HARRIS CORPORATION
2005 EQUITY INCENTIVE PLAN
PERFORMANCE UNIT AWARD AGREEMENT
TERMS AND CONDITIONS
(AS OF 10/28/05)
1.
Performance Unit Award – Terms and Conditions . Under
and subject to the provisions of the Harris Corporation 2005 Equity
Incentive Plan (as amended from time to time the “
Plan ”), Harris Corporation (the “
Corporation ”) has granted to the employee receiving
these Terms and Conditions (the “ Employee ”) a
Performance Unit Award (the “ Award ”) of such
number of Performance Units as set forth and designated in writing
by the Corporation to the Employee. At all times, each Performance
Unit shall be equal in value to one share of common stock, $1.00
par value, of the Corporation (a “ Share ”).
Such Award is subject to the following Terms and Conditions (which
together with the Corporation’s letter to the Employee
specifying the number of Performance Units subject to the Award,
the Performance Period and the form of payment of the Award (the
“ Award Letter ”) and the Statement of
Performance Goals (as defined below) related thereto is referred to
as the “ Agreement ”).
(a)
Performance Period . For purposes of the Agreement, the
“ Performance Period ” shall be the Performance
Period set forth and designated as such in the Award
Letter.
(b)
Payout of Award . Provided the Award has not previously been
forfeited, within two and one-half months of the expiration of the
Performance Period and upon the satisfaction of the applicable
withholding obligations (i) if the Award Letter specifies that
the Award is to be paid in Shares, the Corporation shall issue to
the Employee the Shares to which the Employee is entitled pursuant
to Section 1(c) hereof; or (ii) if the Award Letter specifies
that the Award is to be paid in cash, the Corporation shall pay to
the Employee a single lump sum cash payment equal to the Fair
Market Value (as defined in the Plan) of the Shares underlying the
Award to which the Employee is entitled pursuant to Section 1(c)
hereof. If the Award is to be paid in Shares, upon payout the
Corporation shall at its option, cause such Shares as to which the
Employee is entitled pursuant hereto (i) to be released
without restriction on transfer by delivery of a stock certificate
in the name of the Employee or his or her designee, and the
certificate shall be released to the custody of the Employee, or
(ii) to be credited without restriction on transfer to a
book-entry account for the benefit of the Employee or his or her
designee maintained by the Corporation’s stock transfer agent
or its designee.
(c)
Satisfaction of Performance Objectives .
(i) The
payout of the Award shall be contingent upon the attainment during
the Performance Period of the performance objectives set forth in
the Statement of Performance Goals delivered to the Employee at the
time of the making of the Award (the “ Statement of
Performance Goals ”). The payout of the Award shall be
determined upon the expiration of the Performance Period in
accordance with the Statement of Performance Goals. The final
payout determination of the Award will be authorized by the Harris
Board of Directors, the Board Committee, or its designee.
Performance Units will be forfeited if they are not earned at the
end of the Performance Period and, except as otherwise provided
herein, if the Employee
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ceases to be
employed by the Corporation at any time prior to the termination of
the Performance Period.
(ii) If
employment is commenced after July 15th of the first fiscal
year of the Performance Period (such commencement date is referred
to as the “ Start Date ”), the final payout to
be made to the Employee determined in accordance with the prior
provisions of this Section 1(c) shall be reduced by 1/36th for each
month between July 1 of the first fiscal year of the Performance
Period and the Start Date. Only a Start Date prior to the 15th of a
month shall be deemed employment for a full month. Other than with
respect to the final payout, the pro-ration pursuant to this
Section will not otherwise impact the Award.
(d)
Rights During the Performance Period . During the
Performance Period, the Employee shall not have any rights as a
shareholder with respect to the Shares underlying the Performance
Units. During the Performance Period, the Employee shall be
entitled to receive dividend equivalents in cash paid with respect
to the number of Shares underlying the Performance Units. Such
dividend equivalents will be paid to the Employee as soon as is
practicable following payment of the dividend to shareholders of
the Shares, but no later than the end of the calendar year in which
the corresponding actual cash dividends are paid to shareholders of
the Shares. If any such dividends or distributions are paid in
securities of the Corporation (including Shares), such dividend
equivalents relating to the Performance Units shall be subject to
the same restrictions and conditions as the Performance Units in
respect of which such dividend or distribution was made and shall
be paid to the Employee in the manner and at the time the
Performance Units are paid in accordance with Section 1(b). If
the number of outstanding Shares is changed as a result of a stock
dividend, stock split or the like, without additional consideration
to the Corporation, the number of Performance Units subject to this
Award shall be adjusted to correspond to the change in the
Corporation’s outstanding Shares. If the Award Letter
specifies that the Performance Units are to be paid in Shares, upon
the expiration of the Performance Period and payout of the Award,
the Employee may exercise voting rights and shall be entitled to
receive dividends and other distributions with respect to the
number of Shares to which the Employee is entitled pursuant to
Section 1(c) hereof.
(e)
Adjustment to Award . The number of Performance Units
subject to the Award is based upon the assumption that the Employee
shall continue to perform substantially the same duties throughout
the Performance Period, and such number of Performance Units may be
reduced or increased by the Board of Directors or the Board
Committee or its designee without formal amendment of the Agreement
to reflect a change in duties during the Performance
Period.
2.
Forfeiture; Termination of Employment . Other than in the
event of a Change of Control covered in Section 5 herein or as
otherwise provided in the Award Letter, if the Employee ceases to
be an employee of the Corporation or of one of its Subsidiaries or
Affiliates prior to the expiration of the Performance Period:
(i) for any reason other than (a) death, (b) disability,
(c) retirement after age 55 with ten or more years full-time
service, or (d) involuntary termination of employment of the
Employee by the Corporation other than for Misconduct, all
Performance Units awarded to the Employee hereunder shall be
automatically forfeited upon such termination of employment; or
(ii) due to (a) death, (b) disability,
(c) retirement after the Employee has reached age 55 and has
ten or more years of full-time
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service, or
(d) involuntary termination of employment by the Corporation
other than for Misconduct, the Employee shall be eligible to
receive a pro-rata portion of the payout of the Performance Units
which would have been made to the Employee under the Award at the
end of the Performance Period under Section 1(b) determined in
accordance with the provisions of Section 1(c) hereof, such
pro-rata portion to be measured by a fraction, of which the
numerator is the number of full months of the Performance Period
during which the Employee’s employment continued, and the
denominator is the full number of months of the Performance Period.
For purposes of this Section 2, only employment for 15 days or
more of a month shall be deemed employment for a full month.
Termination of employment of the Employee by the Corporation for
deliberate, willful or gross misconduct, as determined by the
Corporation, shall constitute “ Misconduct .”
The pro-rata portion of the Performance Units required to be paid
under this Section 2 shall be paid to the Employee, in Shares
or in cash as specified in the Award Letter, within two and
one-half months of the expiration of the Performance
Period.
3.
Transfer of Employment . If the Employee transfers
employment from one business unit of the Corporation or an
Affiliate to another business unit or Affiliate during a
Performance Period, the Employee shall be eligible to receive the
number of Performance Units determined by the Board of
Director
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