How will the ownership of the new entity (Newco) be structured?

Upon completion of the combination, Harris is expected to hold approximately 56% of Newco's outstanding common stock (as Class B shares), and Stratex shareholders will hold approximately 44% (as Class A shares). Stratex stock options and warrants will be converted into Newco Class A stock options and warrants.

What are the key ancillary agreements mentioned?

In addition to the Combination Agreement, Harris and Stratex will enter into an Investor Agreement (detailing board representation), a Non-Competition Agreement (limiting Harris's future competitive activities), and a Registration Rights Agreement (allowing Harris to register its Newco shares).

Are there any conditions to closing the transaction?

Yes, the transaction is subject to customary closing conditions, including approval by Stratex stockholders, approval for quotation of Newco stock on NASDAQ, obtaining necessary regulatory and antitrust approvals, accuracy of representations and warranties, and the absence of any material adverse effects on either party's business.

LHX 8-K: Material Agreements

Q: What is the primary purpose of this filing?

This Form 8-K announces the entry into a definitive Combination Agreement between Harris Corporation and Stratex Networks, Inc. to combine Harris's Microwave Communications Division (MCD) with Stratex, creating a new entity named Harris Stratex Networks, Inc. (Newco).

Summary

L3Harris Technologies, Inc. (formerly Harris Corporation) announced a significant strategic transaction via an 8-K filing on September 7, 2006. The company entered into a definitive Combination Agreement with Stratex Networks, Inc. to combine Harris's Microwave Communications Division (MCD) with Stratex. This transaction will be structured as a contribution of MCD and $25 million in cash to a newly formed subsidiary, Newco, followed by a merger of a Newco subsidiary with Stratex. Upon completion, a new entity, Harris Stratex Networks, Inc. ("Newco"), will be formed. Harris is set to receive approximately 56% of Newco's outstanding common stock, with Stratex shareholders receiving the remaining 44% in the form of Newco Class A common stock. This combination aims to create a new, larger entity focused on microwave communications, with provisions for board representation and non-compete agreements to govern the post-combination landscape. Investors should note the creation of two classes of stock (Class A and Class B) with differing voting rights and the involvement of ancillary agreements such as investor, non-competition, and registration rights agreements.

Key Highlights

1Harris Corporation has entered into a definitive Combination Agreement with Stratex Networks, Inc. to combine Harris's Microwave Communications Division (MCD) with Stratex.
2The transaction involves forming a new entity, "Newco" (Harris Stratex Networks, Inc.), to which Harris will contribute MCD assets and $25 million cash.
3Following the contribution, a merger will occur, resulting in Stratex becoming a wholly-owned subsidiary of Newco.
4Harris is expected to own approximately 56% of Newco, while Stratex shareholders will own approximately 44% in the form of Newco Class A common stock.
5The agreement outlines the issuance of Newco Class A common stock to Stratex shareholders and Newco Class B common stock to Harris.
6An Investor Agreement details Harris's rights to appoint Class B Directors and initial board composition for Newco.
7A Non-Competition Agreement restricts Harris from competing with the combined entity's microwave radio systems for five years, with certain exceptions.

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Sep 8, 2006)

Summary

Key Highlights

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