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EXHIBIT 10.3
HARRIS CORPORATION
2005 EQUITY INCENTIVE
PLAN
PERFORMANCE SHARE UNIT
AWARD AGREEMENT
TERMS AND
CONDITIONS
(AS OF JUNE 30,
2007)
1.
Performance Share 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 ”) and upon the terms and conditions set forth
herein (these “ Terms and Conditions ”), Harris
Corporation (the “ Corporation ”) has granted to
the employee receiving these Terms and Conditions (the “
Employee ”) a Performance Share Unit Award (the
“ Award ”) of such number of performance share
units as set forth in the Award Letter (as defined below) from the
Corporation to the Employee (such units, as may be adjusted in
accordance with Sections 1(c), 1(d) and 1(e) of these Terms
and Conditions, the “ Performance Units ”). At
all times, each Performance Unit shall be equal in value to one
share of common stock, $1.00 par value per share (the “
Common Stock ”), of the Corporation (a “
Share ”). Such Award is subject to the following Terms
and Conditions (these Terms and Conditions, together with the
Corporation’s letter to the Employee specifying the number of
Performance Units subject to the Award, the Performance Period, the
form of payment of the Award, certain other terms (the “
Award Letter ”) and the Statement of Performance Goals
(as defined below) related thereto, are 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 following the expiration
of the Performance Period and upon the satisfaction of the
applicable tax withholding obligations, (i) if the Award
Letter specifies that the Performance Units are to be paid in
Shares, the Corporation shall issue to the Employee the number of
Shares underlying the Performance Units to which the Employee is
entitled pursuant hereto; or (ii) if the Award Letter
specifies that the Performance Units are 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 number of Shares underlying the Performance Units to which the
Employee is entitled pursuant hereto. 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
to the custody of the Employee of a stock certificate in the name
of the Employee or his or her designee 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 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 determination of the payout of the Award will be authorized
by the Harris Board of Directors, the Board Committee, or its
designee. Performance Units will be forfeited (A) if they are
not earned at the end of the Performance Period or (B) except as
otherwise provided herein, if the Employee ceases to be employed by
the Corporation at any time prior to the expiration 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 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, if any dividends or other distributions are
paid in cash to holders of Common Stock, 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 or other
distribution to holders of Common Stock, but no later than the end
of the calendar year in which the corresponding actual cash
dividends or other distributions are paid to holders of Common
Stock. If any such dividend or distribution is paid in securities
of the Corporation (including Shares), such dividend equivalents in
respect of such securities 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
in the form of securities 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 of Common Stock is changed as a result of a
stock dividend, stock split or the like, without additional
consideration to the Corporation, the Performance Units subject to
this Award shall be adjusted to correspond to the change in the
Corporation’s outstanding shares of Common Stock. 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 pursuant to Section 1(b), 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 hereto.
(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 . Except 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 prior to the expiration of the
Performance Period:
(a) for any reason other than (i) death,
(ii) permanent disability, (iii) retirement after age 55
with ten or more years of full-time service, or
(iv) involuntary termination of employment of the Employee by
the Corporation other than for Misconduct, all Performance Units
subject to the Award shall be automatically forfeited upon such
termination of employment; or
(b) due to (i) death, (ii) permanent disability,
(iii) retirement after age 55 with ten or more years of
full-time service, or (iv) involuntary termination of
employment by the Corporation other than for Misconduct, the
Employee shall receive a pro-rata portion of the payout in respect
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, and the remaining payout and Performance Units subject to
the Award shall be automatically forfeited. Such pro-rata portion
shall 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
number of full 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 payout in respect 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 following 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 e
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