Summary
This 8-K filing by Harris Corporation (now L3Harris Technologies) on June 2, 2015, primarily details the financial obligations arising from its merger with Exelis Inc. The core of the report concerns the execution of supplemental indentures, which formalize the cross-guarantees of outstanding debt between Harris and Exelis following the merger's consummation on May 29, 2015. This action is a standard procedural step in such acquisitions to ensure continuity and security for bondholders of both entities. Additionally, the filing discloses compensation adjustments for key executives, including special stock awards and performance-based stock options granted to Senior Vice President Miguel A. Lopez (CFO), Robert L. Duffy (SVP, HR & Administration), and Group President Sheldon J. Fox. These awards recognize their efforts in the Exelis acquisition and are tied to retention and the achievement of net synergies, reflecting the company's focus on integrating the newly acquired business and rewarding leadership for successful execution.
Key Highlights
- 1Harris Corporation and Exelis Inc. executed supplemental indentures to formalize debt guarantees following Exelis' merger into Harris, effective May 29, 2015.
- 2Exelis became a guarantor for specific Harris debt instruments, including 7% debentures due 2026 and 6.35% debentures due 2028.
- 3Harris became a guarantor for specific Exelis debt instruments, including 4.25% senior notes due 2016 and 5.55% senior notes due 2021.
- 4Exelis also guaranteed Harris' obligations under its Revolving Credit Agreement and Term Loan Agreement.
- 5Key executives, including the CFO Miguel A. Lopez, received special one-time stock awards for their work on the Exelis acquisition.
- 6Retention and integration awards, including restricted stock and performance stock options, were granted to Messrs. Lopez, Duffy, and Fox, with vesting tied to continued employment and achievement of net synergies.
- 7The performance stock options for these executives have a ten-year term and an exercise price of $79.70 per share, based on the June 1, 2015 closing price.