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SUPPLEMENTAL PENSION PLAN

Employee Benefits Plan Agreement

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This Employee Benefits Plan Agreement involves

HARRIS CORP /DE/

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Title: SUPPLEMENTAL PENSION PLAN
Governing Law: Florida     Date: 11/2/2006
Industry: COMEQP     Sector: TECHNO

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EX-10.1 Supplemental Pension Plan
 

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.

 

(i)

 

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.

 

 

 

 

 

(ii)

 

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.

 

 

 

 

 

(iii)

 

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.

 

 

 

 

 

(iv)

 

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.

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