What are the key changes to CEO Howard L. Lance's employment agreement?

Effective January 20, 2005, Howard L. Lance will have a new employment agreement with an indefinite term. It details enhanced severance benefits if his employment is terminated by Harris without cause or if he resigns for good reason. These benefits include two years of continued base salary, prorated bonus, continued health and disability benefits for 24 months, and extended vesting/exercisability of his stock options and restricted stock.

How has director compensation been affected by this filing?

Director compensation has seen substantial changes. The annual cash retainer for non-employee directors has increased from $30,000 to $55,000. Attendance fees for Board and committee meetings have also been raised. Notably, automatic stock option grants upon initial election and annually have been eliminated, and a new deferred compensation plan has been established.

What is the new Harris Corporation 2005 Directors' Deferred Compensation Plan?

This new plan, effective starting April 1, 2005, will credit non-employee directors' accounts with stock equivalent units valued at $24,000 quarterly ($96,000 annually). Directors can defer compensation into these units or other investment alternatives. The plan outlines specific provisions for lump sum or installment cash payouts following resignation or retirement, and a lump sum payment upon a Change of Control within 90 days.

What happens to previous director stock incentive plans?

The Harris Corporation 2000 Stock Incentive Plan has been amended to eliminate automatic stock option grants for both new and continuing non-employee directors. The 1997 Directors' Deferred Compensation and Annual Stock Unit Award Plan is being amended to cease further deferrals and annual stock equivalent unit awards effective December 31, 2004, with the new 2005 Directors' Deferred Compensation Plan taking over.

LHX 8-K: Material Agreements

Summary

This 8-K filing by L3HARRIS TECHNOLOGIES, INC. /DE/ (formerly Harris Corporation) on December 8, 2004, details significant executive compensation and director compensation adjustments. The most impactful information for investors pertains to the new employment agreement for CEO Howard L. Lance, effective January 20, 2005. This agreement, with an indefinite term, outlines specific severance benefits, including continued base salary for two years and extended stock option vesting and exercisability in case of termination without cause or resignation for good reason. Furthermore, the filing announces material changes to director compensation, including increased annual retainers and meeting fees, alongside a significant overhaul of stock-based compensation. Automatic stock option grants to new and existing directors have been eliminated, and a new deferred compensation plan (2005 Directors' Deferred Compensation Plan) has been adopted, which will provide directors with stock equivalent units valued at $24,000 per quarter, with new payout and change-in-control provisions. These changes reflect an ongoing review of compensation and governance practices.

Key Highlights

1New indefinite employment agreement for CEO Howard L. Lance effective January 20, 2005, superseding his prior agreement.
2Significant severance package for CEO Lance in case of termination without cause or resignation for good reason, including 2 years of base salary continuation and extended stock option vesting/exercisability.
3Elimination of automatic stock option grants to non-employee directors under the 2000 Stock Incentive Plan.
4Increased annual cash retainers for non-employee directors, with the basic retainer rising from $30,000 to $55,000.
5Increased attendance fees for Board and committee meetings for directors.
6Adoption of the Harris Corporation 2005 Directors' Deferred Compensation Plan, replacing previous deferral and stock unit award plans.
7The new Director Deferred Compensation Plan will award quarterly stock equivalent units valued at $24,000 per quarter (initially $96,000 annually) and includes new provisions for payout and change-in-control benefits.

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Dec 8, 2004)

Summary

Key Highlights

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