SUPPLEMENTAL PENSION PLANEmployee Benefits Plan Agreement |
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SUPPLEMENTAL PENSION PLAN
FOR HOWARD L. LANCE
(Adopted effective October 27, 2006)
In
order to retain and motivate Howard L. Lance (the “Employee”) to
excel as Chief Executive Officer of the Corporation, the Board of Directors has
determined that it is in the best interest of Harris Corporation (the
“Corporation”) to adopt this Supplemental Pension Plan for Howard
L. Lance (the “SPP”), effective October 27, 2006.
The
Corporation intends that the SPP shall be an unfunded plan maintained primarily
for the purpose of providing deferred compensation within the meaning of
Sections 201, 301, and 401 of the Employee Retirement Income Security Act
of 1974 (“ERISA”).
SECTION 1
DEFINITIONS
When
used herein, the following words and phrases and any derivatives thereof shall
have the meanings below unless the context clearly indicates otherwise.
Definitions of other words and phrases are set forth throughout the SPP.
Section references indicate Sections of the SPP unless otherwise stated.
“Actuarial
Equivalent” means equal value computed on the basis of (i) the
“applicable mortality table” determined from time to time under
Code Section 417(e)(3), and (ii) a discount rate of 7.0%, compounded
annually.
“Cause”
has the meaning set forth in the Letter Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time.
“Compensation
Committee” shall mean the Management Development and Compensation
Committee of the Board of Directors of the Corporation.
“Corporation”
means Harris Corporation, a Delaware corporation.
“Disability.”
The Employee shall be considered to be “disabled” if the Employee
qualifies for long-term disability under the executive long-term disability
plan sponsored by the Corporation in which the Employee participates at the
time the determination of Disability is made.
“Early
Retirement Eligibility Date” shall mean the date the Employee has
attained age 55 and accrued 10 Years of Credited Service.
“Early
Retirement Factor” means 100% minus one-half of one percent (.5%) for
each month by which the SPP Commencement Date precedes the date the Employee
would have attained age 60, with any partial final month to be rounded to the
closest whole month.
“Employee”
means Howard L. Lance.
“Executive
Severance Agreement” means the Executive Severance Agreement between the
Employee and the Corporation dated January 20, 2003.
“Final
Pay” means the sum of the Employee’s most recent annual base
salary, plus the Employee’s most recent annual cash incentive, payable at
target.
“Good
Reason” has the meaning set forth in the Letter Agreement.
“Joint
and 50% Survivor Annuity” means an annuity, payable for the life of the
Employee and, following the Employee’s death, 50% of such amount to be
paid to the Employee’s Surviving Spouse for her remaining life. The Joint
and 50% Survivor Annuity shall be the Actuarial Equivalent of a single life
annuity payable for the Employee’s life.
“Late
Retirement Date” means the the Employee’s Termination Date, if the
Termination Date occurs after he attains age 60.
“Letter
Agreement” means the Letter Agreement between the Employee and the
Corporation dated December 3, 2004.
“Normal
Retirement Date” means the date the Employee attains age 60.
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“Offset
Amount” means an amount, calculated as a single life annuity for the
Employee’s life, which is the Actuarial Equivalent of the following
benefits. In each case, the benefit below shall be determined as of the
Employee’s Termination Date, and shall be converted on an Actuarially
Equilvalent basis to a single life annuity payable for the Employee’s
life commencing on the SPP Commencement Date.
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(i) |
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Harris
Corporation Retirement Plan. The portion of the Employee’s account balance under the
Harris Corporation Retirement Plan, as amended from time to time,
attributable to employer contributions and earnings thereon. |
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(ii) |
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Harris
Corporation Supplemental Executive Retirement Plan. The portion of the Employee’s
account balance under the Harris Corporation Supplemental Executive
Retirement Plan, as amended from time to time, attributable to employer
credits and earnings thereon. |
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(iii) |
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Social
Security Benefit. The
annual primary insurance amount which will become payable to the Employee at
the later of (A) the earliest date the Employee could begin to receive
old age benefits (whether or not reduced) under the Social Security Act, if
the SPP Commencement Date occurs prior to such date; or (B) the SPP
Commencement Date, based on the Social Security Act in effect on the
Employee’s Termination Date, assuming in all cases (1) no future
adjustments in benefits or the contribution and benefit base; (2) the
Employee’s Final Pay at his Termination Date remains in effect
thereafter; and (3) if the SPP Commencement Date occurs prior to the
earliest date the Employee could begin to receive old age benefits (whether
or not reduced) under the Social Security Act, the Social Security benefit
shall be reduced on an Actuarially Equivalent basis from such date to the SPP
Commencement Date. |
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(iv) |
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Emerson
Electric Benefit. Any
benefits owed or paid at any time to the Employee under the tax-qualified,
defined benefit pension plan known as the Emerson Electric Co. Retirement
Plan and any benefits owed or paid at any time to the Employee under any
non-qualified, defined benefit-type pension plan maintained at any time by
Emerson Electric Co. If the SPP commencement Date occurs prior to the
earliest date the Employee could begin to receive benefits from any Emerson
Electric plan, the benefit |
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available at
the earliest commencement date shall be reduced on an Actuarially Equivalent
basis from such date to the SPP Commencement Date. |
The Offset Amount shall not
change after the Employee’s Termination Date, except that, if the
Employee receives Disability Retirement under Section 3.5, then in each
year during the period from the Employee’s SPP Commencement Date to the
date the Employee attains age 65 there shall be deducted from the Disability
Retirement Benefit the amount of payments during such year to Employee under
any and all long-term disability plan(s) (broad-based and executive) sponsored
by the Corporation. Also, for purposes of clause (i) and clause (ii),
earnings on the account balance from January 1, 2006 to the
Employee’s Termination Date shall be based not on the actual earnings on
such account, but instead on the earnings that would have accrued during such
period if the account had been invested in the investment option under such
Plan that, in the determination of the Compensation Committee, most closely
resembles a “balanced fund” investment option.
“SPP”
means the Supplemental Pension Plan for Howard L. Lance, as contained herein
and as hereafter amended from time to time.
“SPP
Commencement Date” shall mean the date the SPP benefit hereunder actually
commences.
“Surviving
Spouse” means the person to whom the Employee is legally married on his
SPP Commencement Date.
“Termination
Date” means the date the Employee terminates employment with the
Corporation and and its controlled group members (as determined pursuant to
Section 414(b) and (c) of the Code) by reason of resignation, discharge,
retirement, death or Disability. For this purpose, the Employee shall be deemed
to have terminated employment by reason of Disability as of the date the
Employee ceases to perform substantial services for the Corporation and its
controlled group members (as determined pursuant to Section 414(b) and
(c) of the Code).
“Trust”
means any trust agreement created under Section 7.2(b) by and between the
Corporation and the Trustee, under which assets are held in connection with
paying benefits under the SPP.
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“Years
of Credited Service” shall be measured on the basis of twelve
(12) consecutive month periods commencing on the Employee’s
effective date of employment and subsequent annual anniversaries thereof, and
ending on the Employee’s Termination Date. Any period of less than twelve
(12) consecutive months shall be rounded to the nearest whole month. Paid
and authorized leaves of absence shall not cause a break in consecutive
employment periods.
SECTION 2
ELIGIBILITY TO PARTICIPATE
The
only participant in the SPP shall be the Employee.
SECTION 3
ELIGIBILITY FOR AND AMOUNT OF BENEFITS
3.1
Normal Retirement Benefit. If the Employee retires on his Normal
Retirement Date, the Normal Retirement Benefit shall be a benefit, calculated
as a single life annuity for the Employee’s life, equal to 50% of the
Employee’s Final Pay as of his Termination Date, minus the Offset Amount.
3.2
Late Retirement Benefit. If the Employee retires on his Late Retirement
Date, the Late Retirement Benefit shall be the benefit calculated as set forth
in Section 3.1 above, but with the Employee’s Final Pay determined
as of his Termination Date.
3.3
Early Retirement Benefit. If the Employee retires on or after his Early
Retirement Eligibility Date, but before his Normal Retirement Date, the Early
Retirement Benefit shall be a benefit, calculated as a single life annuity for
the Employee’s life, equal to 50% of the Employee’s Final Pay,
multiplied by the Early Retirement Factor as of the SPP Commencement Date, and
then further reduced by the Offset Amount.
3.4
Termination without Cause or for Good Reason prior to Early Retirement
Eligibility Date. If before his Early Retirement Eligibility Date the
Employee is terminated without Cause or terminates for Good Reason, the
Termination Benefit shall be a benefit, calculated as a single life annuity for
the Employee’s life, equal to the Employee’s Final Pay as of his
Termination Date, times the product of (w) times (x), with the result
multiplied by (y), and then
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further reduced by (z), where
(w) is Four Percent (4%), (x) is the Employee’s Years of
Credited Service as of his Termination Date, plus two (2) additional Years
of Credited Service, as though the Employee had terminated employment with the
Corporation on the second anniversary of his actual Termination Date,
(y) is the Early Retirement Factor as of his SPP Commencement Date, and
(z) is the Offset Amount. Under no circumstances shall the benefit under
this Section 3.4, prior to application of the Early Retirement Factor and
subtraction of the Offset Amount, exceed 50% of the Employee’s Final Pay
as of his Termination Date.
3.5
Disability. If the Employee becomes Disabled before his Early Retirement
Eligibility Date, the Disability Retirement Benefit shall be a benefit,
calculated as a single life annuity for the Employee’s life, equal to the
Employee’s Final Pay as of his Termination Date, times the product of
(w) times (x), with the result multiplied by (y), and then further reduced
by (z), where (w) is Four Percent (4%), (x) is the Employee’s
Years of Credited Service as of his Termination Date, (y) is the Early
Retirement Factor as of his SPP Commencement Date, and (z) is the Offset
Amount. If the Employee recovers from a Disability prior to his SPP
Commencement Date, and the Employee does not return to work for the
Corporation, then the Employee’s SPP Benefit shall be determined under
Section 3.4 (and for such purpose the Employee’s Termination Date
shall be the date the Employee initially ceased to perform substantial services
for the Corporation and its controlled group members as determined pursuant to
Section 414(b) and (c) of the Code). If the Employee’s period of
Disability ceases by reason of death prior to his SPP Commencement Date,
employment with the Employer will be deemed terminated as of the day of
recovery or death and in such event the Employee or Surviving Spouse, as the
case may be, will be entitled only to the benefit otherwise provided under
Section 3. If the Employee becomes Disabled after his Early Retirement
Eligibility Date, then his SPP Benefit shall be determined under
Section 3.1, 3.2, or 3.3, as applicable, but his SPP Commencement Date
shall be determined under Section 5.2(a)(5). Under no circumstances shall
the benefit under this Section 3.5, prior to application of the Early
Retirement Factor and subtraction of the Offset Amount, exceed 50% of the
Employee’s Final Pay as of his Termination Date.
3.6
Death of Employee.
(a) If
the Employee dies before his SPP Commencement Date, then no benefit shall be
paid to any person or entity under this SPP.
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(b) If
the Employee dies after his SPP Commencement Date, then the SPP benefit, if
any, after the Employee’s death shall be determined by the form of
payment that was in force on the Employee’s date of death.
3.7
Resignation or Termination for Cause prior to Early Retirement Eligibility
Date. If before his Early Retirement Eligibility Date the Employee resigns
or is terminated for Cause, then no benefit shall be paid to any person or
entity under this SPP.






