Summary
L3Harris Technologies (formerly Harris Corporation) filed an 8-K on September 1, 2010, reporting on compensation actions approved by its Board of Directors and Compensation Committee around August 27-28, 2010. These actions primarily involve payouts for fiscal year 2010 and setting compensation structures for fiscal year 2011 for its named executive officers, including CEO Howard L. Lance. The report details cash bonuses, performance share awards, base salary adjustments, and new equity grants, all aligned with previously established performance metrics and incentive plans. Key actions include the adoption of a new Annual Incentive Plan for fiscal year 2011, subject to shareholder approval, which aims to align executive pay with corporate performance and retention. Additionally, the company amended and restated its 2005 Equity Incentive Plan, introducing new performance measures and updating the definition of "Change in Control" to align with industry peers. These changes are designed to ensure continued alignment between executive compensation and shareholder interests, while also addressing tax deductibility requirements under Section 162(m) of the Internal Revenue Code.
Key Highlights
- 1Fiscal Year 2010 incentive payouts approved for named executive officers, including cash bonuses and performance share awards based on revenue, operating income, EBIT, and ROIC.
- 2New annual base salaries approved for named executive officers, effective August 28, 2010.
- 3Adoption of a new Harris Corporation Annual Incentive Plan for Fiscal Year 2011, pending shareholder approval, with defined minimum, target, and maximum cash award levels for executive officers.
- 4Restatement of the 2005 Equity Incentive Plan, effective August 27, 2010, to include new performance measures and update the definition of 'Change in Control'.
- 5Grants of stock options and performance share awards for Fiscal Year 2011 under the Restated 2005 Equity Incentive Plan, with specific vesting schedules and performance targets.
- 6Amendments to various other compensatory plans and arrangements to update the definition of 'Change in Control' consistent with the Restated 2005 Equity Incentive Plan.
- 7The company is seeking shareholder approval for the new Annual Incentive Plan and certain amendments to the Equity Incentive Plan at the October 22, 2010 Annual Meeting to ensure tax deductibility of compensation under Section 162(m) of the Internal Revenue Code.