[FORM]
EXECUTIVE CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AGREEMENT is
entered into as of the
day of
, 2008 by and between Harris Corporation, a
Delaware corporation (the “Company”), and [
] (“Executive”).
WHEREAS, the
Company considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the
best interests of the Company and its stockholders; and
WHEREAS, the
Company recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may arise and
that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its stockholders; and
WHEREAS, Executive
currently serves as an officer of the Company; and
WHEREAS, the Board
(as defined in Section 1) has determined that it is in the
best interests of the Company and its stockholders to secure
Executive’s continued services and to ensure
Executive’s continued and undivided dedication to
Executive’s duties in the event of any threat or occurrence
of or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1)
of the Company without being influenced by Executive’s
uncertainty of Executive’s own situation; and
WHEREAS, the Board
has authorized the Company to enter into this Agreement.
NOW, THEREFORE,
for and in consideration of the premises and the mutual covenants
and agreements herein contained, the Company and Executive hereby
agree as follows:
1.
Definitions . As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a)
“Board” means the Board of Directors of the
Company.
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(b)
“Cause” means (1) a material breach by Executive
of the duties and responsibilities of Executive (other than as a
result of incapacity due to physical or mental illness) which is
(x) demonstrably willful, continued and deliberate on
Executive’s part, (y) committed in bad faith or without
reasonable belief that such breach is in the best interests of the
Company and (z) not remedied within fifteen (15) days
after receipt of written notice from the Company which specifically
identifies the manner in which such breach has occurred or
(2) Executive’s conviction of, or plea of nolo
contendere to, a felony involving willful misconduct which
is materially and demonstrably injurious to the Company. Any act,
or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of
counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best
interests of the Company. Cause shall not exist unless and until
the Company has delivered to Executive a copy of a resolution duly
adopted by three-quarters (3/4) of the entire Board at a meeting of
the Board called and held for such purpose (after thirty
(30) days notice to Executive and an opportunity for
Executive, together with counsel, to be heard before the Board),
finding that in the good faith opinion of the Board an event set
forth in clauses (1) or (2) has occurred and specifying
the particulars thereof in detail. The Company must notify
Executive of any event constituting Cause within ninety
(90) days following the Company’s knowledge of its
existence or such event shall not constitute Cause under this
Agreement.
(c)
“Change in Control” means the occurrence of any one of
the following events:
(i)
any “person” (as such term is defined in Section 3(a)
(9) of the Securities Exchange Act of 1934 (the
“Exchange Act”) and as used in Sections l3(d)
(3) and 14(d) (2) of the Exchange Act) is or becomes a
“beneficial owner” (as defined in Rule 13(d)
(3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 20% or more of the combined
voting power of the Company’s then outstanding securities
eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however , that
the event described in this paragraph (i) shall not be deemed
to be a Change in Control by virtue of any of the following
acquisitions: (A) by the Company or any Subsidiary,
(B) by any employee benefit plan sponsored or maintained by
the Company or any Subsidiary, (C) by any underwriter
temporarily holding securities
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pursuant to an
offering of such securities, (D) pursuant to a Non-Control
Transaction (as defined in paragraph (iii)), or (E) pursuant
to any acquisition by Executive or any group of persons including
Executive;
(ii) individuals
who, on July 1, [year — most recent], constitute the
Board (the “Incumbent Directors”) cease for any reason
to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to July 1, [year —
most recent], whose election or nomination for election was
approved by a vote of at least two-thirds of the Incumbent
Directors who remain on the Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person
is named as a nominee for director, without objection to such
nomination) shall also be deemed to be an Incumbent Director;
provided , however , that no individual initially
elected or nominated as a director of the Company as a result of an
actual or threatened election contest with respect to directors or
any other actual or threatened solicitation of proxies or consents
by or on behalf of any person other than the Board of Directors
shall be deemed to be an Incumbent Director;
(iii) the
consummation of a merger, consolidation, share exchange or similar
form of corporate reorganization of the Company or any such type of
transaction involving the Company or any of its Subsidiaries that
requires the approval of the Company’s stockholders (whether
for such transaction or the issuance of securities in the
transaction or otherwise) (a “Business Combination”),
unless immediately following such Business Combination:
(A) more than 80% of the total voting power of the Company
resulting from such Business Combination (including, without
limitation, any company which directly or indirectly has beneficial
ownership of 100% of the Company Voting Securities) eligible to
elect directors of such company is represented by shares that were
Company Voting Securities immediately prior to such Business
Combination (either by remaining outstanding or being converted),
and such voting power is in substantially the same proportion as
the voting power of such Company Voting Securities immediately
prior to the Business Combination, (B) no person (other than
any publicly traded holding company resulting from such Business
Combination, any employee benefit plan sponsored or maintained by
the Company (or the corporation resulting from such
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Business
Combination)) becomes the beneficial owner, directly or indirectly,
of 20% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the company resulting
from such Business Combination, and (C) at least a majority of
the members of the board of directors of the company resulting from
such Business Combination were Incumbent Directors at the time of
the Board’s approval of the execution of the initial
agreement providing for such Business Combination (any Business
Combination which satisfies the foregoing conditions specified in
(A), (B) and (C) shall be deemed to be a
“Non-Control Transaction”); or
(iv)
the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or the direct or indirect
sale or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries.
Notwithstanding
the foregoing, a Change in Control of the Company shall not be
deemed to occur solely because any person acquires beneficial
ownership of more than 20% of the Company Voting Securities as a
result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities
outstanding; provided , that, if after such
acquisition by the Company such person becomes the beneficial owner
of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially
owned by such person, a Change in Control of the Company shall then
occur.
Notwithstanding
anything in this Agreement to the contrary, if Executive’s
employment is terminated prior to a Change in Control, and
Executive reasonably demonstrates that such termination was at the
request or suggestion of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change
in Control (a “Third Party”) and a Change in Control
involving such Third Party occurs, then for all purposes of this
Agreement, the date of a Change in Control shall mean the date
immediately prior to the date of such termination of
employment.
(d)
“Date of Termination” means (1) the effective date
on which Executive’s employment by the Company terminates as
specified in a prior written notice by the Company or Executive, as
the case may be, to the other, delivered pursuant to
Section 13 or (2) if Executive’s
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employment by
the Company terminates by reason of death, the date of death of
Executive. For all purposes of this Agreement, Executive’s
termination of employment shall mean Executive’s
“separation from service,” as defined in Treasury
Regulation §1.409A-1(h) (without regard to any permissible
alternative definition thereunder).
(e)
“Good Reason” means, without Executive’s express
written consent, the occurrence of any of the following events
after a Change in Control:
(1)
(i) the assignment to Executive of any duties or
responsibilities inconsistent in any material adverse respect with
Executive’s position(s), duties, responsibilities or status
with the Company immediately prior to such Change in Control
(including any diminution of such duties or responsibilities) or
(ii) a material adverse change in Executive’s reporting
responsibilities, titles or offices with the Company as in effect
immediately prior to such Change in Control;
(2)
a reduction by the Company in Executive’s rate of annual base
salary or annual target bonus opportunity (including any adverse
change in the formula for such annual bonus target) as in effect
immediately prior to such Change in Control or as the same may be
increased from time to time thereafter;
(3)
any requirement of the Company that Executive (i) be based
anywhere more than fifty (50) miles from the facility where
Executive is located at the time of the Change in Control or
(ii) travel on Company business to an extent substantially
greater than the travel obligations of Executive immediately prior
to such Change in Control;
(4)
the failure of the Company to (i) continue in effect any
employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of
any action by the Company which would adversely affect
Executive’s participation in or reduce Executive’s
benefits under any such plan, (ii) provide Executive and
Executive’s dependents with welfare benefits in accordance
with the most favorable plans, practices, programs and policies of
the Company and its affiliated companies in effect for
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Executive and
Executive’s dependents immediately prior to such Change in
Control or provide substantially comparable benefits at a
substantially comparable cost to Executive, (iii) provide
fringe benefits in accordance with the most favorable plans,
practices, programs and policies of the Company and its affiliated
companies in effect for Executive immediately prior to such Change
in Control, or provide substantially comparable fringe benefits, or
(iv) provide Executive with paid vacation in accordance with
the most favorable plans, policies, programs and practices of the
Company and its affiliated companies as in effect for Executive
immediately prior to such Change in Control; or
(5)
the failure of the Company to obtain the assumption agreement from
any successor as contemplated in Section 12(b); or
(6)
any purported termination by the Company of Executive’s
employment otherwise than as expressly permitted hereby.
Any event or
condition described in this Section 1(e)(1) through
(6) which occurs prior to a Change in Control, but was at the
request or suggestion of a Third Party who effectuates a Change in
Control, shall constitute Good Reason following a Change in Control
for purposes of this Agreement notwithstanding that it occurred
prior to the Change in Control. An isolated, insubstantial and
inadvertent action taken in good faith and which is remedied by the
Company within fifteen (15) days after receipt of notice
thereof given by Executive shall not constitute Good Reason.
Executive must provide notice of termination of employment within
ninety (90) days of Executive’s knowledge of an event
constituting Good Reason or such event shall not constitute Good
Reason under this Agreement.
(f)
“Nonqualifying Termination” means a termination of
Executive’s employment (1) by the Company for Cause,
(2) by Executive for any reason other than Good Reason,
(3) as a result of Executive’s death, (4) by the
Company due to Executive’s absence from Executive’s
duties with the Company on a full-time basis for at least one
hundred eighty (180) consecutive days as a result of
Executive’s incapacity due to physical or mental illness or
(5) as a result of Executive’s mandatory retirement (not
including any mandatory early retirement) in accordance with the
Company’s retirement policy generally applicable to
its
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salaried
employees, as in effect immediately prior to the Change in Control,
or in accordance with any retirement arrangement established with
respect to Executive with Executive’s written
consent.
(g)
“Subsidiary” means any corporation or other entity in
which the Company has a direct or indirect ownership interest of
more than 50% of the total combined voting power of the then
outstanding securities of such corporation or other entity entitled
to vote generally in the election of directors or in which the
Company has the right to receive more than 50% of the distribution
of profits or of the assets on liquidation or
dissolution.
(h)
“Termination Period” means the period of time beginning
with a Change in Control and ending two (2) years following
such Change in Control.
2.
Obligations of Executive .
(a) Executive
agrees that if a Change in Control shall occur, Executive shall not
voluntarily leave the employ of the Company without Good Reason for
a period of six (6) months following the Change in
Control.
(b) Executive
agrees to hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data
relating to the Company or any of its Subsidiaries or affiliated
companies, and their respective businesses, which shall have been
obtained by Executive during Executive’s employment by the
Company or any of its Subsidiaries or affiliated companies and
which shall not be or become public knowledge (other than by acts
by Executive or representatives of Executive in violation of this
Agreement). After termination of Executive’s employment with
the Company, Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this
Section 2(b) constitute a basis for deferring or withholding any
amounts otherwise payable to Executive under this
Agreement.
3.
Payments Upon Termination of Employment .
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(a) If
during the Termination Period the employment of Executive shall
terminate, other than by reason of a Nonqualifying Termination,
then the Company shall pay to Executive (or Executive’s
beneficiary or estate) within sixty (60) days following the
Date of Termination, as compensation for services rendered to the
Company:
(1)
a lump-sum cash amount equal to the sum of
(i) Executive’s base salary through the Date of
Termination, to the extent not theretofore paid, (ii) a
pro rata portion of Executive’s annual bonus in
an amount at least equal to: (A) the greatest of (x) not less
than Executive’s target bonus for the fiscal year in which
the Change in Control occurs; (y) not less than
Executive’s target bonus for the fiscal year in which
Executive’s Date of Termination occurs; and
(z) Executive’s actual bonus payout for the fiscal year
in which Executive’s Date of Termination occurs (in the case
of each of (x), (y) and (z), not including as bonus any amount
payable under the Company’s Performance Reward Plan or a
similar broad-based plan), multiplied by (B) a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of w
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