understood and agreed that the Restricted Stock Units are subject to the following terms and conditions: |
(a) | Restrictions . Except as otherwise provided in the Plan and this Agreement, neither this Award nor any Restricted Stock Units subject to this Award may be sold, assigned, pledged, exchanged, transferred, hypothecated or encumbered, other than to the Company as a result of forfeiture of the Restricted Stock Units. | ||
(b) | Voting and Dividend Equivalent Rights. The Grantee shall not have any privileges of a stockholder of the Company with respect to the Restricted Stock Units or any Shares that may be delivered hereunder, including without limitation any right to vote such Shares or to receive dividends, unless and until such Shares are delivered upon vesting of the Restricted Stock Units. Dividend equivalents shall be earned with respect to each Restricted Stock Unit that vests. The amount of dividend equivalents earned with respect to each such Restricted Stock Unit that vests shall be equal to the total dividends declared on a Share where the record date of the dividend is between the Grant Date of this Award and the date a Share is issued upon vesting of the Restricted Stock Unit. Any dividend equivalents earned shall be paid in cash to the Grantee when the Shares subject to the vested Restricted Stock Units are issued. No dividend |
equivalents shall be earned or paid with respect to any Restricted Stock Units that do not vest. Dividend equivalents shall not accrue interest. | |||
(c) | Vesting of Restricted Stock Units and Payment . Subject to earlier vesting pursuant to subsections 2(d) and 2(e) below, the Restricted Stock Units shall vest (meaning the Period of Restriction shall lapse and the Restricted Stock Units shall become free of the forfeiture provisions in this Agreement) on [Month, Day, Year], provided the Grantee has been continuously employed by the Company or an Affiliate on a full-time basis from the Grant Date through the date the Restricted Stock Units vest. Except as provided in subsections 2(i)(i) and 2(i)(ii) below, upon vesting of the Restricted Stock Units (including vesting pursuant to subsections 2(d) or 2(e) below), the Company will deliver to the Grantee (i) one Share for each vested Restricted Stock Unit, with any fractional Shares resulting from proration pursuant to subsection 2(e)(ii) to be rounded to the nearest whole Share (with 0.5 to be rounded up) and (ii) an amount in cash attributable to any dividend equivalents earned in accordance with subsection 2(b) above, less any Shares withheld in accordance with subsection 2(f) below. For the avoidance of doubt, continuous employment of a Grantee by the Company or an Affiliate for purposes of vesting in the Restricted Stock Units granted hereunder shall include continuous employment with the Company for so long as the Grantee continues working at such entity. | ||
(d) | Effect of Acceleration Event . The Restricted Stock Units shall vest in full upon an Acceleration Event. | ||
(e) | Effect of Termination of Employment . If the Grantees employment with the Company and its Affiliates is terminated for any reason and such termination constitutes a separation from service within the meaning of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (Section 409A), any Restricted Stock Units that are not vested at the time of such separation from service shall be immediately forfeited except as follows: |
(i) | Separation from Service due to Death or Disability . If the Grantees separation from service is due to death or Disability (as defined below), the Restricted Stock Units shall immediately become 100% vested as of such separation from service. For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Grantee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. | ||
(ii) | Separation from Service due to Retirement or Separation from Service by the Company for Other than Cause . If the Grantees separation from service is due to Retirement (as defined below) or an involuntary separation from service by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), a prorated portion of the Restricted Stock Units shall immediately vest as of such separation from service. For these purposes, |
2
A. | the prorated portion of the Restricted Stock Units shall be determined by multiplying the total number of Restricted Stock Units subject to this Award by a fraction, the numerator of which is the number of full months during which the Grantee has been continually employed since the Grant Date, together with any period during which the Grantee is entitled to receive severance in the form of salary continuation (not to exceed [XX] in the aggregate), and the denominator of which is [XX] (for avoidance of doubt, the period during which the Grantee may receive severance in the form of salary continuation or otherwise shall not affect the determination of the date of the Grantees separation from service or the date of delivery of any Shares or dividend equivalent payments); and | ||
B. | full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. |
For purposes of this Agreement, the term Retirement shall mean the Grantees separation from service if, at the time of such separation from service, the Grantee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such traditional formula defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Grantees 65th birthday. |
(f) | Tax Withholding . In accordance with Article 15 of the Plan, the Company may make such provisions and take such actions as it may deem necessary for the withholding of all applicable taxes attributable to the Restricted Stock Units and any related dividend equivalents. Unless the Committee determines otherwise, the minimum statutory tax withholding required to be withheld upon delivery of the Shares and payment of dividend equivalents shall be satisfied by withholding a number of Shares having an aggregate Fair Market Value equal to the minimum statutory tax required to be withheld. If such withholding would result in a fractional Share being withheld, the number of Shares so withheld shall be rounded up to the nearest whole Share. Notwithstanding the foregoing, the Grantee may elect to satisfy such tax withholding requirements by timely remittance of such amount by cash or check or such other method that is acceptable to the Company, rather than by withholding of Shares, provided such election is made in accordance with such conditions and restrictions as the Company may establish. If FICA taxes are required to be withheld while the Award is outstanding, such withholding shall be made in a manner determined by the Company. | ||
(g) | Grantee Bound by Plan and Rules . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof. The Grantee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee prior to the date the Restricted Stock Units vest. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(h) | Governing Law . This Agreement is issued, and the Restricted Stock Units evidenced hereby are granted, in McLean, Virginia, and shall be governed and construed in accordance with the laws of the State of New York, excluding any |
3
conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |||
(i) | Section 409A Compliance . To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A, and the Plan and this Agreement shall be interpreted accordingly. |
(i) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, and if the Grantee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code, at the time of the Grantees separation from service, then, to the extent required under Section 409A, any Shares that would otherwise be distributed (along with the cash value of all dividend equivalents that would be payable) upon the Grantees separation from service, shall instead be delivered (and, in the case of the dividend equivalents, paid) on the earlier of (x) the first business day of the seventh month following the date of the Grantees separation from service or (y) the Grantees death. | ||
(ii) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, upon an Acceleration Event that does not constitute a change in the ownership or a change in the effective control of the Company or a change in the ownership of a substantial portion of a corporations assets (as those terms are used in Section 409A), the Restricted Stock Units shall vest at the time of the Acceleration Event, but distribution of any Restricted Stock Units (or related dividend equivalents) that constitute deferred compensation for purposes of Section 409A shall not be accelerated ( i.e ., distribution shall occur when it would have occurred absent the Acceleration Event). |
4
Agreed to:
|
EXELIS INC. |
Dated: _________________
|
Dated: [Month, Day, Year] |
5
1. | Grant of Restricted Stock Units . In accordance with, and subject to, the terms and conditions of the Plan and this Agreement, the Company hereby confirms the grant on [Month, Day, Year] (the Grant Date) to the Grantee of #,### Restricted Stock Units. The Restricted Stock Units are notional units of measurement denominated in Shares of common stock ( i.e ., one Restricted Stock Unit is equivalent in value to one share of common stock). | |
The Restricted Stock Units represent an unfunded, unsecured right to receive cash payments equal to the Fair Market Value of such Shares (and dividend equivalent payments pursuant Section 2(b) hereof) in the future if the conditions set forth in the Plan and this Agreement are satisfied. |
2. | Terms and Conditions . It is understood and agreed that the Restricted Stock Units are subject to the following terms and conditions: |
(a) | Restrictions . Except as otherwise provided in the Plan and this Agreement, neither this Award nor any Restricted Stock Units subject to this Award may be sold, assigned, pledged, exchanged, transferred, hypothecated or encumbered, other than to the Company as a result of forfeiture of the Restricted Stock Units. | ||
(b) | Voting and Dividend Equivalent Rights. The Grantee shall not have any privileges of a stockholder of the Company with respect to the Restricted Stock Units or any Shares that may be delivered hereunder, including without limitation any right to vote such Shares or to receive dividends, unless and until such Shares are delivered upon vesting of the Restricted Stock Units. Dividend equivalents shall be earned with respect to each Restricted Stock Unit that vests. The amount of dividend equivalents earned with respect to each such Restricted Stock Unit that vests shall be equal to the total dividends declared on a Share where the record date of the dividend is between the Grant Date of this Award and the date a cash payment equal to the Fair Market Value of a Share is paid upon vesting of the Restricted Stock Unit. Any dividend equivalents earned shall be paid in cash to the Grantee when the Shares subject to the vested |
Restricted Stock Units are issued. No dividend equivalents shall be earned or paid with respect to any Restricted Stock Units that do not vest. Dividend equivalents shall not accrue interest. |
(c) | Vesting of Restricted Stock Units and Payment . Subject to earlier vesting pursuant to subsections 2(d) and 2(e) below, the Restricted Stock Units shall vest (meaning the Period of Restriction shall lapse and the Restricted Stock Units shall become free of the forfeiture provisions in this Agreement) on [Month, Day, Year], provided the Grantee has been continuously employed by the Company or an Affiliate on a full-time basis from the Grant Date through the date the Restricted Stock Units vest. Except as provided in subsections 2(i)(i) and 2(i)(ii) below, upon vesting of the Restricted Stock Units (including vesting pursuant to subsections 2(d) or 2(e) below), the Company will deliver to the Grantee (i) a cash amount equal to the Fair Market Value of such Shares, with any fractional Shares resulting from proration pursuant to subsection 2(e)(ii) to be rounded to a cash amount equal to the Fair Market Value of the nearest whole Share (with 0.5 to be rounded up) and (ii) an amount in cash attributable to any dividend equivalents earned in accordance with subsection 2(b) above, less any Shares withheld in accordance with subsection 2(f) below. For the avoidance of doubt, continuous employment of a Grantee by the Company or an Affiliate for purposes of vesting in the Restricted Stock Units granted hereunder shall include continuous employment with the Company for so long as the Grantee continues working at such entity. | ||
(d) | Effect of Acceleration Event . The Restricted Stock Units shall vest in full upon an Acceleration Event. | ||
(e) | Effect of Termination of Employment . If the Grantees employment with the Company and its Affiliates is terminated for any reason and such termination constitutes a separation from service within the meaning of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (Section 409A), any Restricted Stock Units that are not vested at the time of such separation from service shall be immediately forfeited except as follows: |
(i) | Separation from Service due to Death or Disability . If the Grantees separation from service is due to death or Disability (as defined below), the Restricted Stock Units shall immediately become 100% vested as of such separation from service. For purposes of this Agreement, the term Disability shall mean the complete and permanent inability of the Grantee to perform all of his or her duties under the terms of his or her employment, as determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. | ||
(ii) | Separation from Service due to Retirement or Separation from Service by the Company for Other than Cause . If the Grantees separation from service is due to Retirement (as defined below) or an involuntary separation from service by the Company (or an Affiliate, as the case may be) for other than cause (as determined by the Committee), a prorated portion of the Restricted Stock Units shall immediately vest as of such separation from service. For these purposes, |
2
A. | the prorated portion of the Restricted Stock Units shall be determined by multiplying the total number of Restricted Stock Units subject to this Award by a fraction, the numerator of which is the number of full months during which the Grantee has been continually employed since the Grant Date, together with any period during which the Grantee is entitled to receive severance in the form of salary continuation (not to exceed 36 in the aggregate), and the denominator of which is 36 (for avoidance of doubt, the period during which the Grantee may receive severance in the form of salary continuation or otherwise shall not affect the determination of the date of the Grantees separation from service or the date of delivery of any Shares or dividend equivalent payments); and | ||
B. | full months of employment shall be based on monthly anniversaries of the Grant Date, not calendar months. |
For purposes of this Agreement, the term Retirement shall mean the Grantees separation from service if, at the time of such separation from service, the Grantee is eligible to commence receipt of retirement benefits under a traditional formula defined benefit pension plan maintained by the Company or an Affiliate (or would be eligible to receive such benefits if he or she were a participant in such traditional formula defined benefit pension plan) or if no such plan is maintained, the first day of the month which coincides with or follows the Optionees 65th birthday. |
(f) | Tax Withholding . In accordance with Article 15 of the Plan, the Company may make such provisions and take such actions as it may deem necessary for the withholding of all applicable taxes attributable to the Restricted Stock Units and any related dividend equivalents. Unless the Committee determines otherwise, the minimum statutory tax withholding required to be withheld upon delivery of the cash amount equal to the Fair Market Value of such Shares and payment of dividend equivalents shall be satisfied by withholding a cash amount equal to the Fair Market Value of a number of Shares having an aggregate Fair Market Value equal to the minimum statutory tax required to be withheld, with any fractional Shares to be rounded up to a cash amount equal to the Fair Market Value of the nearest whole Share (with 0.5 to be rounded up). If FICA taxes are required to be withheld while the Award is outstanding, such withholding shall be made in a manner determined by the Company. | ||
(g) | Grantee Bound by Plan and Rules . The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by the terms and provisions thereof. The Grantee agrees to be bound by any rules and regulations for administering the Plan as may be adopted by the Committee prior to the date the Restricted Stock Units vest. Terms used herein and not otherwise defined shall be as defined in the Plan. | ||
(h) | Governing Law . This Agreement is issued, and the Restricted Stock Units evidenced hereby are granted, in McLean, Virginia, and shall be governed and construed in accordance with the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. |
3
(i) | Section 409A Compliance . To the extent applicable, it is intended that the Plan and this Agreement comply with the requirements of Section 409A, and the Plan and this Agreement shall be interpreted accordingly. |
(i) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, and if the Grantee is a specified employee, as defined in Section 409A(a)(2)(B)(i) of the Code, at the time of the Grantees separation from service, then, to the extent required under Section 409A, any Shares that would otherwise be distributed or cash payments in lieu of such Shares (along with the cash value of all dividend equivalents that would be payable) upon the Grantees separation from service, shall instead be delivered (and, in the case of the dividend equivalents, paid) on the earlier of (x) the first business day of the seventh month following the date of the Grantees separation from service or (y) the Grantees death. | ||
(ii) | If it is determined that all or a portion of the Award constitutes deferred compensation for purposes of Section 409A, upon an Acceleration Event that does not constitute a change in the ownership or a change in the effective control of the Company or a change in the ownership of a substantial portion of a corporations assets (as those terms are used in Section 409A), the Restricted Stock Units shall vest at the time of the Acceleration Event, but distribution or payments in respect of any Restricted Stock Units (or related dividend equivalents) that constitute deferred compensation for purposes of Section 409A shall not be accelerated ( i.e ., distribution shall occur when it would have occurred absent the Acceleration Event). |
4
5
DIRECTOR
|
[Non-Employee Director Name] | |
RESTRICTED STOCK UNITS GRANTED
|
[ #,### ] | |
DATE OF GRANT
|
November 7, 2011 | |
VESTING SCHEDULE
|
Except as provided in Section 3 of this Agreement, the Restricted Stock Units will vest on the following date(s), subject to the Directors continued service as a director of the Company: |
Restricted | ||||
Stock Units | ||||
Vesting Date(s) | Vesting | |||
|
the Business Day immediately prior to the Exelis Inc. 2012 Annual Meeting. | 100% of Award |
1. | Grant of Award . The Company hereby grants to the Director the Restricted Stock Units, subject to the terms, definitions and provisions of the Plan and this Agreement. All terms, provisions, and conditions applicable to the Restricted Stock Units set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan the provisions of the Plan will govern. All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. | ||
2. | Vesting and Settlement of Award . |
a. | Right to Award . This Award shall vest in accordance with the vesting schedule set forth above (the Vesting Schedule) and with the applicable provisions of the Plan and this Agreement. |
b. | Settlement of Award . Except as otherwise provided in a deferral agreement duly executed by the Director on a form prescribed by the Company for such elections and timely filed with the Company, the vested portion of this Award shall be settled (and any related dividend equivalents shall be paid) on or as soon as practicable following the vesting date set forth in the Vesting Schedule or in Section 3 of this Agreement, as the case may be. | ||
The Company may require the Director to furnish or execute such documents as the Company shall reasonably deem necessary (i) to evidence such settlement and (ii) to comply with or satisfy the requirements of the Securities Act of 1933, as amended, the Exchange Act or any applicable laws. If the Director dies before the settlement of all or a portion of the Award, the vested but unsettled portion of the Award may be settled by delivery of Shares (and payment of related dividend equivalents) to the Participants designated beneficiary or, if no such beneficiary has been designated, the Participants estate. | |||
c. | Method of Settlement . The Company shall deliver to the Director one Share for each vested Restricted Stock Unit in book entry form. | ||
d. | Dividend Equivalents . If a cash dividend is declared on the Shares, the Director shall be credited with a dividend equivalent in an amount of cash equal to the number of Restricted Stock Units held by the Director as of the dividend payment date, multiplied by the amount of the cash dividend paid per Share. Any such dividend equivalents shall be paid if and when the underlying Restricted Stock Units are settled. Dividend equivalents shall not accrue interest. |
3. | Separation from Service . The Award shall become 100% vested prior to the vesting date set forth in the Vesting Schedule above upon the Directors separation from service for any of the following reasons: |
a. | the Directors death; | ||
b. | the Directors Disability (as defined below); | ||
c. | the Directors retirement from the Board at or after age 72; or | ||
d. | the Directors separation from service on account of the acceptance by the Director of a position (other than an honorary position) in the government of the United States, any State or any municipality or any subdivision thereof or any organization performing any quasi-governmental function. |
If the Directors service on the Board terminates for any reason other than one listed above prior to the vesting date set forth in the Vesting Schedule above (other than in connection with the Directors commencement of services as a director of a Spinco), the Award shall be forfeited immediately with respect to the number of Restricted Stock Units for which the Award is not yet vested. | |||
For purposes of this Agreement, the term Disability means the complete and permanent inability of the Director to perform all of his or her duties as a member of the Board, as |
2
determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. |
4. | Transferability of Award . | ||
The Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated. | |||
5. | Miscellaneous Provisions . |
a. | Rights as a Stockholder . The Director shall have no rights as a stockholder with respect to any Shares subject to this Award, except as provided in Paragraph 2(d), until the Award has vested and Shares, if any, have been issued. | ||
b. | Compliance with Federal Securities Laws and Other Applicable Laws . Notwithstanding anything to the contrary in this Agreement or in the Plan, to the extent permitted by Section 409A of the Code and any treasury regulations or other applicable guidance promulgated with respect thereto, the issuance or delivery of any Shares pursuant to this Agreement may be delayed if the Company reasonably anticipates that the issuance or delivery of the Shares will violate Federal securities laws or other applicable law; provided that delivery or issuance of the Shares shall be made at the earliest date at which the Company reasonably anticipates that such delivery or issuance will not cause a violation. | ||
c. | Choice of Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | ||
d. | Modification or Amendment . This Agreement may only be modified or amended by written agreement executed by the parties hereto; provided, however, that the adjustments permitted pursuant to Section 4.2 of the Plan may be made without such written agreement. | ||
e. | Severability . In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included. | ||
f. | References to Plan . All references to the Plan shall be deemed references to the Plan as may be amended from time to time. | ||
g. | Headings . The captions used in this Agreement are inserted for convenience and shall not be deemed a part of this Award for construction or interpretation. | ||
h. | Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Director or by the Company forthwith to the Committee, |
3
which shall review such dispute at its next regular meeting. If the Director is a member of the Committee, the Director shall not participate in such review. The resolution of such dispute by the Committee shall be final and binding on all persons. | |||
i. | Section 409A of the Code . The provisions of this Agreement and any payments made herein are intended to comply with, and should be interpreted consistent with, the requirements of Section 409A of the Code, and any related regulations or other effective guidance promulgated thereunder by the U.S. Department of the Treasury or the Internal Revenue Service. | ||
j. | Signature in Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
The Director represents that s/he is familiar with the terms and provisions thereof, and hereby accepts this Agreement subject to all of the terms and provisions thereof. The Director has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of this Agreement. The Director hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or this Agreement. |
Signed:
|
|||||
|
|
||||
(Online acceptance constitutes agreement) |
Dated:
|
|||||
|
|
4
DIRECTOR | [Non-Employee Director Name] | |||
RESTRICTED STOCK UNITS GRANTED
|
[ ] | |||
DATE OF GRANT
|
[Month, Day, Year] | |||
VESTING SCHEDULE | Except as provided in Section 3 of this Agreement, the Restricted Stock Units will vest on the following date(s), subject to the Directors continued service as a director of the Company: | |||
|
||||
|
Vesting Date(s) |
Restricted
Stock Units Vesting |
||
|
the Business Day
immediately prior to the Exelis Inc. [Year] Annual Meeting. |
100% of Award |
1. | Grant of Award . The Company hereby grants to the Director the Restricted Stock Units, subject to the terms, definitions and provisions of the Plan and this Agreement. All terms, provisions, and conditions applicable to the Restricted Stock Units set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan the provisions of the Plan will govern. All capitalized terms that are used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. | ||
2. | Vesting and Settlement of Award . |
a. | Right to Award . This Award shall vest in accordance with the vesting schedule set forth above (the Vesting Schedule) and with the applicable provisions of the Plan and this Agreement. |
b. | Settlement of Award . Except as otherwise provided in a deferral agreement duly executed by the Director on a form prescribed by the Company for such elections and timely filed with the Company, the vested portion of this Award shall be settled (and any related dividend equivalents shall be paid) on or as soon as practicable following the vesting date set forth in the Vesting Schedule or in Section 3 of this Agreement, as the case may be. | ||
The Company may require the Director to furnish or execute such documents as the Company shall reasonably deem necessary (i) to evidence such settlement and (ii) to comply with or satisfy the requirements of the Securities Act of 1933, as amended, the Exchange Act or any applicable laws. If the Director dies before the settlement of all or a portion of the Award, the vested but unsettled portion of the Award may be settled by delivery of Shares (and payment of related dividend equivalents) to the Participants designated beneficiary or, if no such beneficiary has been designated, the Participants estate. | |||
c. | Method of Settlement . The Company shall deliver to the Director one Share for each vested Restricted Stock Unit in book entry form. | ||
d. | Dividend Equivalents . If a cash dividend is declared on the Shares, the Director shall be credited with a dividend equivalent in an amount of cash equal to the number of Restricted Stock Units held by the Director as of the dividend payment date, multiplied by the amount of the cash dividend paid per Share. Any such dividend equivalents shall be paid if and when the underlying Restricted Stock Units are settled. Dividend equivalents shall not accrue interest. |
3. | Separation from Service . The Award shall become 100% vested prior to the vesting date set forth in the Vesting Schedule above upon the Directors separation from service for any of the following reasons: |
a. | the Directors death; | ||
b. | the Directors Disability (as defined below); | ||
c. | the Directors retirement from the Board at or after age 72; or | ||
d. | the Directors separation from service on account of the acceptance by the Director of a position (other than an honorary position) in the government of the United States, any State or any municipality or any subdivision thereof or any organization performing any quasi-governmental function. |
If the Directors service on the Board terminates for any reason other than one listed above prior to the vesting date set forth in the Vesting Schedule above (other than in connection with the Directors commencement of services as a director of a Spinco), the Award shall be forfeited immediately with respect to the number of Restricted Stock Units for which the Award is not yet vested. | |||
For purposes of this Agreement, the term Disability means the complete and permanent inability of the Director to perform all of his or her duties as a member of the Board, as |
2
determined by the Committee upon the basis of such evidence, including independent medical reports and data, as the Committee deems appropriate or necessary. |
4. | Transferability of Award . | ||
The Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated. |
5. | Miscellaneous Provisions . |
a. | Rights as a Stockholder . The Director shall have no rights as a stockholder with respect to any Shares subject to this Award, except as provided in Paragraph 2(d), until the Award has vested and Shares, if any, have been issued. | ||
b. | Compliance with Federal Securities Laws and Other Applicable Laws . Notwithstanding anything to contrary in this Agreement or in the Plan, to the extent permitted by Section 409A of the Code and any treasury regulations or other applicable guidance promulgated with respect thereto, the issuance or delivery of any Shares pursuant to this Agreement may be delayed if the Company reasonably anticipates that the issuance or delivery of the Shares will violate Federal securities laws or other applicable law; provided that delivery or issuance of the Shares shall be made at the earliest date at which the Company reasonably anticipates that such delivery or issuance will not cause a violation. The Company shall not be liable to the Director for any damages relating to any delays in issuing the certificates to the Director, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or the certificates themselves. | ||
c. | Choice of Law . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | ||
d. | Modification or Amendment . This Agreement may only be modified or amended by written agreement executed by the parties hereto; provided, however, that the adjustments permitted pursuant to Section 4.2 of the Plan may be made without such written agreement. | ||
e. | Severability . In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of this Agreement, and this Agreement shall be construed and enforced as if such illegal or invalid provision had not been included. | ||
f. | References to Plan . All references to the Plan shall be deemed references to the Plan as may be amended from time to time. | ||
g. | Headings . The captions used in this Agreement are inserted for convenience and shall not be deemed a part of this Award for construction or interpretation. |
3
h. | Interpretation . Any dispute regarding the interpretation of this Agreement shall be submitted by the Director or by the Company forthwith to the Committee, which shall review such dispute at its next regular meeting. If the Director is a member of the Committee, the Director shall not participate in such review. The resolution of such dispute by the Committee shall be final and binding on all persons. | ||
i. | Section 409A of the Code . The provisions of this Agreement and any payments made herein are intended to comply with, and should be interpreted consistent with, the requirements of Section 409A of the Code, and any related regulations or other effective guidance promulgated thereunder by the U.S. Department of the Treasury or the Internal Revenue Service. | ||
j. | Signature in Counterparts . This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
4
2
3
(b) | With respect to any such Proceeding: | ||
(1) | the Corporation shall be entitled to participate therein at its own expense; | ||
(2) | except as otherwise provided below, to the extent that it may wish, the Corporation jointly with any other indemnifying party shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so to assume the defense thereof and approval by the Indemnitee of such counsel (which approval shall not be unreasonably withheld), the Corporation will not be liable to the Indemnitee under this Agreement for any legal or other expenses subsequently incurred by the Indemnitee for separate counsel in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided below. The Indemnitee shall have the right to employ its counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of such counsel by the Indemnitee has been authorized by the Corporation, (ii) the Indemnitee shall have reasonably concluded (with written notice to the Corporation setting forth the basis for such conclusion) that there may be a conflict of interest between the Corporation and the Indemnitee in the conduct of the defense of such Proceeding, or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel shall be at the expense of the Corporation. The Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of the Corporation or as to which the Indemnitee shall have made the conclusion provided for in (ii) above; and | ||
(3) | the Corporation shall not be liable to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without the Corporations written consent. The Corporation shall not settle any Proceeding in any manner that would impose any penalty, obligation or limitation on the Indemnitee without the Indemnitees written consent. Neither the Corporation nor the Indemnitee will unreasonably withhold their consent to any proposed settlement. |
4
5
6
Exelis Inc.
|
||||
By: | ||||
Name: | ||||
Title: | ||||
By | ||||
Name: | [Directors Name] | |||
7
November 17, 2011
|
/S/ DAVID F. MELCHER | |||
|
|
|||
(Date)
|
David F Melcher | |||
Chief Executive Officer and President |
November 17, 2011
|
/S/ PETER J MILLIGAN | |||
|
|
|||
(Date)
|
Peter J. Milligan | |||
Senior Vice President
and Chief Financial Officer |
November 17, 2011
|
/s/
DAVID
F. MELCHER
|
|||
|
|
|||
(Date)
|
David F Melcher | |||
Chief Executive Officer and President |
November 17, 2011
|
/s/
PETER
J MILLIGAN
|
|||
|
|
|||
(Date)
|
Peter J. Milligan | |||
Senior Vice President
and Chief Financial Officer |